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GEK TERNA SOCIETE ANONYME
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 2023
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
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CONTENTS
I. STATEMENTS BY MEMBERS OF THE BOARD OF DIRECTORS .................................................... 5
II. ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR
2023 ON THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ................................ 7
A. Financial Developments and Performance for the Year 2023 ......................................... 7
B. Significant Events for the Financial Year 2023 ............................................................... 10
C. Significant Events after the end of the period 01.01 – 31.12.2023 ................................ 26
D. Risk Factors and Uncertainties ....................................................................................... 29
E. Outlook and Prospects .................................................................................................... 36
F. Alternative Performance Measurement Indicators (“APMI”) ........................................ 43
G. Report of Payments to Governments ............................................................................. 47
H. Non-Financial Information Report 2023 ......................................................................... 47
I. Treasury Shares ............................................................................................................ 119
J. Transactions with Related Parties ................................................................................ 120
CORPORATE GOVERNANCE STATEMENT ............................................................................. 129
EXPLANATORY REPORT OF THE BOARD OF DIRECTORS ACCORDING TO ARTICLE 4 OF L.
3556/2007 ............................................................................................................................ 202
III. Independent Auditor’s Report ............................................................................................. 205
IV. ANNUAL SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED
AS AT DECEMBER 31 2023 (1 January - 31 December 2023) .............................................. 213
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER
2023 ...................................................................................................................................... 215
CONSOLIDATED AND SEPARATE STATEMENT OF TOTAL COMPREHENSIVE INCOME 2023 217
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS 2023 ................................. 219
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY 2023 ..................... 222
NOTES ON THE FINANCIAL STATEMENTS ............................................................................. 225
1 GENERAL INFORMATION ABOUT THE GROUP AND THE COMPANY .................................... 225
2 BASIS FOR THE PRESENTATION OF THE FINANCIAL STATEMENTS ....................................... 227
3 SIGNIFICANT ACCOUNTING ESTIMATES AND MANAGEMENT ASSESSMENTS ..................... 231
3.1 Significant judgments of the Management ............................................................. 231
3.2 Uncertainty of estimates and assumptions ............................................................. 232
4 SUMMARY OF KEY ACCOUNTING PRINCIPLES ..................................................................... 236
4.1 Basis for consolidation ............................................................................................. 236
4.2 Business Combinations ............................................................................................ 239
4.3 Acquisition of entities that do not constitute a “business” according to the definition
of IFRS 3 – Acquisition of assets .............................................................................. 240
4.4 Operating segments ................................................................................................ 241
4.5 Goodwill ................................................................................................................... 241
4.6 Intangible assets ...................................................................................................... 242
4.7 Property, plant and equipment ............................................................................... 245
4.8 Impairment of non-current assets (intangible and tangible assets/investments in
consolidated companies) ......................................................................................... 245
4.9 Financial instruments .............................................................................................. 246
4.9.1 Recognition and derecognition ............................................................................... 246
4.9.2 Classification and initial recognition of financial assets .......................................... 246
4.9.3 Subsequent measurement of financial assets ......................................................... 247
4.9.4 Impairment of financial assets ................................................................................ 248
4.9.5 Classification and measurement of financial liabilities ........................................... 249
4.9.6 Derivative financial instruments and hedge accounting ......................................... 250
4.9.7 Offsetting financial assets and financial liabilities ................................................... 251
4.10 Receivables on Embedded Derivatives .................................................................... 251
4.11 Service concession agreements ............................................................................... 252
4.12 Revenue ................................................................................................................... 253
4.13 Income tax ............................................................................................................... 258
4.14 Share capital, reserves and distribution of dividends .............................................. 259
4.15 Provisions, Contingent Assets and Liabilities ........................................................... 260
4.16 Leases ...................................................................................................................... 261
4.17 Foreign currency conversion ................................................................................... 264
4.18 Borrowing costs ....................................................................................................... 265
4.19 Investment property ................................................................................................ 265
4.20 Inventory ................................................................................................................. 265
4
4.21 Cash and Cash Equivalents .................................................................................... 266
4.22 Employee benefits ................................................................................................ 266
4.23 Government grants ............................................................................................... 268
4.24 Earnings per share ................................................................................................ 269
5 GROUP AND COMPANY STUCTURE ................................................................................... 269
6 OPERATING SEGMENTS ..................................................................................................... 281
7 BUSINESS COMBINATION AND ASSETS ACQUISITION ....................................................... 289
8 INTANGIBLE ASSETS AND GOODWILL ................................................................................ 291
9 RIGHT OF USE ASSETS ........................................................................................................ 297
10 TANGIBLE FIXED ASSETS .................................................................................................... 301
11 INVESTMENT PROPERTY .................................................................................................... 308
12 PARTICIPATIONS IN SUBSIDIARIES ..................................................................................... 311
13 PARTICIPATIONS IN ASSOCIATES ....................................................................................... 315
14 INVESTMENTS IN JOINT ARRANGEMENTS ......................................................................... 316
15 FINANNCIAL ASSETS - CONCESSIONS ................................................................................. 320
16 OTHER LONG-TERM ASSETS .............................................................................................. 322
17 INVENTORIES ..................................................................................................................... 325
18 TRADE RECEIVABLES .......................................................................................................... 325
19 RECEIVABLES / LIABILITIES FROM CONTRACTS WITH CUSTOMERS ................................... 328
20 ADVANCES AND OTHER RECEIVABLES ............................................................................... 330
21 INVESTMENT IN EQUITY INTERESTS .................................................................................. 332
22 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS ..................................... 332
23 CASH AND CASH EQUIVALENTS ......................................................................................... 333
24 BORROWINGS .................................................................................................................... 334
25 LEASE LIABILITIES ............................................................................................................... 337
26 PROVISIONS FOR EMPLOYEE COMPENSATION ................................................................. 338
27 OTHER PROVISONS ............................................................................................................ 340
28 GRANTS .............................................................................................................................. 341
29 SUPPLIERS .......................................................................................................................... 342
30 ACCRUED AND OTHER LIABILITIES ..................................................................................... 342
31 FINANCIAL DERIVATIVES .................................................................................................... 344
32 SHARE CAPITAL – EARNINGS PER SHARE ........................................................................... 348
33 RESERVES ........................................................................................................................... 350
34 INCOME TAX – DEFERRED TAX .......................................................................................... 358
35 TURNOVER ......................................................................................................................... 365
36 COST OF SALES - ADMINISTRATIVE AND DISTRIBUTION EXPENSES - RESEARCH AND
DEVELOPMENT EXPENSES ................................................................................................. 369
37 AUDITORS’ FEES ................................................................................................................. 371
38 OTHER INCOME/(EXPENSES) ............................................................................................. 371
39 PROFIT/(LOSSES) FROM SALE OF PARTICIPATIONS AND SECURITIES ................................ 373
40 GAINS/(LOSSES) FROM VALUATION OF INTERESTS AND SECURITIES ................................ 373
41 GAINS / (LOSSES) FROM PARTICIPATIONS AND OTHER EQUITY INSTRUMENTS ............... 373
42 FINANCIAL INCOME/(EXPENSES) ....................................................................................... 374
43 PAYROLL COST ................................................................................................................... 375
44 TRANSACTIONS WITH RELATED PARTIES ........................................................................... 376
45 RISK MANAGEMENT POLICIES AND PROCEDURES ............................................................ 377
46 PRESENTATION OF FINANCIAL ASSETS AND LIABILITIES PER CATEGORY .......................... 383
47 FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS ............................................. 385
48 CAPITAL MANAGEMENT POLICIES AND PROCEDURES ...................................................... 389
49 CONTINGENT LIABILITIES AND ASSETS .............................................................................. 390
50 EVENTS AFTER THE REPORTING DATE OF THE STATEMENT OF FINANCIAL POSITION ...... 397
51 APPROVAL OF FINANCIAL STATEMENTS ............................................................................ 401
V. REPORT ON USE OF FUNDS RAISED FROM THE ISSUANCE OF COMMON BOND LOAN OF 120
MILLION ............................................................................................................................. 403
VI. REPORT ON USE OF FUNDS RAISED OF THE COMMON BOND LOAN OF 500 MILLION ...... 409
VII. REPORT ON USE OF FUNDS RAISED OF THE COMMON BOND LOAN OF 300 MILLION ...... 423
5
I. STATEMENTS BY MEMBERS OF THE BOARD OF DIRECTORS
(according to article 4 par. 2 of L. 3556/2007)
We
1. George Peristeris, Chairman of the Board of Directors and Chief Executive Officer, Executive Member of the Board of Directors
2. Apostolos Tamvakakis, Vice Chairman, non-Executive Member of the Board of Directors
3. Penelope Lazaridou, Executive Director, Executive Member of the Board of Directors
STATE THAT
To the best of our knowledge:
a. The attached separate and consolidated Financial Statements of GEK TERNA SOCIETE ANONYME for the period from January 1 st 2023 to December 31 st 2023, prepared in accordance with the effective accounting standards reflect in true manner the Assets and Liabilities, the Shareholders’ Equity and the Total Comprehensive Income of the Company, as well as of the companies included in the consolidation in aggregate, and
b. The Board of Directors’ Report presents in true manner the developments, the performance and the position of the Company, as well as of the companies included in the consolidation in aggregate, including the description of main risks and uncertainties they are facing.
Athens, 29th April 2024
Chairman of the BoD and
Chief Executive Officer
Georgios Peristeris
Vice Chairman of the BoD, Executive Director,
non-Executive Member Executive Member of the BoD
Apostolos Tamvakakis Penelope Lazaridou
6
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GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
7
II. ANNUAL MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR 2023 ON THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
Dear Shareholders,
Pursuant to the provisions of Law 4548/2018 and Law 3556/2007 article 4 paragraph 2c, 6, 7 and 8, of article 2 of the decisions issued thereon 8/754/14.04.2016 of the Board of Directors of the Hellenic Capital Market Commission and the Company’s Articles of Association, we are hereby submitting to you the Annual Report of the Board of Directors for the closing year from 01.01. 2023 to 31.12. 2023.
This report contains financial and non‐financial information regarding GEK TERNA Group, for the financial year 2023 and describes the most significant events that took place during as well as after the reporting period of the financial statements. Moreover, the report outlines the key risks and uncertainties the Group may face in 2024 and records significant transactions between the Company and its related parties.
A. Financial Developments and Performance for the Year 2023
Despite the ongoing geopolitical uncertainties and high inflation in 2023, along with the subsequent strict monetary policy, the Greek economy maintained a significant portion of the developmental momentum from the previous year, but at a milder rate compared to the rates of the post-pandemic period of the previous year. As a result, the real GDP in 2023 strengthened by 2% on an annual basis (compared to 5.9% in 2022), surpassing the European average by a considerable margin (estimated increase of 0.5%). It is worth noting that the growth rate exceeds the initial estimates of the Greek government's budget for 2023, which set the bar at 1.8%, indicative of the resilience and dynamism of the economy.
In terms of components contributing to the GDP growth in 2023, significant factors included: a) investments, mainly due to the construction activity, b) the increase in exports, which was supported by the strong impact of tourism, c) the increase in consumption, as a result of increased wages and pensions, and d) the reduction of energy prices.
On the inflation front, the downward trend that started at the end of 2022 continued mainly as a result of the significant decline in international energy prices. Specifically, the Harmonized Consumer Price Index (CIP) decreased to 4.2% in 2023 from 9.3% in 2022, lower than the corresponding average of 5.4% in the Eurozone according to the estimates of the Bank of Greece, for the period 2024 – 2025, it is expected to decrease to 2.3% and 2% respectively.
In the fiscal sector, Greece recorded a primary surplus of 1.1% of GDP for 2023, compared to initial estimates of 0.7% for the year, in contrast to 0.1% in 2022, with the main factor being the rational management of parameters positively affecting its course.
A significant event for the Greek economy in 2023 was the upgrade of the country's credit rating, which returned to investment grade after 13 years. Thus, during the second half of the year, credit rating agencies S and P (BBB-), Fitch (BBB-), DBRS (BBB low), and Scope (BBB-) upgraded the credit rating of the Greek State in the investment category. As a result of this upgrade, the yields of Greek government
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
8
bonds have reduced borrowing costs compared to other eurozone countries, and at the same time, investment activity has increased due to lower interest rates.
The Greek economy is expected to maintain a growth rate in the coming years higher than the European average, with the latest estimates from the Bank of Greece aiming for GDP growth of 2.3% for 2024 and 2.5% for 2025 (compared to 0.8%-1.5% for the eurozone according to the ECB). Key driving forces of the economy in the coming years are expected to continue to be investments, exports, and private consumption.
Investments in the coming years are expected to increase significantly due to the fact that Greece is among the leaders in the EU in terms of absorbing funds from the Recovery and Resilience Mechanism, which provide a significant fiscal stimulus to the economy, having received 41% of the available funds (15 bn euros, of which 7.7 bn euros in grants and 7.3 bn euros in low-interest loans) after completing the agreed goals/milestones of its program. Finally, it should be noted that after the final revision of the national recovery and resilience plan, new investment projects have been incorporated to absorb additional funds from the European program Repower EU, totaling 5.8 bn euros, bringing the total available funds to 36 bn euros, of which 18.2 bn euros for grants and 17.7 euros bn for loans.
It should be noted that the moderation of inflation in food items has not directly followed the general inflation index, exerting significant pressure on households' disposable income. However, all indications suggest that this particular inflation will also trend downwards, allowing for greater disposable income to be available for increased consumption.
The European Central Bank, as part of its efforts to further reduce inflation, continues to implement measures to restrict liquidity, maintaining elevated interest rates, resulting in an increase in financial costs. Current indications from the ECB suggest that within 2024, it will make the first reduction in interest rates, without ruling out additional reductions, as long as the level of inflation continues to moderate. The anticipated decision by the ECB will have a direct impact on the growth rates of eurozone economies.
The potential deterioration of international trade conditions due to the ongoing hostilities in Ukraine, as well as a possible escalation of geopolitical tensions in the Middle East and the Red Sea, through which a significant portion of global trade passes, could lead to a slowdown in growth and weaken the GDP of the Greek economy.
Despite the uncertainties stemming from structural weaknesses in the Greek economy (high public debt, high current account deficits), adverse geopolitical developments and the existence of extreme weather events, the prospects for the Greek economy remain positive in the medium term due to significant projects that are implemented, with a leading role played by: a) Increased investments for i) the construction or improvement of infrastructure, ii) the production of clean electricity through renewable energy sources, iii) the increase of energy storage capacity, and iv) the development of upgraded tourist accommodations, allowing Greece to leverage its comparative advantages over other countries (geographical location, climatic conditions, high level of education of the workforce), b) the increase in exports, which was also supported by the strong impact of tourism, c) the reduction of energy prices and d) the increase in consumption, as a result of rising wages and pensions.
In this changing economic and geopolitical environment, GEK TERNA Group, which is one of the most important Greek corporate groups and holds a leading position in the fields of infrastructure and
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
9
construction, clean energy, electricity generation and trading, as well as concessions, implements and seamlessly expands its investment plan with regard to “green development” mainly in the segments of Renewable Energy Sources, Concessions and Self/Co-financed projects, as its capital structure remains healthy and strong. At the same time the Group continues to have a selective presence in countries outside Greece.
The main consolidated financial results from continuing operations of the year 2023 based on the International Financial Reporting Standards compared to the corresponding period of 2022, are as follows:
Revenues from third parties from continuing operations amounted to 3,499.2 mn euros, compared 3,938.2 mn euros in 2022 posting a decrease of 439.0 mn euros, due to the decrease in revenue of the Electricity Production Segment from Thermal Energy Sources – Energy Sales, as a result of the moderation of energy prices for 2023.
The Adjusted EBITDA (EBITDA from continuing operations plus non-cash results included therein) amounted to 585.5 mn euros in 2023 against 661.8 mn euros in the corresponding period of 2022, posting a decrease by 76.3 mn euros, which is mainly due to the reduction in the results of the Electricity Production Segment from Thermal Energy Sources – Energy Sales.
Operating Results before interest and taxes (EBIT) from continuing operations amounted to 393.2 mn euros compared to 415.8 mn euros in the corresponding period of 2022 and are decreased for the reasons mentioned above.
Earnings before taxes from continuing operations amounted to 268.5 mn euros, against 243.3 mn euros in the corresponding period of 2022, and the difference is mainly attributed to the increase in profits: a) of the Construction Segment, b) of the Electricity Production Segment from Renewable Energy Sources and c) of the Concession – Self/Co-financed projects segment, despite the decrease in profits of the Electricity Production Segment from Thermal Energy Sources - Energy Sales.
It is noted that the results of the current period include events characterized as non-operating results, which are as follows:
a) a loss of 5.6 mn euros from the decrease in the fair value of the embedded derivative, compared to a loss of 76.3 mn euros for the corresponding period of 2022, which was mainly recognized in the context of the operation of the Concession – Self/Co-financed projects Segment,
b) a gain of 20.5 mn euros from the valuation of forward contracts for the purchase and sale of Electricity and Natural Gas, against a loss of 1.8 mn euros for the corresponding period of 2022, in the Electricity Production Segment from Thermal Energy Sources - Energy Sales and
c) a gain of 4 mn euros from the valuation of other investments, against a profit of 21.7 mn euros for the corresponding period of 2022.
The valuations of interest rate swap contracts and the embedded derivative of the Concessions - Self/Co-financed projects Segment, which are recognized in accordance with the provisions of the IFRS in each reporting period, are determined taking into account, among other factors, the corresponding changes in the Euribor and the yield of the country's borrowing bonds. According to the structure and correlation of the above contracts for their entire duration, the changes in these valuations will not have any substantial impact on the Operating results, Cash Flows and Net Position of the Group
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
10
respectively, given that the offsetting amounts have been calculated at fixed prices for the entire duration of the concessions.
Earnings after taxes from continuing operations amounted to 187.3 mn euros, against 177.3 mn euros in the respective period of 2022 , of which, the earnings that are attributed to the shareholders of the Parent company stood at 147.8 mn euros for the year 2023 compared to 136.5 mn euros in the respective period of 2022.
Earnings after taxes from continuing operations without the effect of the above non-operating items, amounted to 172.5 mn euros for the year 2023 compared to 215.1 mn euros in the respective period of 2022, of which 133.3 mn euros are the ‘’adjusted’’ earnings attributed to the shareholders of the Parent company, compared to 174.4 mn euros in the respective period of 2022.
Total Earnings attributed to the Shareholders of the Parent company amounted to 137.9 mn euros in 2023, compared to 273.5 mn euros in the respective period in 2022, with a significant portion of the difference coming from the increase in the liability arising from the revaluations in the interest rate swap contracts, due to the future gradual normalization of interest rates, recorded in Other Comprehensive Income.
The Net Debt of the Group stood on 31.12. 2023 at 1,751.7 mn euros, compared to 1,501.6 mn euros on 31.12. 2022 posting an increase by 250.1 mn euros.
Investment expenditures for the year 2023 settled at 194.8 mn euros, compared to 338.4 mn euros in the respective period of 2022 and almost the entire amount has been spent on the operating segment of Renewable Energy Sources.
The Total Assets of the Group on 31.12. 2023 stood at 6,054 mn euros, compared to 5,978 mn euros on 31.12. 2022.
In the section “B Significant Events for the Financial Year 2023” there are presented in detail the significant events of the period, as well as the key financial performance of the operating segments.
B. Significant Events for the Financial Year 2023
During the financial year of 2023 the following significant events took place:
• On 09.01.2023, was registered in the General Commercial Registry (GEMI) with Registration Number 3409259, the decision numbered 226/09.01.2023 of the G.E.M.I. Service approving the modification of Articles 1 paragraph 1 and 3 paragraph 2 case (iii) of the articles of association of the Limited Company named CASINO OF WIDE SPECTRUM SOCIETE ANONYME COMPANY," with distinctive title EKAZ HELLINIKON S.A. (EKAZ) and G.E.M.I. number 163658901000, according to the decision of the Extraordinary General Meeting of Shareholders dated 09.01.2023. Following the above, the name of the company was formed as follows: INTEGRATED RESORT COMPLEX HELLINIKON SOCIETE ANONYME, and with the distinctive title as follows: IRC HELLINIKON S.A.
• With the decision No. 3/26.01.2023, the Hellenic Gaming Commission (HGC) approved the change of the conveyor technical experience in IRC HELLINIKON, namely from HR ATLANTIC CITY LLC.
• On 04.02.2023, the subsidiary TERNA S.A. signed a contract with BLUE IRIS INVESTMENTS S.M.S.A. for the construction of the project "5-Star Luxury Resort in Kalo Livadi Mykonos" with a budget of
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
11
78.6 mn euros. Additionally, on October 31, 2023, a contract for supplementary works amounting to 6.5 mn euros was signed, bringing the total budget to 85.1 mn euros.
• On 10.02.2023, the subsidiary TERNA ENERGY S.A. acquired all the corporate shares of the company ANAX PC, which was renamed to TERNA ENERGY SAPPON PC, and which is developing a Photovoltaic Station with a capacity of 246.35 MW in the wider area of the Evros prefecture.
• On 16.03.2023, the joint venture TERNA - EKTER, in which the subsidiary TERNA S.A. participates with a 70% stake, in the construction of the project "Ionian Center - Creation of a Culture and Youth Center," the contract for which was signed on 11.01.2023 by TERNA S.A., with a budget of 29.4 mn euros and a construction duration of 27 months.
• On 31.03.2023, the joint venture TERNA - INTRAKAT, in which the subsidiary TERNA S.A. participates with a 65% stake, signed a contract with the Ministry of Citizen Protection for the construction of the project "Construction of Artificial Barrier and Associated Works, along the Methori E/T, in the area of Psathades Didymoteicho until Kornofolia Soufli, in the Regional Unit of Evros," with a budget of 78 mn euros and a construction duration of 14 months.
• On 06.04.2023, THERMOELECTRIC KOMOTINI S.A., in which GEK TERNA jointly participates with the MOTOR OIL Group with a 50% stake, signed a program for a Common Bond Loan agreement with Greek creditor banks for a total amount of 325 mn euros for the purpose of developing and building the new state-of-the-art Combined Cycle Gas Turbine Station with natural gas as fuel aiming at a total installed capacity of 877 MW, located in the Industrial Area of Komotini.
• On 21.04.2023, the company PASIFAI ODOS S.A., in which GEK TERNA participates with a 55% stake, undertook the project "Northern Road Axis of Crete (BOAK): Study, Construction, Financing, Operation and Maintenance of Hersonissos - Neapolis, with PPP." The duration of the concession is 30 years, of which 4 years refer to the construction period and 26 years to the operation period.
Additionally, the joint venture TERNA S.A. - AKTOR S.A. - INTRAKAT VOAK PPP, in which the subsidiary company TERNA S.A. participates with a 55% stake, signed a contract with PASIFAI ODOS S.A. for the project "Northern Road Axis of Crete (BOAK): Study, Construction, Financing, Operation and Maintenance of Hersonissos - Neapolis, with PPP," with a contract value of 240.4 mn euros.
• On 21.04.2023, the subsidiary TERNA S.A. signed a contract with PUMPED STORAGE I S.M.S.A for the construction of the "Amfilochia Pumped Storage Electric Station" with a capacity of 680 MW. This project involves Road Construction and Tunnel Projects for the Amfilochia Pumped Storage Project, with a budget of 587.3 mn euros. This agreement constitutes an extension of the existing contract for preliminary works signed on 10.11.2022, with a budget of 36.3 mn euros. The total budget for the project amounts to 623.58 mn euros.
• On 21.04.2023, the subsidiary TERNA ENERGY S.A. signed a contract with OASA S.A. for the construction of the project "Procurement, Installation, Testing, Setting to operation, Maintenance and Technical Support of a Unified, Automatic Toll Collection System Equipment (ATCSE) of the extension of Metro Line 3 to Piraeus and of the Tram Extension to Piraeus", with a budget of 6.6 mn euros.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
12
• On 28.04.2023, it was announced that following the annual audit carried out by the Nominations Committee, it was confirmed that on the date of the audit, the members of the Board of Directors and of the Committees had met the individual criteria set by the Suitability Policy, i.e. adequacy of knowledge and skills, guarantee of ethics and reputation, absence of conflict of interest, independence of judgement, and availability of sufficient time. Especially for the independent members of the Board of Directors and Committees (including Mr. Angelos Tagmatarchis, third person/non-member of the Board of Directors and member of the Audit Committee) the fulfilment of the independence criteria of Article 9 of Law 4706/2020 was confirmed, with the exception of Mr. Apostolos Tamvakakis, for whom the Committee found that he had ceased to meet the independence criteria, as he had completed nine (9) years as member of the Company's Board of Directors and became a non-executive member of the Board of Directors, retaining the position of Vice Chairman and he was replaced in the position of Chief Independent Director by Mr. Spyridon Capralos.
Following the above, the composition of the Board of Directors of "GEK TERNA S.A." was formulated as follows:
1. Peristeris George, Chairman and Chief Executive Officer, Executive Member
2. Tamvakakis Apostolos, Vice Chairman of BoD, Non-executive Member
3. Gourzis Michail, Vice Chairman of BoD, Executive Member
4. Lazaridou Penelope, Executive Director, Executive Member
5. Benopoulos Aggelos, Executive Director, Executive Member
6. Antonakos Dimitrios, Executive Member
7. Lamprou Konstantinos, Executive Member
8. Moustakas Emmanuel, Executive Member
9. Souretis Petros, Executive Member
10. Afentoulis Dimitrios, Non-Executive Member
11. Apkarian Gagik, Independent Non-Executive Member
12. Delikoura Aikaterini, Independent Non-Executive Member
13. Capralos Spyridon, Independent Non-Executive member, Chief Independent Director
14. Skordas Athanasios, Independent Non-Executive Member
15. Staikou Sophia, Independent Non-Executive Member
Also, the Board of Directors decided after the loss of the status of independent member by Mr. Tamvakakis, the Nominations Committee was reconstituted into a body and Mr. Spyridon Capralos was elected as its Chairman with Ms. Delikouras, Mr. Apkarian, and Mr. Tamvakakis as its members.
• On 02.05.2023, GEK TERNA sold and transferred for a price of 12.2 mn euros to the company named SHRE/SHRI L.L.C., a member of the HARD ROCK Group, all the issued shares of the company named MGE HELLINIKON B.V., which were owned by GEK TERNA. MGE HELLINIKON B.V. participates with a percentage of 51% in the share capital of IRC HELLINIKON S.A. which has signed the Concession Agreement and has undertaken the project of developing and operating a wide range of casinos in the Hellinikon Metropolitan Area. The above transfer took place after receiving the relevant approvals from the Gaming Supervision and Control Committee and following the
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transaction, GEK TERNA owns (directly and indirectly) a 49% stake in IRC HELLINIKON S.A. All construction works will be carried out by TERNA S.A., a 100% subsidiary of the GEK TERNA Group.
• On 17.05.2023, the subsidiary company of the Group, ΤΕRΝΑ ENERGY S.A. jointly with the company GRID TELECOM SINGLE MEMBER SOCIETE ANONYME established the company under the name TERNA FIBER SPECIAL PURPOSE SOCIETE ANONYME COMPANY. The company is a special purpose company for the execution of the Partnership Agreement that will be signed between the Greek State through the Minister of Digital Governance (hereinafter "the Contracting Authority"), the Company and the founders - initial shareholders of the Company as third parties, for the execution of the "ULTRA FAST BROADBAND infrastructures through PPP" project for Geographical Zones 2, 4, 5 and 6, as referred to in the Invitation to Expression of Interest and in the Issue of Invitation to Submit Binding Offers.
• On 19.05.2023, the joint venture TERNA S.A. - AKTOR S.A. - METKA S.A., in which the subsidiary TERNA S.A. participates with a percentage of 40%, signed a contract with the MUNICIPALITY OF ATHENS for the construction of the project "Construction of the New Football Stadium of Panathinaikos in Votanikos", amounting to 96.8 mn euros with a construction duration of 36 months.
• On 24.05.2023, the Board of Directors of the subsidiary company TERNA ENERGY, decided the increase of the Share Capital of the subsidiary by the amount of Six Hundred Seventy Five thousand euros (675,000.00 euros) by issuing Two Million Two Hundred Fifty Thousand (2,250,000) new common registered shares with voting rights, with a nominal value of thirty euro cents (0.30 euros) per share, via the capitalization of share premium reserves and their free distribution to Executive Members of the Board of Directors and senior management of the subsidiary, in accordance with the approved Bonus Shares Distribution Scheme. Prior to that, on January 18, 2023 the Board of Directors of the subsidiary had decided the increase of the Share Capital by the amount of Three Hundred Sixty thousand euro (360,000.00 euros) by issuing One Million Two Hundred Thousand (1,200,000) new common registered shares with voting rights, with a nominal value of thirty euro cents (0.30 euros) per share, via the capitalization of share premium reserves. These decisions are related to the achievement of targets representing in total 90% of all the shares included in the Bonus Shares Distribution Scheme.
• On 31.05.2023, the Joint Venture TERNA S.A. - FOTAGONLED S.A., in which the subsidiary TERNA S.A. participates with a 50% stake, signed a contract with the Municipality of Ioannina for the implementation of the project "Provision of Energy Efficiency Upgrade Services for the road and urban lighting system of the Municipality of Ioannina", with a budget of 15.3 mn euros and a construction duration of 12 months.
• On 20.06.2023, the Ordinary General Meeting of Shareholders of GEK TERNA was held, in which 150 Shareholders, holders of 54,075,651 shares and voting rights, namely 56.08% of the Share Capital, were legally present.
The decisions of the Ordinary General Meeting for the financial year 01.01 – 31.12.2022 were the following:
1. Approval of the Financial Statements
2. Approval of the Annual Report of the Audit Committee
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3. Announcement of the election of the new executive member of the Board of Directors, Mr. Petros Souretis
4. Submission of the report of the independent members of the Board of Directors
5. Approval of the overall administration and management for the year 2022 by the members of the Board of Directors
6. Release of the Chartered Auditor Accountant from any responsibility for compensation from the exercise of the respective duties
7. Approval of the Remuneration Report of the members of the Board of Directors for the year 2022
8. Approval of the new Remuneration Policy for the period 2023 – 2027
9. Election of an auditing company for the audit of the Financial Statements for the year 2023
10. Election of a new four-member Audit Committee with a two-year term
11. Decision to increase the share capital of the Company by the amount of 20,684,658.20 euros by capitalizing part of the special share premium reserve, through an increase in the nominal value per share from 0.57 euros to 0.77 euros, and also with a simultaneous reduction of the share capital by the amount of 20,684,658.20 euro and a corresponding reduction of the nominal value per share from 0.77 euros to 0.57 euroS and the return of the amount of the reduction, 0.20 euros per share, to the Company’s Shareholders.
The Ordinary General Meeting of the Company's Shareholders on 20.06.2023 elected the following Audit Committee for a two-year term, automatically extended until the first Ordinary General Meeting after the end of its term:
- Spyridon Capralos, independent non-executive member of BoD,
- Apostolos Tamvakakis, non-executive member of BoD,
- Athanasios Skordas, independent non-executive member of BoD,
- Aggelos Tagmatarchis, third party, non-member of BoD who meets the independence conditions of article 9 of law 4706/2020.
The Audit Committee, during its meeting on June 20, 2023, was constituted into body with Mr. Spyridon Capralos, an independent non-executive member of the BoD, as Chairman.
• On 30.06.2023, the joint venture TERNA S.A. – P and C DEVELOPMENT S.A., in which the Subsidiary TERNA S.A. participates with a percentage of 50%, signed a contract with the company AMFIKTYONIES S.A. for the construction of the "Exploitation of the Panhellenic Exhibition area of Lamia" project, amounting to 38.2 mn euros with a construction duration of 32 months.
• On 03.07.2023, the subsidiary TERNA S.A. signed a contract with FOIVI ENERGY S.P.E. S.A. for the construction of the project "Study, Civil Engineering Works, Procurement (except PV Panels), Transport, Installation, and Commissioning of one (1) Photovoltaic (PV) Station, with a total nominal power of 550 MW, within Lignitic Center of Western Macedonia, in the location "PPC Ptolemaida Mine" of the Municipalities of Eordaia and Kozani, of the Region of Western Macedonia and Projects of Connecting it to the System", amounting to 178.1 mn euros.
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• On 04.07.2023, the Board of Directors of subsidiary GEK TERNA CONCESSIONS S.M.S.A. approved a Share Capital Increase of the company THERMOELECTRIC KOMOTINI S.A. in which it participates with 50%, for the amount of 24 mn euros, paying 12 mn euros. The remaining 50% was covered by MOTOR OIL S.A.
The share capital increase of THERMOELECTRIC KOMOTINI S.A., the granted Bond Loans by the Shareholders for the amount of 102.74 mn euros, as well as the already drawn-down amounts of the Syndicated Bond Loan of 183.8 mn euros, will be used for the construction project "Combined Cycle Gas Turbine Station fueled by natural gas, with an installed capacity of 877 MW in VI.PE. Komotini" , with a budget of 375 mn euros. The commercial operation of the plant is expected within 2024.
• On 12.07.2023, the subsidiary TERNA S.A. signed a Preliminary Share Transfer Agreement for the acquisition of 49.99% of the societe anonyme company AIGISTOS S.A., which concerns its construction objective, subject to the fulfillment of specific terms and conditions, such as the approval by the Commission of Competition, without reservation, conditions or limitations. On 28.12.2023 the acquisition of 49.99% of the shares of AIGISTOS S.A. by the subsidiary TERNA S.A. was completed.
• On 02.08.2023, GEK TERNA S.A. announced the decision of the Board of Directors concerning the election of the independent non-executive member of the Board of Directors Mr. Spyridon Kapralos, as Vice Chairman of the Board of Directors and the appointment of the executive member of the Board of Directors Mr. Petros Souretis, as Executive Director of the Company, while Mr. Dimitrios Antonakos became non-executive member of the Board of Directors, remaining at the same time Regulatory Compliance Officer and Risk Management Officer of the Company.
Following these changes, the new composition of the Board of Directors of GEK TERNA S.A. is as follows:
1) Peristeris George , Chairman and Chief Executive Officer, Executive Member
2) Capralos Spyridon, Vice Chairman, Independent Non-Executive member, Chief
Independent Director
3) Tamvakakis Apostolos , Vice Chairman, Non-Executive Member,
4) Gourzis Michail , Executive Member
5) Lazaridou Penelope, Executive Director, Executive Member
6) Benopoulos Aggelos, Executive Director, Executive Member
7) Souretis Petros, Executive Director, Executive Member
8) Lamprou Konstantinos, Executive Member
9) Moustakas Emmanuel, Executive Member
10) Antonakos Dimitrios, Non-Executive Member
11) Afentoulis Dimitrios, Non-Executive Member
12) Delikoura Aikaterini, Independent Non-Executive Member
13) Skordas Athanasios, Independent Non-Executive Member
14) Staikou Sophia, Independent Non-Executive Member
15) Apkarian Gagik Independent Non-Executive Member
Additionally, the Board of Directors decided to establish an Executive Committee, composed of the CEO of the Company, Mr. George Peristeris, the executive members of the Board of Directors,
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Mr. Emmanuel Moustakas, Aggelos Benopoulos, Petros Souretis, and Ms. Penelope Lazaridou, as well as Mr. George Perdikaris, Management Consultant, with administrative and strategic implementation responsibilities for the Company.
Subsequently, the Board of Directors decided to streamline the Company's operations by merging the Nominating Committee and the Compensation Committee into a single committee. Additionally, the optional Committees that assist the Board of Directors in its work were reconstituted with the following composition:
NOMINATIONS AND REMUNERATION COMMITTEE
1. Capralos Spyridon , Chairman of the Committee
2. Tamvakakis Apostolos
3. Staikou Sophia
4. Delikoura Aikaterini
5. Skordas Athanasios
INVESTMENT COMMITTEE
1. Perdikaris George, non-member of the BoD, Chairman of the Committee
2. Lazaridou Penelope
3. Moustakas Emmanuel
4. Souretis Petros
5. Tamvakakis Apostolos
STRATEGIC PLANNING COMMITTEE
1. Peristeris Georgios, Chairman of the Committee
2. Perdikaris Georgios, (non-member of the BoD)
3. Capralos Spyridon
4. Moustakas Emmanuel
5. Tamvakakis Apostolos
6. Afentoulis Dimitrios
ESG COMMITTEE (ENVIRONMENT, SOCIETY, GOVERNANCE)
1. Staikou Sophia , Chairman of the Committee
2. Delikoura Aikaterini
3. Lamprou Konstantinos
4. Lazaridou Penelope
5. Chatziarseniou Dimitra, ( non-member of the BoD)
REGULATORY COMPLIANCE COMMITTEE
1. Skordas Athanasios, Chairman of the Committee
2. Delikoura Aikaterini
3. Antonakos Dimitrios
4. Chatziarseniou Dimitra, (non- member of the BoD)
Also, the Board of Directors decided to create the General Directorate of Corporate Activities, which will be headed by the new Executive Director Mr. Petros Souretis and which will govern the
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Real Estate Projects Development Division and the Division of Supervision / Operation of subsidiaries / holdings (except for subsidiaries with independent organizational structure such as TERNA ENERGY, TERNA, HERON, etc.), where the Digital Technology / IoT Segment, the Services Segment and the Mining Activities Segment will be included.
Also, due to the ever-expanding scope and importance of corporate social responsibility and sustainable development (ESG) issues as well as of strategic communication and public relations, the relevant Directorate was upgraded to a General Directorate of Corporate Relations and Sustainable Development, which be headed by the executive member of the Board of Directors Mr. Konstantinos Lambrou, and which include the Press Office, the Communication and Public Relations Department, which also include the Strategic Communication and Public Relations Department, which include the Digital and Social Media Department and the Department of Internal Communication, as well as the Corporate Social Responsibility and Sustainable Development Department.
• On 07.08.2023, the subsidiary TERNA S.A. signed a Contract with ELEKTRA NORTHERN GREECE HOTELS S.A., for the construction of the project "Construction of a Hotel Unit of "ELEKTRA NORTHERN GREECE HOTELS S.A." at the junction of Tsimiski and Ethnikis Amynis streets", amounting to 20 mn euros.
• On 07.08.2023, the subsidiary TERNA S.A. signed a Contract with EGNATIA ODOS S.A., for the construction of the project "Egnatia Odos: Operation and Maintenance of the Motorway in the Western Sector and on the Vertical Axis A29, year 2023 (no. 6073)" , amounting to 10 mn euros.
• On 07.08.2023, the subsidiary TERNA S.A. signed a Contract with EGNATIA ODOS S.A., for the construction of the project "Egnatia Odos: Operation and Maintenance of the Motorway in the Western Sector and on the Vertical Axes A1, A25 and A23, year 2023 (no. 6074)", amounting to 7.5 mn euros.
• On 09.08.2023, the subsidiary TERNA S.A. signed a Contract with the TECHNICAL CHAMBER OF GREECE, for the construction of the "Property Utilization through Consideration, TCoGE Ownership" project, amounting to 43.5 mn euros.
Subsequently, the company DI TERNA S.M.S.A.S.P. was established, to which the subsidiary TERNA S.A. assigned the Contract with the TECHNICAL CHAMBER OF GREECE, and on 16.11.2023 signed the construction contract with DI TERNA S.M.S.A.S.P. for the construction of the project “Construction of a new office building complex with two underground levels, green roof, and surrounding area” , amounting to 38.9 mn euros. The parent company GEK TERNA SA holds a 19% stake in this company.
• On 29.08.2023, the payment of the capital return of 0.20 euro/share to the Company's shareholders commenced. The aforementioned capital return was approved by the Ordinary General Meeting of the Company's Shareholders on June 20, 2023.
• At the end of August 2023, the installation of all Wind Turbines of the Group's Wind Park Complex in the area of Karystos and Kafirea with a total capacity of 327 MW was completed. This project is the largest project of TERNA ENERGY sub-Group in the field of renewable energy and Wind Energy in particular.
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• On 12.09.2023, the subsidiary TERNA S.A. signed a Contract with ADMIE S.A., for the construction of the project “Study, Supply of Equipment and Installation for section A: “Y/S GIS 150kv/MT Folegandros and Milos” within the framework of the 4th Fase of interconnection of the Cyclades”, amounting to 40.9 mn euros.
• On 14.09.2023, the Board of Directors of Hellenic Republic Asset Development Fund (HRADF) declared the GEK TERNA Group as Preferred Investor for the award of a service concession contract for the financing, operation, maintenance, and exploitation of the 70-km long Attica Motorway for a period of 25 years. The total price, based on the financial offer submitted by GEK TERNA in the relevant tender, amounts to 3.270 bn euros.
• On 27.10.2023, the subsidiary TERNA S.A. signed a contract with TRANS ADRIATIC PIPELINE A.G. for the construction of the "TAPX1 Expansion - Construction Works (Greece)" project, amounting to 20 mn euros with a construction duration of 19 months. This is an expansion of the existing compression station in Kipoi, Evros.
• On 21.12.2023, the merger through absorption of HERON II VOIOTIAS S.A. by HERON ENERGY S.A. was implemented, with GEK TERNA Group continuing to be the exclusive 100% shareholder.
• On 21.12.2023, the subsidiary TERNA S.A. signed a contract with the Ministry of Culture for the construction of the "Conversion of the "SILO" building into a Museum of Marine Antiquities" project, amounting to 66.8 mn euros with a construction duration of 24 months.
• On 22.12.2023, the subsidiary TERNA S.A. signed a contract with AMYNTEO SOLAR PARK NINE S.M.S.A. for the construction of the "Engineering, Procurement and Construction of the 449.98 MWp Oricheio Amyntaio Solar PV Plant" project, amounting to 133 mn euros with a construction duration of 22 months.
• On 28.12.2023, the subsidiary TERNA S.A. signed a contract with THE GRID S.A. for the construction of the "Construction of a five-story complex of office buildings with three underground parking spaces on Heimaras 10-12, Amarousiou-Chalandriou and Gravia streets" project, amounting to 96.5 mn euros with and construction duration of 17 months.
• Within 2023, the subsidiary TERNA S.A. signed new contracts of small value, as well as extensions of existing project execution contracts, amounting to 290 mn euros.
Key Financial Performance of the Operating Segments for the Year 2023
The financial analysis of the operating segments mentioned below records the performance of these segments, before performing the intersegmental elimination, which are accounted for in accordance with the provisions of IFRS for the purposes of preparing the consolidated financial statements of GEK TERNA.
Construction Operating Segment
TERNA S.A., the construction arm and fully owned by 100% subsidiary of GEK TERNA, is one of the strongest Greek construction companies, specializing in complex and demanding infrastructure projects, by also being a partner that international groups select to work with, possessing at the same
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time experience inside and outside Greece. TERNA also generates significant synergies with the other segments of the Group, and particularly in concessions and energy.
Revenues from construction activities increased significantly, while the construction backlog has been maintained at high levels, reaching approximately 2.8 bn euros on 31.12.2023. It should be noted that the outstanding balance as of 31.12.2023 towards third parties does not include the cross-segmental outstanding item of 0.6 bn euros, which concerns the construction works for the implementation of Amfilochia Pumped Storage project. Furthermore, the Group is awaiting the signing of contracts for new projects for which it has been qualified, amounting to 1.9 bn euros, of which 0.2 bn euros concern the execution of public constructions, 0.1 bn euros concern the execution of private constructions and 1.6 bn euros concern the Group investments (Egnatia, IRC HELLINIKON S.A. etc.).
Turnover of the Construction Operating Segment settled at 1,413.3 mn euros compared to 1,024.2 mn euros in the corresponding period of 2022 enhanced by 38.0%. The increase in turnover was mainly due to the increase in construction activity in public and private infrastructure projects and the implementation of the Group's investment plan, such as the construction of the new natural gas-fired electric energy production unit at the new Heraklion International Airport in Crete, the construction of wind farms, as well as waste management projects and other facilities.
Adjusted EBITDA (EBITDA plus non-cash results included therein) amounted to 136.6 mn euros compared to 80.6 mn euros in the respective period of 2022 higher by 69.5%, due to the increase in construction revenue and the improvement in the profit margin of ongoing projects.
Operating Results before interest and taxes (EBIT) amounted to 118.4 mn euros compared to 62.8 mn euros in the respective period of 2022 significantly increased by 88.5% due to the aforementioned reasons.
Earnings before taxes in 2023 amounted to 108.8 mn euros compared to 66.4 mn euros in the corresponding period of 2022.
Earnings after taxes in 2023, stood at 78.3 mn euros compared to 47.9 mn euros in the respective period of 2022.
Revenues of the Construction segment towards third parties arise from the operations: a) in Greece and Cyprus at percentage of 96% and b) in Balkan countries at percentage of 4%.
The Net Debt of the Construction Operating Segment stood at minus -86.9 mn euros approximately, compared to minus -120.7 mn euros on 31.12.2022.
The high backlog of 5.3 bn euros of construction works, the experience possessed in the execution and construction of major road, building and large-scale energy projects, as well as the established presence of the subsidiary TERNA S.A. in the markets in which it operates, combined with the positive growth prospects of the Greek economy, support the further improvement of the financial performance and the broader course of this operating segment within the Group.
Energy Production Operating Segment from RES
GEK TERNA Group, operating in the energy segment through the sub-Group TERNA ENERGY S.A. since the mid-1990s, is one of the leading players in the Renewable Energy Segment (RES).
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The shift to Renewable Energy Sources (RES) is confirmed worldwide, with the segment being one of the top investment destinations for the coming years. In this context, TERNA ENERGY sub-Group continues the development of selected RES projects in Greece at a high pace, in order to lay the solid foundation for the sustainable development of the company, which is the long-term objective of its strategic planning for the next 10 years and at the same time, by capitalizing on its experience, is intensifying its efforts in order to further expand its presence in Poland and Bulgaria.
TERNA ENERGY Sub-Group, during 2023, continued the implementation of its investment plan with the construction of mature projects and the strengthening of its portfolio with additional mature projects from the existing portfolio and the addition of new ones at various stages. As part of this plan, the connection to the network of the wind park complex in Kafirea with a total power of 327 MW was completed during the year, with the project now being fully operational at the date of publication of the financial statements.
Furthermore, with regard to the long-term storage project with pumped storage technology in the area of Amfilochia (680 MW) which had already started by the end of 2022, it is noted that its construction work continues and is expected to be completed in about three years.
As of 31.12.2023, the sub-group TERNA ENERGY has almost 2,500 MW of capacity from RES electric energy production units, which are in operation, under construction or ready for construction in Greece, Central and Eastern Europe, including projects in various stages of maturity, the Group's portfolio approaches 12 GW.
Specifically, the sub-group's total installed capacity in Greece and abroad amounts to 1,223.8 MW.
Specifically in the energy segment, the installed capacity settled as follows:
TOTAL
GREECE
POLAND
BULGARIA
WIND PARKS
1,193.4
1,061.4
102
30
HYDROELECTRIC
17.8
17.8
PHOTOVOLTAIC
8.5
8.5
BIOMASS
4.1
4.1
TOTAL
1,223.8
1,091.8
102
30
Revenues from continuing operations during the year 2023 in the segment of Electricity Production from Renewable Energy Sources, amounted to 249.9 mn euros compared to 236.2 mn euros in the respective period of 2022, recording an increase of 5.8%. %. This increase is mainly due to the commissioning of the new wind farms in the area of Kafireas in Evia. The limited increase in sales was significantly impacted by the reduced wind power recorded during the first half of 2023.
Adjusted EBITDA (EBITDA from continuing operations plus non-cash results included therein) settled at 171.4 mn euros compared to 161.1 mn euros in the respective period of 2022, posting an increase of 6.4%.
Operating Results before interest and taxes (EBIT) from continuing operations amounted to 120.8 mn euros compared to 71.7 mn euros in the corresponding period of 2022 and are increased of 68.5%, mainly due to the reduced expense from the program distribution of free shares in the amount of 0.6 mn euros, against 48.8 mn euros of the previous year.
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Earnings before taxes amounted to 72.5 mn euros compared to 34.1 mn euros in the corresponding period of 2022 , negatively affected by the expense recorded for the company’s stock options plan, i.e. distribution of bonus shares, amounting to 48.8 mn euros.
Earnings after taxes accounted for 55.2 mn euros compared to 18.0 mn euros in the corresponding period of 2022 , positively impacted by the above reasons.
The investments of TERNA ENERGY sub-Group amounted to 218.4 mn euros in 2023, which includes the cross-segmental payment for the execution of works in the project "Amfilochia Pumped Storage Electric Energy Storage Station" amounting to 66.5 mn euros.
The continuing investment activity of TERNA ENERGY sub-Group in the field of Renewable Energy Sources (RES), an area of great investment interest on global scale as it aims to reduce air pollution, creates the conditions for an even stronger revenue flow and profitability on a stable long-term basis.
The Net Debt in the segment of Electricity Production from Renewable Energy Sources settled at approximately 855.8 mn euros compared to 668.3 mn euros on 31.12.2022.
Operating Segment of Electric Energy Production from Thermal Energy Sources – Electric Energy
Sales
GEK TERNA Group is active in the field of Electricity and Natural Gas Production, Distribution and Trading through the subsidiary companies HERON ENERGY S.A. and HERON II VOIOTIAS S.A.
The Group, in the context of its decision to increase its participation in the area of Thermal Energy Sources and Electricity Trading, completed within 2022 the implementation of the agreement dated on 12.07.2021 for the acquisition of the additional equity stakes of 50% and 75% in the companies HERON ENERGY S.A. and HERON II VOIOTIAS S.A., which operate two power plants with a total capacity of 588 MW, fueled by natural gas.
At the same time, for the rational management of the two companies, their merger was implemented on 21.12.2023, which was done by the absorption method of HERON II VOIOTIAS S.A. from HERON ENERGY S.A., with GEK TERNA Group continuing to be the exclusive 100% Shareholder.
In the Electric Energy Production segment, the Group managed to ensure the uninterrupted, competitive and flexible supply of its generation stations, successfully addressing the challenges arising from new market conditions. Those conditions included the volatility of international natural gas prices, the high liquidity needs to ensure supply, especially when importing liquefied natural gas, but also the constantly changing production costs of the generation stations, mainly in relation to the electricity clearing prices of the neighboring countries.
The total participation of the energy production units of the companies HERON ENERGY S.A. and HERON II VOIOTIAS S.A., with a total capacity of 588 MW, settled during 2023 at 11.3% of the broader energy production from natural gas plants in Greece, thus comprising a strong pillar in the country’s strategy to ensure energy sufficiency. The Group's production derives to a very large extent from the operation of HERON II combined cycle plant, which produced a total of 1,719 GWh during year 2023.
In the Segment of Electricity Distribution to final consumers, the gradual normalization of energy prices helped to stabilize the market. The company HERON ENERGY S.A. managed to increase its market share
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to 10.8%. The company, within 2023, achieved its ranking among the top independent energy suppliers in terms of market share.
Revenues from continuing operations in the Electricity Production from Thermal Energy Sources – Electric Energy Sales settled at 1,711.0 mn euros compared to 2,661.1 mn euros in 2022, posting a significant decrease of 35.7% that was mainly due to the following:
a) in the price decalcification of electricity sale prices following the reduction in the wholesale price of electricity (DAM), due to the significant reduction in Natural Gas prices in Europe and
b) the reduction in electricity demand during 2023, due to milder weather conditions, but also by measures to limit consumption by households and businesses.
Adjusted EBITDA (EBITDA plus non-cash results included therein) amounted to 131.8 mn euros compared to 335.5 mn euros in the corresponding period of 2022 and is significantly reduced for the aforementioned reasons.
Operating Results before interest and taxes (EBIT) from continuing operations amounted to 88.9 mn euros compared to 276.0 in the corresponding period of 2022 and is significant decreased for the aforementioned reasons.
Earnings before taxes amounted to 106.3 mn euros compared to 260.3 mn euros in the corresponding period of 2022.
Earnings after taxes amounted to 77.2 mn euros compared to 198.4 mn euros in the period of 2022.
The Group's investments in the segment of Electric Energy Production from Thermal Energy Sources amounted to 2.8 mn euros in 2023.
The Net Debt of the segment of Electricity Production from Thermal Energy Sources – Electric Energy Sales amounted to approximately 50.4 mn euros compared to minus -6.2 mn euros on 31.12. 2022.
Concessions – Self or Jointly Financed Projects Operating Segment
In the Operating Segment of Concessions, the Group participates:
➢ with a percentage of 100% in the Motorway Concession companies NEA ODOS SOCIETE ANONYME CONCESSION and CENTRAL GREECE MOTORWAY SOCIETE ANONYME CONCESSION,
➢ with a percentage of 32.46% in the Concession Company of Kasteli Airport INTERNATIONAL AIRPORT HERAKLION CRETE SOCIETE ANONYME CONCESSION,
➢ with a percentage of 49% through the company IRC HELLINIKON S.A. in the construction, development, and operation of (a) a five (5) star hotel, (b) a conference and exhibition center, (c) an audience gathering place for sports and cultural events and (d) a casino area. The duration of the concession is 30 years,
➢ with a percentage of 55% through the company PASIFAI ODOS S.A. in the construction of the project "Northern Road Axis of Crete (BOAK): Study, Construction, Financing, Operation and Maintenance of the Section Hersonissos - Neapoli, with PPP" . The duration of the concession is 30 years, of which 4 years refer to the construction period and 26 years to the operation period,
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➢ with a percentage of 17% in the Motorway Concession Company OLYMPIA ODOS SOCIETE ANONYME CONCESSION,
➢ with a percentage of 70% in the Electronic Ticket Service Provider Societe Anonyme - HELLAS SMARTICKET S.A., which undertook from the Athens Urban Transport Organization S.A. (AUTO), the Partnership Agreement for the “Study, Financing, Installation, Operational Support, Maintenance and Technical Management of a Unified, Automatic Toll Collection System for the AUTO Group of companies based on a PPP scheme” . The term of the concession has been set at 10 years after the construction period,
➢ with a percentage of 35% through the company SARISA SUB-CONCESSION S.A. for the right to use, maintain, operate and exploit a multi-purpose station, in a part of the Philip II port of ORGANISATION KAVALA PORT S.A,
➢ with a percentage of 100% in PERIVALLONTIKI OF PELOPONNESE S.M.S.A, which has undertaken in the Peloponnese Region the construction of PPP project "Integrated Waste Management of Peloponnese" , where in 2023 the Integrated Management Unit of Arcadia, the Waste Transfer Stations of Argolida and Corinthia and the Transitional Management Units of Messinia and Laconia were put into commercial operation,
➢ with a percentage of 100% in the company AEIFORIKI EPIRUS S.M.S.A.S.P., which is active in the operation of the Waste Management Unit of Epirus with a maximum annual capacity of 105,000tn, the operation of which started on 27.03.2019. The duration of the Concession has been set for 27 years and
➢ with a percentage of 70% in the Joint Venture TERNA ENERGY - INDIGITAL - AMCO with which it signed a contract for the project "Digital Transformation, Telematics, and the Unified Automated Collection System for Thessaloniki (ACST)".
Finally, the Group's business activity in the Car Parking Station Management and Operation Segment continued for 2023, and the number of car parking spaces attributed to the Group as a whole amounts to 2,171.
Revenues of the Concessions Operating Segment amounted to 227.5 mn euros compared to 202.0 mn euros in the corresponding period of 2022. The increase was mainly due to improved vehicle traffic at NEA ODOS and CENTRAL GREECE highways by 9.1%, compared to the corresponding period of 2022, as well as the increase in return on investment in the waste management of the Epirus and Peloponnese regions.
Adjusted EBITDA (EBITDA plus non-cash results included therein) settled at 164.8 mn euros compared to 111.7 mn euros in the corresponding period of 2022 recording an increase by 47.5%. This increase stems from the improved Turnover of the Segment and, as well as from increased compensation from loss of revenues of the concession companies, due to Public Liability Events, which are reported in Other Income.
Operating Results before interest and taxes (EBIT) amounted to 79.0 mn euros compared to 41.1 mn euros in corresponding period of 2022, posting an increase of 92.2% for the reasons mentioned above.
Earnings before taxes amounted to 16.2 mn euros compared to minus -80.8 mn euros in the corresponding period of 2022. The positive difference of 97 mn euros is mainly due to: a) the increased
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operating results of the period (before the effect of the results from derivative valuations), as above and b) in the change in fair value which comes mainly from subsidiary Concession company CENTRAL GREECE MOTORWAY S.A., both the embedded derivative and the Interest Rate Swaps, which amounted to minus -5.5 mn euros, compared to minus -74.7 mn euros in the corresponding period of 2022.
The fluctuations in the loan rates of the Greek State and the six-month Euribor, which respectively affect the valuations of derivatives, are mainly due to the volatility of interest rates at the European level, due to geopolitical developments, the energy crisis, and inflationary pressures. It should be noted that the changes in valuations do not have any substantial impact on the Operating results, Cash Flows and Equity of the Group respectively, since the amounts compensated have been calculated at constant prices for the entire duration of the concessions.
Earnings after taxes settled at 21.9 mn euros compared to minus -51.1 mn euros in the corresponding period of 2022. The change in the result from a loss to a profit is due to the improvement in the results from the segment's business on the one hand and to the improvement in the valuations of both the embedded derivative and the Interest Rate Swaps on the other hand.
The Net Debt of the Concessions Operating Segment amounted to approximately 603.7 mn euros compared to 618.8 mn euros on 31.12.2022.
Real Estate Operating Segment
GEK TERNA Group is active in the management and sale of real estate assets holding a broad portfolio of value of 127.2 mn euros in Greece, Bulgaria and Romania that includes shopping centers, industrial parks, leisure parks, hotels, plots, and lands in tourist destinations, etc. In this context, with cautious steps the Group has restarted its investment activities in the domestic real estate market. At the same time, the Group examines alternative scenarios for the utilization of its portfolio and whenever it deems appropriate it will proceed with additional investments.
Revenues of the Real Estate Operating Segment amounted to 4.7 mn euros compared to 3.9 mn euros in the corresponding period of 2022.
Adjusted EBITDA (EBITDA plus non-cash results included therein) settled at 0.2 mn euros compared to negative -0.2 mn euros in the corresponding period of 2022.
Operating Results before interest and taxes (EBIT) settled at 7.3 mn euros compared to negative -0.9 mn euros in the corresponding period 2022. The significant increase in earnings was positively impacted by the Revaluation of fair value of investment properties, whose value increased significantly as a result of the demand for the development of upgraded tourist accommodation facilities.
Earnings before taxes stood at 3.2 mn euros compared to 2.9 mn euros in the corresponding period of 2022, affected by the positive valuation of the aforementioned increase in the value of investment properties and the negative valuation of a specific fixed asset of the segment.
Earnings after taxes settled at 1.4 mn euros compared to 2.6 mn euros in the corresponding period of 2022, due to the non-recurrence of profits from related companies in the segment, which existed in 2022.
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The Net Debt of the Real Estate Operating Segment amounted to approximately 84.4 mn euros compared to 83.3 mn euros on 31.12.2022 .
Industry/Quarry Operating Segment
The Group, via the fully owned by 100% subsidiary TERNA MAG S.A. (through the mining licenses and concessions it possesses), is active in the mining and processing of limestone and magnesium, as well as in its industrial processing for the production of caustic and refractory magnesia products of various qualities and chemical characteristics, which are being sold mainly to foreign customers.
Revenues from the Industry / Quarry Operating Segment, settled at 20.6 mn euros in 2023, compared to 18.7 mn euros in the corresponding period of 2022, posting an increase of 10.2%.
Adjusted EBITDA (EBITDA plus non-cash results included therein) settled at 1.2 mn euros during the year 2023, compared to 0.4 mn euros in the corresponding period of 2022. The above increase was mainly due to the increase in the selling price of products due to the quality upgrade of the sales mix, as well as due to the higher number of customers.
Operating Results before interest and taxes (EBIT) settled at minus -2.9 mn euros compared to minus -3.3 mn euros in the corresponding period of 2022. The positive difference was due to the reasons mentioned above.
Earnings before taxes settled at minus -13.6 mn euros compared to minus -17.2 mn euros in the corresponding period of 2022. The above results are significantly impacted by additional impairments of the value of the exploitation of the production factors (inventories, etc.), as a result of valuations for the future value of the segment, which are performed on a regular basis.
Earnings after taxes settled at minus -12.7 mn euros compared to minus -16.3 mn euros in the corresponding period of 2022.
The Net Debt of the Industry / Quarry Operating Segment amounted to approximately 115.1 mn euros compared to 106.1 mn euros on 31.12.2022.
Holding Operating Segment
Adjusted EBITDA (EBITDA plus the non-cash results) settled in 2023 at minus -13.1 mn euros compared to minus -12.4 mn euros in the corresponding period of 2022.
Operating Results before interest and taxes (EBIT) settled in 2023 at minus -14.7 mn euros compared to minus -15.7 mn euros in the corresponding period of 2022.
Earnings before taxes in 2023 settled at minus -21.5 mn euros compared to minus -6.6 mn euros in the corresponding period of 2022. This significant difference is due to the existence of reduced income of 4 mn euros from valuations of participations and other investments in 2023, compared to 21.7 mn in the corresponding period of 2022.
Earnings after taxes in 2023 settled at minus -30.5 mn euros compared to minus -6.3 mn euros in the corresponding period of 2022. The difference is due to the above-mentioned reasons, as well as to the significant increase in income tax, on the one hand, due to the existence of an intragroup tax gain which is eliminated in the Group's results and, on the other hand, to the write-off of tax advance claims for dividends distributed before 2013, as a result of the tax clarifications issued by the IAPR.
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The Net Debt of the Holding Operating Segment amounted to approximately 129.1 mn euros compared to 151.8 mn euros on 31.12.2022.
Intersegmental Transactions
During year 2023, Revenues of Intersegmental Transactions amounted to 131.6 mn euros compared to 210.6 mn euros in the corresponding period of 2022. The decrease in Revenues was mainly due to the lower intersegmental transactions in the segment of Electricity Production from Renewable Energy Sources and in the Concessions – Self or Jointly Financed Projects Operating Segment for the construction of the Waste Management Units of the Peloponnese region.
Adjusted EBITDA (EBITDA plus non-cash results included therein) settled in 2023 at minus -7.6 mn euros compared to minus -15.0 mn euros in the corresponding period of 2022.
Operating Results before interest and taxes (EBIT) stood at minus -3.5 mn euros compared to minus -15.9 mn euros in the corresponding period of 2022.
Earnings before taxes settled at minus -3.3 mn euros compared to minus -15.8 mn euros in the corresponding period of 2022.
Earnings after taxes settled at minus -3.3 mn euros compared to minus -15.8 mn euros in the corresponding period of 2022.
C. Significant Events after the end of the period 01.01 – 31.12. 2023
From 01.01.2024 until the date of approval of the attached financial statements, the following important events took place:
• On 12.01.2024, the Joint Venture TERNA S.A. – INTRAKAT S.A., in which the subsidiary TERNA S.A. participates with a percentage of 50%, signed a contract with EGNATIA ODOS S.A., for the construction of the project "Egnatia Odos: Operation and Maintenance of the Motorway in the Western Sector and on the Vertical Axis A29, year 2023-2025 (code 6060)", amounting to 68.7 mn euros.
• On 12.01.2024, the Joint Venture INTRAKAT S.A. – TERNA S.A., in which the subsidiary TERNA S.A. participates with a percentage of 50%, signed a contract with EGNATIA ODOS S.A., for the construction of the project "Egnatia Odos: Operation and Maintenance of the Motorway in the Eastern Sector and on the Vertical Axes A1, A25 and A23, year 2023-2025 (code 6061)", amounting to 57.1 mn euros.
• On 18.01.2024, the Company announced the successful completion of the private placement to selected institutional investors of 6,000,000 shares of the Company (i.e. 5.80% of the share capital) at a price of 13.20 euro per share.
• On 25.01.2024 the subsidiary TERNA S.A. signed a Preliminary Share Transfer Agreement for the acquisition of 100% of the shares of the anonymous company P and C DEVELOPMENT, concerning its construction part, subject to the approval of the relevant acquisition from Competition Commission .
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• On 13.02.2024, the Extraordinary General Meeting of Shareholders of GEK TERNA was held, in which 178 Shareholders, holders of 56,098,842 shares and voting rights, i.e. 58.78% of the Share Capital, legally attended .
The Extraordinary General Meeting of Shareholders adopted the following decisions:
1.
Approved the decision of the Board of Directors of 18.01.2024 regarding the definitive cessation of purchases of treasury shares under the treasury share purchase plan that was approved by the resolution of the Extraordinary General Meeting of the Company of 20.10.2022.
2.
Approved the increase of the Company's share capital, by the amount of 3,420,000 euros, by cash payment, through the issue of 6,000,000 common shares, with a nominal value of 0.57 euros each and with an offer price of 13.20 euros per share , and the exclusion of the preference right of the existing shareholders of the Company, in accordance with article 27 par.1 of Law 4548/2018, with the amount of 75,780,000 euros to be transferred to the special reserve of the Company from the issue of premium shares.
3.
Approved the cancellation of 6,000,000 treasury shares held by the Company, corresponding to 5.8% of the Company's share capital, and, consequently, the reduction of the Company's share capital by the amount of 3,420,000 euros.
4.
Approved the amendment of Article 5 par. 1 of the Company's Articles of Association as a consequence of the subjects 2 and 3.
5.
Approved the program for the purchase of treasury shares up to the completion of 10% of the Company's total shares, with a minimum purchase price of 0.57 euros and a maximum price of 40.00 euros per share, which will take place within a period of 24 months, i.e. no later than February 12, 2026, and authorized the Board of Directors of the Company to comply with all legal formalities related to the above approval.
6.
Approved the change of the name and the distinctive title of the Company and the amendment of article 1 of the Company's Articles of Association.
• On 15.02.2024, with the decision of RAAEY, the subsidiary company TERNA ENERGY S.A. was selected as one of the shortlisted bidders of the second (b) Competitive Bidding Procedure for the granting of investment and operational support to Electricity Storage Stations in accordance with the provisions of article 143F of Law No. 4001/2011, of a capacity of 40 MW and a capacity of 80 MWh.
• On 01.03.2024, following the decisions of the Extraordinary General Meeting of the Company's Shareholders held on 13.02.2024, the Decision of the Ministry of Development and - General Secretariat of Commerce No. 3230817/01.03.2024, by which the amendment of Article 5 of the Company's Articles of Association was approved following the increase and decrease of the share capital, as well as the Decision of the Ministry of Development - General Secretariat of Commerce No. 3230817/01.03.2024, by which the amendment of Article 1 of the Company's Articles of Association was approved regarding the change of the Company's name and distinctive title were registered in the General Commercial Registry (G.E.MI.) .
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• On 07.03.2024, the subsidiary company TERNA ENERGY S.A. signed the first ever PPA agreement in Greece, for a period of 8 years with an option for 4 additional years, under which it will supply EYATH with 100% green energy of up to 100 GWh/year. The energy will come from wind and photovoltaic parks.
• On 11.03.2024, 6,000,000 new common registered shares of the Company, with a nominal value of 0.57 euros each, were admitted for trading on the Main Market of the Athens Stock Exchange. The shares were issued as part of the increase of the Company's Share Capital by the amount of 3,420,000 euros, with the exclusion of the preference right of the existing shareholders, with cash payment and with an offering price of 13.20 euros, in accordance with the decision of the Extraordinary General Meeting of the Company's Shareholders of 13.02.2024. Also, on the same date, the trading of 6,000,000 treasury shares of the Company with a nominal value of 0.57 euros each ceased as they were delisted from the Athens Stock Exchange, with a consequent reduction of the Company's share capital by the amount of 3,420,000 euros, in implementation of the resolution of the Extraordinary General Meeting of Shareholders of the Company of 13.02.2024. The said admission of 6,000,000 new shares and the cancellation of 6,000,000 treasury shares were approved by the Listing and Market Operations Committee of the Athens Stock Exchange at its meeting on 06.03.2024. The total funds raised through the Increase, amounting to 79,200,000 euros, will be used to implement its investment program as reflected in its latest published financial statements and corporate presentation, as well as to undertake new projects within a period of 36 months. As a result of the above increase and decrease, the Company's share capital remained unchanged and amounts to a total of 58,951,275.87 euros and is divided into 103,423,291 common shares with voting rights, with a nominal value of 0.57 euros each.
• Also, in implementation of the relevant decision of the Extraordinary General Meeting of the Company's Shareholders held on 13.02.2024, the Company's name on the Athens Stock Exchange was changed to "GEK TERNA S.A." and its distinctive title to "GEK TERNA" as of 11.03.2024. For international transactions, the above name is attributed to "GEK TERNA S.A." and its distinctive title to "GEK TERNA".
• On 15.03.2024, following relevant publications and a relevant query of the Capital Market Commission and with the aim of officially informing the investing public, GEK TERNA S.A. and TERNA ENERGY S.A. announced that, as has been repeatedly mentioned by the Management of both companies in a series of official statements, TERNA ENERGY S.A. has been the recipient of significant interest from major international investors over the years. This interest is assessed on a case-by-case basis and if there is any development to be announced, GEK TERNA S.A. and TERNA ENERGY S.A., in the context of their consistent policy of transparent and responsible communication with the entire investment community, will proceed in a timely manner to inform the investment community.
• On 19.03.2024, the RENCO - TERNA Joint Venture was established, in which the subsidiary TERNA S.A. participates with a percentage of 50% and is expected to sign a contract for the construction of the first Microsoft Data Center in Greece and specifically in Spata, Attica.
It is an industrial-type facility, consisting mainly of mechanical and electrical equipment for data storage and processing in the Cloud and is structured as an Equipment Building (ATH04 Building) and an Administration Building (Admin Block) accompanied by a number of supporting facilities
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and infrastructure in the surrounding area, while its design follows the LEED (Gold Grade) certification requirements. The project budget amounts to 79.6 mn and foresees the completion of the design, the construction and commissioning of Microsoft's first Data Center, with a total installed capacity of 19.2MW.
• On 26.03.2024, GEK TERNA announced that it was declared as the temporary Contractor in the concession project "Study, Construction, Financing, Operation and Maintenance of the Northern Road Axis of Crete (BOAK) in the Chania - Heraklion section" .
The concession period is 35 years, of which up to five (5) years is the design-construction period. The total length of the Chania-Heraklion section is 187 km (including 30 km for the optional Kissamos-Chania section).
• On 29.03.2024, GEK TERNA signed as the original shareholder and member of the company NEA EGNATIA ODOS SOCIETE ANONYME CONCESSION, the concession agreement regarding the right to finance, operate, maintain and exploit the Egnatia Odos motorway, as well as the three (3) roads perpendicular to it, for a period of 35 years, with the Greek State and the Hellenic Republic Asset Development Fund (HRADF) as contracting parties. The company named NEA EGNATIA ODOS SOCIETE ANONYME CONCESSION, which was established for the purposes of the concession contract, is owned by GEK TERNA S.A. with a 75% stake and EGIS PROJECTS S.A.S. with a 25% stake.
• On 16.04.2024 the subsidiary TERNA S.A. signed a contract with PPC S.A for the lease of three (3) GE Gas Turbine Units, with a total delivered net power of 130MW to cover the additional power needs of the AES Linoperamaton of Crete, for a period of time until 31.12.2025.
D. Risk Factors and Uncertainties
The Group's operations are subject to various risks and uncertainties, such as the return of macroeconomic uncertainty, market risk, credit risk and liquidity risk, wind and weather conditions, the uncertainty of the results from the impact of emergency events which may have a prolonged and unforeseen term.
1) Financial Risks
The Group's activities expose it to various financial risks, including market risk (including foreign exchange risk, interest rate risk, and price fluctuation risk), credit risk and liquidity risk.
To address financial risks, there is a management plan aiming to reduce the adverse impact on the financial results of the Group, arising from the inability to project financial markets and fluctuations in cost and sales variables.
The financial instruments used by the Group mainly comprise bank deposits, mainly long‐term and secondarily short‐term loans as well as derivatives, trade debtors and creditors, other accounts receivable and payable. The impact of the main risks and uncertainties on the Group's activities is analyzed below.
Credit risk
Credit risk entails the possibility that a counterparty will cause financial loss to the Group and the Company due to the breach of the counterparty’s contractual obligations.
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The Group continuously monitors its receivables, either separately or per group and encompasses all the arising information into the credit audit. When deemed necessary, external reports or analyses related to effective or potential clients are used.
The Group is not exposed to significant credit risk arising from trade receivables with regard to its business activities, except for the trading of electric energy. This is attributed, on the one hand, to the Group’s policy, which is focused on cooperation with reliable clients and, on the other hand, to the nature of the Group’s operations.
In particular, total receivables, whether related to the narrow or the broader public sector, or private sector clients with significant financial position in Greece and abroad, are under special monitoring and the Management constantly assesses the reliability of its customers, their financial sizes regardless of whether they are a broader public or private entity, for potential implications, in order to take the necessary measures to minimize any adverse effects for the Group.
The Group is exposed to credit risk from end consumers due to the sale of electric energy and natural gas to them. The control carried out to ensure the collectability of receivables is systematic. Wherever required, adequate reserves are being created through provisions to minimize any potential adverse impact. Apart from the above, and in addition to safeguarding collectability, the Group makes sure to issue monthly bills concerning the probable consumption per month, so that with the issuance of the settlement invoice that is being made in the fourth month of consumption, there is no large outstanding balance to be settled. It should be noted that at the start of cooperation with customers, an amount equal to the indicative cost of consumption for one month is paid by the customers in the form of a guarantee.
The credit risk regarding cash and cash available and other receivables is considered limited, given that the counterparties are reliable Banks with high quality capital structure, the Greek State and the broader public sector and strong Groups of companies.
The Management assumes that all the financial assets, with the exception of those for which necessary impairment is calculated, are of high credit quality.
Liquidity risk
Liquidity risk entails the risk that the Group or the Company will be in no position to meet their financial obligations when required. The Group maintains its liquidity risk at a low level.
Specifically, the Group’s liquidity, in particular, is considered satisfactory, as in addition to the existing cash and cash equivalents, the cash flows generated by the Concessions of the motorways, the operating wind farms, the production and sale of electric energy as well as from construction works are ongoing.
The Group manages liquidity needs by closely monitoring the progress of the long-term financial obligations, as well as the payments made daily. Liquidity needs are monitored in different time zones on a daily and weekly basis as well as in a rolling period of 30 days. Liquidity needs for the next 6 months and the next year are determined on a monthly basis.
The Group maintains cash and cash available in banks to meet liquidity needs for periods of up to 30 days. The funds for the medium‐term liquidity needs are released from the Group's time deposits and if deemed necessary, bank credits are also being used.
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Market risk analysis
Foreign exchange risk
Foreign exchange risk arises when the fair value or future cash flows of a financial instrument are subject to fluctuations due to changes in exchange rates. This type of risk may arise, for the Group, from foreign exchange differences at the valuation and conversion into the Group’s currency (Euro) of financial assets, mainly financial receivables, and financial liabilities, related to transactions that are carried out in a currency other than the operating currency of the Group’s entities. The transactions mainly concern purchases of fixed assets and inventories, commercial sales, investments in financial assets, loans, as well as net investments in foreign operations.
The Group operates mainly in Greece and Eastern Europe for investments in renewable energy sources and selectively in the undertaking of construction projects, and therefore may be exposed to foreign exchange risk that may arise from Euro exchange rate with other currencies. To manage this risk category, the Group’s Financial Management Department uses the financial instruments and offset the Group's exposure to foreign exchange risk on the basis of specific policies, whenever it is necessary.
Regarding the Group's transactions with foreign companies, these are usually carried out with European Groups where the settlement currency is the euro. To reduce this risk, the Group utilizes the locally produced cash available in local currency to pay the expenses incurred, minimizing the creation of foreign exchange risk.
Interest rate risk
Interest rate risk entails the probability that fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates.
The Group's policy is to minimize its exposure to the interest rate risk of long‐term financing. Under this policy, medium‐term loans are mainly in Euro, with fixed spread and a floating base interest rate linked to Euribor. In order to reduce the interest rate risk associated with long‐term financing and to reduce the consequent volatility of financial expenses, the Group implements specific policies that include Interest Rates Swaps.
The largest component of the Group's short‐term debt is in Euro at a floating base interest rate linked to Euribor. Short‐term loans are mainly issued as a bridge financing in order to cover temporary needs during the implementation phase - construction of investments of the Group. The Group's policy is to convert these loans into long‐ term fixed spreads linked to Euribor and, where deemed necessary due to repayment time, to implement approved interest rate risk management policies through Interest Rate Swaps.
On 31.12. 2023, 36.68% of the Group’s total debt bares fixed interest rate, 35.20% bares floating interest rate that have been offset through derivatives, with which future fixed interest rate payments are exchanged against floating rate based receivables, while 28.12% of the Group’s loans bare floating rate based on the Euribor or wibor on a per case basis.
These loans are repaid either during the collection of the relevant state grants or through the operating cash flows from the Group's operations.
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Sensitivity analysis of interest rate risk
The following table presents the sensitivity of profit or loss for the period against the Groups short‐ term debt and deposits, towards a change in variable interest rates amounting to +20% –20% ( 2022: +/-20%). The changes in interest rates are estimated to be logical in relation to the current market conditions and until now they have been consistent with the previous year.
2023
2022
20%
-20%
20%
-20%
Net earnings after income tax (from interest bearing liabilities)
(4,425)
4,425
(1,227)
1,227
Net earnings after income tax (from interest earning assets)
3,096
(3,096)
617
(617)
The Group is not exposed to other interest rate risks.
2) Risks arising from existing financial conditions prevailing in Greece and from the global economy
The performance of the Greek economy for the year 2023 was positive since the achieved GDP growth rate settled at 2% following another positive growth in 2022 (5.9%) and according to estimates of the Bank of Greece GDP growth is expected to settle at 2.3% in 2024 and at 2.5% in 2025.
To date, with the existing expectations for continuation of the energy crisis, given the duration and intensity of hostilities in Ukraine, no potential favorable outcome appears to be in sight for the near future. Therefore, the lower supply of natural gas from Russia to the countries of the European Union and, to a significant extent, the substitution of natural gas by liquefied natural gas (LNG), will continue to affect the prices of the generated electricity, and the prices of all products affected by the use of electricity. This is the case despite the efforts that have already been made by government authorities to normalize prices and minimize these problems. As a result of the above, inflation continues to affect the economic climate.
As a result of the above, inflation, based on the harmonized Consumer Price Index, settled for the entire European Union at 4.2% in 2023, in relation to 9.6% in 2022, due to the upward trend in energy needs as well as due to price increases in food items.
The estimated inflation based on the harmonized Consumer Price Index for the period in the Eurozone for the period 2024-2025, is expected to settle at 2.3% and 2% respectively, mainly due to the anticipated decline in energy prices and also due to the negative effect on the comparison basis.
The European Central Bank’s efforts to control inflationary pressures with consecutive interest rate hikes, which in September 2023 set the interest rate level at 4% to reduce increased demand, which is seen as the cause of inflationary pressures, have not has yet produced the desired results in reducing the inflation rate. On the contrary, however, the increase in financial costs results in a significant reduction in the growth of certain European countries.
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The additional sources of uncertainty regarding the economic activity in Greece for the coming years that could have either positive or negative impact in terms of achievement of the ultimate GDP growth target, are listed below:
• Failure to enhance competitiveness, so that the economy becomes export-oriented and addresses the current account deficit.
• Delay in reducing the public debt level.
• The maintenance of high borrowing rates, which leads borrowers to face difficulties in repaying installments of their mortgage loans for the first residence and the agricultural land.
• The continued increase in the prices of consumer goods, which reduces the real disposable income and household purchasing power and deprives the ability to create savings for future investment.
• The weakening of disposable income of citizens, mainly in the European Union, will result in a reduction of revenues from tourism.
• The lack of acceleration towards the structural reforms and the government’s inability for the timely disbursement of European funds and any obstacles in the implementation of the investment plans.
• The continuing delay in the process of granting justice.
• The inability of certain sections of the Public Administration to overcome the bureaucracy for solving significant problems that require immediate actions and long-term planning (e.g., natural disasters, fires, climate change).
Despite the new conditions that have arisen due to the geopolitical developments along with the ongoing energy crisis and inflationary pressures and given that the Group does not have any meaningful activity in Russia, Ukraine and Belarus, the outlook for the Group remains positive in the medium term due to the following factors: a) The upgrading of the investment grade regarding the creditworthiness of the Greek economy, which entails more inflows of investment capital with favorable lending terms required for investments, b) Investments with long-term yields in the form of Concessions and PPPs, c) Significant signed and pending construction contracts for execution, d) The increase in the share of electricity generated in the Greek economy using natural gas as fuel, as well as the market share in electricity trading, e) the increase of investments for the production of clean energy through RES and f) the increase in energy storage capacity.
3) Risks related to the impact of pandemic (COVID-19)
The experience gained in protecting the population from virus transmission, the mass vaccination programs initiated since 2021 and the provision of new medicines to the patients have reduced the severity of the risk as well as the percentage of cases, resulting that a possible appearance of a new virus within the same category is no longer considered a significant threat.
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4) Other Risks and Uncertainties
Consequences of the war in Ukraine
The ongoing and escalating hostilities between Ukraine and Russia with the indirect involvement of the European Union and the U.S.A. through the provision of support to the Ukrainian side, weakened the possibility of a ceasefire in the immediate future between the two sides of war.
The adoption of restrictive measures by the European Union and the U.S.A. regarding the international circulation of funds of Russian origin, as well as the additional restrictive measures towards the same direction (asset freezes, convictions, etc.), as well as the bans on the sale of Russian products in the European Union and other countries, resulted in countermeasures taken by Russia against the European Union, including the reduction of natural gas’ sold quantities.
It should be noted that the embargo against Russia did not provide the expected solution, resulting in the continuation of the war two years after its inception, with no estimation for an immediate resolution of the issues. At the same time, the generated electricity continues to be very expensive for the end consumer, fueling the existing inflation, in which the price of energy is one of the main factors in the cost of producing products.
Specifically, in the Construction operating segment there is an effect on construction costs from the geopolitical developments in Ukraine but given that in a large part of mainly important contracts, there is provision for price adjustments, the final effect on the Group is not expected to be significant. At the same time, for all the new projects in which we are the bidder or will participate in the tenders for their undertaking, the increased costs are included in the bid budgets.
In the area of Electricity Production from Renewable Energy Sources due to the fact that the majority of Wind Farms have a fixed selling energy price, the important costs are the depreciation of the equipment and the cost of borrowing refers to fixed interest loans, the effect is not significant.
In the operational segment of Electric Energy Production from Thermal Energy Sources, due to the nature of the activity and given that the selling price follows the purchase cost, typically there was no problem of substantial influence of the consequences of geopolitical developments.
In the area of Concessions, there is a charge related to the cost of supplying electricity and fuel required for the operation of traffic control systems, as well as in relation to the cost of lighting the motorways. To reduce these costs, a series of measures have been already taken, such as changing light bulbs and using LED technology, as well as using cars with lower fuel.
The Group does not have direct operations in Russia, Ukraine and Belarus, however it constantly assesses the geopolitical risks it is exposed to, having formulated specific policies and procedures, so as to mitigate the risk to the extent possible.
Uncertainty due to hostilities in the Middle East
After the unprovoked attack by the Palestinian Islamist movement Hamas on October 7, 2023, in Israel, a counterattack by the Israeli army on the Gaza Strip was triggered, resulting in the loss of thousands of lives causing a humanitarian catastrophe for Gaza residents. In these hostilities, neighboring countries Lebanon and Yemen have also participated with the support of Iran, with the result that, among other things, problems have been created navigation and consequently in the transportation
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of goods. A possible direct involvement in the hostilities by Iran could further exacerbate the overall problems in the region and by extension in the global economy, indirectly affecting the Greek economy as well.
Despite this, the Group's prospects remain positive and not directly dependent on hostilities in the Middle East. However, due to the dynamics of hostilities, new risks may potentially arise. The Group's management, taking into account the existing uncertainty in the broader economic climate, seeks to assess any indirect consequences on the Group in a timely manner, in order to take necessary measures to minimize the consequences.
Backlog of the construction contracts
The backlog of the construction contracts does not necessarily constitute an indication of future revenues from the Group's operations in this segment. Although the backlog of these contracts represents projects that are considered certain, no guarantee can be given that cancellations or adjustments will not be performed.
The backlog of the Group's construction contracts may fluctuate in connection with the delays in the project’s implementation and/or receivables or inability to fulfill contractual obligations.
Climate change risk
The increase in the average temperature of the planet has caused a series of extreme natural phenomena (disastrous floods, frosts, heavy snowfalls, but also large-scale wildfires from prolonged drought).
The risks arising from the effects of climate change and the transition to a low-carbon economy are expected to affect most, if not all, business entities in matters related to their sustainability.
The Group owns and operates in Greece and abroad Wind Parks, operates two major highways, where the effects of climate change in recent years consist of intense weather phenomena and long-term natural turnarounds.
Taking into account the extreme natural phenomena that have occurred in recent years, the Group takes all necessary measures to eliminate or minimize the problems that may arise, in addition to insurance coverage for the risks that are insurable.
Cyber Security Risk
Potential violations in the security of networks, information and operating systems threaten the integrity of the Group's data, sensitive information, as well as the smooth operation of its business activities. Such a breach could adversely affect the Group's reputation and competitive position. Also, a possible occurrence of damages, release of fines or loss of business (including restoration costs) could have a significant negative impact on our financial position and operating results. In addition, managing cybersecurity breaches may require a significant investment of time by the management.
In order to avoid the Cyber Security risks, GEK TERNA Group has established and implements Cyber Security Policies and Procedures, with which all the executives and the external collaborators of the Group must comply. In cases where it is deemed necessary, the IT Department provides additional instructions and guidance.
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The Group is in continuous cooperation with companies providing specialized Cybersecurity services as well as with experienced consultants in the field, in order to provide full technical and organizational coverage in terms of Cybersecurity in close collaboration with its various departments .
E. Outlook and Prospects
GEK TERNA – the parent company of the Group ( www.gekterna.com ) is listed on Athens Stock Exchange (FTSE / Athex Large Cap / Athex ESG) and comprises one of the largest business groups in Greece, with selective presence in Central and Southeastern Europe as well as in Middle East.
GEK TERNA Group with a Turnover of 3,499.2 mn euros is active in the following segments:
a) infrastructure, b) the production of electricity from Renewable Energy Sources (RES), c) the production of electricity with natural gas fuel and the trade of electricity, d) the construction and operation of the Concessions, as well as the construction and joint operation co-financed projects (PPPs) and waste management projects, e) mining activities and f) real estate management and sale of properties.
GEK TERNA Group in the field of construction activities has a backlog of construction works to third parties, which on 31.12.2023 amounted to 2.8 bn euros proximately, in which it does not include the sectoral outstanding item of 0.6 bn euros, related to construction works for the implementation of the Amfilochia Pumping Project. Furthermore, the Group expects to sign contracts for new projects for which it has been prequalified, amounting to 1.9 bn euros, of which 0.2 bn euros concern the execution of public projects, 0.1 bn euros concern the execution of private projects, and 1.6 bn euros concern projects related to Group investments (such as Egnatia, IRC Hellinikon, etc.).
The total installed capacity of the Group's RES projects in operation has settled at 1.223,8 ΜW on 31.12.2023.
The investment in the construction of the long-term storage project with pumped storage technology in the area of Amfilochia (680 MW) is expected to be completed in approximately three years.
As of December 31, 2023, the TERNA ENERGY sub-group owns almost 2,500 MW of capacity from renewable energy sources (RES) electric energy production units, which are either operational, under construction or ready for construction in Greece, Central and Eastern Europe including projects in various stages of development. The portfolio of the Group approaches 12 GW.
In the field of energy production using natural gas as fuel, the Group owns and operates two (2) units with a total installed capacity of 588 MW, while it participates in the construction and is expected to operate one (1) unit of 877 MW, with a 50% stake, scheduled for operation within 2024. In the electricity supply sector, the Group holds a market share of 10.8% in the Greek market, while at the same time, it engages in electricity trading both domestically and internationally.
In the field of Concessions, the Group owns 100% of the Motorway Concessions NEA ODOS SOCIETE ANONYME CONCESSION and CENTRAL GREECE MOTORWAY SOCIETE ANONYME CONCESSION, 100% in AEIFORIKI EPIRUS S.M.S.A.S.P., which has undertaken the project of operating the Waste Treatment Plant of Epirus, 100% in PERIVALLONTIIKI OF PELOPONNESE S.M.S.A., which has undertaken the PPP project "Integrated Waste Management of Peloponnese" , 32.46% in the Concession Company of Kasteli Airport INTERNATIONAL AIRPORT HERAKLION CRETE SOCIETE ANONYME CONCESSION, 49% to
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the IRC HELLINIKON S.A. company for the construction, development and operation of: (a) a five (5) star hotel, (b) a conference and exhibition center, (c) a public gathering place for sports and/or cultural events and (d) a casino area, 55% to the company PASIFAI ODOS S.A. for the construction of the project "North Road Axis of Crete (BOAK)" , 70% to the Electronic Ticket Services Company - HELLAS SMARTICKET S.A., 70% to the Joint Venture TERNA ENERGY - INDIGITAL - AMCO for the project "Digital Transformation, Telematics, and the Unified Automated Collection System for Thessaloniki (ACST)", 17% to the Motorway Concession Company OLYMPIA ODOS SOCIETE ANONYME CONCESSION, and 35% to the company SARISA SUB-CONCESSION S.A for the right to use, maintain, operate and exploit a multi-purpose station in part of the port of Philip II of KAVALAS PORT ORGANIZATION S.A.
Finally, the Group is active in the management and sale of real estate assets, owning commercial properties with a total estimated value of approximately 127.2 mn euros, as well as in the quarry / industrial segment through the extraction and processing of limestone and magnesium.
The Group, for the existing business activities in 2023 employed more than 5,053 employees (directly 4,932 and in its proportion through joint ventures 121) on international level.
Total investments during the year amounted to 194.8 mn euros, with the energy segment being the main contributor. In recent years, investments have exceeded 2.7 bn euros, actively supporting the Greek economy, but also the country's banking system, constantly maintaining all the Group's assets from operations in Greece in Greek banks.
Despite the prevailing uncertainty, the outlook for the Greek economy remains positive in the medium term, in view of a number of conditions that could facilitate the change in the pattern of economic growth, which is expected in turn to derive from investment spending to an even greater extent.
In this changing economic and geopolitical environment, GEK TERNA Group, which is one of the most important Greek corporate groups and holds a leading position in the fields of infrastructure, clean energy, electricity production and concessions, implements and expands its investment plan (mainly in the fields of Renewable Energy Sources, Concessions and Infrastructure), as its capital structure remains strong while the Group continues to have a selective presence in countries outside Greece. Furthermore, GEK TERNA Group has already proved during the Greek financial crisis the last years its ability to expand and further solidify its market position.
It is worth noting, however, that the boost of investment activity in the segments in which GEK TERNA Group operates (such as in RES, Concessions, Constructions and Infrastructure) constitute a priority for both the Greek State and the European Union. Infrastructure projects, through their higher multiplier effect, contribute significantly to the increase in GDP and to the strengthening of employment.
In 2024 GEK TERNA Group will continue to implement its strategy for continuous development in the Greek and international markets in the fields of infrastructure, production, supply, and trading of electricity and natural gas, production of electricity from RES, Concessions in general and in the Construction segment. The objective is to maintain its leading position in the Greek market and to pursue its sustainable development in the international markets in order to achieve a satisfactory diversification of corporate risk and to maintain return on equity at satisfactory levels.
The Group's investment plan continues intensively in all areas of its activity (infrastructure, concessions - PPPs, energy production and storage, circular economy - environmental projects), with the total
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investments planned or in which the Group participates, in the medium term, expected to exceed the value 10 bn euros.
With the investments that are in progress and those that will follow, GEK TERNA Group creates thousands of well-paid jobs, giving the opportunity to the Greek scientific workforce, to our young men and women to live with dignity and optimism for the future in their homeland, but also to those who left we provide the incentive to gradually return back to the country.
The prospects for achieving the targets for 2024 and beyond are positive given that:
In the Construction Operating Segment:
TERNA S.A., the construction arm and fully owned by 100% subsidiary of GEK TERNA, is the strongest Greek construction company specializing in the execution of large and complex public and private projects of a wide range, large budget and complex expertise , such as including road and railway networks, buildings, hospitals, museums, industrial facilities, hydroelectric projects, dams, power plants, etc.
The prospects for the coming years are in favor of improving the financial performance of this operating segment, while the backlog of construction objects is maintained at high levels, amounting to approximately 2.8 bn euros on 3 1.12.2023 with the contrasts to third parties. The above backlog does not include the sectoral backlog of approximately 0.6 bn euros, which concerns construction works for the implementation of the Amfilochia Pumped Storage Project, as well as the backlog approximately 1.9 bn euros for new contracts awaiting signature, for projects for which the Group has already been declared the contractor or preferred investor and the signing of construction contracts is expected.
In addition, the prospects of the construction segment in Greece are particularly positive, as in the coming years the budget of the new projects to be auctioned may exceed under certain conditions the level of 20 bn euros, of which a significant part is estimated to be executed by the Group .
It should be noted that the execution of the above projects will deliver significant positive multiplier results to the Greek Economy.
The Group, with the consistency and the high sense of corporate social responsibility that distinguishes its actions for years now, will remain a leader in the construction segment and will seek to increase the financial size of the particular market segment, while generating satisfactory earnings to the benefit of its shareholders.
In the Energy Operating Segment:
Production and trading of electricity from RES
GEK TERNA Group, operating through the sub-Group TERNA ENERGY in the field of energy since the mid-1990s is one of the leading players in the field of Renewable Energy Sources (RES).
The shift to Renewable Energy Sources (RES) is confirmed worldwide, with the segment being one of the top investment destinations for the coming years. In this context, TERNA ENERGY sub-Group continues the development of selected RES projects in Greece at a high pace, in order to lay the solid foundation for the company's sustainable development which is the long-term objective of its strategic
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planning for the next 10 years and at the same time, by capitalizing on its experience it is intensifying its efforts in order to further expand its presence in Poland and Bulgaria.
The energy needs of the country are covered mainly by imports (crude oil and natural gas) and to a lesser extent, by domestic production of solid fuels and renewable energy sources (RES). The Greek Government, in order to reduce the imported energy, presented the draft of the new National Energy and Climate Plan (NECP) using the Repower EU policy package as a reference.
In the electricity segment, NECP aims to increase the installed RES capacity in the country to 25 GW by the year 2030, with RES covering approximately 80% of the demand for electricity and 45% of the total demand for energy.
TERNA ENERGY sub-Group during 2023, continued the implementation of its investment plan with the construction of mature projects and the strengthening of its portfolio with additional mature projects from the existing portfolio and the addition of new ones at various stages. In the context of this plan on behalf of the Group, the connection to the network of the wind park complex in Kafirea with a total power of 327 MW was completed within the year, with the project now fully operational as of the date of publication of the financial statements. Specifically, the total installed capacity of the subgroup in Greece and abroad amounts to 1,223.8 MW, increased by 318.5 MW compared to 2022.
Furthermore, with regard to the long-term storage project with pumped storage technology in the area of Amfilochia (680 MW), which had already started with preliminary work since the end of 2022, its construction work continues and is expected to be completed within approximately three years.
Furthermore, gradually within the current year, the construction of new parks (mainly photovoltaic) has begun in Greece, while projects abroad are also being considered on a case-by-case basis. Additionally, the sub-group is advancing procedures for the maturation of projects involving various technologies (e.g., hydroelectric, storage, hybrid, etc.) in Greece, which are expected to gradually commence construction starting from the following year.
As of December 31, 2023, the TERNA ENERGY subgroup possesses nearly 2,500 MW of capacity from renewable energy sources (RES) electric energy production units, which are either operational, under construction, or ready for construction in Greece, Central and Eastern Europe. This includes projects at various stages of maturity, bringing the Group's portfolio close to 12 GW.
Given the above and despite the constant challenges and the ever-changing conditions in the energy markets in Greece and abroad as the recent past has shown, TERNA ENERGY sub-Group is expected to continue to play a leading role in the market. It is recalled that the Group's long-term goal is to reach a project portfolio of more than 6.0 GW in operation before the end of the current decade.
The Group, through its subsidiary TERNA ENERGY, leveraging upon its dominant position and expertise in RES and evaluating the favorable environment in the area, continues its investment plan.
Electricity production from thermal energy sources – Electric Energy Sales
GEK TERNA Group is active in the field of Production, Distribution and Trading of Electricity and Natural Gas mainly through the subsidiary companies HERON ENERGY S.A. and HERON II VOIOTIAS S.A. A t the same time, for the rational management of the two companies, within 2023 the decision of the Parent Company GEK TERNA to merge the two companies through the absorption of HERON II VOIOTIAS S.A. by HERON ENERGY S.A. was implemented, with GEK TERNA Group continuing to be the exclusive 100%
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shareholder. Following the above merger, HERON ENERGY S.A. owns two gas-fired power plants with a total capacity of 588 MW.
At the same time, GEK TERNA Group and MOTOR OIL Group, through their participation in the company KOMOTINI THERMOELECTRIC S.A. (with a percentage of 50% each), continue the joint development, construction, and operation of the new state-of-the-art Combined Cycle Gas Turbine Station with natural gas as fuel aiming at an installed gross capacity of 877 MW in the Industrial Area of Komotini, Greece.
The technology of the main equipment that has been selected for the Station is the most modern one and will lead to very high degrees of overall net efficiency. The amount of the investment is estimated at approximately 375 mn euros and it is expected to create about 500 jobs during the construction period and about 80 jobs during the operating period. Construction of the new unit started in 2021 and it is estimated that it will enter commercial operation in the second half of 2024.
The Group, through its subsidiary HERON ENERGY S.A., utilizing its know-how in energy production from the operation of factories via the use of natural gas, continues to operate the production units, based on the principle of cost benefit from this activity. At the same time, it seeks new opportunities to increase its production capacity in Greece or abroad.
The total participation of the energy production units of the company HERON ENERGY SA. with a total Incapacity of 588 MW, amounted to 11.3% of the production from natural gas plants in Greece in 2023, constituting a strong pillar of ensuring the energy sufficiency of our country. The Group's production comes to a very large extent from the operation of the combined cycle unit, which produced a total of 1,719 GWh during 2023.
In the area of Electricity Distribution to final consumers, the volatility of electricity and natural gas prices has resulted in strong customer mobility among electricity providers. Despite this trend, the company HERON ENERGY S.A. managed to fully cope with the difficult market conditions and even increase its market share to 10.8%. As a result, the company is among the top two leading independent suppliers in the domestic energy market, aiming through 2024 to maintain and expand its position in terms of market share.
It should be noted that the risk of large sales contracts with a time horizon of more than one month is ensured through future contracts for the purchase and sale of electricity and natural gas, in order to minimize the risk of changes in the cost of buying and selling energy. The existing experience in handling electricity and gas trading ensures the Group's positive outlook for the operating segment of Electricity Production from Thermal Energy Sources and Energy Sales.
In the Concession Operating Segment - Self/Co-financed projects:
The Group has a dominant presence in the financing, construction, maintenance and operation of concession projects. The ever-expanding portfolio of concession projects and PPPs, as analyzed below, makes GEK TERNA Group one of the most important concession portfolio managers at European level.
The Group participates in the Concessions operating segment:
➢ with a percentage of 100% in the Motorway Concessions NEA ODOS SOCIETE ANONYME CONCESSION and CENTRAL GREECE MOTORWAY SOCIETE ANONYME CONCESSION,
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➢ with a percentage of 32.46% in the Concession Company of Kasteli Airport INTERNATIONAL AIRPORT HERAKLION CRETE SOCIETE ANONYME CONCESSION,
➢ with a percentage of 49% through the company IRC HELLINIKON S.A. in the construction, development, and operation of (a) a five (5) star hotel, (b) a conference and exhibition center, (c) an audience gathering place for sports and cultural events and (d) a casino area. The duration of the concession is 30 years,
➢ with a percentage of 55% through the company PASIFAI ODOS S.A. in the construction of the project "Northern Road Axis of Crete (BOAK): Study, Construction, Financing, Operation and Maintenance of the Section Hersonissos - Neapoli, with PPP". The duration of the concession is 30 years, of which 4 years refer to the construction period and 26 years to the operation period,
➢ with a percentage of 17% in the Motorway Concession Company OLYMPIA ODOS SOCIETE ANONYME CONCESSION,
➢ with a percentage of 70% in the Electronic Ticket Service Provider Societe Anonyme - HELLAS SMARTICKET S.A., which undertook from the Athens Urban Transport Organization S.A. (AUTO), the Partnership Agreement for the “Study, Financing, Installation, Operational Support, Maintenance and Technical Management of a Unified, Automatic Toll Collection System for the AUTO Group of companies based on a PPP scheme”. The term of the concession has been set at 10 years after the construction period,
➢ with a percentage of 35% through the company SARISA SUB-CONCESSION S.A. For the right to use, maintain, operate and exploit a multi-purpose station, in a part of the Philip II port of ORGANISATION KAVALA PORT S.A,
➢ with a percentage of 100% in PERIVALLONTIKI OF PELOPONNESE S.M.S.A, which has undertaken in the Peloponnese Region the construction of PPP project "Integrated Waste Management of Peloponnese" , where in 2023 the Integrated Management Unit of Arcadia, the Waste Transfer Stations of Argolida and Corinthia and the Transitional Management Units of Messinia and Laconia were put into commercial operation,
➢ with a percentage of 100% in the company AEIFORIKI EPIRUS S.M.S.A.S.P., which is active in the operation of the Waste Management Unit of Epirus with a maximum annual capacity of 105,000tn, the operation of which started on 27.03.2019. The duration of the Concession has been set for 27 years and
➢ with a percentage of 70% in the Joint Venture TERNA ENERGY - INDIGITAL - AMCO with which it signed a contract for the project "Digital Transformation, Telematics, and the Unified Automated Collection System for Thessaloniki (ACST)".
Within 2024, the Group:
➢ signed as the original shareholder and member of the company NEA EGNATIA ODOS SOCIETE ANONYME CONCESSION, the concession agreement regarding the right to finance, operate, maintain and exploit the Egnatia Odos motorway, as well as the three (3) roads perpendicular to it, for a period of 35 years, with the Hellenic State and the Hellenic Republic Asset Development Fund (HRADF) as contracting parties, while at the same time, as a member of the company NEA
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EGNATIA ODOS SOCIETE ANONYME CONCESSION, it signed the operation and maintenance contract of the project with the aforementioned concession company for a period of also 35 years.
The company named NEA EGNATIA ODOS SOCIETE ANONYME CONCESSION, which was established for the purposes of the concession contract, is owned by GEK TERNA S.A. with a 75% stake and EGIS PROJECTS S.A.S. with a 25% stake.
➢ was declared as the temporary Contractor in the tender for the concession project "Study, Construction, Financing, Operation and Maintenance of the Northern Road Axis of Crete (BOAK) in the Chania - Heraklion section" where it is awaiting the signing of the Contract.
It should be noted that, in the fourth quarter of 2023, the Board of Directors of the Hellenic Republic Asset Development Fund (HRADF) declared GEK TERNA as the Preferred Investor for the award of a service concession for the financing, operation and maintenance of the 70 km long Attica Road for a period of 25 years. The signing of the contract is expected within 2024.
The total portfolio of motorway projects of GEK TERNA Group after the start of the operation of Egnatia Odos, including the concessions of the B.O.A.K. and Attiki Odos, now exceeds 1,600 km. This is the largest motorway portfolio in the country and one of the largest in Europe, further enhancing the Group's ability to generate significant, stable and recurring returns over time.
Finally, the Group's business activity in the Car Parking Station Management and Operation Segment will continue in the following years, and the number of car parking spaces attributed to the Group as a whole amounts to 2,171.
Apart from the above, at the same time the Management continues to pursue new investments for the expansion of the Group's business activity in Greece and abroad, by constantly monitoring the developments in the Greek economy, collaborating with financial agents and expert analysts of the international markets.
The Group confirms its strategic decision to invest dynamically in the Concessions segment and in the fields of PPPs, while creating satisfactory earnings and returns for its shareholders.
Taking into consideration the above, the prospects of the concessions segment of GEK TERNA Group for the year 2024 and for the following years are positive, despite the difficult period that the global economy is going through.
In the Real Estate Operating Segment:
GEK TERNA Group is also engaged in real estate development, management and sale and examines alternative scenarios for the exploitation of a part of the existing investments and wherever it deems appropriate, it will proceed into new investments.
In the Quarry/Industry Operating Segment:
The Group is also involved in extracting and processing whitewash and subsequent production of magnesium products through the subsidiary company TERNA MAG S.A., mainly focusing on export related activities ( www.ternamag.com ).
Despite the negative results, the operating result (EBIT) in the current financial year is improved compared to the previous financial year in the industry segment, the company by having already
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restructured its operational activities in order to reduce production cost, estimates that the industrial segment will become a profitable business in the future.
F. Alternative Performance Measurement Indicators (“APMI”)
(In the context of applying the Guidelines “Alternative Performance Measures” of the European Securities and Markets Authority (ESMA/2015/1415el) which are applied from 3rd of July 2016 in the Alternative Performance Measures Indicators [APMI])
The Group utilizes Alternative Performance Measurement Indicators ("APMI") in its financial, operational, and strategic planning decisions, as well as in evaluating and publishing its performance. These APMI serves to better understand the Group’s financial and operating results as well as its financial position. Alternative indicators should always be considered in conjunction with the financial results prepared in accordance with IFRSs and in no case should they replace them.
The following indicators are used when describing the Group's performance by segment:
A. ‘’Net Debt/(Surplus)’’
It is a ratio, through which the Group’s Management assesses the cash position of an operating segment at any given time. The ratio is defined as total loan liabilities and bank leases less cash and cash equivalents. If restricted deposits are excluded from the aforementioned ratio, (note 20) and grants to be repaid (note 30), are added, then the item of "Adjusted Net Debt/(Surplus)" will arise.
The ratio for the financial years 2023 and 2022 is as follows:
GROUP
31.12.2023
31.12.2022
Long-term loans (Note24)
2,737,058
2,672,299
Liabilities from bank leases (Note25)
44,680
16,907
Short-term loans (Note24)
107,699
143,869
Long-term liabilities payable during the next financial year (Note24)
172,900
160,224
Total bank debt
3,062,337
2,993,299
Less: Cash and cash equivalents (Note23)
(1,310,649)
(1,491,703)
Net Debt / (Surplus) (Note6)
1,751,688
1,501,596
Less: Blocked bank deposit accounts (Note20)
(146,133)
(139,055)
Add: Approved and collected grants to be returned (Note30)
0
3,260
Adjusted Net Debt / (Surplus)
1,605,555
1,365,801
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
44
B. “Bank Debt to Total Capital Employed”
It is a ratio, based on which the Management assesses the Group's financial leverage. “Total bank debt” is defined as the sum of Short-Term Loans, Long Term Loans, Bank lease liabilities and Long term liabilities payable during the next financial year. The “Total Capital Employed” is defined as the sum of Total Equity, Total bank debt and Equity investments, the state grants minus the amount of cash and cash equivalents which are not subject to any limitation in use or to any commitment.
The ratio for the financial years 2023 and 2022 is as follows:
GROUP
31.12.2023
31.12.2022
Total bank debt (Note6) (a)
3,062,337
2,993,299
Total equity
1,276,622
1,190,698
Grants
171,648
176,232
Sub total (b)
4,510,607
4,360,229
Less:
Cash and cash equivalents (Note23)
(1,310,649)
(1,491,703)
Blocked bank deposit accounts (Note20)
(146,133)
(139,055)
Approved and collected grants to be returned (Note30)
0
3,260
Sub total (c)
(1,456,782)
(1,627,498)
Total Capital Employed (b+c)=(d)
3,053,825
2,732,731
Total Bank Debt / Total Capital Employed (a)/(d)
100.28%
109.54%
C. EBITDA (Earnings before Interest Taxes Depreciation and Amortization)
It is a ratio based on which the Management of the Group assesses the operational performance of an operating segment. "EBITDA" is defined as Earnings before Interest and Taxes (EBIT), plus depreciation and amortization, less any equity‐based grants as presented in the accompanying financial statements.
D. Adjusted EBITDA (Adjusted Earnings before Interest Tax Depreciation and Amortization)
"Adjusted EBITDA" is defined as EBITDA, plus any non‐cash items (see note below the table of Business Segments).
E. EBIT (Earnings before Interest and Taxes)
Earnings before Interest and Taxes (EBIT) is defined as the Gross Profit less Administrative and Distribution Expenses, less Research and Development Expenses, plus/less Other Revenues/(Expenses) EBIT determinants. Other Revenues/ (expenses) EBIT determinants are defined as Other Revenues/(Expenses) apart from the items of Foreign Currency Valuation Differences and Impairments/ (Reversals of Impairments) of fixed, intangible assets, right of use assets and goodwill as presented in Note 38.
EBITDA and Adjusted EBITDA ratios in the years 2023 and 2022, per operating segment and as a total are presented below as follows:
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
45
Business segments 31.12.2023
Constructions
Electricity from RES
Electricity from thermal energy and EP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Gross profit
147,460
148,306
129,230
129
3,231
69,532
(901)
(10,139)
486,848
Administrative and distribution expenses
(21,364)
(32,117)
(28,052)
(616)
(5,017)
(8,978)
(10,381)
(144)
(106,669)
Research and development expenses
(1,826)
(6,180)
0
0
(276)
(1)
(3,516)
8
(11,791)
Other income/(expenses) attributable to EΒΙΤ
(5,874)
10,834
(12,270)
7,748
(885)
18,419
120
6,746
24,838
Results (EBIT)
118,396
120,843
88,908
7,261
(2,947)
78,972
(14,678)
(3,529)
393,226
Net depreciation
17,083
49,760
28,813
698
4,101
44,752
134
(4,024)
141,317
EBITDA
135,479
170,603
117,721
7,959
1,154
123,724
(14,544)
(7,553)
534,543
Non cash results
1,105
806
14,083
(7,728)
95
41,062
1,490
0
50,913
Adjusted EBITDA
136,584
171,409
131,804
231
1,249
164,786
(13,054)
(7,553)
585,456
Adjustments to non-cash results for the year 2023 relate to provisions for staff compensation of 1,275, an expense recognized from the valuation of stock options 2,334, valuation gain of investment properties 7,646, provisions for heavy maintenance 40,585, provisions for impairment of receivables 14,617 and income from reversal of provisions for impairment of inventories, other provisions, and gains from cancellation of obligations amounting to minus 252 .
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
46
Business segments 31.12.2022
Constructions
Electricity from RES
Electricity from thermal energy and EP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Gross profit
94,807
142,365
326,841
(428)
2,521
55,683
340
(16,440)
605,689
Administrative and distribution expenses
(27,261)
(76,252)
(23,493)
(633)
(5,772)
(9,233)
(14,183)
3,503
(153,324)
Research and development expenses
(2,146)
(6,982)
0
0
(257)
0
(534)
38
(9,881)
Other income/(expenses) attributable to EΒΙΤ
(2,592)
12,571
(27,367)
185
222
(5,359)
(1,291)
(3,046)
(26,677)
Results (EBIT)
62,808
71,702
275,981
(876)
(3,286)
41,091
(15,668)
(15,945)
415,807
Net depreciation
11,599
40,561
27,125
614
3,461
44,194
161
960
128,675
EBITDA
74,407
112,263
303,106
(262)
175
85,285
(15,507)
(14,985)
544,482
Non cash results
6,212
48,860
32,424
20
270
26,434
3,116
0
117,336
Adjusted EBITDA
80,619
161,123
335,530
(242)
445
111,719
(12,391)
(14,985)
661,818
Adjustments to non-cash results for the year 2022 relate to provisions for staff compensation of 1,294, an expense recognized from the valuation of stock options 50,724, valuation loss of investment properties 378, provisions for heavy maintenance 25,923, provisions for impairment of receivables 39,634 and income from reversal of provisions for impairment of inventories, other provisions, and gains from cancellation of obligations amounting to minus 617 .
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
47
G. Report of Payments to Governments
In accordance with the provisions of article 6 of Law 3556/2007 as effective, the Group, due to the mining activity of quarry products of its subsidiaries TERNA and TERNA MAG S.A., paid to the Greek Government during the year ended 31.12.2023, an amount of 127.0 thousand euros.
H. Non-Financial Information Report 2023
1. Introduction
The current Non-Financial report covers the fiscal year ended on the 31 st of December 2023 . Having taken into account the provisions of section 7 "Report (Statement) of Non-Financial Information" of the circular 62784/2017 of the Ministry of Economy and Development, in accordance with the provisions of the Law 4548/2018 (articles 151 and 154), the report contains information on all GEK TERNA Group’s activities with respect to the following areas :
• Supply chain issues
• Anti-corruption and anti-bribery
• Respect for human rights
• Labour issues
• Social issues
• Environmental issues
The statement presents relevant information on the required disclosures of Article 8 of the Taxonomy Regulation, as specified in Article 10 of the Delegated Regulation (EU) 2021/2178. The content of the report has been prepared taking into account the Global Reporting Initiative (GRI) international standards, the standards introduced by the Sustainability Accounting Standards Board (SASB) and the Athens Stock Exchange ESG Reporting Guide (ATHEX ESG Reporting Guide 2022 ). The statement presents information on the main risks related to the Group's activities, the due diligence policies as well as other relevant policies applied. In addition, for a better understanding of the Group's performance, the qualitative and quantitative results of these policies are presented, while relevant financial and non-financial performance indicators are listed.
The structure of this report is as follows:
• The Group's approach to Sustainable Development
• Corporate Governance and the Group's Basic Operating Principles
• Environmental issues
• Sustainable Supply Chain
• Social and labour issues
• Taxonomy Report
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
48
GEK TERNA Group
GEK TERNA Group is one of the largest Greek business groups, with a presence also in Central and Southeastern Europe and the Middle East. The Group has a leading position in the fields of infrastructure, production, supply, and trade of electricity from thermal and renewable energy sources (RES), concessions, waste management, real estate development and management and mining. GEK TERNA is listed on the Athens Stock Exchange (FTSE/Athex Large Cap) with a turnover of 3,499 million euros.
GEK TERNA has the expertise and commitment to continue playing a leading role in the areas of Sustainable Development and the Green Economy, in line with the aspirations of the UN Sustainable Development Goals, with activities that contribute both to the Group’s economic development and to the mitigation of the negative effects of climate change.
GEK TERNA Group's construction backlog at the date of preparation of the Financial Statements amounts to almost 3.4 billion euros and with the contracts to be signed to 5.3 billion euros.
As of 31.12.2023, the Group has almost 2,500 MW of power from RES power plants that are in operation, under construction or ready for construction in Greece, Central and Eastern Europe. Including projects in various stages of maturity, the Group's portfolio exceeds 12 GW.
Sustainable development and corporate responsibility are fundamental components of the Group's strategy and business activities. Ensuring a fair, safe and healthy work environment, making significant contributions to economic growth, supporting local communities, building long-term trust relationships with customers, and reducing its environmental footprint, are core principles of the Group. These commitments serve as the guiding principles for fulfilling the Group's mission and are expressed through modern sustainable, green and secure infrastructure projects for people and the environment, as well as initiatives related to alternative energy sources and innovative waste management solutions, creating long-term added value for all stakeholders.
More information on the Group's presence and activities will be published in the GEK TERNA Group’s Sustainable Development Report, in June 2024.
Identification of financial/non-financial risks and management
The risk management policy followed by the Group aims to limit the effects that may negatively affect its business activity, its financial performance as well as the achievement of its strategic goals. The main sources of associated risks consist of the difficulty in predicting the performance of financial markets, the cost variations and sales trends as well as the ambiguity linked to the prediction of meteorological data.
Regarding the financial risks for the Group, the most important factors are related to the persistence of macroeconomic uncertainty, market risks (fluctuations in exchange rates, interest rates, market prices, etc.), credit risk, and the risk liquidity. Regarding non-financial risks, these are categorized into risks related to Governance, Environment and Society issues. To deal with non-financial risks, the Group takes the necessary measures to identify them in time and implement mitigation policies.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
49
2. The Group’s approach to Sustainable Development
ATHEX C-G4: Sustainability Policy
The Group's Sustainable Development Policy summarizes the way the Group approaches Sustainable Development issues. The Group's Sustainable Development Policy is inextricably linked to the needs of stakeholders (internal and external) considering both the current socio-economic trends and the scope of the Global Sustainable Development Goals. The main aim of implementing it is to strengthen the positive effects and limit the negative ones, through best practices, sustainable initiatives, and reliable partnerships by enhancing dialogue and consultation processes among its stakeholders.
In the context of the Group's Sustainable Development Policy, corporate responsibility is aligned with ESG (Environmental-Social-Governance) criteria/principles and focuses on four (4) axes:
• Human Value Promotion
• Environmental Protection
• Strengthening our Social Footprint
• Shaping a Responsible Market
The Policy is monitored by the Corporate Social Responsibility and Sustainable Development Division and the ESG Committee and is subject to updates with final approval by the Board of Directors if required. In this context, the Corporate Social Responsibility and Sustainable Development Division serves as the center for strategic planning and proposal submission to the ESG Committee and the Group’s Management regarding matters related to the environment, society, and governance. It is responsible for the Group’s Annual Sustainable Development Report and monitors specific sustainable development goals/indicators with the aim of continuous improvement, adjusting or revising as required.
The Group's Policy reflects its goals for Sustainable Development and is based on the dialogue with the stakeholders to identify, evaluate and prioritize the most important effects that its activity creates or may create on the environment, society, and the economy.
To establish mutual trust and constructive cooperation with all stakeholders, the Group has established distinct communication channels with each group and promotes timely and open dialogue with them. Its primary concern is recognizing the diverse expectations and needs of each group. The Group acknowledges as stakeholders, those groups that affect and are directly or indirectly affected by its activities. Stakeholders belong either to the Group's internal environment (such as shareholders, employees) or external environment (suppliers, customers, business partners, etc.).
Stakeholder mapping is revised every year to determine consultation channels and methods as well as the respective frequency and main topics of interest. It is pointed out that the Group recognizes and prioritizes its stakeholders according to the degree of their impact and influence on its operations and vice versa.
ATHEX C-S1: Stakeholder engagement, ATHEX C-G3: Materiality
To enhance transparency and facilitate regular stakeholder engagement, the Group's performance on ESG topics is published in the annual Sustainable Development Report and in the current Statement.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
50
Furthermore, it should be noted that the Group, with an emphasis on transparency, accountability and sustainable business practices, is expected to incorporate the "double materiality" assessment into the Sustainable Development Report from 2024 onwards. The aim is to inform stakeholders about the impacts it creates or may create on the environment, people, and the economy. Specifically, within the context of "double materiality", the Group will record, measure, set targets, and assess relevant risks associated with:
• The impact of all its activities on the Environment, Society, People, and the Economy.
• The impact/effect that the external environment in which the Group operates has on its activities and its ability to develop responsibly with the goal of sustainable development.
To conduct the "double materiality" assessment, the Group will invite stakeholders to participate in surveys to assess the material sustainability issues, the results of which will be utilized in shaping the Group’s Sustainable Development report.
3. Corporate Governance and the Group's Basic Operating Principles
ΑΤΗΕΧ C-G2: Sustainability Oversight
Corporate Governance is the set of the overall established guidelines, practices and processes applied by the Group to ensure its business continuity and thereby its ability to create long-term value to benefit its shareholders and stakeholders. The Group has adopted the Greek Corporate Governance Code (GCGC) to promote responsible and ethical corporate governance mechanisms throughout its activities.
The Board of Directors (BoD) is the Group’s top governing body. BoD members are elected by the General Meeting of Shareholders. The BoD is responsible for setting the guidelines and monitoring the effective implementation of the Group’s strategy, aiming at safeguarding, and promoting the long- term interests of all Shareholders, with terms and methods that reflect the Group's sense of credibility in the economic-business community and in the wider society. In addition, as an expression of its administrative philosophy, the Board of Directors ensures respect from and towards any stakeholder.
For the effective performance of its duties and the establishment of a responsible business model, the BoD is supported by individual Committees which have an advisory role with a significant weight in the decision-making process:
• Audit Committee
• Nominations and Remuneration Committee
• Strategic Planning Committee
• Regulatory Compliance Committee
• Investment Committee
• ESG Committee
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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3.1. Due diligence and other policies
3.1.1. Code of Conduct
ΑΤΗΕΧ A-G2: Business ethics violations
ΑΤΗΕΧ C-G5: Business ethics policy
The Group’s Code of Conduct acts as a point of reference for all its employees and partners (suppliers,
subcontractors) as it constitutes the core framework of principles and values that must characterize their professional behavior. The Code reflects the fundamental principles, beliefs, corporate culture, business ethics and voluntary ethical commitments that characterize the Group with its focal points being issues related to tackling corruption and bribery.
The content of the Code is in accordance with the general principles provided by the International Regulations and Conventions as well as the international standards ISO 9001, ISO 14001, ISO 45001, ISO 39001, ISO 37001, ISO 37301 and ISO 50001. The application of the Code extends to all the companies and subsidiaries of the Group at national and international level, concerning all areas of activity and all the partnerships and joint ventures in which it participates.
The Regulatory Compliance Committee and the Regulatory Compliance Unit, which report directly to the Board of Directors, monitor the implementation of the Code of Ethics and Conduct. In addition, the Group maintains a program of internal audits by the Head of Regulatory Compliance which aims to monitor the implementation of the Code of Ethics and Conduct and the Management System in all
activities of the Company.
The Group has set the following policies, to ensure the desired robust and transparent framework of its operation:
• Regulatory Compliance, Corruption and Bribery Control Policy
• Unfair Competition Policy
• Travel and Hospitality Expenses Policy
• Gift Policy
• Sponsorship Policy
• Conflict of Interest Policy
• Policy Against Violence and Harassment at Work
• Reporting Policy
The Code of Ethics is an overarching framework that also includes issues related to labour and human rights.
Any employee can report or express concern about all matters related to the implementation of the Code of Ethics and Conduct, either named or anonymously, through the following communication channels:
• Communication via e-mail to: compliance@gekterna.com
• Use of the platform https://gekterna.integrityline.com/frontpage-
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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• Communication via letter to the address: "GEK TERNA S.A." 85 Mesogeion Street, 115 26 Athens, to the attention of the " Regulatory Compliance Officer " marked "Confidential".
• Verbally after a meeting with the Regulatory Compliance Officer who has been designated as the responsible officer for receiving and monitoring reports.
GEK TERNA Group shows zero tolerance in cases of retaliation against employees who have reported on the issues of the Code. If such behavior comes to the attention of the Group, it is reported immediately following the above mechanisms. The Regulatory Compliance Officer is responsible for investigating and evaluating every complaint received and subsequently taking the necessary corrective actions within the framework of applicable legislation and Group policies.
3.1.2. Compliance, Corruption and Bribery Control Policy
Regulatory compliance and control of corruption and bribery are core principles of the Group's voluntary commitments and responsible governance. The objectives of the Group for the efficient and effective management of these issues are reflected in the Regulatory Compliance, Corruption and Bribery Control Policy as follows:
• Strict compliance with the requirements of the Group's regulatory framework and the legal framework governing corruption, bribery, money laundering and terrorist financing.
• Raising staff awareness on compliance, corruption and bribery through training and implementation of the Code of Ethics and Conduct.
• Identification and management of regulatory compliance and corruption-bribery risks. This includes identifying and assessing the risks associated with the regulatory corruption and bribery framework to take appropriate measures to reduce them.
• Communication of compliance obligations, including risks, management procedures, non- compliances as well as improvement actions and the results of controls / inspections to all parties involved.
• Creation of the appropriate control mechanism and prevention measures to detect and prevent issues such as bribery, corruption, money laundering and bribery financing, conflict of interest, general regulatory compliance issues.
The Group also implements certified anti-corruption and regulatory compliance management systems, based on the ISO 37001:2016 and ISO 37301:2021 standards respectively. In addition, the Group is committed to continuous training and awareness of staff, reporting and management of complaints and grievances, independence of the regulatory compliance officer, conflict-of-interest management, improvement of the effectiveness of the management system, operation of a mechanism for assessing incidents of non-compliance, and the formulation and implementation of policies that specialize in regulatory compliance, corruption and bribery issues.
3.1.3. Data Protection Policy
ATHEX C-G6 Data Protection Policy
the Group processes personal data for business purposes, that result to data identification of individuals (such as the clients of the company, suppliers, shareholders and investors, as well as ordinary users of the website).
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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In the context of ensuring a level of security relative to the criticality and confidentiality of the data and information processed, an Information Security Management System Officer has been appointed, working closely with the Group's Chief Information Systems Security Officer (CISO). Moreover, the BoD is regularly informed about data security issues.
In order to comply with the European legislation on the General Data Protection Regulation (GDPR- GDPR 2016/679) and the Law 4624/2019 and the recommendations of the Personal Data Protection Authority, the Group has appointed a Data Protection Officer (DPO), who reports to the Board of Directors and cooperates with the Data protection Unit. Α t the same time it implements appropriate organizational and technical measures to protect the personal data it processes, with a corresponding commitment to those performing data processing procedures on behalf of the Group. Policies and procedures relating to the rights of data subjects and the management of breaches incidents are part of these measures.
For any matter concerning personal data, there is a direct communication channel with the Data Protection Officer (DPO) by using the following email: dpo@gekterna.com .
3.1.4. Information Security Policy
An Information Security Management System has been developed and implemented, certified with the international standard ISO/IEC 27001, to define the basic conditions for the protection of data and information systems and the appropriate principles have been established to reduce the risk of compromising confidentiality, integrity and availability of data and IT systems. In this context, an Information Security Management System Manager has been appointed, who works closely with the Group's Chief Information Systems Security Officer (CISO). At the same time, policies and procedures have been developed that form the framework for securing the Group's data and networks.
The Board of Directors, during its meetings, is regularly updated on cybersecurity issues.
3.1.5. Ensuring Business Continuity
In addition, through the Business Continuity Policy, the Group’s top management sets the framework of conditions to ensure uninterrupted operation, by identifying risks that may threaten its smooth operation and providing for the allocation of all necessary resources for the implementation of the Business Continuity Management System, in accordance with the international standard ISO 22301:2019 in order to:
• ensure business continuity of critical activities in the event of an incident leading to unavailability or inability to implement them.
• be able to return to acceptable levels of operation as quickly as possible.
• minimize the impact that incidents of disruption may have on its stakeholders.
The implementation of a Business Continuity Management System, aims to ensure the timely, effective and controlled recovery of services throughout the scope of the System, identifying the steps of work required to achieve recovery and restore operations to normal rates in the shortest possible and foreseeable period of time.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
54
3.2. Major Risks and Risk Management
The Regulatory Compliance Officer, in collaboration with the CEO and heads of Departments, identify potential risks that may affect Regulatory Compliance as well as issues related to corruption and bribery in the Group's activities. The risks may come from the external or the internal environment.
3.3. Non-financial performance indicators
GRI 205-3: Confirmed incidents of corruption and actions taken
ATHEX A-G2: Business ethics violations
During 2023, there was no confirmed case of corruption, either through complaints or through relevant audits carried out by the Group.
GRI 419-1: Non‐compliance with laws and regulations in the social and economic area
IF-EN-510a.2: Total amount of monetary losses as a result of legal proceedings related to charges of (1) bribery or corruption and (2) anti-competitive practices.
Furthermore, there were no monetary losses caused as a result of violations of business ethics and non-compliance with laws and regulations in the social and economic sector.
4. Environmental issues
4.1. Due diligence and other policies
4.1.1. Environmental Management and Compliance
Protection of the environment and reduction of the environmental footprint of the Group are integral parts of its strategy and one of the central axes on which it focuses its action on. Thus, the Group acts purposefully by taking measures that lead to the reduction of adverse environmental effects to ensure both its business continuity and compliance with environmental legislation.
In particular, the Group's environmental strategy on environmental compliance includes:
•
Environmental and Energy Management
•
Re sponsible E nergy M anagement
•
Mitigation and Adaptation to Climate Change
•
Protection and Conservation of Biodiversity
•
Resource Management and Circular Economy
To ensure environmental compliance both on activity and operational level, internal and external environmental audits are carried out on an annual basis and at regular intervals. Internal environmental inspections are carried out by QHSE Department, while external audits are conducted by accredited Certification Bodies and other auditing authorities.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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The Group has a Unified Systems Management Policy, that commits it to reducing the environmental impact of its operations, reducing energy consumption and greenhouse gas emissions in its buildings and facilities, with the aim of promoting sustainable development within its operating model.
For the immediate achievement of these objectives, the companies of Group, TERNA and TERNA ENERGY are certified according to the international standard ISO 50001:2018 to achieve the most efficient energy management of their operations. Furthermore, the Group invests in the renewal and regular maintenance of its machinery aiming to improve its energy efficiency and increase its useful lifetime.
4.2. Risk Management
4.2.1. Tackling climate change
Metric A-E2: Climate change risks and opportunities
The issue of climate change is particularly critical to the Group's activities, with its business model being strategically oriented towards mitigating the effects of the climate crisis. Considering its impact on all stages of its value chain, proper management of this issue is deemed necessary as it affects its business strategy and its ability to create long-term value.
Mitigation and adaptation to climate change is the Group's greatest commitment to the current environmental regulatory framework (National Climate Law N. 4936/2022). GEK TERNA Group recognizes that active participation in the efforts made at global and national level in dealing with the consequences of climate change constitutes its moral commitment beyond its legal obligation.
The Group promotes the transition to a business model less dependent on fossil fuels while promoting alternative energy production and storage technologies, and the development of climate change adaptation plans. In this way, the integration of relevant risks into its operational processes is achieved and the Group's competitive advantage and its ability to create long-term value for stakeholders are strengthened . In this context, the identification and assessment of climate-related risks and opportunities has been completed in line with the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures) framework.
More specifically, through its own business operations and activities, the Group contributes to tackling climate change by planning, and implementing a series of projects and planned investments, such as developing and operating energy projects from renewable sources, including onshore and offshore (floating) wind farms, hydroelectric projects, photovoltaic parks, as well as pumped storage projects to secure energy supply and waste treatment plants with green energy generation. Simultaneously, the Group participates in infrastructure development projects with the primary goal of minimizing their energy footprint.
Concurrently, the Group recognizes the increasing occurrence of challenging natural phenomena (severe weather events, wildfires, floods, heightened seismic activity, etc.) resulting from the inevitable impacts of climate change. To address the relevant risks and ensure the Group’s resilience, a comprehensive assessment of the Group’s business activities has been conducted, in order to identify climate risks that may have potential economic consequences, assess the likelihood of threats posed by one or more of these climate risks, and evaluate corresponding adaptation measures aimed at mitigating the impacts of specific risks and hazards.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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4.2.2. Protection and conservation of biodiversity
Metric A-E5: Biodiversity sensitive areas
The Group prioritizes the protection of biodiversity, as it is a critical factor for both the balance of ecosystems and the proper operation of ecosystem services. Considering that plenty of Group's activities (e.g., wind farm development, infrastructure development, highway construction) take place within areas of high biodiversity value, the Group is responsible for implementing a management system that ensures the enhancement of the positive and the limitation of the negative effects that its operation creates or may create.
The Group has taken several measures in this direction:
• Application of certified systems.
• Conducting training for the workers of the construction sites regarding the protection of biodiversity.
• Undertaking initiatives to promote and protect local ecosystems.
• Use of mechanisms for monitoring and recording its effects on the wider natural environment.
Lastly, the Group constantly ensures that it operates beyond the provisions required by environmental legislation, by using mechanisms to monitor and record its effects on the wider natural environment. Both during the construction and operation of its projects, the Group prepares Environmental Impact Studies (EIA), Special Ecological Assessment Studies (SEAS), Special Ornithological Studies (SEO), as well as Monitoring Programs in collaboration with specialized scientists and audit bodies. The aim of these actions is to obtain and use the necessary information to ensure the protection of local ecosystems, by taking appropriate measures to protect and restore the effects of its activities.
4.2.3. Responsible waste management
ATHEX A-E3: Waste Management
The Group ensures that it cooperates with licensed bodies for the collection, recovery, treatment, reuse and/or disposal of its waste. By adopting the principles of the circular economy, significant quantities of generated materials are reused (e.g. excavation, construction and demolition materials) to meet the needs of other activities among the Group's companies and different locations of operation.
Regarding the management of hazardous waste, the Group takes all necessary measures to eliminate the risk of potential pollution of the natural environment, to ensure the safe transport of hazardous waste.
In all Group's offices and facilities, an integrated system of recycling paper, aluminum, glass, plastic, electronic and electrical equipment, lamps, and batteries is implemented using special collection containers in collaboration with special partners for their disposal and reuse of collected recyclable materials. Emphasis is placed on electrical and electronic equipment waste, which is recycled in specific units, where valuable metals and materials are recovered and therefore dangerous leakages of heavy metals into the environment are prevented.
The raw materials procured by the Group play a crucial role in the quality of its as well as the size of its environmental and energy footprint. The Group makes sure to select materials that meet high standards of safety and functionality even under adverse, intense weather conditions. In addition, the
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construction of waste treatment plants and their operation through Public-Private Partnerships (PPP schemes) contribute to the reduction of pollution of the natural environment, both above ground (lakes, rivers, seas and air) and below ground (aquifers). These initiatives have also a positive impact on improving the hygiene conditions for local communities and social groups exposed to the risk of waste and on raising environmental awareness among citizens.
4.3. Non-financial performance indicators
To ensure environmental compliance, in 2023, more than140 internal and external audits, led by the Group HSE department, were carried out.
GRI 304-2 Significant impacts of activities, products and services on biodiversity
During 2023, there were no incidents or complaints from regulatory bodies, environmental inspectors, NGOs or the local community regarding any violation of the environmental permits related to the protection of biodiversity in the context of GEK TERNA Group’s operations.
GRI 307‐1 Non-compliance with environmental laws and regulations
IF-EN-160a.1: Number of incidents of non-compliance with environmental permits, standards and regulations
In 2023 there were no incidents of non-compliance with environmental permits, standards and regulations. Moreover, no monetary fines or other sanctions were imposed related to violations of environmental legislation and relevant regulations.
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Environmental data from the Group's activity for the production of electricity
GRI 302-1: Energy consumption within the Organization
ATHEX C-E3: Energy consumption and production
ATHEX C-E3: Energy consumption and production
GRI 302-1: Energy consumption within the organization
2023
2022
Fuel consumption within the organization from non-renewable sources (in MJ)
9 , 972 , 041 , 905
14 , 885 , 006 , 089
Electricity consumption ( in MWh)
61 , 314
65 , 599
Total energy consumption inside the Group (in GJ)
10 , 271 , 838
15 , 493 , 160
Total energy consumption inside the Group (in MWh)
2 , 853 , 288
4 , 303 , 655
Percentage of electricity consumed (in MWh)
2 .2 %
1 . 5%
Percentage of energy consumed from renewable sources (in MWh)
1 . 8%
0 . 6%
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ΑΤΗΕΧ C-E1: Scope 1 emissions
GRI 305-1: Direct GHG emissions (Scope 1)
ΑΤΗΕΧ C-E2: Scope 2 emissions
GRI 305-2: Energy related indirect GHG emissions (Scope 2)
SASB topic: Greenhouse gas emissions and energy resource management
ATHEX C-E1 Scope 1 emissions
GRI 305-1: Direct (Scope 1) GHG emissions
2023
2022
Total gross direct (Scope 1) GHG emissions (in t CO₂e)
570 ,779
880 , 184
Biogenic CO 2 emissions (in t CO₂e)
5 ,847
4 , 273
ATHEX C-E2 Scope 2 emissions
GRI 305-2: Energy related indirect (Scope 2) GHG emissions
2023
2022
Location-based emissions (in t CO₂e)
22,928
32 , 346
Market-based emissions (in t CO₂e)
11,835
21 , 066
Which gases have been included in the calculation of indirect emissions (e.g., CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, NF₃, or all)?
ALL
ALL
SASB (IF-WM-120a.1): Emissions of gaseous pollutants
2023
2022
NOₓ emissions (including NO and NO₂ and excluding N₂O) in tonnes
2 . 4
302
SOₓ emissions (including SO₂ and SO₃) in tonnes
1 .4
6 .2
Emissions of non-methane organic compounds (VOCs) in tonnes
N/A
N/A
Emissions of hazardous air pollutants (HAPs) in tonnes
N/A
N/A
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GRI 306-3: Waste generated
GRI 306-4: Waste diverted from disposal
GRI 306-5: Waste directed to disposal
Unit
2023
2022
GRI 306-3: Waste generated
Waste generated
Waste diverted from disposal
Waste directed to disposal
Waste generated
Waste diverted from disposal
Waste directed to disposal
Hazardous Waste
Tn
300
278
21
454
445
8
Non-hazardous Waste
Tn
1,994,628
431,070
1,563,557
414,036
340 , 694
73 , 341
GRI 306-4: Waste diverted from disposal
Unit
2023
2022
Hazardous waste
Onsite
Offsite
Total
Onsite
Offsite
Total
Preparation for reuse
Tn
0
29
29
0
18
18
Recycling
Tn
0
63
63
0
416
416
Other recovery methods
Tn
0
185
185
0
10
10
Total
Tn
0
278
278
0
445
445
Non-hazardous Waste
Onsite
Offsite
Total
Onsite
Offsite
Total
Preparation for reuse
Tn
0
44,521
44,521
263 , 465
16
263 , 481
Recycling
Tn
307
384,859
385,167
534
72 , 140
72 , 675
Other recovery methods
Tn
1.70
15
16
1 . 44
4 , 536
4 , 538
Total
Tn
309
429,395
431,070
264 , 001
76,693
340 , 694
GRI 306-5: Waste direrted from disposal
Unit
2022
2021
Hazardous Waste
Onsite
Offsite
Total
Onsite
Offsite
Total
Incineration (with energy recovery)
Tn
0
0
0
0
0
0
Incineration (without energy recovery)
Tn
0
0
0
0
0
0
Landfilling
Tn
0
18
18
0
0
0
Other recovery procedures
Tn
0
3
3
0
8
8
Total
Tn
0
21
21
0
8
8
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ATHEX A-E3 Waste Management
ATHEX A-E3 Waste management
2023
2022
Percentage of waste by type of treatment
Total amount of waste generated
Tn
1,994,928
414,490
Recycling
%
19%
17%
Preparation for reuse
%
2.2%
63%
Landfill
%
78%
16%
Incineration (with energy recovery)
%
0%
0%
Incineration (without energy recovery)
%
0%
0%
Other recovery methods
%
0.1%
2.2%
GRI 303-3: Water withdrawal
GRI 303-4: Water discharge
GRI 303-5: Water consumption
2023
2022
Total water withdrawal, discharge, consumption
Unit
All the areas
Areas of significant influence on water resources
All the areas
Areas of significant influence on water resources
Total water withdrawal
ML
3,731,733
3,730,529
3,963,907
3,963,203
Total water discharge
ML
3,730,926
3,730,525
3,963,407
3,963,200
Total water consumption
ML
807
4
500
2.6
1 The difference in 2022 is due to a significant increase in earthworks at Group construction sites.
Non-hazardous Waste
Onsite
Offsite
Total
Onsite
Offsite
Total
Incineration (with energy recovery)
Tn
0
0
0
0
0
0
Incineration (without energy recovery)
Tn
0
0
0
0
4 . 44
4 . 44
Landfill
Tn
0
1,561,383
1,561,383
0
68,893
68,893
Other recovery procedures
Tn
0
2,174
2,174
0 .4
4 , 443
4 , 443
Total
Tn
0
1,563,557 1
1,563,557
0 .4
73 , 341
73 , 341
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5. Sustainable supply chain
5.1. Due diligence and other policies
5.1.1. Supply chain
ATHEX C-S8: Supplier assessment
Responsible supply chain management is at the centre of the Group's effort to create long-term value through its business operations and the establishment of responsible business relationships with its suppliers and partners. To address the new challenges arising by supply chain issues, the Group makes sure to incorporate new criteria into its supply chain management procedures, such as the new terms of engagement with suppliers and preference for domestic suppliers to help the Group contribute to stimulating the local economy.
The Group recognizes that the responsible management of the supply chain also requires responsible collaborations with the mutual contribution and dialogue of all contracting parties. The Code of Ethics and Conduct constitutes the basic framework of principles and values that must characterize, among others, the Group's suppliers, subcontractors, and partners to maintain transparent and responsible business relations with it.
As of 2023, the Group applies a Procurement Policy that incorporates ESG (Environmental, Social and Governance) criteria for the evaluation and selection of suppliers and partners, with the ultimate goal of contributing to the creation of a supply chain that respects the principles of sustainability and social responsibility.
5.1.2. Human rights
ATHEX C-S6: Human rights Policy
Human rights Policy
The Group's Human Rights Policy, which has been developed and implemented by the Group, recognizes the importance of internationally recognized human rights as a foundation for responsible business conduct and contribution to Sustainable Development. This policy is intended to express a commitment to respect internationally recognized human rights and to recognize the responsibility to identify, assess and manage potential impacts on the rights of stakeholders throughout its value chain and operations.
The Policy’s scope covers all countries that the Group operates by identifying human rights per stakeholder group categories and taking into consideration the following:
• The United Nations Universal Declaration of Human Rights.
• The United Nations International Pact on Civil and Political Rights.
• The United Nations International Pact on Social, Economic and Cultural Rights.
• The United Nations Guidelines for Business Activities and Human Rights.
• The United Nations Global Compact.
• The ILO (International Labour Organization) Declaration on Fundamental Principles and Rights at Work.
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• United Nations Resolution 46/7 on Human Rights and the Environment.
• The voluntary commitments of the Company’s Management for safety and human rights.
The Human Rights Policy is covered by the Group’s Complaints and Grievance Mechanism and has been thoroughly communicated to all employees.
5.2. Risk Management
5.2.1. Supply Chain
The Group monitors, assesses and reviews supply chain risks on an annual basis.
Among other incidents that have a significant impact on the achievement of the Group's strategic objectives and may affect its reputation, as well as its business operations, and which are related to the supply chain, the following have been identified:
• Shortages of goods, products and raw materials.
• Inability to execute contracts from approved suppliers due to climate disruptions, unstable geopolitical environment, etc.
In addition, GEK TERNA Group acknowledges the risk of incidents of violation of international standards and/or legislation related to the practices of its suppliers as well as the non-sharing of common policies/values with its suppliers. It is noted that potential risks including in the supply chain may arise from not supporting local and domestic suppliers, with a potential reduction in their purchasing power and the wider economic growth and prosperity of the regions of operation. Therefore, the Group consistently prefers to work with local suppliers.
To this end, the Group communicates minimum cooperation requirements and ensures that its cooperating suppliers comply with environmental, energy and social criteria such as:
• Their certification to international standards e.g. ISO 9001, ISO 14001 and ISO 50001.
• The implementation of policies and procedures targeting the protection of the environment and the society.
• The availability and use of materials and equipment that, apart from their suitability and usability, have high health and safety standards, are environmentally friendly and belong to a high energy class with low energy consumption.
• Full compliance with the Health and Safety regulatory framework and adherence to the Group's Code of Ethics and Conduct.
5.2.2. Human Rights
Risk management is an important factor for GEK TERNA Group in the protection of human rights. The Group is committed to identifying, preventing and addressing the risks that may cause human rights violations.
To better manage these risks, the Group adopts a number of measures, including:
• Analysis of risks that may affect human rights in all its activities. This analysis helps to identify potential problems and risks that may arise.
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• Policies and procedures that promote the protection of human rights. These policies and procedures set out the requirements and practices to be followed to protect workers' rights and prevent violations.
• Educating and raising awareness among its employees about human rights and the importance of protecting them. This helps to increase awareness and compliance with the Group's policies and procedures.
• Audits and evaluations to verify compliance with policies and procedures relating to the protection of human rights. This ensures that the Group's practices comply with standards and requirements.
5.3. Non-financial performance indicators
During 2023, there were no incidents of human rights violations at GEK TERNA Group.
GRI: 204-1 Proportion of spending on local suppliers
In 2023, 80.7% of the Group's supplies came from domestic suppliers.
6. Social and labour issues
6.1. Due diligence and other policies
Through the adoption of responsible policies, GEK TERNA Group supports the development of both its human capital and the local communities in which it operates and interacts with. Through continuous consultation and efforts to identify and respond to the real needs but also through its own activities, the Group actively participates, supports and considers as a high priority the investment in its people by providing the necessary resources to promote the continuous improvement of the working environment.
The Group, for the management of social and labour issues:
• Continuously increases its socio-economic footprint.
• Implements a Recruitment and Evaluation Policy with objective and fair selection criteria.
• Implements a Remuneration and Benefits Policy.
• Seeks to increase workplace diversity.
• Provides equal training and education opportunities.
• Implements a Health and Safety Policy.
• Implements a Data Protection and Cookies policy.
6.1.1. Human Resources
Equal opportunities, rewards, and benefits
GEK TERNA places at the center of its action equal treatment in the working environment, the elimination of all kinds of discrimination and the provision of equal opportunities for professional development to ensure respect for the rights of employees.
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Among others, the Group supports internal recruiting, ensuring that existing employees are considered for filling job vacancies and thus giving them the opportunity to improve their careers.
The Group collaborates with the largest University Institutions of the country, (at times with the National Technical University of Athens, National and Kapodistrian University of Athens, Athens University of Economics and Business, University of Piraeus, Aristotle University of Thessaloniki, University of Macedonia, etc.), strengthening the development of more internship positions and the acquisition of professional experience to undergraduate students, while providing the ability to offer professional opportunities after their graduation. In 2023, more than 41 young people completed their traineeships, many of whom were absorbed into full-time jobs at the end of their traineeships.
The Group is committed to providing fair wages and a decent living to all employees without discrimination or preferential treatment based on the employee’s gender or other characteristics. Therefore, the Group has formulated the remuneration and benefits framework with objective criteria and evaluation indicators considering market trends in an impartial and transparent manner, while any additional benefits are offered according to the needs and requirements of each job.
The Group manages human resources issues impartially and ensures that every employee is treated fairly and without discrimination in order to promote a fair working environment, a healthy corporate culture and the development of beneficial working relationships.
The Remuneration Committee is responsible for the Remuneration Policy applied to the members of the Board of Directors, and the Senior Executives of GEK TERNA Group. Within this framework, the Group operates with transparency and meritocracy regarding the provision of remuneration and benefits, applying objective criteria and evaluation indicators depending on the importance of the role, the responsibilities and responsibilities of each position, the educational background, experience, skills, the ability to implement the objectives and the level of performance of each employee.
Also, GEK TERNA Group has set as a goal, the representation of all genders at all levels of jobs. Therefore, the focus of its action is to increase the representation rates of women in its companies at all job levels. A step in this direction is the recording and monitoring of the distribution of women by geographical area of activity, by age and by job level.
Employee training
Remaining faithful to the principle of continuous development, GEK TERNA Group focuses on targeted and meaningful training, organizing educational and training programs in order to develop the knowledge and skills of its employees.
The Group has an Employee Development Policy, which is a guiding policy for all Group personnel. The purpose of the Policy is to describe the framework of the internal procedures concerning the training of the Group's Human Resources and the dissemination of knowledge and experience, with an emphasis on any developments concerning the departments of Internal Control, Risk Management, Regulatory Compliance, Information Systems, Information Security and Personal Data Protection. The Policy is implemented under the responsibility of the Development department of the Human Resources Department and approved by the Group Management as a framework, while it can be specialized according to the needs and requirements of each subsidiary company.
The Group's training plan includes the following categories of training activities:
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• In-house training programs.
• Third-party cross-company training programs.
• Conferences/ Seminars/ Lectures/ Exhibitions.
• Certifications of professional qualifications.
• Foreign Language Courses.
• Subsidy of Postgraduate programs.
In 2023, as part of its digital transformation efforts and with the goal of creating a unified educational environment for all Group employees, the Group implemented a central Learning Management System (LMS - Knowledge Center). This platform offers interactive and up-to-date content, enabling all employees to have a comprehensive educational experience through modern E-learning practices.
Throughout the year 2023, the LMS platform was utilized by 3650 users. Additionally, a total of 3565 courses were completed across the following categories:
1. Mandatory Training courses that ensure compliance and safety within the Company:
• Regulatory Compliance
• Health and Safety
• Risk Management
• GDPR (General Data Protection Regulation)
• Corporate Governance
• Cybersecurity
2. Training courses related to Information Technology and Collaboration Tools, including:
• Information Technology (IT)/Software/Microsoft products
3. Onboarding Training courses
4. Soft Skills Development Training courses
Based on the principle of equal opportunities, the Group ensures that all employees can participate in educational activities and promotes a clear and detailed framework of procedures for planning, implementing, and evaluating the training of its employees to achieve the development of skills and the increase of productivity of its human capital. To achieve this goal, there is a collaboration between the Human Resources Department and all the Departments, Construction Sites and Facilities of the Group's companies.
At the same time, due to the nature of the Group's activities, it is considered necessary to cultivate a broader environmental and energy culture to achieve both better energy management and the improvement of the Group's overall environmental footprint. The Project Environmental Managers or the Group Health and Safety Department, plan and implement trainings on an annual basis aiming at the correct information and systematic training of employees.
In 2023, the Group joined forces with the National Technical University of Athens (NTUA) to create the first Professional Interdisciplinary Master’s Program titled “Infrastructure and Construction Project
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Management”. This postgraduate program is organized by the School of Civil Engineering at the National Technical University of Athens, in partnership with the School of Mechanical Engineering- NTUA and the School of Electrical and Computer Engineering-NTUA for the interdisciplinary coverage of the subjects it includes. The program is entirely financed by GEK TERNA Group for an initial period of five years, with a total amount of half a million euros. Its aim is to provide optimal preparation, professional competence, and contemporary specialization for young engineers who will be called upon to lead and implement infrastructure and construction projects of the future.
6.1.2. Health and Safety
Protecting the Health and Safety of employees is a key priority. The Group is committed to reducing the impact of its activities on the health and safety of employees at all stages, from design and planning to construction, maintenance and operation of projects and facilities.
GEK TERNA is aligned with the provisions of the applicable Ν ational, European, and Ι nternational legislation through the implementation and monitoring of a concrete Health and Safety Management System according to the ISO 45001:2018 standard.
As part of this Health and Safety Management System, the Group implements a Health and Safety Policy, which:
• Is suitable to the Group’s purpose.
• Includes a commitment to comply with applicable legal and other requirements concerning Health and Safety at work.
• Includes a commitment to continuous education and information for all employees on matters of workplace safety.
• includes a commitment to investigate each incident with the aim of identifying deeper causes that lead to them, ultimately minimizing their impact.
• Includes a commitment to prevent and control work-related violence and all forms of harassment and violent incidents that occur during work, whether related to it or resulting from it
• Provides the framework for setting and reviewing Health and Safety targets and objectives, as well as energy achievements.
• Is documented, implemented, and maintained.
• Is communicated to all personnel working for and/or on behalf of the Company (subcontractors’ personnel).
• Is available to the public and interested parties.
• Is periodically reviewed and updated.
6.1.3. Workplace violence and harassment
With regards to the creation of a healthy and safe working environment, GEK TERNA Group adopted the Policy against Violence and Harassment at work. The purpose of this policy is to create and maintain a working environment that respects, promotes and guarantees human dignity and ensures the right of every individual to a working world free of violence and harassment.
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This policy emphasizes information and education of employees about their rights, and the consequences of violence and harassment, as well as how to report incidents. In addition, it provides mechanisms for anonymous reporting of incidents to ensure that employees can report problems without fear of retaliation or retribution.
The Group seeks to create a working environment that encourages mutual respect, open communication and cooperation between employees and management. It also regularly organizes training programs and information events on the issue of violence and harassment, promoting awareness and solidarity in the workplace.
6.1.4. Social contribution and support
The Group continuously strengthens its relations with local communities in its areas of operation through new actions and projects in order to maximise the added value it produces and its positive impact. In particular, GEK TERNA Group implements a social support program that reflects the Group's commitment to the principles of Sustainable Development in order to strengthen its business activities, meet the needs of its stakeholders and defend the well-being of local communities.
Through targeted actions and initiatives, GEK TERNA Group improves the daily life of local communities, supports the younger generation, contributes to the care of socially vulnerable groups, and strengthens the local economy and entrepreneurship, while consistently standing ready to address crises and urgent needs. During 2023, GEK TERNA Group's social contribution through sponsorships, donations and infrastructure projects in the regions where it operates amounted to 11.6 million euros. Below are some characteristic actions and initiatives of the Group for the year 2023:
• Supporting the new generation of scientists through a comprehensive and targeted program of sponsorships and initiatives, focused on innovation, education, and training. A prominent position among the program’s relevant actions is held by the exclusive sponsorship of GEK TERNA Group at the National Technical University of Athens (NTUA) for the first Professional Interdisciplinary Postgraduate Program in Infrastructure and Construction Project Management. The Postgraduate Program is fully funded by GEK TERNA Group in principle for five years, with the total amount standing at half a million euros.
• Supporting local communities through sponsoring the construction of infrastructure projects as well as programs to assist vulnerable social groups, sports and cultural clubs, etc.
• Transformation of the 115th Combat Wing into a green aviation facility: Through the initiative and donation from GEK TERNA Group, the critical for national defense 115th Combat Wing in Souda has been transformed into a green aviation facility, More specifically, it has been transformed into a Near Zero Carbon Emissions Airport, with almost zero carbon footprint and with simultaneous coverage of 100% electricity needs from Renewable Energy Sources (Net Zero Energy Airport). This transformation utilizes a system that generates electricity from photovoltaics and connects it to a large energy storage system with lithium-ion batteries. To ensure seamless and efficient management of both generated and consumed energy, a smart Energy Management System has also been developed.
• Reconstruction and rehabilitation of damaged areas: In the aftermath of the devastating summer wildfires of 2023, the GEK TERNA Group undertook the responsibility for restoration in the Mandra- Magoula region, funding the study and execution of anti-corrosion projects amounting to 1 million
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euros. Additionally, when the devastating cyclone, i.e. Daniel, broke in Thessaly, the GEK TERNA Group promptly stood by the local community, deploying personnel and machinery from neighboring construction sites to assist in the broader area. The aid efforts in the affected regions, particularly in the municipalities of Karditsa, Mouzaki, Domokos, Sofades, Meteora, Trikala, Argithea, and Metsovo, included tasks such as water pumping from flooded homes, rescuing residents, restoring road traffic, cleaning streams and drains, transporting deceased animals from barns and fields, and clearing debris from roads and properties.
6.2. Risk Management
The employees of GEK TERNA Group are one of its most important priorities as they are the reason for its growth and business continuity.
The Group having recognized the potential risks associated with the lack of equal opportunities, fair compensation, appropriate health and safety conditions, and employee training that may adversely affect its ability to operate effectively, has invested in creating appropriate structures and conditions that promote transparent recruitment, training, development and reward of its human resources by offering equal opportunities and supporting diversity.
At the same time, the Group gives priority to the Health and Safety of its employees, while recognizing the potential risk of occupational accidents. In order to minimize the possibility of occupational accidents, the Group conducts specific Occupational Risk Assessment studies (ORAs), which identify potential health and safety risks for each job position. In addition, it conducts training programs for employees and those of its partner subcontractors on issues related to occupational hazards and their prevention both before the commencement of work and during the construction or operation of the facilities. An occupational accident, in addition to the human impact, which is the most significant, can cause negative consequences both at operational level (e.g. work stoppage) and economic level (e.g. imposition of fines, damages and other penalties). In addition, the failure of employees, partners or suppliers to properly follow or fail to follow health and safety procedures and instructions is highlighted as a significant risk.
6.3. Non-financial performance indicators
GRI 406-1: Incidents of discrimination and corrective actions taken
During 2023, no reported cases of human rights abuse and/or violations of human rights, discrimination due to race, religion, gender, age, disability, nationality, political opinion, etc., including incidents of harassment, in any Group’s activities.
Metric ATHEX SS-E6: Backlog cancellations
During 2023, there were no backlog cancellations or delays of work related to impacts on society within the Group.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
70
GRI 2-7: Employees
GREECE
2023
2022
GRI 2-7: Employees 2
Female
Male
Other 1
Not disclosed
Total
Female
Male
Other 1
Not disclosed
Total
Number of permanent employees
930
2 , 892
0
0
3 , 822
843
2 , 289
0
0
3 , 132
Number of temporary employees
50
95
0
0
145
22
47
0
0
69
Number of non- guaranteed hours employees
0
0
0
0
0
0
0
0
0
0
Number of full-time employees
950
2 , 978
0
0
3 , 928
841
2 , 325
0
0
3 , 166
Number of part-time employees
30
9
0
0
39
24
10
0
0
34
Number of freelancers
166
629
0
0
795
130
555
0
0
685
Number of employees (incl. freelancers) (Total)
1 , 146
3 , 616
0
0
4 , 762
995
2 , 890
0
0
3 , 885
GREECE
Number of employees (excl. freelancers) (Total)
980
2,987
0
0
3 , 967
865
2 , 335
0
0
3 , 200
1 Gender as specified by the employees themselves.
2 The total number of employees has been calculated by using the headcount methodology
.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
71
GRI 2-7: Employees
ABROAD
2023
2022
GRI 2-7: Employees 2
Female
Male
Other 1
Not disclosed
Total
Female
Male
Other 1
Not disclosed
Total
Number of permanent employees
49
202
0
0
251
74
382
0
0
456
Number of temporary employees
7
32
0
0
39
5
22
0
0
27
Number of non-guaranteed hours employees
0
0
0
0
0
0
0
0
0
0
Number of full-time employees
54
225
0
0
279
74
391
0
0
465
Number of part-time employees
2
9
0
0
11
6
12
0
0
18
Number of freelancers
0
1
0
0
1
0
1
0
0
1
Number of employees (freelancers included)
56
235
0
0
291
80
404
0
0
484
ABROAD
Number of employees (freelancers excluded)
56
234
0
0
290
80
403
0
0
483
1 The gender as determined by the employees themselves.
2 The number of employees has been calculated using the Headcount method.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
72
GRI 2-8: Workers who are not employees
GREECE
GRI 2-8: Workers who are not employees
202 3 2
2022 1
Workers who are not employees and whose work is controlled by the organization
TOTAL
1,278
31
1 Includes all trainees, employees of third party organizations.
2 Includes all trainees, employees of third party organizations, as well as subcontractors insured by the Group.
ABROAD
GRI 2-8: Workers who are not employees
202 3 1
2022 1
Workers who are not employees and whose work is controlled by the organization
TOTAL
1
1
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
73
ATHEX C-S2: Female employees
GREECE
ATHEX C-S2: Female employees
2023
2022
Percentage of female employees
24.07%
25 . 72%
ABROAD
ATHEX C-S2: Female employees
2023
2022
Percentage of female employees
19%
16%
ATHEX C-S3: Female employees in management positions
GREECE
ATHEX C-S3: Female employees in management positions
2023
2022
Percentage of female employees at the top 10% of employees by total compensation
11.1%
12 . 3%
ABROAD
ATHEX C-S3: Female employees in management positions
2023
2022
Percentage of female employees at the top 10% of employees by total compensation
3%
15 . 6%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
74
401-1: New employees hires and employee turnover
ATHEX C-S4: Employee turnover
GREECE
GRI 401-1: New employee hires and employee turnover
2023
2022
Total
Male
Female
<30 years
30-50 years
>50 years
Total
Male
Female
<30 years
30-50 years
>50 years
Number of new employee hires
1 , 640
1 , 377
263
284
932
424
1 , 305
1 , 081
224
234
651
420
Rate of new employee hires (%)
34.4%
28.9%
5.5%
6.0%
19.6%
8.9%
33 . 7%
27 . 9%
5 . 8%
6%
17%
11%
Total number of turnover
599
477
122
77
356
166
563
459
104
97
328
138
Total employee turnover rate (%)
12.6%
10.0%
2.6%
1.6%
7.5%
3.5%
1 . ,6%
11,9%
2 . 7%
2,5%
8 . 5%
3 . 6%
Employee voluntary turnover rate (%)
7.4%
5.6%
1.7%
1.1%
4.9%
1.4%
10 . 1%
7,8%
2 . 2%
2,0%
6 . 4%
1 . 6%
Employee involuntary turnover rate (%)
5.2%
4.4%
0.8%
0.5%
2.6%
2.1%
4 . 5%
4,0%
0 . 5%
0,5%
2 . 1%
2 . 0%
ABROAD
GRI 401-1: New employee hires and employee turnover
2023
2022
Total
Male
Female
<30 years
30-50 years
>50 years
Total
Male
Female
<30 years
30-50 years
>50 years
Number of new employee hires
116
94
22
28
55
33
86
56
30
21
35
30
Rate of new employee hires (%)
39.9%
32.3%
7.6%
9.6%
18.9%
11.3%
32 . 3%
21 . 1%
11 . 3%
7 . 9%
13 . 2%
11 . 3%
Number of voluntary employee exits
274
247
27
57
170
47
114
97
17
7
59
48
Percentage of total turnovers (%)
94.2%
84.9%
9.3%
19.6%
58.4%
16.2%
42 . 9%
36 . 5%
6 . 4%
2 . 6%
22 . 2%
18 . 0%
Employee voluntary turnover rate (%)
92.1%
83.2%
8.9%
19.6%
57.4%
15.1%
13 . 5%
8 . 6%
4 . 9%
1 . 9%
7 . 1%
4 . 5%
Employee involuntary turnover rate (%)
2.1%
1.7%
0.3%
0.0%
1.0%
1.0%
29 . 3%
27 . 8%
1 . 5%
0 . 8%
1 . 0%
13 . 5%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
75
ATHEX C-S4: Employee turnover
GREECE
2023
2022
Metric ATHEX C-S4: Employee turnover
Male
Female
Total
Male
Female
Total
Employee voluntary turnover rate (%)
5.62%
1.74%
7.37%
7 . 8%
2 . 2%
10 . 1%
Employee involuntary turnover rate (%)
4.39%
0.82%
5.20%
4 . 0%
0 . 5%
4 . 5%
Metric ATHEX C-S4: Employee turnover
ABROAD
2023
2022
Metric ATHEX C-S4: Employee turnover
Male
Female
Total
Male
Female
Total
Employee voluntary turnover rate (%)
83.16%
8.93%
92.10%
8 . 6%
4 . 9%
13 . 5%
Employee involuntary turnover rate (%)
1.72%
0.34%
2.06%
27 . 8%
1 . 5%
29 . 3%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
76
GRI 404-1: Average hours of training per year per employee
ATHEX C-S5: Employee training
GREECE
Greece
Employee training
GRI 404-1 Average hours of training per year per employee
2023
2022
Gender
Males
Females
Other*
Not disclosed
Male
Female
Other
Not disclosed
By employee level
Employees in the top 10% of employees by total compensation
6.00
9.21
0.00
0.00
2.06
3.83
0.00
0.00
Employees in the bottom 90% of employees by total compensation
4.36
10.10
0.00
0.00
4.27
3.27
0.00
0.00
TOTAL
4.52
10.06
0.00
0.00
4.02
3.29
0.00
0.00
Gender
Males
Females
Other*
Not disclosed
Male
Female
Other
Not disclosed
By function
Administrative staff
14.12
12.85
0.00
0.00
9.44
4.99
0.00
0.00
Technicians
6.44
7.21
0.00
0.00
3.77
2.40
0.00
0.00
Rest of workers
1.37
3.35
0.00
0.00
3.13
0.00
0.00
0.00
TOTAL
4.61
10.48
0.00
0.00
4.68
3.95
0.00
0.00
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
77
ABROAD
Abroad
Employee training
GRI 404-1 Average hours of training per year per employee
2023
2022
Gender
Males
Females
Other*
Not disclosed
Male
Female
Other
Not disclosed
By employee level
Employees in the top 10% of employees by total compensation
1.78
0.00
0.00
0.00
3.53
4.00
0.00
0.00
Employees in the bottom 90% of employees by total compensation
0.72
0.00
0.00
0.00
3.14
2.25
0.00
0.00
TOTAL
0.9
0.0
0.0
0.0
3.2
2.40
0.00
0.00
Gender
Males
Females
Other*
Not disclosed
Males
Females
Other*
Not disclosed
By function
Administrative staff
0.00
0.00
0.00
0.00
0.92
2.40
0.00
0.00
Technicians
5.42
0.00
0.00
0.00
6.60
2.00
0.00
0.00
Rest of workers
0.10
0.00
0.00
0.00
3.71
3.00
0.00
0.00
TOTAL
0.79
0.00
0.00
0.00
3.2
2.40
0.00
0.00
*Gender as determined by the employees themselves
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
78
403-8 Workers covered by an occupational health and safety management system 1
403-8 Workers covered by an occupational health and safety management system
2023
2022
Employees and workers who are not employees but whose work and/or workplace is controlled by the organization 2
Total
8,003
6 , 730
Number and percentage of all employees and workers who are not employees but whose work and/or workplace is controlled by the organization, who are covered by a health and safety system
Total
8,003
6 , 873
Percentage
100%
100%
Number and percentage of all employees and workers who are not employees but whose work and/or workplace is controlled by the organization, who are covered by an internally audited health and safety system
Total
8,003
6 , 873
Percentage
100%
100%
Number and percentage of all employees and workers who are not employees but whose work and/or workplace is controlled by the organization, who are covered by an externally audited health and safety system 2
Total
7,711
6 , 873
Percentage
96%
97%
1 For GRI 403-8, the number of employees refers to the number of employees and workers who are not employees but whose work and/or workplace is controlled by the organization (number of employees and subcontractors) per month, which are summed for the whole year and the average of the year is obtained.
2 Employees who are not employees but whose work and/or workplace is controlled by the organization include all interns, employees of third-party organizations and employees of subcontractors of the Group.
The number of subcontractor employees in the Group's joint ventures has been calculated on a percentage basis and based on the Group's proportionate share in the joint ventures.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
79
GRI 403-9 Work-related injuries
GRI 403-10 Work-related ill health
SASB IF-EU-320a.1: (1) Total recordable incident rate (TRIR), (2) fatality rate, and (3) near miss frequency rate (NMFR)
GRI 403-9: Work-related injuries
2023
2022
Employees
Number of hours worked
8 , 798 , 266
6 , 923 , 812
Number of fatalities as a result of work-related injury
0
0
Rate of fatalities as a result of work-related injury
0
0
Number of high-consequence work-related injuries (excluding fatalities)
1
0
Rate of high-consequence work-related injuries (excluding fatalities)
0 . 02
0 . 00
Number of recordable work-related injury 3
69
52
Rate of recordable work-related injuries (IR) 4
1 . 58
2 . 13
The main types and number of work-related injuries:
N/A
N/A
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
80
All workers who are not employees but whose work and/or workplace is controlled by the organization
Number of hours worked 5
6 , 254 , 085
2 , 540 , 268
Number of fatalities as a result of work-related injury
0
0
Rate of fatalities as a result of work-related injury
0.00
0 . 00
Number of high-consequence work-related injuries (excluding fatalities)
0
0
Rate of high-consequence work-related injuries (excluding fatalities)
0.00
0 . 00
Number of recordable work-related injury
25
65
Rate of recordable work-related injuries (IR)
0.80
3 . 21
The main types and number of work-related injuries
N/A
N/A
• The indicators presented, are rounded.
• Indicators are calculated at a rate of 200,000 ([total number of recordable work-related injuries or number of working days lost due to work-related accidents / total number of working hours of all employees per year] x 200,000). The rate of 200,000 indicates the number of hours worked by 100 full-time employees in a year.
• Occupational hazards that may result in injuries have been identified and recorded by the safety technician in collaboration with the operation and project managers of each facility, through the occupational risk assessment process. The Safety Technician, in case of any injury, makes recommendations for the proper monitoring of safety rules and instructions to show due care.
• Work related near-misses are not included.
• Workers who are not employees but whose work and/or workplace is controlled by the organization, include all trainees, agency workers as well as subcontractors working in the operations of GEK Terna activities.
3 They refer to:
- LTI > 3 (Lost Time Injuries), Lost Time Injuries of more than three (3) days
- LTI < 3 (Lost Time Injuries).
- MTC (Medical Treatment Case), Medical treatment cases
- RWC (Restricted Work Cases)
4 Accident frequency index based on the terminology of the ESG Disclosure Guide of the Stock Exchange.
5 The number of hours worked by subcontractor employees in the Group's joint ventures has been calculated on a percentage basis and based on the Group's proportionate share in the joint ventures.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
81
GRI 405-1 Diversity of governance bodies and employees
2023
<30 years
30-50 years
>50 years
Number of employees by category
GRI 405-1 Diversity of governance bodies and employees
Male
Female
Total
Male
Female
Total
Male
Female
Total
By employee level
Administrative staff
72
68
140
461
576
1 , 037
132
139
271
Technic ians
53
32
85
579
175
754
309
39
348
Rest of workers
200
10
210
1 , 145
93
1 , 238
901
74
975
Total
325
110
435
2 , 185
844
3 , 029
1 , 342
252
1 , 594
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
82
7. Taxonomy Report
7.1. Article 8 Taxonomy Regulation
The Taxonomy Regulation (EU 2020/852, as in force) is a key component of the European Commission's action plan to redirect capital flows towards sustainable and inclusive growth. It represents an important step towards achieving carbon neutrality by 2050, in line with EU’s climate goals, as the Taxonomy is a classification system for environmentally sustainable economic activities.
In the following section, we, as a non-financial parent entity, present the share of our group turnover, capital expenditure (CapEx) and operating expenditure (OpEx) for the reporting period 2023, that is associated with Taxonomy-aligned economic activities related to the first environmental objective (Climate change mitigation) in accordance with Art. 8 of the Taxonomy Regulation.
7.2. Our activities
Overview
For details and tables see chapter “Our KPIs and accounting policies”.
Table 1 - Proportion of Taxonomy-eligible and Taxonomy-aligned economic activities in total turnover, CapEx and OpEx in FY 2023
FY 2023
Total
(TEUR)
Proportion of Taxonomy-eligible (non-aligned) economic activities (in %)
Proportion of Taxonomy- aligned economic activities (in %)
Proportion of Taxonomy non- eligible economic activities (in %)
Turnover
3,499,207
40%
16%
44%
Capital expenditure (CapEx)
226,658
9%
67%
24%
Operating expenditure (OpEx)
76,706
25%
41%
34%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
83
7.3. Definitions
Taxonomy-eligible economic activity is an economic activity that is described in the delegated acts supplementing the Taxonomy Regulation (EU 2020/852 as in force), namely the supplementary delegated acts issued for the six (6) Environmental Objectives (EOs) of the Regulation (a) climate change mitigation; (b) climate change adaptation; (c) sustainable use and protection of water and marine resources; (d) transition to a circular economy; (e) pollution prevention and control; (f) protection and restoration of biodiversity and ecosystems, irrespective of whether the economic activity meets the Technical Screening Criteria (TSC) of substantial contribution and Do No Significant Harm (DNSH) defined in these acts for each EO of the Taxonomy.
Non-eligible economic activities are those which are not described in the delegated acts supplementing the Taxonomy Regulation.
An economic activity is considered as Taxonomy-aligned when it complies with the TSC defined in the supplementary delegated acts of the Regulation and is conducted in accordance with the minimum social safeguards related to human and consumer rights, anti-corruption and anti-bribery, fair competition and taxation. In order to comply with the TSC, an economic activity should contribute substantially to one or more of the Environmental Objectives while not significantly harming any of the remaining EOs.
7.4. Eligible and aligned economic activities
We examined all the economic activities carried out by our Group in order to determine which activities are eligible and aligned in accordance with the TSC defined in the Annexes of the supplementary Delegated Acts of the Taxonomy Regulation.
The following table presents the activities that qualify as eligible and the EOs where they are expected to contribute substantially.
Information on the degree to which economic activities are aligned (as defined in Article 8 of the Taxonomy Regulation in force) is provided in the Key Performance Indicator (KPIs) tables included in section 'Key Performance Indicators (KPIs) and accounting policies'. The KPI tables also provide a clear indication of which environmental objective is pursued by the respective economic activity. Our activities contribute substantially to Climate change mitigation. These activities generate revenues, but also incur both capital and operating costs.
Economic activities associated with individual eligible and aligned CapEx and OpEx, are described in more detail in the sections dedicated to the CapEx and OpEx KPIs in order to provide insight on our further investment activities that are not directly related to our turnover generating activities (see chapter “Our KPIs and accounting policies”).
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
84
Table 2 – Taxonomy-eligible economic activities
Economic activity
Description
NACE- Code
Environmental Objective where Substantial Contribution is expected
4.1 Electricity generation using solar photovoltaic technology
Construction or operation of electricity generation facilities that produce electricity using solar photovoltaic (PV) technology.
35.11
Climate change mitigation
4.3 Electricity generation from wind power
Construction and operation of electricity generation facilities that produce electricity from wind power.
35.11
Climate change mitigation
4.5 Electricity generation from hydropower
Construction and operation of electricity generation facilities that produce electricity from hydropower.
35.11
Climate change mitigation
4.8 Electricity generation from bioenergy
Construction and operation of electricity generation installations that produce electricity exclusively from biomass, biogas or bioliquids.
35.11
Climate change mitigation
4.9 Transmission and distribution of electricity
Construction and operation of distribution systems that transport electricity on high-voltage, and ultra high- voltage distribution systems.
35.12
Climate change mitigation
4.10 Storage of electricity
Construction and operation of facilities where electricity is stored and later returned in the form of electricity. The activity includes pumped hydropower storage.
-
Climate change mitigation
4.14 Transmission and distribution networks for renewable energy gases and low-carbon transmission gases
Construction and operation of transmission and distribution pipelines dedicated to the transport of hydrogen or other low-carbon transmission gases.
D35.22
F42.21
H49.50
Climate change mitigation
4.29 Electricity generation from fossil gaseous fuels
Construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
35.11
-
6.5 Transport by motorcycles, passenger cars and light commercial vehicles
Purchase, financing, rental, leasing and operation of vehicles designated as category M1, N1, both falling within the scope of Regulation (EC) No 715/2007 of the European Parliament and of the Council, or L (two-, three- and four-wheel vehicles)
H49.32
H49.39
N77.11
Climate change mitigation
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
85
Economic activity
Description
NACE- Code
Environmental Objective where Substantial Contribution is expected
6.14 Infrastructure for rail transport
Construction of electrified trackside infrastructure and associated subsystems, as well as stations, terminals and rail service facilities.
42.12
43.21
Climate change mitigation
6.15 Infrastructure enabling low carbon road transport and public transport
Construction, operation, exploitation and maintenance of motorways, including bridges and tunnels, and airfield runways.
42.11
42.13
Climate change mitigation and adaptation
7.1. Construction of new buildings
Development of building projects for residential and non-residential buildings by bringing together financial, technical and physical means to realise the building projects for later sale as well as the construction of complete residential or non-residential buildings, on their own account for sale or on a fee or contract basis.
41.1
41.2
Climate change mitigation and adaptation
Taxonomy eligibility
We consider and assess all of the group’s electricity generation, transmission and storage facilities that meet the criteria for substantial contribution to the Climate change mitigation EO as eligible under the respective activities 4.1, 4.3, 4.5, 4.8, 4.9, 4.10, 4.14 and 4.29 of the Taxonomy.
In particular, eligible activities concerning the production (4.1, 4.3, 4.5, 4.8) and storage (4.10) of electricity from RES (solar photovoltaic technology, wind energy, hydropower and bioenergy respectively), aim in a substantial reduction of GHG emissions through the generation, transmission, storage, distribution or use of renewable energy. It should be noted that in 2023, activity 4.10 includes the pumped hydropower storage project (Pumped Hydropower Storage System in Amphilochia), which was added to the Group's portfolio of construction projects and constitutes the largest power storage project investment in Greece, while seven (7) more large PV Stations were added to activity 4.1:
• 14.99MW P/V Station in Xeropotamos, Municipality of Eordaia, Regional Unit of Kozani with a substation 33kV/150kV.
• Four (4) PV Stations in Western Macedonia
• 500MW PV Station in Ptolemaida
• Amyntaio Mines PV Station 449,98MW
Furthermore, we consider as Taxonomy-eligible (under activity 4.9), the interconnection of Electricity Transmission facilities on the island of Crete at Damasta, with the Hellenic Electricity Transmission System (HETS) in Attica (Koumoundourou Substation). Activity 4.9 also includes the interconnection project of Cyclades islands (Phase D) with the HETS, which was added to the Group's portfolio in 2023
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
86
and concerns the design, supply of equipment and installation of the new substations for Section A: "GIS 150kV/MT Folegandros and Milos substation".
The Group, through Heron, produces and supplies electricity to businesses and retail customers. The portfolio of these energy assets includes two gas-fueled power plants, HERON I and HERON II, located outside of Thiva, Viotia (with a total installed capacity of 147 and 435 ΜW respectively). According to the supplementary Delegated Act to the EU Taxonomy Regulation, electricity generation from fossil gaseous fuels (4.29) is a Taxonomy-eligible economic activity.
In 2023, the Trans Adriatic Pipeline (TAP) Compression Station Expansion project at Kipi Evros (C37382), was added in the Group’s construction activities and falls under activity 4.14 of Taxonomy- eligible activities as it is estimated to contribute substantially to climate change mitigation.
In 2023, the Group also renewed its vehicle fleet by adding 7 electric vehicles (passenger and light commercial vehicles). The rental/purchase and operation of hybrid electric passenger and light commercial vehicles is also an eligible activity for the Taxonomy (6.5) as it substantially contributes to climate change mitigation.
We consider as Taxonomy-eligible under activity 6.14, the construction of railways, electrified trackside infrastructure and associated subsystems, as well as stations, terminals and rail service facilities. This activity is considered as a climate change mitigation activity under Annex I of the Climate Delegated Act, as it enables a substantial reduction of GHG emissions by using electrified infrastructure instead of gas-fueled railway services.
Moreover, we consider as Taxonomy-eligible under activity 6.15, the construction, operation, exploitation and maintenance of motorways, including bridges and tunnels. The activity is considered as an activity contributing to climate change adaptation, as measures have been implemented to adapt to climate change following a climate risk vulnerability assessment conducted to identify key material issues. Under activity 6.15 in 2023 we also include the electric vehicle chargers installed along PATHE motorway which contribute substantially to the EO of climate mitigation.
Finally, activity 7.1 includes both construction works on existing residential and non-residential buildings, as well as the development or construction of new buildings for the purpose of subsequent sale, rental or concession on contract basis. Financing of these projects is considered as a Taxonomy eligible activity contributing substantially to climate change mitigation. In 2023, three (3) major tourism and commercial infrastructure building projects were added under activity 7.1:
• Construction of 5-star hotel ‘’Blue Iris’’ in Kalo Livadi, Mykonos Island
• Construction of Conference - Cultural Youth Centre "Ionic Centre" in Nea Ionia
• Preliminary construction works for the Casino in the Metropolitan Park of Elliniko
The following table presents information on the Group's fossil fuel-related activities in FY 2023, in accordance with Annex XII, article 8 par. 6 and 7 of the Supplementary Delegated Act 2021/2178 of the Taxonomy Regulation.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
87
Table 3 - Declaration of activities related to nuclear energy and fossil gaseous fuels
Row
Nuclear energy related activities
1.
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
Fossil gas related activities
4.
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
YES
5.
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
NO
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
NO
Taxonomy-alignment
Electricity generation activities using solar photovoltaic technology (4.1), wind power (4.3), hydropower (4.5) and bioenergy (4.8), as well as electricity storage through pumped hydropower storage (4.10) and low-carbon gas transmission and distribution projects (4.14) are assessed as fully Taxonomy-aligned.
The construction of railways infrastructures (6.14) and the purchase/leasing of electric vehicles (6.5) are also assessed as Taxonomy-aligned activities, while building constructions under activity 7.1 and the construction and concession projects under activity 6.15 are assessed as partially Taxonomy- aligned. The construction and operation of electricity transmission and distribution facilities (4.9) as well as electricity generation activities using fossil gaseous fuels (4.29) are not Taxonomy-aligned, according to the criteria defined in the supplementary Delegated Acts 2021/2139 (climate change delegated act) and 2022/1214 respectively. Details on the alignment assessment are presented below.
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7.5. Assessment of Taxonomy-alignment
The Taxonomy Regulation (EU 2020/852 as in force) establishes the framework for EU taxonomy, defining four conditions in order for an economic activity to qualify as environmentally sustainable and aligned:
i) it contributes substantially to one or more of the environmental objectives set out in Article 9 in accordance with Articles 10 to 16;
ii) it does not significantly harm any of the environmental objectives set out in Article 9 in accordance with Article 17 of the Taxonomy Regulation;
iii) it is carried out in compliance with the minimum (social) safeguards laid down in Article 18; and
iv) it complies with Technical Screening Criteria (TSC) that have been established by the Commission through the supplementary Delegated Acts of the Taxonomy Regulation. The TSC should set the out the performance requirements for each economic activity, specifying under which conditions the activity substantially contributes to a given EO and does not significantly harm the other Environmental Objectives.
7.6. Substantial contribution
In order to determine if an economic activity is taxonomy-aligned, the activity should firstly meet the first requirement regarding substantial contribution to one or more of the Environmental Objectives (EOs) of the Regulation
Activities 4.1, 4.3, 4.5, 4.8, 4.9, 4.10, 4.14, 4.29, 6.5 and 6.14 pursue substantial contribution to climate change mitigation, while activity 6.15 and 7.1 aim in contributing substantially both to climate change adaptation and mitigation.
To substantially contribute to an environmental objective, an activity must meet specific TSCs set out in the relevant Annex to the supplementary Delegated Act for climate of the Taxonomy Regulation. Details on these criteria and their assessment are provided below.
The Group’s electricity generation activities using solar photovoltaic technology (4.1) and wind power (4.3), as well as the construction of the Amfilochia pumped hydropower storage system (4.10) by definition substantially contribute to climate change mitigation EO.
Activity 4.5, which includes electricity generation facilities that produce electricity from hydropower, also substantially contributes to climate change mitigation. These facilities are run-of-river plants that do not have an artificial reservoir. More specifically they comprise of two small hydropower plants on Acheloos River in Sanidi - Dafnozonara and on Axios River in Eleousa Thessaloniki, with a total installed capacity of 17,8MW.
Activity 4.8 includes an electricity generation facility exclusively from biomass which contributes substantially to climate change mitigation. The biogas plant has a total rated thermal input of 1MW and is designed to produce electricity from biogas resulting from anaerobic digestion of organic material. The plant is supplied with a large amount of organic-rich wastewater from dairy cow farming enterprises, supplemented by feed residues (corn fillings), sludge and waste with organic load. The plant is based on anaerobic digestion of this organic material, which results in the production of biogas
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used for electricity generation. The plant implements measures to prevent risks related to the operation of the reactor, including leakage of gases such as CH 4 .
Activity 4.9 includes the construction of important electricity transmission infrastructures connecting the islands grids to the HETS and thereby to the interconnected European system, while contributing to an increase of the generation and use of RES, as defined by the TSCs. Considering the above, this activity is assessed as an activity that contributes substantially to the climate change mitigation EO.
The Trans Adriatic Pipeline (TAP) Existing Compression Station Expansion Project at Evros Kipi (4.14) is assessed as an activity substantially contributing to climate change mitigation, as it involves the expansion/enhancement of natural gas (NG) transmission network infrastructures, and the necessary safety measures are implemented to detect methane leaks.
Activity 4.29, which involves electricity generation from fossil gaseous fuels, is not considered as substantially contributing to climate change mitigation since it does not meet any of the technical screening criteria. According to the TSCs, among other criteria, the life cycle GHG emissions from the generation of electricity using fossil gaseous fuels must be lower than 100 gCO2e/kWh and the annual direct GHG emissions of the activity should be on a credible declining trajectory. For FY 2023, this activity does not meet these GHG emissions’ limits and thus we have not conducted a detailed analysis of the DNSH criteria for this activity.
Activity 6.5 concerning the purchase, leasing and operation of electric vehicles is assessed as an activity that substantially contributes to the climate change mitigation EO, as it includes M1 and N1 vehicles of a mass up to 2,610kg, with zero direct GHG emissions.
Activity 6.14, which includes the construction of railways and electrified trackside infrastructures and associated subsystems, as well as stations, terminals and rail service facilities, is considered as an activity substantially contributing to climate change mitigation. More specifically, electrified infrastructure includes Kiato-Rododafni and Rododafni-Rio railway lines in Greece, as well as the Sofia - Dragoman - Serbian borders railway lines in Bulgaria, under the Trans-European Transport Network (TEN-T) Programme. Additionally, none of the above railway infrastructures is dedicated to the transport or storage of fossil fuels. Thus, the technical screening criteria set out for activity 6.14 are met.
Activity 6.15, which includes both the construction and concession of motorways, is considered as an activity that substantially contributes to climate change adaptation. Specifically, the construction and motorway concessions are incorporated in major motorways of the Greek mainland, e.g. Ionia Motorway, Central Greece E65 motorway and Egnatia and Olympia motorways. The subsidiary Nea Odos has undertaken the study, design, construction, operation, exploitation and maintenance of Ionia and part of Lamia-Athens (PATHE) motorways, while the subsidiary Kentriki Odos has undertaken the management of the “Central Greece Motorway – E65 ''. Furthermore, activity 6.15 includes the construction and maintenance of a Qatar motorway in the Middle East, as well as the restoration of damages in motorways and other infrastructure in the region of Thessaly, caused by the Mediterranean cyclone IANOS. All the above projects are assessed as substantially contributing to climate change adaptation as we have conducted a climate risk and vulnerability assessment to reduce the potential physical climate risks and define the relevant adaptation solutions, a prerequisite of the technical screening criteria for substantial contribution. In 2023, our activities under 6.15 also include
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the installation of electrical vehicle chargers along PATHE motorway, infrastructures that are considered as substantially contributing to the climate mitigation EO.
Furthermore, our activity 7.1 Construction of new buildings, is assessed as partially aligned. It comprises of 21 building projects, of which 11 are considered as substantially contributing to climate change mitigation, while the rest contribute to climate change adaptation. The first group includes the terminal of the new international airport of Kasteli on Crete, the office building at Fragokklisias street Athens and the building in the corner of Amarousiou-Chalandriou and Chimaras 16 street in Marousi, the Tower of Piraeus, hotel “Asteria” in Glyfada, the ΙRC “City of Dreams” in Limassol, Cyprus, as well the Interbalkan Hospital, the office buildings “Hub 26”, in Thessaloniki, the Blue Iris hotel complex in Mykonos, the Casino of the Hellinikon Metropolitan Park and the Ionic Centre. For these building projects, there is a formal commitment that, upon completion, they will be certified with Energy Performance Certificates from private institutions (LEED, BREEAM or Passive House) and will undergo testing for airtightness and thermal integrity. The life-cycle Global Warming Potential (GWP) of the buildings resulting from the construction has begun to be calculated for each stage in the life cycle and will be disclosed to investors and clients on demand, upon completion. The second group, contributing to climate change adaptation, includes the tower of Agia Napa marine in Cyprus, the Refugee Building project, the terminal of “Nikola Tesla” airport in Belgrade and 10 building projects related to energy production units from fossil fuels (i.e., lignite, natural gas). For this activity, a climate risk assessment has been conducted in order to define the physical climate risks and to develop a plan with potential scenarios. Therefore, the above-mentioned buildings are fully aligned with the Taxonomy Regulation.
The assessment of CapEx/OpEx associated with these activities (category a), follows the conclusions made for the purpose of assessing our turnover.
To learn more about how we determined the KPIs please refer to section “Our KPIs and accounting policies” below.
7.7. Do No Significant Harm (DNSH)
For all economic activities where we are able to demonstrate substantial contribution to climate change mitigation and to climate change adaptation, we further assess the DNSH criteria. This assessment usually starts with the relevant sites where we perform our respective economic activity. For activities carried out outside the EU, providing evidence of compliance with the DNSH criteria is not possible. Therefore, the portion of our turnover, CapEx and OpEx, allocated to third countries is considered as not Taxonomy-aligned.
DNSH to Climate change mitigation
Activity 6.15 and 7.1
None of our construction projects under activity 6.15, are dedicated to fossil fuel extraction, production, transportation or storage. Regarding the part of these activities related to the construction and operation of motorways, this is considered as non aligned for the climate mitigation EO since the relevant DNSH technical screening criteria are not met.
Regarding our building projects under activity 7.1 contributing substantially to climate change adaptation, 3 building projects, the Tower of Agia Napa marine in Cyprus, the Refugee Buildings in Lesvos, Chios and Evros, and the terminal of “Nikola Tesla” airport in Belgrade, are not dedicated to
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fossil fuel extraction, production, transportation or storage. However, the remaining 7 building projects are related to energy production from fossil fuels (i.e., lignite, natural gas) and therefore cannot comply with this requirement. In addition, none of the 11 above-mentioned buildings are qualified to receive an Energy Performance Certificate, and consequently do not meet DNSH TSC for climate change mitigation.
DNSH to Climate change adaptation
Activities 4.1, 4.3, 4.5, 4.8, 4.9, 4,10, 4.14, 6.14, 6.15 and 7.1
For all our activities contributing substantially to climate change mitigation, a physical climate risk assessment is required pursuant to Annex I, Appendix A of the supplementary delegated act on climate (EU 2021/2139).
With respect to the activities carried out by GEK TERNA Group, the assessment focuses on:
• our facilities where we have installed solar photovoltaic panels (activity 4.1)
• our sites where we have installed wind turbines (activity 4.3)
• our sites where we have hydropower generation technology installed (activity 4.5)
• our sites where we have anaerobic combustion plants (activity 4.8)
• our sites where we have electricity transmission systems (activity 4.9)
• our sites where we have pumped hydropower storage facilities (activity 4.10)
• our sites where we have natural gas transmission network installations (activity 4.14)
• our sites where electrical vehicle chargers have been installed (activity 6.5)
• our railway infrastructure sites (activity 6.14)
• our sites where we have construction of buildings for (activity 7.1)
For each of the above sites a preliminary screening of climate-related risks was carried out as mapped in Annex I, Appendix A and the risks found to be relevant were further analyzed through a climate risk assessment. Since the expected lifetime of all relevant activities is longer than ten years, the climate risk assessment was conducted considering an optimistic, a moderate and a pessimistic scenario, compared to the current risk. The impact of scenarios RCP2.6, RCP4.5 and RCP8.5 (Representative Concentration Pathway) of the IPCC were assessed as they represent the optimistic outcome of zero emissions by 2100, the moderate outcome of emissions peaking around 2040, then decline, whereas the global mean temperature increases between 1 and 2 ℃ by 2100 and, thirdly, the pessimistic outcome with a global temperature increase of about 4.3˚C by 2100. Risk assessment involves the calculation of the severity (magnitude) of potential impacts (on a five-level scale) and the likelihood (on a five-level scale) of these impacts to occur, as follows:
Risk = likelihood x impact, where:
i) likelihood is the probability of occurrence of the identified climate risk; and,
ii) impact is the magnitude of a business effect from climate risk.
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The adaptive capacity is based on adaptation plans already in place and internally available measures to mitigate the impact of climate risks. The result of the climate risk assessment is, for each of the identified climate risks in each scenario, a physical risk score that indicates the materiality of each risk.
DNSH to the Sustainable use and protection of water and marine resources
Activities 4.3, 4.5, 4.8, 4,10, 4.14, 6.14, 6.15 and 7.1
Electricity generation facilities under activities 4.5, 4.8 and low carbon gas transmission under activity 4.14 located in the EU, and the construction and concession activities under activities 6.14, 6.15 and 7.1 located in the EU, have all been subject to a successfully completed/approved Environmental Impact Assessment (EIA) including an assessment of the impact on water in accordance with Directive 2000/60/EC, and the risks have been identified and addressed through appropriate mitigation and response measures.
Regarding activity 4.10, the Amfilochia pumped hydropower storage project is connected to river systems and complies with the relevant TSCs set out in Annex I, Appendix B of the climate change delegated act. In particular, prior to project construction an EIA was conducted in accordance with Article 4 of Directive 2000/60/EC to assess the potential impacts on the status of water bodies within the basins of affected rivers/streams and on protected habitats and species directly dependent on water. The assessment was based on recent, complete and accurate data, as well as the respective River Basin Management Plans currently in force, and also took into consideration potential cumulative impacts from other existing or planned infrastructures in the region. The EIA process was successfully completed with the issuance of the relevant Decision of Approval of Environmental Terms (DAET) which sets out the terms and measures to achieve good status or potential of the affected water bodies. The effectiveness of these measures and terms is monitored as part of the applicable environmental monitoring program and the DAET in force.
For activity 7.1 we ensure that, except for installations in residential building units, the specified water use for the following appliances (wash hand basins and kitchen taps, showers and flushing systems), is certified with product verification datasheets or an existing product label in the EU, all in accordance with all the technical specifications for sustainable water flow. Furthermore, all the hydraulic products and installations used in our buildings are specifically adapted to the criteria of near-zero energy buildings (NZEB).
The DNSH criteria for activity 4.3 are not applicable to our activities as they refer to offshore wind farms, which are not included in our portfolio of FY 2023. Finally, the supplementary Climate Delegated Act does not define DNSH TSC for the sustainable use and protection of water and marine resources for activities 4.1, 4.9 and 6.5.
DNSH to the Transition to a circular economy
Activities 4.1, 4.3, 4.9, 4.10, 6.5, 6.14, 6.15 and 7.1
The photovoltaic panels (4.1) and the wind turbines (4.3) we use, as well as the related engineering equipment, are purchased from established manufacturers who focus on high durability and recyclability. We have carefully considered the durability and recyclability as well as available options for easy dismantling and refurbishing of the components when we decided on the technologies and products used. As a matter of fact, the PV mechanical equipment is reusable to the extent feasible and
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recyclable in accordance with the applicable provisions. The large metal components of our wind turbines that do not contain other materials/mixtures (e.g. tower sections, cast iron frame in nacelle, etc.) are assumed to be 98% recyclable. Other major components, such as generators, gearboxes, cables and diversion system parts are 95% recyclable.
Regarding activities 4.9 and 4.10, a Waste Management Plan is in place, as foreseen by the DAET in force issued for the projects and in line the Group's overall environmental policy, which ensures the prevention of waste generation and maximum reuse or recycling at the end-of-life, in accordance with waste prioritization through contractual agreements with waste management third parties, staff informing/awareness etc.
Our group's electric vehicles (6.5) are reusable or recyclable by at least 95% by weight per vehicle at the end of their life cycle in accordance with article 11 of PD 116/2004 applicable to alternative management systems of end-of-life vehicles in Greece, while measures are implemented for waste management both during the use (maintenance) and at the end of the fleet's life cycle, including reuse and recycling of batteries and electronic equipment (especially critical raw materials contained), in accordance with the waste hierarchy. Nevertheless, there is no available data (from vehicle manufacturers and/or authorized vehicle recycling/management bodies) on the recycling/ recovery/ reuse rate of vehicles by weight.
Regarding activities 6.14, 6.15 and 7.1, we limit waste generation in processes related to construction and demolition activities, use selective demolition to enable the removal and safe handling of hazardous substances, while facilitating the reuse and high-quality recycling. All of our building designs and construction techniques support circularity and in particular, demonstrate in the way they are designed, to be more resource efficient, adaptable, flexible and dismantlable to enable reuse and recycling.
There are no applicable DNSH Technical Screening Criteria (TSC) for the transition to a circular economy for activities 4.5 and 4.8 and 4.14.
DNSH to Pollution prevention and control
Activities 4.8, 4.9, 4.14, 6.5, 6.14, 6.15 and 7.1
The DNSH Technical Screening Criteria (TSC) for activity 4.8 requires facilities to comply with specific European regulations. The emissions produced by our biogas plant are within the best available techniques’ (BAT) ranges. Following the anaerobic digestion process, dissolved water is produced with suspended organic solid waste content at a percentage of about 5%. Solid waste is then separated and used as a first quality soil improver and solid fertilizer, while meeting the requirements for fertilizing materials set out in national legislation on fertilizers or soil improvers for agricultural use. According to the latest studies, our biogas plant processes over 100 tonnes of biowaste per day. Emissions to air and water are within or lower than the emission levels indicated by Best Available Techniques (BAT). Considering the above, electricity generation from biomass complies with all DNSH Technical Screening Criteria.
Regarding the electricity interconnection projects of Crete and Cyclades islands to the HETS (4.9), the IFC guidelines on environment, health and safety are implemented at all construction sites of overground high voltage transmission lines, while their operation complies with applicable regulations limiting the effects of electromagnetic radiation on human health in accordance with the European
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Council Recommendation on the limitation of public exposure to electromagnetic fields (0Hz to 300GHz. Also, polychlorinated biphenyls (PCBs) are not used in these infrastructures since 2001 under current applicable legislation.
The Group's natural gas transmission and distribution activities (4.14) meet the TSC for pollution prevention and control, as the equipment used in the new compression station meets the requirements of Directive 2009/125/EC and complies, where applicable, with the top-class requirements of the energy label, as well as with the implementation regulations under the above Directive and best available technology.
Our Group's electric vehicle fleet (6.5) meets the TSC of the EO considering the fleet has zero direct emissions of air pollutants, while their tires meet the external rolling noise and rolling resistance Coefficient requirements set out in Regulation (EU) 2020/ 740.
For activities 6.14 and 6.15, the relevant DNSH criteria require the mitigation of noise and vibrations from the use of railway or road infrastructures. To this end, we have installed open trenches and wall barriers, in order to comply with Directive 2002/49/EC, and we take relevant measures to reduce noise, dust and pollutant emissions during construction or maintenance works.
Furthermore, the criteria set out for activity 7.1 forbid the manufacture, placing on the market or use of hazardous chemical substances. Components and materials used in building construction that may come into contact with occupants/residents, emit less than 0,06 mg of formaldehyde per m 3 of material or component upon testing and less than 0,001 mg of other carcinogenic volatile organic compounds. Also, construction sites have been subjected to an investigation for potential contaminants, while measures have been taken also to reduce noise, dust and pollutant emissions during construction. The DNSH criterion related to pollution prevention and control, also, requires the activity not to lead to the manufacturing, placing on the market or use of substances specified by Appendix C of the Climate Delegated Act. We have established a process to track potentially concerning substances based on information reported by our suppliers. Through this process, we keep an inventory of all substances subject to the various regulations of the EU referred to in Appendix C and we have adapted our screening procedures accordingly to ensure that all substances of potential concern with regards to the criteria provided in Article 57 of REACH are identified and covered by EU regulations.
Due to technical reasons, not all potentially concerning substances pursuant to point (g) of Appendix C can be avoided during building construction. We consider the use of such substances essential, provided that no feasible alternative is available. Considering that new low energy consumption buildings are key for the transition to low-carbon residential and non-residential zones, we consider the use of such substances essential for society, provided that there is no available/applicable alternative. Therefore, we test all identified substances of potential concern for alternatives that are acceptable from a health and safety perspective and that are technically and economically feasible. We continuously strive to find adequate substitutes for these substances. Moreover, through the Material Safety Data Sheets (MSDS), we test such substances from a health and safety perspective, and we train our personnel accordingly. In addition, we ensure that our buildings do not contain lead, mercury, hexavalent chromium and cadmium.
Taking these considerations and measures into account, all our constructions meet all compliance requirements of the DNSH TSC concerning pollution prevention and control.
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There are no applicable technical screening criteria regarding the pollution prevention and control for activities 4.1, 4.3, 4.5 and 4.10.
DNSH to the Protection and restoration of biodiversity and ecosystems
Activity 4.1, 4.3, 4.5, 4.8, 4.9, 4.10, 4.14, 6.14, 6.15 and 7.1
Appendix D of the supplementary Climate Delegated Act requires an EIA or screening carried out in accordance with Directive 2011/92/EU for all eligible activities of the Group assessed as substantially contributing to climate change mitigation and adaptation, except for activity 6.5 (non applicable TSC). All our electricity generation facilities and construction sites located in the EU have been subject to an EIA and screening successfully. Furthermore, regarding activities 4.1, 4.8 and 7.1, our facilities are not located in or near biodiversity-sensitive areas. Specifically, new building constructions under activity 7.1, are located outside of agricultural land, forests and naturally preserved areas.
Regarding our wind farms (activity 4.3), hydropower facilities (activity 4.5), electricity transmission projects (activity 4.9), pumped hydropower storage system (activity 4.10), transmission and distribution of NG (activity 4.14), railway infrastructures (activity 6.14) and motorways (activity 6.15) located in or near biodiversity-sensitive areas, Appropriate Assessments (AAs) have been conducted (Special Ecological Assessment, Ornithological Studies, etc.) as part of the respective EIA studies. Based on the AA conclusions, the necessary mitigation and/or compensation measures are implemented.
7.8. Minimum Safeguards
The final step for Taxonomy-alignment is compliance with the Minimum Safeguards (MS). The MS include all procedures implemented to ensure that economic activities are carried out in alignment with:
• the OECD Guidelines for Multinational Enterprises (OECD MNE Guidelines)
• the UN Guiding Principles on Business and Human Rights (UNGPs), including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labor Organization on Fundamental Principles and Rights at Work and
• the International Bill of Human Rights
In the absence of further guidance from the European Commission, we based our MS assessment on the “Final Report on Minimum Safeguards” published by the Platform on Sustainable Finance (PSF) in October 2022.
The scope of the MS covers the following four topics:
• Human rights (including labor and consumer rights)
• Corruption and bribery
• Taxation
• Fair competition
We follow a two-dimensional assessment approach to assess compliance with MS. On the one hand, assessing whether adequate processes have been implemented to prevent negative impacts
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(procedural dimension). On the other hand, assessing whether outcomes are monitored in order to check whether our processes are effective (outcome dimension).
In GEK TERNA Group we understand that the behavior of all employees and other actors along our value chain plays a central role in complying with MS. We take our responsibility as a global actor in the energy sector seriously by following the ethical business conduct principles for our daily business activities that are manifested in the Group’s Code of Conduct. Moreover, GEK TERNA group aims to ensure that its operations are aligned with the 17 Sustainable Development Goals of the UN and contribute to the national energy targets. As part of the Group’s Sustainable Development Policy, corporate responsibility is aligned with the ESG (Environmental- Social- Governance) criteria / principles and applies to the four MS dimensions.
Annual training is part of our business strategy, and it is mandatory for all employees. Regarding our supply chains and business relationships, we expect the same ethical business conduct as for our own business entities. Therefore, the MS requirements are an integral part of our business contracts. In fact, all partners and suppliers of GEK TERNA group are obliged to read and understand the Code of Conduct, as well as include a separate article in their contract with GEK TERNA group and its subsidiaries. We expect each of our suppliers to respect the Group's ethical principles and to ensure that this Code of Conduct is respected by all their employees and subcontractors. In addition to these preventive measures, we evaluate any incoming complaints about detrimental behavior regarding a variety of ethics, integrity and compliance issues (including the four topics covered by the MS) and assess any necessary adjustments in our procedures. As part of GEK TERNA group, TERNA ENERGY Group, has a Supplier’s Code of Conduct in place, which aims to promote and enforce practices relating to human rights, ethics, the protection of the environment safety, meritocracy and transparency, the quality of products and services and the fair competition. Moreover, its supplier selection and evaluation processes include human rights, anti-corruption and anti-bribery due diligence.
Human Rights (including labor and consumer rights)
Based on the UNGPs and the OECD Guidelines for Multinational Enterprises, including the OECD Due Diligence Guidance for Responsible Business Conduct, we have implemented a robust approach in order to identify, prevent and, if necessary, mitigate and remediate any actual and potential negative impacts on human rights. Our human rights statement describing our strategy, the high impact areas and our processes and measures to prevent negative human rights impacts, is publicly available on our website. Our strategy for combating human rights violations is based on a thorough impact analysis. The impact analysis includes our own business units and our subsidiaries. Our processes ensure that remedial action is taken promptly in the event of an acute human rights violation and whatever is necessary, is provided. The effectiveness of our processes is monitored by carrying out inspections at facilities and construction sites by competent personnel and monitoring the implementation of legislation and changes in the legislative/regulatory framework. on a regular basis. Any person who feels that their human rights have been violated by activities of GEK TERNA group or an actor of our value chain, can contact us through our grievance mechanism.
During the financial year 2023, GEK TERNA group was not convicted of any violation of labor law or human rights. In addition, GEK TERNA group was not involved in a case dealt with by an OECD National Contact Point and was not questioned by the Business and Human Rights Resource Center (BHRRC).
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Corruption and bribery
Regulatory Compliance and the control of corruption and bribery are fundamental principles of the Group's voluntary commitments and good governance. To prevent and fight against corrupt practices, GEK TERNA group develops, where appropriate and after conducting a risk assessment, specific control measures in all of its activities in order to prevent and avoid corruption and bribery actions. In this context, the Group has installed and implements a certified Anti-Bribery Management System, based on the requirements of the ISO 37001 standard. We have published an anti-corruption policy which is communicated to our employees as well as suppliers and business partners and is publicly available on our website. Regular training of employees and the establishment of awareness mechanisms on the rules of combating corruption and bribery, money laundering and terrorist financing, the application of these rules, as well as the special training of employees, identified as specifically exposed to these risks, is mandatory.
In the financial year 2023, zero violations of corruption or bribery were reported.
Taxation
In line with our ethical business values, tax governance and tax compliance are important elements of our oversight, and we are committed to comply with all relevant tax laws and regulations. GEK TERNA group develops, where appropriate and after conducting a risk assessment, specific control measures in all of its activities in order to prevent and avoid tax violation and illegal activity. Tax risk management is embedded in our overall company risk management system: Therefore, our approach to tax compliance is transparent, sustainable in the long term and complies with our Code of Conduct.
In the financial year 2023, GEK TERNA group has not been convicted in court for any major violation of tax laws.
Fair competition
We carry out our activities in a manner consistent with all applicable competition laws and regulations in all countries where we operate. With our guidelines for fair competition and ethical business conduct, we pursue the goal of operating in a free-market environment by establishing a corresponding group corporate culture. Raising awareness and conducting trainings that address competition law risks are of particular importance to ensure fair competition.
In the financial year 2023, there were no convictions of violation of competition laws in court for GEK TERNA Group.
7.9. Our KPIs and accounting policies
The Key Performance Indicators (KPIs) include the KPI of turnover, the KPI of capital expenditure and the KPI of operating expenditure. For the presentation of the KPIs of the Taxonomy, we use the tables provided in Annex II of Delegated Regulation (EU) 2021/2178, as supplemented by Delegated Regulations (EU) 2023/2486 and (EU) 2022/2014. As the KPIs should include the results of the Taxonomy alignment assessment conducted for the first time for FY 2022 (reference year), we also present in the tables the corresponding data of the alignment assessment for reference FY 2022.
As our portfolio also includes the activity of electricity generation from fossil gaseous fuels (4.29), one of the activities related to natural gas and nuclear energy (activities 4.26-4.31), in the following section
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we present the specific standards of the supplementary Delegated Act 2022/1214 related to activities in certain energy sectors.
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Table 4 Turnover KPI for FY 2023
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(Amounts in thousands Euro, unless otherwise stated)
100
Table 5 Capital Expenditure KPI for FY 2023
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(Amounts in thousands Euro, unless otherwise stated)
101
Table 6 Operating Expenditure KPI for FY 2022
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102
7.10. Fossil Gaseous Fuel Activities KPIs
In this section, we present the tables for each of the KPIs presented in the Supplementary Delegated Act to the EU Taxonomy Regulation for economic activity 4.29 in FY 2023.
Turnover KPI Tables
Table 7 - Taxonomy-aligned economic activities (denominator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
569,684.88 (100%)
569,684.88 (100%)
0 (0%)
8.
Total applicable KPI
569,684.88 (100%)
569,684.88 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
103
Table 8 - Taxonomy-aligned economic activities (numerator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
569,684.88 (100%)
569,684.88 (100%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
569,684.88 (100%)
569,684.88 (100%)
0 (0%)
8.
Total amount and proportion of taxonomy- aligned economic activities in the numerator of the applicable KPI
569,684.88 (100%)
569,684.88 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
104
Table 9 - Taxonomy-eligible but not taxonomy-aligned economic activities
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
419,411.13 (29.9)
419,411.13 (29.9%)
0 (0%)
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated EN 6 EN Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
982,704.98 (70.1%)
982,704.98 (70.1%)
0 (0%)
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
1,402,116.11 (100%)
1,402,116.11 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
105
Table 10 - Taxonomy non-eligible economic activities
Row
Economic activities
Amount
(in TEUR)
Percentage
1.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
2.
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
3.
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
4.
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
5.
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of EN 7 EN the applicable KPI
0
0%
6.
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
7.
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
1,527,406.30
100%
8.
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
1,527,406.30
100%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
106
CapEx KPI Tables
Table 11 - Taxonomy-aligned economic activities (denominator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
151,554.67 (100%)
151,554.67 (100%)
0 (0%)
8.
Total applicable KPI
151,554.67 (100%)
151,554.67 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
107
Table 12 - Taxonomy-aligned economic activities (numerator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
151,554.67 (100%)
151,554.67 (100%)
0 (0%)
8.
Total amount and proportion of taxonomy- aligned economic activities in the numerator of the applicable KPI
151,554.67 (100%)
151,554.67 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
108
Table 13 - Taxonomy-eligible but not taxonomy-aligned economic activities
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
1,091.39 (5.3%)
1,091.39 (5.3%)
0 (0%)
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated EN 6 EN Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
19,614.32 (94.7%)
19,614.32 (94.7%)
0 (0%)
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
20,705.71 (100%)
20,705.71 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
109
Table 14 - Taxonomy non-eligible economic activities
Row
Economic activities
Amount
(in TEUR)
Percentage
1.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
2.
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
3.
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
4.
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
5.
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of EN 7 EN the applicable KPI
0
0%
6.
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
7.
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
54,397.71
100%
8.
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
54,397.71
100%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
110
OpEx KPI Tables
Table 15 - Taxonomy-aligned economic activities (denominator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
31,433.18 (100%)
31,433.18 (100%)
0 (0%)
8.
Total applicable KPI
31,433.18 (100%)
31,433.18 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
111
Table 16 - Taxonomy-aligned economic activities (numerator)
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
5.
Amount and proportion of taxonomy-aligned economic activity EN 3 EN referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
31,433.18 (100%)
31,433.18 (100%)
0 (0%)
8.
Total amount and proportion of taxonomy- aligned economic activities in the numerator of the applicable KPI
31,433.18 (100%)
31,433.18 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
112
Table 17 - Taxonomy-eligible but not taxonomy-aligned economic activities
Row
Economic activities
Amount (in TEUR) and proportion (the information is to be presented in monetary amounts and as percentages)
(CCM + CCA)
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Amount
%
Amount
%
Amount
%
1.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
2.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
3.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
4.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
3,440.44(41.2%)
3,440.44(41.2%)
0 (0%)
5.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
6.
Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated EN 6 EN Regulation 2021/2139 in the denominator of the applicable KPI
0 (0%)
0 (0%)
0 (0%)
7.
Amount and proportion of other taxonomy- eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
15,538.57 (81.9%)
15,538.57 (81.9%)
0 (0%)
8.
Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI
18,979.01 (100%)
18,979.01 (100%)
0 (0%)
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
113
Table 18 - Taxonomy non-eligible economic activities
Row
Economic activities
Amount
(in TEUR)
Percentage
1.
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
2.
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
3.
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
4.
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
5.
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of EN 7 EN the applicable KPI
0
0%
6.
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
0
0%
7.
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
26,293.43
(100%)
8.
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI
26,293.43
(100%)
7.11. Definition and further explanation
7.11.1. Turnover KPI
Definition
The proportion of Taxonomy-aligned economic activities in our total turnover has been calculated as the part of net turnover derived from products and services associated with Taxonomy-aligned economic activities (numerator) divided by the net turnover (denominator), in each case for the financial year from 01.01.2023 to 31.12.2023.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
114
The denominator of the turnover KPI is based on our consolidated net turnover in accordance with IAS 1.82(a). For further details on our accounting policies regarding our consolidated net turnover, cf. Chapter 4.20 Revenue of our Annual Financial Report for the Year 2023.
The numerator of the turnover KPI is defined as the net turnover derived from products and services associated with Taxonomy-aligned economic activities, i.e.
• Activity 4.1 “Electricity generation using solar photovoltaic technology” generates net turnover from feeding into the energy grid
• Activity 4.3 “Electricity generation from wind power” generates net turnover from supplying energy to the energy grid
• Activity 4.5 “Electricity generation from hydropower” generates net turnover from supplying energy to the energy grid
• Activity 4.8 “Electricity generation from bioenergy” generates net turnover from supplying energy into the energy grid
• Activity 4.9 ‘’Transmission and distribution of electricity’’ generates net turnover from the construction of electricity transmission and distribution infrastructures
• Activity 4.10 ‘’Electricity Storage’’ generates net turnover from the construction of electricity storage infrastructures (pumped hydropower storage)
• Activity 4.14 ‘’Transmission and distribution networks for renewable and low-carbon gases’’ generates net turnover from the construction of natural gas transmission and distribution networks
• Activity 6.14 “Infrastructure for rail transport” generates net turnover from the construction of high quality transportation systems
• Activity 7.1 “Construction of new buildings” generates net turnover from the construction of high efficiency buildings
According to the Taxonomy-alignment assessment, activity 6.15 and part of activity 7.1 are considered as substantially contributing to climate change adaptation. For these activities, only the CapEx and OpEx associated with the implementation of climate change adaptation solutions can qualify as Taxonomy-aligned. The turnover of these activities can only be considered as Taxonomy-aligned if the activity itself is also Taxonomy-aligned with respect to climate change mitigation. Therefore, the net turnover derived from products and services related to the aforementioned economic activities is not included in the numerator of the turnover KPI.
Reconciliation
Our consolidated net turnover can be reconciled to our consolidated financial statements, cf. Statement of Tot al Comprehensive Income of our Annual Financial Report for the Year 2023 (“ Turnover ”).
Activities using external personnel and subcontractors
In some cases, we use external subcontractors to offer construction services to our customers (activities 4.9, 4.10, 4.14,6.14, 6.15, 7.1). In this context, we also include turnover for construction
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
115
services (activities 4.9, 4.10, 4.14, 6.14, 6.15 and 7.1) that are delivered by subcontractors, provided that GEK TERNA is acting as a principal in the engagement. This assessment follows the principal-agent considerations under IFRS 15.
7.11.2. CapEx KPI
Definition
The Cap E x KPI is defined as Taxonomy-aligned Cap E x (numerator) divided by our total Cap E x (denominator).
Total Cap E x consists of additions to tangible and intangible fixed assets during the financial year, before depreciation, amortization, and any re-measurements, including those resulting from revaluations and impairments, as well as excluding changes in fair value. It includes acquisitions of tangible fixed assets (IAS 16), intangible fixed assets (IAS 38), right-of-use assets (IFRS 16) and investment properties (IAS 40). Additions resulting from business combinations are also included. Goodwill is not included in CapEx, as it is not defined as an intangible asset in accordance with IAS 38. For further details on our accounting policies regarding our CapEx, cf. Chapter 4.6 Intangible Assets, 4.7 Property, plant and equipment, 4.10 Investment Property and 4.17 Leases of our Annual Financial Report for the Year 2023.
The numerator consists of the following categories of Taxonomy-eligible Cap E x:
a. Cap E x related to assets or processes that are associated with Taxonomy-aligned economic activities (“category a”):
We consider that assets and processes are associated with Taxonomy-aligned economic activities when they are essential components necessary to execute an economic activity. Consequently, all Cap E x invested into the following areas are considered in the numerator of the Cap E x KPI:
• the solar photovoltaic plants (under activity 4.1)
• the wind farms (under activity 4.3)
• the hydropower plants (under activity 4.5)
• the biogas plant (under activity 4.8)
• The electricity interconnection projects of Crete and Cyclades (under activity 4.9)
• The pumped hydropower storage project in Amfilochia (under activity 4.10)
• The natural gas transmission and distribution projects (under activity 4.14)
• the leasing of electrical vehicles (under activity 6.5)
• the railway infrastructures (under activity 6.14)
• the electric vehicle charging facilities (under activity 6.15)
• the construction of new buildings (under activity 7.1)
We generally follow the generation of external revenues as a guiding principle to identify economic activities that are associated with CapEx under ( “ category a ”).
b. CapEx that are part of a plan to upgrade a Taxonomy-eligible economic activity to become Taxonomy-aligned or to expand a Taxonomy-aligned economic activity (“category b”):
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
116
c. We do not have specific upgrade plans for 2023. We also have no specific plans to expand the economic activities aligned with the Taxonomy Regulation.
d. CapEx related to the purchase of output from Taxonomy-aligned economic activities and individual measures enabling certain target activities to become low-carbon or to lead to greenhouse gas reductions (“category c”).
Reconciliation
Our total Cap E x can be reconciled to our consolidated financial statements, cf. Chapter 8 Intangible Assets and Goodwill, 9 Right-of-use-assets, 10 Property, Plant and Equipment, 11 Investment Property of our Annual Financial Report for the Year 2023 (“table on changes in intangible assets, investment property, right-of-use assets, in tangible assets”). They are the total of the movement types (acquisition and production costs)
• additions and
• additions from business combinations for intangible assets, investment property, right-of-use assets and property, plant and equipment.
In order to avoid double counting in the CapEx KPI (and OpEx KPI), CapEx (OpEx) related to purchased outputs and individual measures already considered under “category a” (i.e. CapEx, OpEx related to assets or processes that are associated with Taxonomy-aligned economic activities) are only counted once. Due to the limited verification of our individual investments by most of our suppliers, the largest part of our aligned CapEx is associated with our activities and the individual assessment of our CapEx does not have a substantial impact on our alignment KPIs.
7.11.3. OpEx KPI
Definition
The Op E x KPI is defined as Taxonomy-aligned Op E x (numerator) divided by our total Op E x (denominator).
Total OpEx consists of direct non-capitalized costs that relate to research and development, building renovations, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-today servicing of assets of property, plant, and equipment. This includes:
• Research and development expenditure recognized as an expense during the reporting period in our Statement of Total Comprehensive Income of our Annual Financial Report for the Year 2023). In line with our consolidated financial statements (IAS 38.126), this includes all non-capitalized expenditure that is directly attributable to research or development activities.
• The volume of non-capitalized leases was determined in accordance with IFRS 16 and includes expenses for short-term, low-value and variable charge leases (cf. note 3 6 Cost of sales, administrative and research and development expenses of our Annual Financial Report for the Year 2023). Even though low-value leases are not explicitly mentioned in the Disclosures Delegated Act (EU 2021/2178), we have interpreted the legislation as to include these leases.
• Maintenance and repair and other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment were determined based on the maintenance and repair costs. The related cost items can be found in various line items in our Statement of Comprehensive
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
117
Income, including production costs (maintenance in operations), sales and distribution costs (maintenance logistics) and administration costs (such as maintenance of IT-systems). This also includes building renovation measures.
In general, this includes staff costs, costs for services and material costs for daily servicing as well as for regular and unplanned maintenance and repair measures. These costs are directly allocated to our PP and E.
This does not include expenditures relating to the day-to-day operation of PP and E such as: raw materials, cost of employees operating the machine, electricity or fluids that are necessary to operate PP and E. Amortization and depreciation are also not included in the Op E x KPI.
We exclude direct costs for training and other human resources adaptation needs from the denominator and the numerator. This is because Annex I to the Disclosures Delegated Act (EU 2021/2178), lists these costs only for the numerator which does not allow a mathematically meaningful calculation of the Op E x KPI.
Regarding the numerator, we refer to the corresponding statements on the Cap E x KPI.
Further explanations
For 2023 we have not applied any allocation key on personnel costs, related to the maintenance of our assets, due to a lack of relevant information. Our goal is to identify the proportion of these people and apply this ratio to the total of personnel cost. Such an allocation key may be possible in the future. Other production personnel costs are not included in the operating expenditure in the sense of the Taxonomy.
Contextual Information
CapEx KPI
Quantitative breakdown at the economic activity aggregated level
In FY23 our Taxonomy-aligned CapEx is associated with activities 4.1, 4.3, 4.5, 4.8, 4.9, 4.10, 4.14, 6.5, 6.14, 6.15 and 7.1. In the table below, we present a breakdown of the amounts included in the numerator.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
118
Table 21 – Quantitative breakdown of the CapEx numerator at economic activity-level
Activity
Additions to PPE
Internally generated or purchased intangibles
Right-of-use assets
Sum
4.1
37.30
73.31
135.03
245.67
4.3
112,495.43
734.33
2,021.72
115,251.48
4.5
103.08
0
113.88
216.95
4.8
0
0
0
0
4.9
50.79
350.38
0
401.17
4.10
30,193.23
285,78
51,54
30,530.55
4.14
0
0
6.44
6.44
6.5
203.89
0
0
203.89
6.14
211.87
4.81
73.88
290.56
6.15 (electric vehicle charging facilities)
356.30
0
0
356.30
7.1
657.66
0
3,394.03
4,051.69
Total
144,309.55
1,448.62
5,796.50
151,554.67
OpEx KPI
Quantitative breakdown of the numerator
Table 22 shows the breakdown of the OpEx numerator into its components based on the definition of OpEx in the Disclosure Delegated Act (EU 2021/2178):
Table 22 – Quantitative breakdown of OpEx numerator
OpEx(ΤEUR)
R and D costs
5,297.55
Non-capitalised leases
4,777.80
Maintenance and repair
21,357.82
Total
31,433.18
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
119
I. Treasury Shares
On 31.12.2022, GEK TERNA held directly and indirectly through its subsidiaries a total of 7,768,474 treasury shares, i.e., a percentage of 7.5113% of the Share Capital.
Within the year, the number of treasury shares held by the parent company increased by 2,125,096 shares and the number of treasury shares held by its subsidiaries increased by 386,836.
On 31.12. 2023, the Company held directly or indirectly through its subsidiaries a total of 10,280,406 treasury shares, i.e. 9.9401% of the share capital. It is noted that the Company owns 7,968,340 treasury shares, the subsidiary company TERNA S.A. owns 1,695,231 treasury shares, i.e. 1.6391% of the share capital, and the subsidiary company ILIOHORA S.A. owns 616,835 treasury shares, i.e. 0.5964% of the share capital.
Stock Option Plan of GEK TERNA Group:
1. Company’s Stock Options:
The Extraordinary General Meeting of GEK TERNA S.A. held on 09.12.2019 approved the Company's Remuneration Policy, in accordance with Articles 110 and 111 of Law 4548/2018. In the context of drawing up the Remuneration Policy, a new stock option plan (abolishing the previous one approved on 27.06.2018 by the General Meeting) was introduced to provide stock options up to the limit of 4,000,000 shares of the Company for the five-year period 2019-2023, which will address up to 20 executives. In particular, it was proposed that 50% of the stock options should be allocated to the Chief Executive Officer, 30% to senior executives and members of the Board of Directors of the Company and the companies of the Group and 20% to other executives holding managerial or general managerial positions or positions of responsibility in Group’s companies. The plan will be implemented, provided that the objectives set by the BoD are fulfilled, through the issue of new shares or allocation of treasury shares, in accordance with article 113 par. 2 of Law 4548/18. The share distribution price offered to the beneficiaries is proposed to stand at 2.00 euros per share. The Board of Directors has been authorized to determine the beneficiaries, the way the stock option is exercised as well as the rest terms of the plan and settle all the relevant regulatory issues for the implementation of the decision.
As of 20.02.2020, during the meeting of the Company’s Board of Directors the sale price of the shares to the beneficiaries at the amount of 2.00 euros per share was adopted and the Board of Directors initially appointed 16 executives to be included in the Plan, as well as defined the specific terms and conditions of the plan, mainly related to the fulfillment of performance conditions, not related to the market (e.g. EBITDA of operating segments, distributions in the parent company, etc.). On 08.07.2020, at a new meeting, the Board of Directors approved further terms and conditions of the plan, related to meeting the terms and conditions of market performance (share price). At the meeting held as of 23.12.2020, the Board of Directors determined the final beneficiaries of the plan and the allocation percentage according to the proposal of the Nomination and Remuneration Committee (hereinafter "NRC").
2. Bonus Shares Plan of subsidiary company TERNA ENERGY S.A.
The The Extraordinary General Meeting of 16 December 2020 of TERNA ENERGY S.A. approved the distribution of up to two million five hundred thousand (2,500,000) new shares to be issued with capitalization of share premium reserve to Executive Members of the Board of Directors and senior
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
120
management of the Company due to their contribution to the achievement of financial goals, the implementation of new projects as well as to the increase of the Company's profitability within the three-year period 01.01.2021 - 31.12.2023.
The Board of Directors of the subsidiary company was authorized to further determine the group of beneficiaries, the way to exercise the respective rights and the conditions of the bonus share plan, as well as to regulate all relevant procedures for the implementation of the decision.
The Board of Directors of the subsidiary company at its meeting of 19.03.2021, in implementation of the above decision of the Extraordinary General Meeting of Shareholders, accepted the recommendation of the Nominations and Remuneration Committee regarding the Revision of the Remuneration Policy, the Revision of the Plan’s Implementation Period (extension of the Plan by one year, i.e. ending on 31.12.2024 – the extension of the duration of the plan, in combination with its inclusion in the Remuneration Policy was approved by the Regular General Meeting of the subsidiary company's Shareholders on 23.06.2021), the conditions for the implementation of the Plan, as well as the Criteria – Objectives of the Plan (refer to the fulfilment of performance conditions not related to the market - namely project construction objectives, EBITDA, etc.), as well as regarding the Distribution of the shares by Criterion - Objective.
At the meeting of January 26, 2022, the Board of Directors of the subsidiary company proceeded with the selection of beneficiaries to the bonus-share distribution scheme as well as with the determination of allocation percentages in accordance with the recommendation of the Nominations and Remuneration Committee (NRC).
In order to proceed with the above Plans’ measurement, the Company and the Group applied the requirements of IFRS 2 "Share-based Payments”.
The data regarding the Stock Option Plan are presented below as follows.
No. Stock Options
Year of Programme Start
Rights Exercise Period
Expiration date
Exercise price
31.12.2022
31.12.2023
2020
2019-2023
31.12.2023
2 € per share
1,568,816
1,595,966
2022
2022-2024
31.12.2024
0 € per share
2,500,000
250,000
J. Transactions with Related Parties
The Company’s and Group’s transactions and balances with its related parties for the period 1.1- 31.12.2023:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
121
Sales-Inflows of the Company
Participation type
Total
Revenues from Goods/Consulti ng services
Revenues from administration support services
Income from leases
Income from dividends and related profits
Income from interest and related profit
Share capital reductions
Received Loans
ΤΕRΝΑ S.A.
Subsidiary
15,221
0
1,651
390
0
2,909
0
10,272
ΤΕRΝΑ ENERGY S.A.
Subsidiary
17,204
0
593
201
16,410
0
0
0
HIRON CONCESSIONS S.A.
Subsidiary
463
0
64
0
0
0
399
0
IOANNINON ENTERTAINMENT DEVELOPMENT S.A.
Subsidiary
603
0
36
0
0
8
0
558
MONASTIRIOU TECHNICAL DEVELOPMENT S.M.S.A.
Subsidiary
741
0
0
0
0
120
0
621
GEK SERVICES S.A.
Subsidiary
47
0
33
0
0
15
0
0
ILIOHORA S.A.
Subsidiary
39
0
0
39
0
0
0
0
VIPA THESSALONIKI S.A.
Subsidiary
105
0
0
0
0
105
0
0
TERNA MAG S.A.
Subsidiary
1,286
0
47
0
0
14
0
1,224
NEA ODOS S.A.
Subsidiary
75,602
75,375
228
0
0
0
0
0
CENTRAL GREECE MOTORWAY S.A.
Subsidiary
25,736
25,736
0
0
0
0
0
0
CONSTRUCTION JOINT VENTURES
Subsidiary
15
0
14
1
0
0
0
0
J/V CENTRAL GREECE MOTORWAY Ε-65
Subsidiary
180
0
180
0
0
0
0
0
J/V HELLAS TOLLS
Subsidiary
1
0
0
1
0
0
0
0
HELLAS SMARTICKET S.A.
Subsidiary
551
0
0
0
551
0
0
0
KIFISIA PLATANOU SQ. CAR PARK S.A.
Subsidiary
584
0
11
0
0
0
573
0
GEK TERNA MOTORWAYS S.M.S.A.
Subsidiary
9,503
0
2
1
6,987
0
2,513
0
GEK TERNA KASTELI S.M.S.A.
Subsidiary
1
0
0
1
0
0
0
0
GEK TERNA FTHIOTIDAS S.M.S.A.
Subsidiary
2
0
2
0
0
0
0
0
GEK TERNA CONCESSIONS S.M.S.A.
Subsidiary
3,797
403
0
2
0
3,082
0
310
HERON ENERGY S.A.
Subsidiary
71,920
0
159
0
0
1,496
0
70,266
HERON II VIOTIA THERMOELECTRIC STATION S.A.
Subsidiary
30,937
0
75
0
30,000
431
0
431
ARGOLIKI RIVIERA S.M.S.A.
Subsidiary
32
0
0
1
0
30
0
0
KASSIOPI REAL ESTATE S.M.S.A.
Subsidiary
9
0
7
1
0
0
0
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
122
PASIFAI ODOS S.A.
Joint Venture
1
0
0
1
0
0
0
0
IRC HELLINIKON SA
Joint Venture
125
0
123
2
0
0
0
0
PARKING OUIL S.A.
Joint Venture
153
0
0
0
78
0
75
0
POLIS PARK S.A.
Joint Venture
5
0
0
0
0
0
0
5
SARISA YPOPARACHORISI SA
Joint Venture
46
46
0
0
0
0
0
0
THERMOELECTRIC KOMOTINIS S.A.
Joint Venture
26
0
26
0
0
0
0
0
KEKROPS S.A.
Associate
46
0
0
0
0
46
0
0
254,984
101,560
3,251
642
54,027
8,257
3,559
83,688
Company’s Receivables
Participation type
Total
From revenue
From Loans and Interest
From Dividends and related earnings
From share capital reductions
ΤΕRΝΑ S.A.
Subsidiary
92,378
6,546
85,832
0
0
ΤΕRΝΑ ENERGY S.A.
Subsidiary
1,269
1,269
0
0
0
HIRON CONCESSIONS S.A.
Subsidiary
2
2
0
0
0
IOANNINON ENTERTAINMENT DEVELOPMENT S.A.
Subsidiary
52
52
0
0
0
MONASTIRIOU TECHNICAL DEVELOPMENT S.M.S.A.
Subsidiary
2,506
0
2,506
0
0
GEK SERVICES S.A.
Subsidiary
423
49
375
0
0
VIPA THESSALONIKI S.A.
Subsidiary
2,811
0
2,811
0
0
TERNA MAG S.A.
Subsidiary
245
111
134
0
0
NEA ODOS S.A.
Subsidiary
21,743
21,743
0
0
0
CENTRAL GREECE MOTORWAY S.A.
Subsidiary
5,955
5,955
0
0
0
CONSTRUCTION JOINT VENTURES
Subsidiary
5,757
468
5,289
0
0
J/V CENTRAL GREECE MOTORWAY Ε-65
Subsidiary
433
433
0
0
0
J/V HELLAS TOLLS
Subsidiary
74
74
0
0
0
KIFISIA PLATANOU SQ. CAR PARK S.A.
Subsidiary
9
9
0
0
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
123
GEK TERNA MOTORWAYS S.M.S.A.
Subsidiary
1
1
0
0
0
AVLAKI I B.V.
Subsidiary
115
115
0
0
0
AVLAKI I B.V.
Subsidiary
115
115
0
0
0
AVLAKI I B.V.
Subsidiary
116
116
0
0
0
AVLAKI I B.V.
Subsidiary
116
116
0
0
0
GEK TERNA FTHIOTIDAS S.M.S.A.
Subsidiary
0
0
0
0
0
GEK TERNA CONCESSIONS S.M.S.A.
Subsidiary
55,879
95
55,784
0
0
HERON ENERGY S.A.
Subsidiary
105
105
0
0
0
ARGOLIKI RIVIERA S.M.S.A.
Subsidiary
1,044
3
1,040
0
0
FIER THERMOELECTRIC S.H.A.
Subsidiary
19
19
0
0
0
KASSIOPI REAL ESTATE S.M.S.A.
Subsidiary
179
179
0
0
0
PASIFAI ODOS S.A.
Joint Venture
5
5
0
0
0
IRC HELLINIKON SA
Joint Venture
4
4
0
0
0
THESSALONIKI CAR PARK S.A.
Joint Venture
0
0
0
0
0
SARISA YPOPARACHORISI SA
Joint Venture
8
8
0
0
0
THERMOELECTRIC KOMOTINIS S.A.
Joint Venture
8
8
0
0
0
KEKROPS S.A.
Associate
1,196
0
1,196
0
0
192,567
37,599
154,968
0
0
Purchases - Company’s Outflows
Participation type
Total
Purchases of goods
Revenues from Consulting services
Purchases of administrative services
Lease expenses
Interest expenses
Share capital increases
Granted Loans
GEK SERVICES S.A.
Subsidiary
1,624
15
1,608
0
0
0
0
0
ΤΕRΝΑ S.A.
Subsidiary
34,396
32,788
1,579
0
30
0
0
0
ΤΕRΝΑ ENERGY S.A.
Subsidiary
316
0
250
33
33
0
0
0
IOANNINON ENTERTAINMENT DEVELOPMENT S.A.
Subsidiary
548
0
0
0
0
0
548
0
CHIRON CONCESSIONS SA
Subsidiary
5
0
0
5
0
0
0
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
124
TERNA MAG S.A.
Subsidiary
5,042
0
0
0
0
0
3,827
1,215
NEA ODOS S.A.
Subsidiary
5,311
5,310
0
0
1
0
0
0
CENTRAL GREECE MOTORWAY S.A.
Subsidiary
1,003
1,003
0
0
0
0
0
0
GEK TERNA MOTORWAYS S.M.S.A.
Subsidiary
828
0
0
0
0
184
0
644
GEK TERNA CONCESSIONS S.M.S.A.
Subsidiary
84,125
0
0
0
0
0
84,125
0
HERON ENERGY S.A.
Subsidiary
646
646
0
0
0
0
0
0
MGGR LLC
Subsidiary
21,620
0
0
0
0
0
21,620
0
PASIFAI ODOS S.A.
Joint Venture
33
0
0
0
0
0
33
0
EKAZ HELLINIKON S.A.
Joint Venture
6,300
0
0
0
0
0
6,300
0
DI TERNA SA
Joint Venture
580
0
0
0
0
0
580
0
KEKROPS S.A.
Associate
260
0
0
0
0
0
0
260
162,637
39,762
3,436
38
65
184
117,032
2,119
Company’s Liabilities
Participation type
Total
From purchases
From Loan and interest
From dividends and Joint- Ventures results
From share capital increases
GEK SERVICES S.A.
Subsidiary
466
466
0
0
0
ΤΕRΝΑ S.A.
Subsidiary
27,228
27,228
0
0
0
ΤΕRΝΑ ENERGY S.A.
Subsidiary
230
230
0
0
0
TERNA MAG S.A.
Subsidiary
0
0
0
0
0
NEA ODOS S.A.
Subsidiary
5,077
5,077
0
0
0
CENTRAL GREECE MOTORWAY S.A.
Subsidiary
1,757
1,757
0
0
0
GEK TERNA MOTORWAYS S.M.S.A.
Subsidiary
6,006
0
6,006
0
0
HERON ENERGY S.A.
Subsidiary
159
159
0
0
0
40,925
34,919
6,006
0
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
125
Sales - Inflows of the Group
Participation type
Total
Revenues from Goods/Consulting services
Revenues from administration support services
Income from leases
Income from dividends and related profits
Income from interest and related profit
Share capital reductions
Received Loans
INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A.
Joint Venture
94,795
94,635
137
24
0
0
0
0
AG. NIKOLAOS PIRAEUS CAR PARK S.A.
Joint Venture
29
29
0
0
0
0
0
0
ATHENS CAR PARK S.A.
Joint Venture
130
130
0
0
0
0
0
0
POLIS PARK S.A.
Joint Venture
5
0
0
0
0
0
0
5
PARKING OUIL S.A.
Joint Venture
153
0
0
0
78
0
75
0
THERMOELECTRIC KOMOTINIS S.A.
Joint Venture
136,937
123,918
249
1
9,897
2,873
0
0
IRC HELLINIKON S.A.
Joint Venture
3,772
3,243
472
57
0
0
0
0
AMALTHEIA ENERGY SOCIETY
Joint Venture
2,256
2,250
6
1
0
0
0
0
ARMONIA ENERGY SOCIETY
Joint Venture
1
0
1
0
0
0
0
0
J/V TENERGY - INDIGITAL -AMCO
Joint Venture
77
0
76
1
0
0
0
0
PASIFAI ODOS S.A.
Joint Venture
1
0
0
1
0
0
0
0
SARISA YPOPARACHORISI SA
Joint Venture
46
0
46
0
0
0
0
0
ΤΕRΝΑ FIBER SPECIAL PURPOSES SOCIETE ANONYME
Joint Venture
1,009
0
1,009
0
0
0
0
0
DI TERNA SA
Joint Venture
91
0
91
0
0
0
0
0
KEKROPS S.A.
Associate
46
0
0
0
0
46
0
0
239,350
224,205
2,087
84
9,975
2,918
75
5
Receivables of the Group
Participation type
Total
From revenue
From Loan and interest
From dividends and Joint- Ventures results
Share capital reductions
INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A.
Joint Venture
27,313
27,313
0
0
0
AG. NIKOLAOS PIRAEUS CAR PARK S.A.
Joint Venture
36
36
0
0
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
126
THERMOELECTRIC KOMOTINIS S.A.
Joint Venture
86,075
20,244
55,935
9,897
0
IRC HELLINIKON S.A.
Joint Venture
3,245
3,245
0
0
0
AMALTHEIA ENERGY SOCIETY
Joint Venture
154
154
0
0
0
ARMONIA ENERGY SOCIETY
Joint Venture
12
12
0
0
0
J/V TENERGY - INDIGITAL -AMCO
Joint Venture
13
13
0
0
0
PASIFAI ODOS S.A.
Joint Venture
5
5
0
0
0
SARISA YPOPARACHORISI SA
Joint Venture
8
8
0
0
0
ΤΕRΝΑ FIBER SPECIAL PURPOSES SOCIETE ANONYME
Joint Venture
1,199
1,199
0
0
0
DI TERNA SA
Joint Venture
0
0
0
0
0
CYCLADES RES ENERGY CENTER S.A.
Associate
15
15
0
0
0
KEKROPS S.A.
Associate
1,196
0
1,196
0
0
119,273
52,246
57,131
9,897
0
Purchases - Outflows of the Group
Participation type
Total
Purchases of goods
Revenues from Consulting services
Lease expenses
Share capital increases
Granted Loans
INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A.
Joint Venture
561
0
561
0
0
0
PASIFAI ODOS S.A.
Joint Venture
33
0
0
0
33
0
IRC HELLINIKON S.A.
Joint Venture
8,820
0
0
0
8,820
0
ΤΕRΝΑ FIBER SPECIAL PURPOSES SOCIETE ANONYME
Joint Venture
50
0
0
0
50
0
AMALTHEIA ENERGY SOCIETY
Joint Venture
222
0
222
0
0
0
DI TERNA SA
Joint Venture
580
0
0
0
580
0
KEKROPS S.A.
Associate
260
0
0
0
0
260
10,525
0
783
0
9,483
260
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
127
Liabilities of the Group
Participation type
Total
From Purchases and Advances
From Loan and interest
AG. NIKOLAOS PIRAEUS CAR PARK S.A.
Joint Venture
0
0
0
INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A.
Joint Venture
80,959
80,959
0
AMALTHEIA ENERGY SOCIETY
Joint Venture
137
137
0
ARMONIA ENERGY SOCIETY
Joint Venture
0
0
0
DI TERNA SA
Joint Venture
1,295
1,295
0
82,392
82,392
0
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
128
The remuneration of members of the Board of Directors and senior executives of the Group and the Company recognized for the year 2023 as well as the relevant balances on 31.12.2023, are as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Remuneration for services rendered
7,758
5,644
782
926
Remuneration of employees
2,580
1,843
966
756
Remuneration for participation in Board of Directors meetings
2,705
2,622
1,138
1,252
Stock options expense
2,334
50,725
1,476
1,584
Total
15,377
60,834
4,362
4,518
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities
171
293
195
228
Receivables
77
72
10
11
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
129
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is prepared pursuant to the provisions of articles 152 and 153 of Law 4548/2018, as a special section of the Management Report of the Board of Directors, providing the following information:
1.
Governance documents
1.1 Corporate Governance Code
The Company applies in the entirety of its activities and operations all established rules and procedures by legislative, supervisory and other competent authorities without derogations. In addition, it has adopted internal rules and business practices that contribute to the compliance with the principles of transparency, professional ethics and sound managing of all resources of the Company at every level of its hierarchy for the benefit of its shareholders and related parties.
The Company has adopted the Hellenic Corporate Governance Code ("HCGC") of the Hellenic Corporate Governance Council, as revised in 2021 and in force, with the deviations listed in a table below with an explanation of the reasons for non-compliance. The HCGC can be found at the following email address https://www.esed.org.gr/web/guest/code-listed . With the application of the HCGC and the individual thematic regulations, the Management ensures the effective management and utilization of the Company's resources and promotes corporate responsibility as a key value of the Group's development.
Deviations from the HCGC and explanation of the reasons for non-compliance
Passage
HCGC text
Explanation
2.4.13.
The maturity of options shall be set at an interval of not less than three
(3) years from the date of their issue to the executive members of the Board of Directors.
The remuneration policy includes the stock option plan approved by the General Assembly of 2019 for the provision of options for the five-year period 2019-2023, as well as the program approved by the Annual General Assembly of 2023 for the distribution of free shares for the four-year period 2023- 2027, with a potential maturity period of less than three (3) years in both.
1.2 Internal Rules of Procedure
The Company has Internal Rules of Operation ("IRO"), which were approved and entered into force by virtue of the decision of the Board of Directors of the Company dated 16.07.2021. Subsequently, the IRO were updated by virtue of the decisions of the Board of Directors of the Company dated 30.03.2022 and 28.07.2023.The IRO comply with the applicable legislation on corporate governance and in particular with Law 4706/2020, as well as the relevant directives and decisions of the Hellenic Capital Market Commission. The Company's Internal Rules of Operation have the minimum content
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
130
provided for in article 14 of Law 4706/2020.
The IRO and other regulations incorporate any new relevant provision, measure, rule, etc. in order to maintain the required completeness and adapt immediately to the varying conditions of the economic, social and business environment of the Company.
2.
Board of Directors
The Board of Directors of the Company formulates the vision of the Group, defines its development strategy and ensures its effective implementation, aiming at safeguarding and promoting the long- term interests of its Shareholders.
To ensure transparency and effective management of business risks, the Board of Directors, through the Committees it has established, facilitates its communication with the relevant managers on a daily basis in order to gain immediate understanding of these risks and to proceed promptly and dynamically to make the required decisions and take any corrective measures.
The operation of the Board of Directors is governed by Rules of Operation.
The Board of Directors, as a collective body, runs the Company and manages its affairs, making the necessary decisions on all matters falling within its duties under the Company's Articles of Association, the decisions of the General Assembly and the relevant legislation. It is responsible towards the General Assembly of Shareholders for safeguarding their interests and for the overall effectiveness and operation of the Company. It decides on all corporate affairs, except those for which, according to the legal framework and the Articles of Association of the Company, the General Assembly of Shareholders is competent.
In particular, within the scope of its responsibilities the Board of Directors:
Convening of General Assemblies
Takes all actions for the legal convening of the General Assemblies (annual or extraordinary) and determines the items on their agenda. It answers to the shareholders of the Company and submits proposals for the increase or decrease of the share capital, for the conversion of the Company, as well as for its dissolution before the expiration of its term provided for in the Articles of Association.
Corporate governance
•
Defines and supervises the implementation of the corporate governance system as per articles 1 to 24 of Law 4706/2020.
•
Monitors and evaluates at least every three (3) financial years the implementation and effectiveness of the corporate governance system and takes appropriate actions to address deficiencies.
•
Takes the necessary measures to ensure compliance with the independence requirements for the independent non-executive members of the BoD.
Strategic planning
•
Defines the values and strategic orientation of the Company, as well as the continuous monitoring of their observance.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
131
•
Ensures that the Company's values and strategic orientation are aligned with corporate culture, as the Company's values and purpose influence practices, policies and behaviors within the Company at all levels.
•
Monitors the progress of the implementation of strategic directions and objectives and ensures the availability of the necessary resources.
•
Decides the entry of the Company into other fields of activity through the acquisition or establishment of companies.
Financial statements
Approves the annual and the interim (half-yearly) financial statements and annual reports in accordance with the applicable provisions of Law 4548/2018 and Law 3556/2007. The annual financial statements are submitted to the annual General Assembly for approval. At the same time, it proposes the depreciation to be made in installation expenses, the necessary deductions for the statutory reserve; ensures that the annual financial statements, the annual management report and the corporate governance statement, the consolidated financial statements, the consolidated management reports and any consolidated corporate governance statement, as well as the remuneration report of article 112 of Law 4548/2018 are prepared and published in accordance with the provisions of the Law, proposes the dividends to be distributed, ensures the publication provided for in articles 12 and 13 of Law 4548/2018 as in force.
Internal Audit System
•
Ensures the adequate and effective operation of the Company's Internal Audit System, including the risk management system and compliance.
•
Ensures that the functions that constitute the Internal Audit System are independent from the business areas they audit and that they have the appropriate financial and human resources, as well as the powers for their effective operation, in accordance with their role. The baselines of reference and the allocation of responsibilities shall be clear and dul y documented.
Risk management
•
Promptly identifies, evaluates, manages and monitors the risks to which the Company is exposed due to the activity it undertakes. Risks can come either from the internal or external environment.
•
Identifies potential risks and develops appropriate protective measure s.
•
Manages the main risks and periodically reviews them.
•
Prepares periodic reports on the progress of the implementation of action plans and measures to mitigate Enterprise Risks.
•
Implements effective procedures for early identification, risk assessment, management and response of the Company to them.
•
Monitors the evolution of risks and the implementation of risk mitigation measures.
•
Implements effective Policies, Procedures and uses appropriate tools to identify, analyze, audit, manage, monitor and mitigate risks.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
132
•
Conducts effective training to BoD members, Company Managers for the proper management and management of risks in accordance with the requirements of the institutional framework and the Company's internal Policies.
Regulatory compliance
• Ensures the Company’s compliance with the applicable institutional and supervisory framework, as well as the internal regulations governing its operation.
• Prepares and carries out a plan of periodic audits per regulatory framework area that has been identified and mapped.
• Prepares periodic reports on the progress of monitoring the requirements of the regulatory framework and the applied management system.
• Ensures the compliance policy and related policies.
• It is responsible for the training and information of employees through the preparation of targeted educational and informative actions and/or programs as well as the use of information tools.
Internal audit
• Ensures the effective organization and operation of the Internal Audit Unit.
• Appoints the head of the Internal Audit Unit upon proposal of the Audit Committee.
• Approves the Rules of Operation of the Internal Audit Unit.
The Board of Directors of the Company was elected by the Annual General Assembly on 01.07.2021. At the same Assembly, the term of office of the members of the Board of Directors became four years.
It was constituted into body corporate on 01.07.2021 as a 13-member Board of Directors and on 19.07.2021, in accordance with the approved amendment of article 16 of the Company's Articles of Association which increased the maximum number of members of the Board of Directors to 15 members, it was reconstituted into body corporate as a 15-member BoD. It was subsequently reconstituted into body corporate on 26.04.2023 and then on 28.07.2023 as follows:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
133
2.1. Composition of the Board of Directors
FULL NAME
POSITION
BEGINNING OF TERM OF OFFICE
END OF TERM OF OFFICE
1
Peristeris Georgios
Chairman and CEO
1.7.2021
1.7.2025
2
Kapralos Spyridon 1
Vice-Chairman, Independent Non-Executive Member, Senior Independent Director
1.7.2021
1.7.2025
3
Tamvakakis Apostolos 2
Vice-Chairman, Non- Executive Member
1.7.2021
1.7.2025
4
Lazaridou Penelope
Executive Director, Executive Member
1.7.2021
1.7.2025
5
Benopoulos Angelos
Executive Director, Executive Member
1.7.2021
1.7.2025
6
Souretis Petros 3
Executive Director, Executive Member
30.11.2022
1.7.2025
7
Gourzis Michalis 4
Executive Member
1.7.2021
1.7.2025
8
Lambrou Konstantinos
Executive Member
19.7.2021
1.7.2025
9
Moustakas Emmanouil
Executive Member
1.7.2021
1.7.2025
10
Antonakos Dimitrios 5
Non-Executive Member
1.7.2021
1.7.2025
11
Afentoulis Dimitrios
Non-Executive Member
1.7.2021
1.7.2025
12
Apkarian Gagik
Independent Non- Executive Member
1.7.2021
1.7.2025
13
Delikoura Aikaterini
Independent Non- Executive Member
1.7.2021
1.7.2025
14
Skordas Athanasios
Independent Non- Executive Member
19.7.2021
1.7.2025
15
Staikou Sofia
Independent Non- Executive Member
1.7.2021
1.7.2025
1 . Vice-Chairman of the BoD from 28.07.2023
2 . Independent non-executive member until 26.04.2023
3 . Executive Director from 28.07.2023
4 . Vice-Chairman of the BoD until 28.07.2023
5 . Executive member until 28.07.2023
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
134
During the performance of their duties and their meetings in 2023, the Members of the Board of Directors demonstrated "prudent business diligence", devoted all the time required for the effective management of the Company and acted with integrity, responsibility and good judgment, avoiding actions that could jeopardize the Company's competitiveness or conflict with its interests. They also safeguarded the confidentiality of the information they held and ensured the timely and simultaneous provision of information to all shareholders and interested investors on issues that could affect their decision to carry out any transaction on the Company's shares.
The Board of Directors held twenty-one (21) meetings in 2023.
The dates of the meetings were scheduled in advance in order to ensure the maximum possible quorum.
The members of the Board of Directors participated in the meetings as follows:
FULL NAME
NUMBER OF MEETINGS DURING THE 2023 TERM
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE RATE AT THE 2023 MEETINGS
Peristeris Georgios
21
21
-
-
100%
Capralos Spyridon
21
21
-
-
100%
Tamvakakis Apostolos
21
21
-
-
100%
Lazaridou Penelope
21
20
1
-
100%
Benopoulos Angelos
21
21
-
-
100%
Souretis Petros
21
21
-
-
100%
Gourzis Michalis
21
21
-
-
100%
Lambrou Konstantinos
21
21
-
-
100%
Moustakas Emmanouil
21
20
1
-
100%
Antonakos Dimitrios
21
21
-
-
100%
Afentoulis Dimitrios
21
21
-
-
100%
Apkarian Gagik
21
20
1
-
100%
Delikoura Aikaterini
21
20
1
-
100%
Skordas Athanasios
21
21
-
-
100%
Staikou Sofia
21
20
1
-
100%
During the meetings and work of the Board of Directors, the Members were supported by the Corporate Secretary, Mrs. Dimitra Chatziarseniou.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
135
Chairman of the Board of Directors
The Chairman is the main contributor to the implementation of the Corporate Governance Principles in the Company, being responsible, inter alia, for the effective operation of the Board of Directors and the active participation of all its members in decision making and supervising the implementation of business decisions, as well as for the smooth communication of the Company with its shareholders.
The responsibilities of the Chairman of the Board include:
• The coordination and direction of the meetings and the operation of the Board of Directors in general. The Chairman presides over the meetings of the Board, directs its works, is responsible for convening the meetings, ensuring the good organization of the works of the Board, but also the effective conduct of its meetings.
• The preparation of the agenda of the meetings of the Board of Directors with the support of the Corporate Secretary, based on the needs of the Company and relevant requests from the other Members of the Board of Directors.
• Ensuring effective coordination and unhindered communication among all members of the Board of Directors, as well as between the Company and shareholders – investors so that all Members of the Board of Directors are fully informed about both the internal evaluation of its operation and effectiveness, as well as about its image in its directly related and wider external envi ronment.
• Ensuring that the above communication is based on timely, clear and reliable information to the members of the Board of Directors on all activities and operations of the Company.
• Ensuring the smooth integration of other members into the Board of Directors and motivating them to have active and meaningful participation in corporate affairs and business d ecision-making.
• The diligence and responsibility for evaluating the effectiveness of the Board of Directors as well as the Committees that support its work and the proposal of improvement measures in case of identified weaknesses.
Chief Executive Officer
The Chief Executive Officer is the main contributor to the implementation of the Company's policies and strategy. He is responsible for the elaboration and submission of the relevant recommendations to the Board of Directors and the decision-making on issues for which it has been authorized by the Board.
His duties include:
• The supervision of the Company's business and financial polic y.
• The proposal to the Board of Directors for the development of the Company's actions in new sectors of activity and markets.
• The participation, as a Member of the Board of Directors, in the strategic decisions of the Company and the suggestion of the guidelines of the strategic and operational planning of the Company.
• The review of the Company's annual budget and the submission of a relevant proposal to the Board of Directors.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
136
• The review of new business plans and investment plans of the Group's companies with the cooperation of the heads of business units and the General Division of Business Developmen t.
• The review of the implementation of the business plans, investment plans and budgets of the Group's companies.
• The establishment and termination of Managing Committees that assist its work.
• The management and coordination of the Company's personnel having the main responsibility for the selection, appointment and periodic evaluation of its general managers and executives based on meritocratic criteria and the degree of effectiveness in their duties and the objectives they undertake to achieve. Optionally and at his discretion, he may also recommend to the Board of Directors hiring of executive managers for important positions, the selection and recruitment of whom will be decided by the Board.
• Ensuring the implementation of uniform policies on issues that concern all Group c ompanies.
• Regular communication with the Heads of business units, executive, central and other support functions to provide guidelines, coordinate actions, resolve issues and review the implementation of their business plans and action plans.
• The constant communication with the Company's executives and the responsibility for the management of corporate affairs, in accordance with the Legislation, the Articles of Association, the Corporate Governance Code, the Code of Conduct, the Internal Rules of Operation and the decisions of the Company's Board of Directors.
• The assignment of all or part of the organizational and operational responsibilities of executive or central and support services provided for by the Law and the Articles of Association and/or activities to bodies or managers of the Company or the Group's affiliated companies.
• The audit of the day-to-day operations of the Company and the supervision of how each unit performs its duties.
• The specific responsibilities defined in the Internal Rul es of Operation.
• The monitoring and answering to the General Assembly of shareholders about the financial results and profitability of the Company as a whole and per activity.
• The responsibility of representing the Company at the General Assembly of the shareholders of each affiliated company by himself or through a representative.
• The representation of the Company in its relations with Government and other Public Authorities.
Chairman of the Board of Directors and CEO of the Company is Mr. George Peristeris.
Vice Chairman of the Board of Directors (Lead Independent Director)
The Independent Non-Executive Vice-Chairman of the Board of Directors stands in for the Chairman when the latter is absent or unavailable. He also chairs the meetings of the non-executive members of the Board of Directors and monitors and ensures smooth and effective communication between the Committees of the Board of Directors and the Board of Directors itself. He coordinates the non- executive members of the Board of Directors, including independent members, in the fulfillment of their obligations. He is available and attends the General Assemblies of the Company's Shareholders in
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
137
order to discuss with them corporate governance issues, if they arise.
Mr. Apostolos Tamvakakis served as Independent Non-Executive Vice-Chairman of the Board of Directors and Head of the Independent and Non-Executive Members until 26.04.2023 and since then the position has been taken over by Mr. Spyridon Capralos.
Non-Executive Vice-Chairman of the Board of Directors
The non-executive vice-chairman of the BoD may exercise administrative responsibilities, as assigned by the Board of Directors, if the Chairman is an executive member of the BoD and is absent or prevented from exercising his duties. Mr. Apostolos Tamvakakis is the Non-Executive Vice-Chairman of the Board of Directors as of 26.04.2023.
Executive Directors
The Executive Directors are Members of the Board of Directors, appointed by the Board of Directors and their status is not incompatible with any other managerial position. They are senior managers of the Company, with distinguished responsibilities and report to the CEO.
The Executive Directors, within the framework of their administrative responsibilities, following a relevant decision of the Board of Directors, may undertake any specific responsibility and to the extent of the responsibilities assigned to them by the BoD.
Executive Directors are Mrs. Penelope Lazaridou, Mr. Angelos Benopoulos and Mr. Petros Souretis (as of 28.07.2023).
Independent non-executive members of the Board of Directors
The independent non-executive Members of the Board of Directors are the non-executive members of the Board of Directors of the Company who, upon their appointment or election and throughout their term of office, meet the independence criteria provided for in article 9 of Law 4706/2020, as applicable.
The following members of the Board of Directors are independent non-executives:
Name
Independence criteria
Capralos Spyridon
Apkarian Gagik
Delikoura Aikaterini
Skordas Athanasios
Staikou Sofia
These members meet (a) the independence criteria of para. 1 of article 9 of Law 4706/2020, i.e. they do not hold shares in more than 0.5% of the Company's share capital and (b) they do not have any relationship of dependence with the Company or related persons, as these conditions of independence are described in particular in article 9 par. 2 of Law 4706/2020 (Government Gazette A' 136/17.07.2020). Moreover, members also meet the criteria of the Suitability Policy.
The Board of Directors at its meeting on 26.04.2023, following the recommendation of the Nominations Committee, reviewed the fulfilment of the independence criteria provided for in article 9 of Law 4706/2020, in accordance with the specific provisions of the relevant Minutes of the meeting. During this procedure, it was found that Mr. Apostolos Tamvakakis, Independent Non-Executive Vice Chairman of the BoD and Senior Independent Director, Chairman of the Audit Committee and the Nominations Committee, as well as Member of the Remuneration Committee and the Strategic
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
138
Planning Committee, had ceased to meet the independence criteria as defined in article 9 par. 1 of Law 4706/2020, as he had served as a member of the Board of Directors of the Company for more than nine (9) financial years.
Following the above finding, Mr. Tamvakakis became a non-executive member of the BoD. As the remaining independent members of the BoD were five (5), it was confirmed that the composition of the Board of Directors at that time continued to meet the relevant requirements of the legislation regarding the minimum number of independent members and the Board of Directors was reconstituted into a body with Mr. Tamvakakis becoming Non-Executive Vice Chairman and Mr. Spyridon Capralos being appointed as Vice-Chairman and Lead Independent Director.
Regarding the composition of the Audit Committee, in which Mr. Tamvakakis participates, it was found that it meets the requirements for legal composition in accordance with law 4706/2020 and its approved Rules of Procedure, which provide for at least a three-member committee, in which the majority of members are independent, but did not have the composition by which this committee was elected by the General Assembly of 01.07.2021 (mixed four-member committee with members of the Board of Directors and third parties). Due to the fact that the term of office of the Audit Committee expired on 30.06.2023, it was decided that the Audit Committee will continue its work with the remaining three (3) members, chaired by the independent non-executive member of the BoD, Mr. Spyridon Capralos, until the Annual General Assembly of the Company on 20.06.2023 which approved the election of a new four-member Audit Committee chaired by the independent non-executive member of the BoD, Mr. Spyridon Capralos, and members, the non-executive member of the BoD, Mr. Apostolos Tamvakakis, the independent non-executive member of the BoD Mr. Athanasios Skordas and Mr. Angelos Tagmatarchis, who is a third person, non-member of the BoD and fulfils the independence criteria set forth in Article 9 of the Law. 4706/2020.
2.2. Number of shares held by the members of the Board of Directors and the Company's Executives
FULL NAME
NUMBER OF SHARES HELD IN GEK TERNA AS ON 31.12.2023
PERCENTAGE OF SHARES HELD IN GEK TERNA ON 31.12.2023
Peristeris Georgios
30,993,515*
29.968 %*
Capralos Spyridon
2,000
0.002 %
Tamvakakis Apostolos
-
-
Lazaridou Penelope
121,683
0.118 %
Benopoulos Angelos
352,609
0.341 %
Souretis Petros
20,000
0.019%
Gourzis Michalis
1,223,892
1.183 %
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
139
FULL NAME
NUMBER OF SHARES HELD IN GEK TERNA AS ON 31.12.2023
PERCENTAGE OF SHARES HELD IN GEK TERNA ON 31.12.2023
Lambrou Konstantinos
61,946
0.060%
Moustakas Emmanouil
153,297
0.148 %
Antonakos Dimitrios
422,405
0.408%
Afentoulis Dimitrios
-
-
Apkarian Gagik
-
-
Delikoura Aikaterini
-
-
Skordas Athanasios
3,000
0.003 %
Staikou Sofia
-
-
Perdikaris Georgios
140,269
0.136%
Zaribas Christos
2,400
0.002 %
Chatziarseniou Dimitra
-
-
Nika Angeliki
-
-
Tagmatarchis Angelos
-
-
* It concerns direct and indirect participation in the Company.
2.3. Evaluation of the Board of Directors – findings and corrective actions
The Board of Directors and its Committees collectively, as well as the Chairman and the members of the Board individually, are evaluated annually for the effective fulfillment of their duties. The evaluation process is headed by the Independent Non-Executive Vice Chairman in cooperation with the Nominations Committee. The results are discussed in the Board of Directors, where areas for improvement are identified and response measures are proposed. At least every three years, this evaluation may be facilitated by an external consultant.
According to article 3.3.4 of the Corporate Governance Code adopted by the Company, the evaluation process of the Board of Directors collectively, but also of its members individually, is facilitated every three years by an external consultant. In this context, the Nominations and Remuneration Committee collaborated with the consulting company Grant Thornton, which supported the process.
The members of the Board of Directors were asked during the period 01.2023 – 03.2023 to answer evaluation questionnaires about the BoD, its members, as well as about the Corporate Secretary, on a specialized electronic platform. Accordingly, the members of each Committee answered
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
140
questionnaires concerning the Committee in which they participate. Each questionnaire included close-ended questions, while at the end there were also open-ended questions or a box for additional comments in order for each participant to express their thoughts/comments.
The questionnaires of the overall evaluation of the Board of Directors and its Committees consisted of three main evaluation sections which included: i) the composition of the Board of Directors (size- composition-structure), ii) the role and responsibilities of the Board of Directors and iii) the organization and operation of the BoD. The Board of Directors was evaluated by its 15 members and each Committee by its members (BoD members and non-BoD members). The individual evaluation questionnaires were developed into four main evaluation modules: i) technical knowledge and experience, ii) participation, contribution and independence of judgment, iii) corporate governance and iv) strategy monitoring, expression of opinions and good reputation with differentiation where required for executive, non-executive and independent non-executive members of the BoD. The Chairman of the Board of Directors and CEO, the Independent Non-Executive Vice Chairman and the other BoD members were self-evaluated and evaluated by the remaining 14 BoD members, while the Corporate Secretary was evaluated by the 15 BoD members.
The overall conclusions of the evaluation were that the Board of Directors is composed of members who have the necessary knowledge, skills and experience and with the necessary diversity, as required, to exercise its duties. Also, that it has the necessary organization of its operation in terms of the annual number of meetings, the time and resources available and the appropriateness of the composition of its Committees.
This endeavor did not reveal any material weaknesses. The Board of Directors diligently exercises all aspects of its duties and fulfills its role and obligations.
The Board of Directors in relation to its duties arising from para. 1 of article 4 of Law 4706/2020 evaluated the implementation and effectiveness of the Company's Corporate Governance System with reference date 31 December 2023 and this evaluation did not reveal any material weaknesses.
In the context of the above evaluation, the Board of Directors of the Company assigned to Grant Thornton S.A. Certified Auditors and Business Consultants, among other things, to evaluate the adequacy and effectiveness of the Company's Corporate Governance System. This assessment was carried out on the basis of the program of assurance procedures included in Decision I ́73/08b/14.02.2024 of the Supervisory Board of the Institute of Certified Public Accountants, in accordance with the International Standard on Assurance Engagements 3000 (Revised), "Assurance Projects Beyond Audit or Review of Historical Financial Information". The above work of the Certified Public Accountants did not reveal any material weaknesses in the Company's Corporate Governance System.
3.
BoD Committees
The Board of Directors is supported by Committees with an advisory role, but which are of particular importance in its decision-making. These Committees are the following:
3.1. Audit Committee
The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its supervisory duties
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
141
regarding (i) the Financial Reporting process, (ii) the internal audit system, (iii) the internal audit, (iv) the external audit process, (v) the GEK TERNA Group’s procedures for monitoring compliance with laws, regulations and the Code of Conduct and (vi) the Corporate Governance System. The Committee is established and operates in accordance with all applicable laws and regulations.
Composition
The General Assembly of June 20, 2023, elected a new four-member Audit Committee for a two-year term, which was constituted as follows:
1. Spyridon Capralos, independent non-executive member of the BoD, Chairman of the Committee,
2. Apostolos Tamvakakis, non-executive member of the BoD
3. Athanasios Skordas, independent non-executive member of the BoD, and
4. Angelos Tagmatarchis, third independent person, non-member of the Board of Directors
The above composition of the Audit Committee is in accordance with the provisions of article 44 of Law 4449/2017, i.e. all members of the Audit Committee have sufficient knowledge in the fields in which the Company operates.
In addition, Mr. Tamvakakis and Mr. Tagmatarchis have sufficient knowledge in the field of auditing and accounting.
It is noted that the Audit Committee, according to the decisions of the General Assembly of July 1, 2021, until 26.04.2023 had the following composition:
1. Apostolos Tamvakakis, independent non-executive member of the BoD, Chairman of the Committee,
2. Spyridon Capralos, independent non-executive member of the BoD
3. Dimitrios Afentoulis, non-executive member of the BoD and
4. Angelos Tagmatarchis, who is a third independent person, non-member of the Board of Directors
The Board of Directors at its meeting on 26.04.2023, following the proposal of the Nominations Committee, reviewed the fulfilment of the independence criteria provided for in article 9 of Law 4706/2020, in accordance with the specific provisions of the relevant Minutes of the meeting. During this procedure it was found that Mr. Apostolos Tamvakakis, Chairman of the Audit Committee, had ceased to meet the independence criteria as provided for in Article 9 para. 1 of Law 4706/2020, as he had served as a member of the Board of Directors of the Company for more than nine (9) financial years. Due to the fact that the term of office of the Audit Committee expired on 30.06.2023, it was decided that the Audit Committee would continue its work with the remaining three (3) members, chaired by the independent non-executive member of the BoD, Mr. Spyridon Capralos, until the Annual General Assembly of 20.06.2023, and was constituted into body corporate at the meeting of the Committee on 26.04.2023.
Terms of operation
The Audit Committee meets at least four times a year, with the authority to convene additional
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
142
meetings if circumstances require in compliance with its action plan to perform the duties and responsibilities assigned to it.
The Secretary of the Audit Committee, after communicating with the Chairman and the other members of the Committee, the Head of the Internal Audit Unit and other executives or third parties if required, sends (himself or another authorized executive) to the members of the Committee, the items of the agenda and a relevant invitation via e-mail to those expected to attend or an electronic invitation via videoconference platform if the meeting is held via teleconference.
All members of the Audit Committee are expected to participate in the meetings, either in person or via teleconference or video-conference. Decisions shall be made by a majority of the members present. The Committee may invite members of the Company's Management, executives of the Company or its subsidiaries, or any other person (employee, partner, etc.) to participate in meetings and provide relevant information, where necessary.
The Committee organizes meetings with the external auditors and with the Executive Directors. If required, joint meetings may be held with the Audit Committees of subsidiaries of the Group. Agendas shall be prepared and provided to members in advance, together with appropriate supporting material. Minutes are kept with a full record of decisions and actions on the items discussed.
Every six (6) months or more regularly, if necessary, the Committee prepares and submits to the Board of Directors reports on its activities on important issues and once a year, an activity report (including the evaluation of its work and a description of the Sustainable Development Policy implemented by the Company) which is addressed to the Annual General Assembly of shareholders.
The Audit Committee will be evaluated periodically every 3 years. During 2023, the self-evaluation of the Audit Committee for the year 2022 was completed, in the context of the self-evaluation of the Board of Directors and its Committees. The results of the self-evaluation were considered satisfactory.
The Audit Committee's Rules of Operation, approved by the Board of Directors of the Company, are posted at the following link:
https://www.gekterna.com/userfiles/25cf6784-d046-4d9e-ac0f- a34d00d4050d/GEKTERNA_Audit_Committee_Charter_September_2022_GR.pdf
Responsibilities of the Committee
The Audit Committee has the following, per section, basic responsibilities:
• Overseas the drafting process of the Company's financial statements and other financial reporting and examines their reliability. It shall inform the Board of Directors of the results of the statutory audit. It monitors the financial reporting process and submits recommendations or proposals to ensure its integrity.
• Ensures the smooth conduct of internal audit work by providing its support to the competent Internal Audit Unit and periodically evaluating the adequacy and reliability of the methods and procedures used to carry out its work. Its main objective is the early diagnosis and analysis of business risks so that the Board of Directors can react quickly to address them.
• The Audit Committee receives the reports of the Internal Audit Unit, evaluates their content, proposes to the Board of Directors the head of the Unit, evaluates its efficiency and effectiveness
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
143
and based on these recommends the continuation or termination of its duties.
• Monitors the conduct of the regular auditor's work and assesses whether it complies with the relevant legal – regulatory framework, international standards and best practices. It also investigates and evaluates the adequacy of knowledge, professional consistency, independence and effectiveness of the regular auditor, and based on these recommends to the Board of Directors the continuation or termination of the performance of its duties.
Method of Evaluation
The Committee shall evaluate its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire relating to this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation. The Committee conducts an annual review of its work, a summary report of which is submitted to the Board of Directors. This includes proposals for improving its operation and efficiency.
Activities of the Audit Committee in 2023
The Audit Committee met seventeen (17) times in 2023.
1 For the period 01.01.2023-26.04.2023 and 20.06.2023-31.12.2023
2 Member of the Audit Committee until 20.06.2023
3 Member of the Audit Committee from 20.06.2023
The works included meetings with the Internal Audit Unit, the Head of the Financial, Administrative and other Divisions, the Risk Officer, the Compliance Officer, the Certified Auditors of Grant Thornton, directors of the parent and subsidiary companies. The Chairman of the Audit Committee informs the Board of Directors at most of its meetings about the work of the Committee or important issues that arise.
More specifically, the activities of the Audit Committee are summarized in the following points:
FULL NAME
NUMBER OF
MEETINGS
HELD
DURING THE TERM OF OFFICE OF EACH MEMBER
NUMBER OF
MEETINGS
ATTENDED
ATTENDANCE
AT MEETINGS
Tamvakakis Apostolos 1
15
15
100%
Capralos Spyridon
17
17
100%
Afentoulis Dimitrios 2
7
7
100%
Skordas Athanasios 3
10
10
100%
Angelos Tagmatarchis
17
17
100%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
144
Financial reporting
• The Committee examined and evaluated the adequacy and effectiveness of all policies, procedures and safeguards of the Company regarding, on the one hand, the internal audit system and, on the other hand, the assessment and management of risks, in relation to financial reporting.
• The Committee proposed to the Board of Directors the renewal of the audit firm Grant Thornton and the amount of their remuneration, taking into account a) the existing good cooperation with the audit firm for 6 consecutive years, b) the contribution of this audit firm to the upgrading of the quality and integrity of financial information and c) the absence of threats that would alter the independence of judgment of the specific audit firm in relation to the Company.
• The Committee contacted regularly the Certified Auditors who participated in four (4) meetings of the Audit Committee in 2023 - in order to inform them about the planning, the development of the statutory audit of the Company's and the Group's financial statements and received the supplementary audit report of article 11 of Regulation 537/2014. The Committee was informed about the findings (Key Audit Matters) and the results of the audits and discussed them with the Certified Auditors.
• The Committee was informed about the following sections, during the planning of the audit of the Financial Statements for the year 2023 by the Certified Public Accountants of the company:
- Areas of audit interest
- Audit Risks
- Highlights
- Audit Plan
- Audit approach
- Independence
- Use of specialist work
• More specifically, the areas of audit interest for the financial year 2023 that were discussed and analyzed are a) the Management override of Audits, b) revenue recognition, c) key changes in the Group's structure, d) asset impairment, e) derivatives and hedging instruments, f) bad debts - as well as Key Audit Matters which are a) the impairment of non-current assets data, b) the recognition of revenue, and c) the acquisition of the remaining 50% by Heron Energy (Heron I).
• The Committee held meetings with the Chief Financial Officer of GEK TERNA and was briefed on the significant amounts of the annual and interim half-yearly Financial Statements for the year 2023, on the significant changes compared to the previous period and about the following issues:
- The evaluation of the use of the going concern assumption;
- The significant judgments, assumptions and estimates in the preparation of financial statements;
- The valuation of assets at fair value;
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
145
- The assessment of the recoverability of assets,
- The accounting treatment of acquisitions,
- The adequacy of disclosures about the material risks faced by the Company;
- The significant transactions with related parties;
- The significant unusual transactions
- The important accounting policies.
• The Committee monitored the drafting process by the Group's Financial Management of the interim and annual financial statements of the Company and the Group, which were prepared in accordance with the applicable accounting standards.
• The Committee reviewed the annual and interim half-yearly financial statements of the Group and the Company, as well as the content of the Audit Report of the Certified Auditors prior to their recommendation for approval by the Board of Directors and received the necessary assurances regarding the completeness and consistency of these statements, in relation to the information that has been brought to its attention.
• The Committee pre-approved all non-audit services provided by Grant Thornton in 2023 and the aggregated total remuneration of non-audit services provided for the year 2023. The Committee considered that the work carried out and the remuneration of the commissioned non-audit services did not jeopardize the independence or objectivity of the Certified Auditors.
• The Committee examined the independent status of the Certified Auditors in the following ways:
1. Completion of a predetermined list of questions based on Law 4449/2017 – Article 21,
2. The monitoring of non-audit work and
3. The supplementary report received by the Statutory Auditor (pursuant to Article 11 of EU Regulation 537/2014)
Acts of the Internal Audit Unit
• The Committee collaborated and cooperated constantly throughout the year with the Internal Audit Unit of the Company, providing the appropriate instructions for carrying out the internal audit work by subject and priority. The Internal Audit Unit participated in 15 of the 17 meetings of the Audit Committee in 2023.
• The Committee received from the Internal Audit Unit all audit reports produced during 2023. The Audit Committee reviewed and commented on all audit reports during its meetings. In addition, during 2023, the Internal Audit Unit carried out additional important works and other actions for the organization of the Internal Audit Unit and the evaluation of the Internal Audit System. Regarding the Internal Audit System of GEK TERNA the Internal Audit Unit supported the work of the evaluator, which was completed during 2023 and concerned the fi scal year until 31.12.2022.
• The Committee discussed the findings as well as the conclusions and relevant recommendations with the Head of the Internal Audit Unit of the Company. Where necessary, a meeting was set up, in which the Audit Committee, the head of the Internal Audit Unit, the head of the department / project that was audited and, where applicable, the heads of other departments, who participated
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
146
in the audit, participated.
• Throughout the year, the Committee monitored the progress of the audit activities of the Internal Audit Unit and the operation of the Unit in general.
• The Committee received the annual report of the work of the Internal Audit Unit for the year 2022.
• The Committee reviewed and approved the audit plan for 2023 by the Internal Audit Unit.
• The Committee carried out the annual evaluation of the Head of the Internal Audit Unit and the Internal Audit Unit.
• The Committee made decisions regarding the staffing of the Internal Audit Unit of GEK TERNA. The Committee decided and recommended to the Board of Directors the strengthening of the Internal Audit Unit. The Committee carried out the selection and recruitment process of two new members of the Internal Audit Unit, which now consists of 4 people. One recruitment process concerned an additional member, while the second concerned the replacement of a resigned me mber.
• Based on the above, the Committee considered the adequacy and performance of the Head and the Internal Audit Unit as satisfactory.
• The Committee reviewed the Internal Audit Unit's Report for 2023 and the 2024 audit plan of TERNA ENERGY.
Risk Management Unit
➢ Monitoring and Audits
The compliance with the Group's audit framework is monitored through a range of methods and procedures including, but not limited to, assessments, management information, reports and other monitoring activities at company level, project visits and financial audits.
➢ Staff training
The Risk Management Unit (RMU) designed a training program on risk management issues, in compliance with the requirements of the institutional framework and the Company's internal policies. Specifically, during the year, training material on introductory Risk Management topics (with duration of one hour) was prepared, which is addressed to the following:
❖ members of the Board of Directors in the context of training upon holding duties and during their term of office, to ensure compliance with the provisions of the Suitability Policy of the members of the Board,
❖ executives of top / senior management,
❖ competent executives from the 1st line units.
The purpose of this training material was to train participants on the basic principles, governance, classification and methodology of risk management. The training material attempted to familiarize the recipient with basic concepts of the risk management framework and strengthen the culture of risk perception, while presenting both the risk register and a model of risk formulation and safeguards.
RMU maintains regular communication with the Internal Audit Unit (IAU) on risk management issues, including providing information in the context of the preparation of the annual audit plan by the IAU
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
147
based on the risk based approach, with the aim of ensuring the limitation of overlap of work between them.
In addition, the IAU notifies the RMU of the internal audit reports, which highlight weaknesses in the Company's Internal Audit System, and therefore constitute a key factor in update/revision of the risk registry.
Compliance Unit
Report of actions and Compliance Plan of the previous year.
➢ In 2023, the following actions were effected:
• The Company's annual compliance with ISO 37001:2016 and ISO 37301:2021 has been completed.
• Inspections of the Compliance Unit at the Company's headquarters, where the Group Divisions were inspected.
• Inspections at subsidiaries and construction sites of important Group projects
• Training through asynchronous training, e-learning platform, and briefing of all Group staff on Compliance issues and the Code of Conduct and Policies.
Staff training focused on the following topics:
o Conflict of interest
o Corruption and Bribery
o Workplace bullying, mobbing, violence in the workplace
• Week of celebration "Corporate Compliance and Ethics" with a crossword puzzle on Compliance issues , in which participants who answered all questions correctly were awarded (number of successful participants 725).
• The following Policies have been updated:
o Reporting Policy, in order to comply with Law 4990/2022
o Code of Condcut
o Conflict of Interest Policy
• Participation in specialized training programs:
o EQS: Policy and Procedures Technology
o EQS: Whistleblowing in Europe: From Law to Practice
o EU Directive 1937/2019: on the protection of persons who report breaches of Union law, Law 4808/2021 on the elimination of violence and harassment at the workplace.
o Anti-Bribery Management System according to the requirements of ISO 37001:2016
o Violence and Harassment in the Workplace – The new legislative framework
o Workshop on Whistleblowing and Harassment
• Participation in specialized conferences:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
148
o Whistleblowing programs-New law 4990/2022 – Incorporation of EU Directive 2019/1937 | Sanctions
o 6th Compliance Conference of the Association of Regulatory Compliance Professionals of Greece Focusing on the core to approach the future
o European Compliance and Ethics Conference 2023
• Cooperation with an audit firm in the context of the evaluation of the Company's Internal Audit.
• Meeting of the Compliance Officer with the Compliance Officers of the Group's subsidi aries.
➢ Changes to the Company's Procedures and Policies made in the previous year:
In 2023, the Management System was adapted to the requirements mainly of the new Law 4990/2022 on witness protection based on the European Directive 1937/2019 and the appointment of the Compliance Officer as the Person Responsible for the Receipt and Follow-up of Reports.
The main changes concern the following:
• Code of Conduct (updated)
• Conflict of Interest Policy
• Reporting Policy
➢ Significant risks as they have arisen from the respective Risk Assessment and mitigation actions.
A Risk Assessment Study has been prepared for Bribery and Regulatory Compliance issues, and the risks have been assessed.
The areas where bribery risks have been identified are:
• Relations with banks
• Evaluation of investment programs
• Property management
• Choosing a partner
• Proposals for new projects – participation in competitions
• Relations with authorities
• Donations and Sponsorships
• Joint ventures
• Information Security
• Resource Management and Company Property
• Personnel Management
• Financial Management
• Contract Management
The areas in which risks for Compliance issues have been identified are the following:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
149
• Legislation Management
• Corporate Governance
• Environment
• Labor
• Personal Data
• Tax
• Banks/investment funds
• Contracts
Each risk is assessed based on the possibility of occurrence and the severity of its effects. The RCU (Regulatory Compliance Unit) informed the Compliance Committee, the Internal Audit Unit (IAU), the Audit Committee and the Board of Directors regarding the findings of the internal audits, which fall within the perimeter of responsibility of the RCU and its Action Plan.
Internal Audit System
• The Audit Committee received the detailed and concise evaluation report of the Internal Audit System (IAS) of GEK TERNA (see section 6.4 below).
• The Chairman of the Audit Committee sent the brief evaluation report of the Internal Audit System (IAS) of GEK TERNA to the Hellenic Capital Market Commission, within the deadline provided by the Regulatory Framework.
• The Audit Committee discussed and monitored the compliance with Law 4706/2020 on Corporate Governance and the relevant circulars of the Hellenic Capital Market Commission (Internal Audit System).
• The Audit Committee monitored the implementation of the Group's commitments to sustainable development and corporate responsibility, as the latter promote social welfare, protect the environment and constitute the only sustainable business practice.
• The Audit Committee was briefed on the work carried out by the ESG Committee on ESG issues.
• The Audit Committee selected the Independent Evaluator for the evaluation process of the Corporate Governance System that was completed in 2024 under law 4706/2020.
• The Audit Committee monitored the work of the evaluation process of the Corporate Governance System which was completed in 2024 (see section 6.5).
The Audit Committee constantly informed the Board of Directors of the Company about its activities.
Sustainable development
The Group's approach to Sustainable Development is based on dialogue between the interested parties, as well as the identification and regular evaluation of the most important economic, social and environmental impacts of its activities. It aims to enhance positive impacts and reduce negative ones, through best practices, sustainable initiatives and reliable partnerships, aiming at continuous improvement for the benefit of shareholders, investors, employees and society.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
150
The Unit responsible for the development and the revision of this policy is the General Division of Corporate Relations and Sustainable Development.
Other important issues
• The Audit Committee drafted and presented to the Board of Directors the activities for the first semester of 2023 and for the whole year 2023.
• The Audit Committee drafted and presented to the General Assembly of shareholders the activities for the year 2023.
• The two persons who served as Chairmen of the Audit Committee during the year 2023 met with executives of the Supervisory Authority (Hellenic Accounting and Auditing Standards Oversight Board/) at the request of the Supervisory Authority.
• The Audit Committee met with other executives of Company and subsidiaries to discuss important issues of the group (the General Manager of TERNA ENERGY, the Chairman, the CEO and the Chief Financial Officer of HERON I and II, the CEO of TERNA, the Corporate Governance Officer of GEK TERNA, the Chief Financial Officer of GEK TERNA, the Chairman of the ESG Committee and the Director of Corporate Social Responsibility, the Executive Director, who also serves as General Manager of Administrative Services, the Chief Information Security Officer, the Compliance Officer of Heron I and II, the Human Resources Manager of GEK TERNA and the Human Resources Manager of TERNA).
3.2. Executive Committee
The Board of Directors of the Company at its meeting of July 28, 2023 proceeded to the establishment of an Executive Committee, implementing the relevant decision of the Annual General Assembly of Shareholders of 20.06.2023, which approved the amendment of par. 1 of article 17 of the Company's Articles of Association with the addition of a new paragraph (b) providing for the possibility of establishing an Executive Committee. The Executive Committee assists the Board of Directors in matters of day-to-day management of corporate affairs and contributes to the smooth and efficient operation of the Company. The role of the Executive Committee is important for achieving intra-company information, coordinating the work of the divisions, and supporting the CEO in the implementation of the Company's day-to-day operations. The Executive Committee is responsible for the implementation of its strategic plan of the Company, which is determined by the Board of Directors.
Committee Composition
The Executive Committee consists of six (6) senior managers of the Group and has the following composition:
1. George Peristeris, Chairman of the Board of Directors and CEO, Chairman of the Committee
2. Penelope Lazaridou, Executive Director, Executive Member of the BoD
3. Angelos Benopoulos, Executive Director, Executive Member of the BoD
4. Petros Souretis, Executive Director, Executive Member of the BoD
5. Emmanouil Moustakas, Executive Member of the BoD
6. George Perdikaris, non-member of the BoD, Management Consultant
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
151
The CEO is appointed as Chairman of the Committee, who proposes to the Board of Directors the members of the Committee. The term of office of the Executive Committee is equal to the term of office of the BoD, i.e. until 01.07.2025, and until the election of a new Committee. In case of resignation or withdrawal of members, the Executive Committee proposes to the Board either their replacement or the continuation of the operation of the Committee with the remaining members. The Executive Committee is supported in its work by the Corporate Secretary. Company executives may participate in the Committee's meeting, depending on the subject of the Committee, if their participation is deemed necessary for the effective operation of the Committee. The role of these executives is to carry out studies, make suggestions or provide clarifications on matters discussed in the Committee and they do not have voting rights in the decision-making process.
Terms of Operation
The Committee shall meet upon invitation of its Chairman. The invitation shall set the agenda, place and time of the meeting. Any member of the Committee may request that it be convened to discuss specific issues. Members of the Committee shall receive the items on the agenda promptly before the day of the meeting. Meetings shall be held either physically or remotely by means of any technology enabling discussion or written exchange of views. The Committee appoints as secretary the Corporate Secretary, who keeps the minutes of the meetings. The minutes of the meetings of the Committee shall be signed by all members present at the meeting. The Secretary of the Committee is responsible for collecting material and information that is useful or necessary for the work of the Committee and cooperates with the Chairman of the Committee on the items on the agenda. The Secretary of the Committee shall keep a record of the minutes diligently and in a safe place. Should she cease to support the Committee for any reason, she shall hand over the minutes to her replacement diligently and protocol of delivery and receipt shall be executed. The Executive Committee shall submit to the Board of Directors an activity report on a quarterly basis. The Executive Committee may also submit interim activity reports if this is required for the smooth operation of the Company.
Responsibilities of the Committee
• Management of the Company's day-to-day operations.
• Representation of the Company judicially and extrajudicially, with the possibility of further authorization to third parties, generally or for specific acts.
• Acquisition, establishment or transfer of rights in rem over movable (excluding securities) and contractual or real estate rights in movable and immovable property in exchange for up to the amount of Euro Twenty Million (20,000,000 euros) per contract.
• Approval of the acquisition, establishment or transfer of rights in rem in movable (excluding securities) by or to subsidiaries and of contractual or real estate rights in movable and immovable property of subsidiary companies.
• Provision of credit, guarantees or financial support to companies consolidated with GEK TERNA S.A. up to the amount of Euro Twenty Million (20,000,000 euros) per case.
• Undertaking or awarding as well as termination of service contracts in exchange for up to five million euros (5,000,000 euros) per contract. In the case of ongoing contracts, this amount shall be
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
152
calculated on an annual basis.
• Participation in tenders, public or private, PPPs and/or concessions, as well as in public or private, high or low bidding auctions, regardless of budget.
• Provision of Technical and Professional Capacity to other legal entities for participation in public or private tenders, PPPs and/or concessions, as well as in public or private, high or low bidding auctions, regardless of budget.
• Sponsorships or donations in favor of third parties up to the amount of Euro Fifty Thousand (50.000 euros) per case. Commencement/abolition of construction sites, branches or other facilities of the Company in Greece and abroad.
• Acquisition or transfer of any kind of vehicles or construction machinery, either by ownership or leasing.
• Opening or closing bank accounts.
Method of Evaluation
The Committee shall evaluate its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation. The Committee conducts an annual review of its work, a brief report of which is submitted to the Board of Directors. This includes proposals for improving its operation and efficiency.
Activities of the Executive Committee for the year 2023
The Executive Committee met in full quorum four (4) times in 2023.
The topics of the meetings mainly included the approval of the Internal Rules of Operation of the Executive Committee and the provision of corporate guarantees in favor of subsidiaries of GEK TERNA S.A.
FULL NAME
NUMBER OF
MEETINGS
DURING THE TERM OF OFFICE OF EACH MEMBER (28.07.2023 – 31.12.2023)
NUMBER OF
MEETINGS
PARTICIPATED
ATTENDANCE AT
MEETINGS
Georgios Peristeris
4
4
100%
Penelope Lazaridou
4
4
100%
Angelos Benopoulos
4
4
100%
Petros Souretis
4
4
100%
Emmanouil Moustakas
4
4
100%
Georgios Perdikaris
4
4
100%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
153
3.3. Nominations and Remuneration Committee
The Nominations and Remuneration Committee (Nand RC or the Committee) operates as an independent and objective body, which transparently assists the Board of Directors and has as its main purpose:
a) to assist the Board of Directors by recommending to it persons suitable for becoming member of the Board of Directors based on the principles and criteria provided for in the Suitability Policy and
b) formulating a proposal for the preparation and periodic review of the Remuneration Policy, examining the information in the Company's Remuneration Report, providing a relevant opinion and formulating proposals regarding the remuneration range of persons governed by the Remuneration Policy. The above proposals/opinions of the Committee are submitted to the Board of Directors, who then decide on these issues or make recommendations to the General Assembly, where required.
The Committee is established following a decision of the Board of Directors, which elects both the members and the Chairman of the Committee.
The Rules of Procedure of the Remuneration Committee, approved by the Board of Directors of the Company, are posted at the following link:
https://www.gekterna.com/userfiles/25cf6784-d046-4d9e-ac0f- a34d00d4050d/%CE%93%CE%95%CE%9A%CE%A4%CE%95%CE%A1%CE%9D%CE%91_%CE%9A%CE% 9B_%CE%95%CE%A5%CE%91_GR.pdf
Committee composition
For the period 01.01.2023 to 28.07.2023, the Nomination Committee operated independently of the Remuneration Committee consisting of:
1. Apostolos Tamvakakis, Independent Non-Executive Member of the BoD, Chairman of the Committee
2. Katerina Delikoura, Independent Non-Executive Member of the BoD
3. Spyridon Capralos, Independent Non-Executive Member of the BoD
4. Gagik Apkarian, Independent Non-Executive Board Member
and for the period 25.04.2023 to 28.07.2023 with the following composition:
1. Spyridon Capralos, Independent Non-Executive Member of the BoD, Chairman of the Committee
2. Katerina Delikoura, Independent Non-Executive Member of the BoD
3. Gagik Apkarian, Independent Non-Executive Board Member
4. Apostolos Tamvakakis, Non-Executive Member of the BoD
Respectively, the Remuneration Committee operated independently of the Nomination Committee for the period 01.01.2023 to 28.07.2023 consisting of:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
154
1. Spyridon Capralos, Independent Non-Executive Member of the BoD, Chairman of the Committee
2. Sofia Staikou, Independent Non-Executive Member of the BoD
3. Apostolos Tamvakakis, Independent Non-Executive Member of the BoD*
4. Athanasios Skordas, Independent Non-Executive Member of the BoD
*from 24.04.2023 Mr. Tamvakakis participated in the Nomination and Remuneration Committees as a Non- Executive Member.
By virtue of decision of the Board of Directors dated 28.07.2023, the two Committees were merged into a common Committee, in which all relevant responsibilities are concentrated, an option given by law 4706/2020, art. 10, para. 2 and the Corporate Governance Code. Its composition was then defined as follows:
1. Spyridon Capralos, Independent Non-Executive Member of the BoD, Chairman of the Committee
2. Apostolos Tamvakakis, Non-Executive Member of the BoD
3. Katerina Delikoura, Independent Non-Executive Member of the BoD
4. Sofia Staikou, Independent Non-Executive Member of the BoD
5. Athanasios Skordas, Independent Non-Executive Member of the BoD
Terms of operation
According to its Rules of Procedure, the Committee meets at least three (3) times a year and whenever circumstances require.
The Chairman of the Committee is responsible for convening and responsible for planning and conducting its meetings. However, any member of the Committee shall have the right to ask the Chairman to convene a meeting of the Committee or to add items to the agenda.
Meetings are held either in person or remotely, through any technology that enables discussion and/or written exchange of views. A member of the Committee may authorize another member in writing to represent him/her at a particular meeting and to vote on his/her behalf on the items on the agenda. No member may represent more than one other member of the Committee.
In order for a decision to be made, all members of the Committee are required to be present or represented, either in person at the meeting venue or in another place using technology. Committee decisions shall be made by a majority of at least 75% of the members of the Committee. In case a member of the Committee is absent without justification and without being represented by another member as above, at two (2) meetings within the same year, that member shall be deemed to have resigned.
The minutes of the meetings are kept by a person appointed by the Chairman of the Committee as secretary/technical advisor, who, in addition to keeping the minutes of the meetings, undertakes the role of technical support and coordination of the work of the Committee, as well as the organization, assignment and preparation of studies carried out either internally or by assignment to external consultants. Legal support in the work of the Committee may be provided either by the Corporate
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
155
Secretary, who is required by the Company's Internal Rules of Operation to be a lawyer, or by another lawyer of the Group.
The Committee may receive scientific or technical support from Company or Group executives, either by selecting and appointing them as Technical Advisors of the Committee or by inviting them to prepare a specific project. The secretary/technical advisor of the Committee, the technical or scientific advisor and the legal advisor are appointed by a Decision of the Committee which is recorded in the minutes of the relevant meeting.
The Chairman of the Committee informs the Board of Directors about the works of the Committee, reports important findings and submits proposals to the Board.
The Committee shall carry out an annual review of its works, a brief report of which it submits to the Board. This includes proposals to the Board of Directors for improving its operation and efficiency.
Responsibilities of the Committee
The Committee researches and selects suitable candidates for election to the Board of Directors of the Company. The Committee determines the eligibility criteria of the members of the Board of Directors, in order to ensure individual and collective suitability. It prepares and updates the Suitability Policy, which it submits to the Board of Directors for approval. The Suitability Policy is then approved by the General Assembly when required.
The Committee seeks, features and proposes suitable candidates for election in the Board of Directors in accordance with the criteria set by the Company in its Suitability Policy, following the process of recruitment/selection of senior managing personnel and the process of appointment of senior managers and provision of authorizations.
The Committee conducts periodic reassessment of the size and composition of the Board of Directors in accordance with the Company's Suitability Policy to identify any gaps regarding the suitability of the members of the Board of Directors on an individual and collective level and submits proposals for improvements, when deemed necessary.
The Committee shall make proposals to the Board of Directors regarding the Remuneration Policy or its revision. The Committee ensures that the Company has a clear, objective, well-documented and transparent Remuneration Policy in accordance with applicable legislation and is consistent with the Company's business strategy, market conditions, profile and risk “appetite” and does not encourage excessive and short-term risk-taking. In this context, the Committee formulates proposals to the Board of Directors regarding the range of remuneration of persons falling within the scope of the remuneration policy, in accordance with article 110 of Law 4548/2018, and regarding the remuneration of the Company's executives, and in particular the head of the internal audit unit, and makes a relevant proposal to the Board of Directors, which decides on them or proposes to the General Assembly, where required.
The Committee monitors the implementation of the Remuneration Policy. The Committee examines the information included in the final draft of the annual remuneration report, providing an opinion to the Board of Directors before its submission to the General Assembly.
The Committee examines and submits proposals to the Board of Directors regarding stock option plans, share bonus programs, additional retirement benefit programs and any other long-term reward
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
156
programs.
Method of Evaluation
The Committee evaluates its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation. The Committee submits annually a brief report of the review of its activities to the Board.
Activities of the Committee
For the period 01.01.2023 to 25.04.2023, the independent Nomination Committee met three (3) times in full quorum with the following composition:
FULL NAME
NUMBER OF MEETINGS 01.01.2023- 25.04.2023
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Tamvakakis Apostolos
3
3
100%
Capralos Spyridon
3
3
100%
Katerina Delikoura
3
3
100%
Gagik Apkarian
3
3
100%
and for the period 25.04.2023 to 28.07.2023 it met once (1) with the following composition:
FULL NAME
NUMBER OF MEETINGS 25.04.2023- 28.07.2023
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Capralos Spyridon
1
1
100%
Tamvakakis Apostolos
1
1
100%
Katerina Delikoura
1
1
100%
Gagik Apkarian
1
1
100%
Respectively, the independent Remuneration Committee met three (3) times in full quorum, for the period 01.01.2023 to 28.07.2023 with the following composition:
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
157
FULL NAME
NUMBER OF MEETINGS 01.01.2023- 28.07.2023
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Capralos Spyridon
3
3
100%
Tamvakakis Apostolos
3
3
100%
Staikou Sofia
3
3
100%
Skordas Athanasios
3
3
100%
By virtue of decision of the Board of Directors dated 28.07.2023, the two Committees that operated independently were merged into a common Committee, in which all relevant responsibilities are concentrated, an option given by law 4706/2020, art. 10, para. 2 and the Corporate Governance Code.
The Joint Nominations and Remuneration Committee met in full quorum four (4) times in 2023.
FULL NAME
NUMBER OF MEETINGS 28.07.2023- 31.12.2023
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Capralos Spyridon
4
4
100%
Tamvakakis Apostolos
4
4
100%
Staikou Sofia
4
4
100%
Delikoura Aikaterini
4
4
100%
Skordas Athanasios
4
4
100%
The issues handled by the two independent Committees until 28.07.2023 and the joint N and R Committee since then, are analyzed below:
➢ COMPOSITION OF THE BOARD OF DIRECTORS
In the context of Law 4706/2020 on Corporate Governance and in accordance with article 3 of the above law, the Company has a Suitability Policy for the members of the Board of Directors, which sets out the principles regarding the selection or replacement of its members, the criteria for assessing the suitability of members, the provision of diversity criteria, in accordance with the guidelines published on 18.09.2020 with a relevant circular by the Hellenic Capital Market Commission.
The Nomination Committee proceeded, based on its responsibilities, as they arise from the legal and regulatory framework, on 24.04.2023 to evaluate the composition of the Board of Directors, based on Law 4706/20.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
158
During the evaluation, the following were recorded:
a) Eight (8) executive members of the Company participated in the Board of Directors. All members shall have sufficient professional experience and have held positions of responsibility for many years.
Also, six (6) independent non-executive members participated in the BoD, i.e. more than 1/3 of the total number of members, covering the obligation for five (5) independent non-executive members, arising from article 5 of Law 4706/20.
One (1) non-executive also participated .
b) For the independent non-executive members of the Board of Directors and the Committees, the Committee carried out the annual audit of the fulfillment of the requirements of independence of para.
1 of article 9 of Law 4706/20. During this process, the Committee received a letter from Mr. Apostolos Tamvakakis, Independent Non-Executive Vice Chairman of the BoD and Senior Independent Director, Chairman of the Audit Committee and the Nomination Committee, as well as a Member of the Remuneration Committee and the Strategic Planning Committee, informing that the requirements of independence have ceased to be met, as he had served as a member of the Company's Board of Directors for more than nine (9) financial years.
In this context, the Committee also proposed the new composition of the Audit Committee, as a four- member independent Joint Committee with a two-year term, consisting of non-executive members of the Board of Directors and third parties.
As there were five (5) remaining independent members of the Board, the Committee found that the composition of the Board of Directors at that time still met the relevant requirements of the legislation regarding the minimum number of independent members.
c) regarding the representation by gender defined by law, of at least 25% of the total members of the Board, 3 women participate in the Board of Directors, meeting the requirements of article 3 of Law 4706/2020.
It was also confirmed that by the date of the audit that all members of the Board of Directors met the individual criteria set by the Suitability Policy, i.e. adequacy of knowledge and skills, good standing and reputation, absence of conflict of interest, independence of judgment, availability of sufficient time.
Furthermore, the Committee, within the framework of its responsibilities to identify needs for filling positions and/or replacing Senior Management Executives, conducts an ongoing research. With the aim of strengthening the management of its subsidiary TERNA S.A., it examined and proposed, based on the relevant profile that has been prepared, a CEO with the required qualifications and experience.
➢ EVALUATION OF THE BOARD OF DIRECTORS
The Board of Directors was evaluated by all 15 of its Members. The Board of Directors assessment was carried out by collecting responses through a digital platform to questionnaires approved by the Committee. Subsequently, the Evaluation Results for the Board of Directors, the Committees, the Chairman, the Vice-Chairman, the Members and the Corporate Secretary of GEK TERNA were prepared and distributed to the Board of Directors, the members of the Committees and the members of the Board of Directors respectively. On 29.03.2023, a detailed presentation of the evaluation results for the year 2022 was made to the Board of Directors by the Chairman of the Nomination Committee, during which the strong points, as well as the points for improvement, were discussed.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
159
According to article 3.3.4 of the Corporate Governance Code adopted by the Company, the evaluation process of the Board of Directors collectively, but also of its members individually, is facilitated every three years by an external consultant. In this context, the Committee approved on 14.12.2023 the cooperation with Grant Thornton, for the evaluation of the Board of Directors for the year 2023 (see Section 6.5.).
➢ TRAINING OF BOARD MEMBERS
The Committee attributes great importance to the continuous information and training of the members of the Board of Directors. For this reason, the Committee provides the members of the Board of Directors with informative seminars by specialists, and educational presentations on various topics. In 2023, the members of the Board of Directors received training on the responsibilities of BoD members under the new corporate governance framework, GDPR and cybersecurity.
In addition, on a proposal of the Committee, a new program of annual trainings was adopted, according to which those in charge for each sector are appointed in order to prepare the relevant updates.
➢ REMUNERATION
The Committee reviewed the remuneration of the Head of the Internal Audit Unit and made a relevant recommendation to the Board of Directors.
Also, the Remuneration Report for the year 2022 that was part of the Corporate Governance Statement in the Annual Financial Report for the year 2022 was examined and discussed at the Annual General Assembly.
➢ REMUNERATION POLICY
The Remuneration Policy determines all types of remuneration (fixed, variable, additional benefits) in a comprehensible, clear and coherent manner and applies to the members of the BoD, the members of the Committees and the respective General Managers - senior managers as provided for in article 110 par. 1 of Law 4548/2018, contributing to transparency, meritocracy, justice and proportionality.
The Remuneration Policy was evaluated by the Remuneration Committee, which proceeded to a new Remuneration Policy for the period 2023-2027, according to which it is provided, inter alia, for the establishment of a share bonus program in accordance with Law 4548/18, article 114 and its basic terms.
In addition, the Remuneration Policy was supplemented with the remuneration description concerning non-executive members of the BoD, who hold positions of responsibility in Group companies, which are assigned specific responsibilities of critical roles with reference to the Board of Directors and additional remuneration or benefits, with a view to retaining suitable executives for a specific period of time.
➢ SHARE BONUS PROGRAM
Following the approval of the new Remuneration Policy by the Annual General Assembly (20.06.2023), the Committee considered and recommended for approval by the Board of Directors the details and terms of a Share Bonus Program, the goals, on a corporate and consolidated basis, and any other details for the implementation of the Program.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
160
➢ STOCK OPTION PLAN
The Committee monitors the approved ongoing Stock Option Plan until its expiry (2023). In this context, in cooperation with the General Division of Financial Services and the Financial Services Division of the Company, the relevant documentation was collected for the safeguarding of rights corresponding to the targets achieved within the year 2022.
➢ REGULATIONS, POLICIES, PROCEDURES
The new Rules of Operations of the Joint Nomination and Remuneration Committee were approved.
3.4. Investment Committee
The Investment Committee is established by the Board of Directors. Its main role is to help ensure that new investments are aligned with the Company's objectives and have a benefit to the Company.
Composition
With the meeting of the Board of Directors on 28.07.2023, was constituted into body corporate as follows:
1. George Perdikaris, non-member of the BoD, Chairman of the Committee
2. Apostolos Tamvakakis, Vice-Chairman of the BoD, Non-Executive Member of the BoD
3. Penelope Lazaridou, Executive Director, Executive Member of the BoD
4. Emmanouil Moustakas, Executive member
5. Petros Souretis, Executive Director, Executive Member of the BoD
In the period preceding the decision of the Board of Directors dated 28.07.2023, the Investment Committee on 01.12.2022 was constituted into body corporate as follows:
1. Emmanouil Moustakas, Executive Member of the BoD, Chairman of the Committee
2. Penelope Lazaridou, Executive Director, Executive Member of the BoD
3. Petros Souretis, Executive Director, Executive Member of the BoD
Terms of operation
The Committee shall meet following an invitation of its Chairman. The invitation shall set the agenda, place, and time of the meeting. Meetings shall be held either in person or remotely by means of any technology enabling discussion or written exchange of views.
In order for a decision to be made, a quorum of 80% of the members of the Committee is required to be present in person either at the meeting place or elsewhere using conference technologies. Decisions of the Committee shall be made by unanimity of its members present or represented. The Committee appoints a Secretary, who keeps the minutes of the meetings or is assisted by the Corporate Secretary or other lawyer of the Company.
Responsibilities of the Committee
• The Committee ensures that new investments are in line with the approved strategy of the Company or that they constitute new decisions, which the Board of Directors approves. Specifically, all Committee decisions for investments over 10 million euros are forwarded to the Board of
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
161
Directors for approval, as well as strategic investment decisions which are not included in the Company's approved strategy, regardless of the amount. For investments approved by the Committee up to 10 million euros, the Committee recommends their approval to the Chief Executive Officer, who makes the final decision.
• Evaluation of the return on implemented investments.
• Monitoring the Company's performance per business activity in achieving goals.
• Examination of new investments and submission of a relevant proposal to competent bodies of the Company / the Board of Directors of the Company regarding:
- the capital adequacy of the Company for the implementation of the investment,
- assessing the business risks associated with implementation of every i nvestment proposal,
- the documentation of its feasibility and confirmation that the implementation is part of the approved strategy of the Company or leads to the development of new market segments
• The Committee examines partnerships of subsidiaries aimed at establishing new companies or joint ventures of strategic importance with third parties, mergers and acquisitions of companies.
Method of Evaluation
The Committee shall evaluate its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation.
Activities of the Investment Committee for the year 2023
During 2023 the Committee met in full quorum once (1).
FULL NAME
NUMBER OF MEETINGS DURING EACH MEMBER'S TERM OF OFFICE
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Perdikaris Georgios 1
1
1
-
-
100%
Tamvakakis Apostolos 1
1
1
-
-
100%
Lazaridou Penelope
1
1
-
-
100%
Moustakas Emmanouil
1
1
-
-
100%
Souretis Petros
1
1
-
-
100%
1 From 28.07.2023
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
162
3.5. Regulatory Compliance Committee
The Regulatory Compliance Committee consists of at least three (3) members.
The following members of the Compliance Committee participate therein:
• Up to two (2) independent non-executive members of the Company's Board of Directors
• Up to one (1) executive member of the Company's Board of Directors
• A lawyer (the Corporate Secretary provided for in the Regulation must be a lawyer or another lawyer of the Group)
• The Compliance Officer (C.O.)
Composition
The Regulatory Compliance Committee consists of:
1. Athanasios Skordas, Independent non-executive member of the BoD, Chairman of the Committee.
2. Aikaterini Delikoura, Independent non-executive member of the BoD
3. Dimitrios Antonakos, Non-Executive Member of the BoD
4. Dimitra Chatziarseniou, Head of the Legal Department
Terms of operation
The Committee shall meet when convened by its chairman, who shall determine the agenda, place and time of the meeting. Meetings shall be held either in person or remotely by means of any technology enabling discussion or written exchange of views.
The Committee appoints a Secretary , who keeps the minutes of the meetings or is assisted by the Corporate Secretary or other lawyer of the Company.
Duties and Responsibilities of the Committee
• Ensuring compliance of the Company and the Group with regulatory provisions and approved Policies and Procedures regarding compliance.
• Evaluation of inspections by regulatory authorities and important findings by the Regulatory Compliance Unit, with the aim of optimally dealing with them.
• Information on the reports / complaints made by employees, suppliers and customers on issues of the Code of Conduct and the applied management system through the Regulatory Compliance Officer.
• Information on issues of named or anonymous complaints from employees, suppliers, customers and the result of their handling.
• Information on mediation issues or amicable settlements and out-of-court settlements with employees, suppliers and customers.
• Recommending actions to deal with complaints where necessary and monitoring of the implementation and effectiveness of actions.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
163
• Protection against retaliation against employees, suppliers and customers who make complaints.
• Informing the Executive Management about incidents of complaints.
• Preparation of reports to Senior Management on a systematic basis.
• Participation in risk assessment regarding issues of regulatory compliance, corruption and bribery in existing and new activities of the Company.
• Evaluation of results of internal inspections by the Regulatory Compliance Officer.
• Assessing the effectiveness of audits for regulatory compliance, corruption, bribery, fraud, collusion and obstruction of investigation.
• Providing clarifications on issues related to the Code of Conduct.
• Participation in the updating of the Code of Conduct and related Policies.
• Participation in the training and monitoring of the staff training program on issues of regulatory compliance, corruption and bribery, fraud, collusion and obstruction of i nvestigation.
• Participation in the planning of actions to raise awareness and inform staff on issues related to the Code of Conduct.
• Recommending actions to the Senior Management that will improve the Company's performance on regulatory compliance, corruption and bribery, fraud, collusion and obstruction of investigation.
• Information on Regulatory Compliance issues of the Group's subsidiaries.
Method of Evaluation
The Committee evaluates its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation.
The Committee shall submit annually a brief report of the review of its work to the Board.
Activities of the Regulatory Compliance Committee for the year 2023
During 2023 the Committee met in full quorum three (3) times.
FULL NAME
NUMBER OF MEETINGS DURING EACH MEMBER'S TERM OF OFFICE
NUMBER OF MEETINGS ATTENDED
NUMBER OF MEETINGS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Skordas Athanasios
3
3
-
-
100%
Delikoura Aikaterini
3
3
-
-
100%
Antonakos Dimitrios
3
3
-
-
100%
Chatziarseniou Dimitra
3
3
-
-
100%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
164
The issues discussed by the Regulatory Compliance Committee are the following:
• Presentation of internal audit plan and its results.
• Planning of the Company’s certification inspection.
• Update of the Company's Code of Conduct, Procedures and Policies
• Planning and implementation of meetings with Compliance Officers of the Group's s ubsidiaries.
• Certification of the Company with ISO 37001:2016 and ISO 37301:202 1.
• Planning trainings and staff information on the revision of the Code of Conduct, management system issues against Corruption and Bribery, Conflict of Interest, Combating Violence and Harassment at Work as well as the revised Reporting Procedures, and Due Diligence for Staff and the Company's Conflicts of Interest and Reporting Policies.
• Rewarding successful participants with 100% success in the thematic units with self-assessment questions.
• Examination and decisions on issues of complaints from employees, customers, suppliers or other third parties, on issues of the Code of Conduct.
• Staff awareness during the week of celebration of Corporate Compliance and Ethics.
3.6. Strategic Planning Committee
The Strategic Planning Committee is established by virtue of decision of the Board of Directors. Its primary role is, inter alia, to assist the Board of Directors and Management in reviewing the competitive field, designing the Strategic Plan, as well as the Company's capabilities and structure in this context, and exploring possible new areas of growth.
Committee Composition
The Strategic Planning Committee by virtue of decision of the Board of Directors dated 28.07.2023, was constituted into body corporate as follows:
1. George Peristeris, Chairman and CEO, Chairman of the Committee
2. George Perdikaris, Non-member of the Board of Directors stands in for the Chairman in case of absence or impediment
3. Spyridon Capralos, Vice-Chairman of the BoD, Independent non-executive member of the BoD
4. Emmanouil Moustakas, Executive Member of the BoD
5. Apostolos Tamvakakis, Vice-Chairman of the BoD, Non-executive member of the BoD
6. Dimitrios Afentoulis, Non-executive member of the BoD
Terms of operation
The Strategic Planning Committee meets whenever necessary, upon invitation of its Chairman, with or without an agenda, for discussion and exchange of views.
Meetings shall be held either in person or remotely by means of any technology enabling discussion or written exchange of views.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
165
Company executives may participate in the meeting of the Committee, provided that, depending on the field of their duties, their participation is deemed necessary for the effective operation of the Committee. The role of these persons is to carry out studies, make suggestions or provide clarifications on matters discussed in the Committee and they do not have voting rights in the decision-making process.
Responsibilities of the Committee
• Evaluation / analysis on issues of strategic selections of the Company (e.g. strategic partnerships, share capital increases, acquisitions, mergers, formation of joint ventures, creation of special purpose vehicles) and formulation of relevant recommendations to the Board of Directors.
• Formulation of the Company's Strategic Planning, which includes the strategic axes and proposal to the Company's Board of Directors for approval.
• Overview of the Company's business plans and investment plans, which are prepared by the Heads of Business Activities and the General Division of Business Development, in terms of their alignment with the Company's Strategic Planning, before submitting them to the Board of Directors for approval.
Method of Evaluation
The Committee shall evaluate its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee replied to a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation.
Activities of the Strategic Planning Committee for the year 2023
During 2023, the Committee met once (1) in full quorum. During the meetings, the Company's performance, the general environment and the markets in which it operates were reviewed. There was a wide-ranging exchange of views on the prospects. The meetings of the Committee are considered particularly useful for the course and medium to long-term goals of the Company.
3.7. ESG Committee
The Sustainability Committee (Environmental, Social and Governance – ESG, hereinafter referred to as the "Sustainability Committee" or the "ESG Committee" or the "Committee") is established by the Board of Directors to monitor the Company's performance and recommend environmental, social and corporate governance improvements that can affect the Group's ability to generate value in the long term. The Committee's work includes monitoring integration of non-financial factors in business strategy and decision-making, with the aim of keeping the Company resilient and ready to manage changes in the environment in which it operates.
Committee Composition
By virtue of decision of the Board of Directors dated 30.11.2022, the Committee was reconstituted into a body corporate with the following composition:
1. Sofia Staikou, Independent non-executive member of the BoD, Chairman of the Committee.
2. Aikaterini Delikoura, Independent non-executive member of the BoD
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3. Konstantinos Lambrou, Executive member of the BoD
4. Penelope Lazaridou, Executive Member of the Board of Directors
5. Dimitra Chatziarseniou, Corporate Secretary, Head of the Legal Department
Terms of operation
The Sustainability Committee meets whenever necessary, with or without an agenda, for discussion and exchange of views, upon invitation of its Chairman.
The invitation shall set the agenda, place and time of the meeting.
Any member of the Committee may request in writing that it be convened to discuss specific questions.
Meetings shall be held either physically or remotely by means of any technology enabling discussion or written exchange of views.
The Committee appoints a Secretary who keeps the minutes of the meetings or is assisted by the Corporate Secretary or other lawyer of the Company.
The minutes of the meetings of the Committee shall be signed by all members present at the meeting.
Responsibilities of the Committee
The ESG Committee separately considers the following:
Q : The environmental criteria, i.e. the way in which the Company acts as a participant in the natural environment, showing in practice respect for the Environment, biodiversity, tackling Climate change, CO2 emissions, air / water pollution, energy efficiency, etc.
S : The social criteria , i.e. the management of relationships with employees, suppliers, customers and communities, in which it operates. It monitors social issues such as employee health and safety, labor and human rights, animal rights, gender equality, diversity, GDPR compliance, etc .
G : Corporate governance, i.e. with the Company's leadership, the composition of the BoD, the structure of the Audit Committee, the supervision of sustainable development by the BoD and the adoption of the Committee's recommendations, business ethics, executive remuneration, labor relations, variable remuneration, internal audits, transparency, corruption and shareholder rights, etc.
The Committee has, inter alia, the following responsibilities. It:
• Promotes and monitors the integration of ESG criteria into business strategy and decision-making.
• Examines the Sustainable Development Policy and other policies related to issues within its competence, as well as their revisions, and proposes them to the Board of Directors for approval.
• Monitors the implementation of the Sustainable Development Policy and other ESG policies.
• Monitors the materiality analysis process.
• Examines the content of the Company's annual report on ESG issues included in the annual and CSR reports and proposes them to the Board of Directors for approval.
• Approves the Company's strategic goals for carbon dioxide (CO2) emission reduction, water management, and other ESG issues and proposes them to the Board of Directors for approval. At
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the same time, the Committee is informed of the implementation plan for the achievement of these objectives and informs the Board.
• Is informed about the Company's participation in ESG management programs, e.g. TCFD, SBTi, CBT.
• Informs the Board of Directors on matters falling within the Committee's competence and proposes measures for improvement if necessary.
• Monitors new developments on ESG issues in Greece and internationally and promotes their incorporation into the Company's policies.
• Is informed, examines and, where appropriate, gives opinions or approves relevant issues promoted by the management.
• Reviews on an annual basis its work with suggestions for improving its operation and efficiency, submitting a relevant summary report to the BoD.
The ESG Committee may appoint working groups as follows:
1. Economic Development and Corporate Governance.
2. Occupational Health and Safety.
3. Environment.
4. Social Responsibility.
Method of Evaluation
The Committee shall evaluate its work annually. In the context of the annual evaluation of the Board of Directors, the members of the Committee completed a questionnaire concerning this Committee with sections of questions on a) the composition of the Committee, b) its role and responsibilities and c) its organization and operation.
The Committee shall submit annually a brief report of the review of its work to the Board.
Activities of the ESG Committee for the year 2023
During 2023, the Committee met in full quorum four (4) times.
FULL NAME
NUMBER OF MEETINGS DURING EACH MEMBER'S TERM OF OFFICE
NUMBER OF MEETINGS
NUMBER OF MEETINGS WHO PARTICIPATED
NUMBER OF MEETINGS WHO WAS REPRESENTED
NUMBER OF MEETINGS ABSENT and NOT REPRESENTED
ATTENDANCE AT MEETINGS
Staikou Sofia
4
4
4
-
-
100%
Delikoura Aikaterini
4
4
4
-
-
100%
Lambrou Konstantinos
4
4
4
-
-
100%
Lazaridou Penelope
4
4
4
-
-
100%
Chatziarseniou Dimitra
4
4
4
-
-
100%
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
168
In 2023, the Committee:
➢ Approved the Non-Financial Report and the Taxonomy Report which were published together with the Financial Reports for the year 2022 (April 2023).
➢ Approved the Group's Sustainability Report issued in June 2023.
➢ Approved the Group's participation in the international platform CDP (climate disclosure project) with expected results within the 1st half of 2024.
In 2023, the Committee was informed about the new European Union Directive - CSRD - Corporate Sustainability Reporting Directive - and the new requirement created at a Group level for better internal organization of procedures and data collection, as these should be included in the financial statements from 2025 (financial statements 2024) and have been audited by both the Audit Committee and an external auditor.
In addition, the Committee was informed of:
• for the Group's response to the emergencies created within the latter, and
• the revision of the Group's decarbonization plan.
4.
Detailed CVs of BoD members, BoD committee members, BoD Secretary and senior management
Georgios Peristeris
In 1980 he received his degree in Civil Engineering from NTUA. His activity with TERNA S.A. began in 1981. From 1982-1984 he was Director of Construction of major Hydraulic and Railway projects. Since 1984 he had held the duties of Chairman and CEO of TERNA S.A.
Since 1997 he has been developing intense business activity in the field of Renewable Energy Sources (RES). In fact, in the same year he founded TERNA ENERGY S.A. where he has served as Chairman and from 2000 until today he is also the Chairman of the Hellenic Association of Renewable Energy Producers (ESIAPE). The Association is a founding member and is represented in the Board of Directors of the respective European Renewable Energies Federation (EREF). He is also a member of the Board of Directors of Business and Industry Association.
Capralos Spyridon
He studied Economics at the University of Athens, and received a Master of Business Administration (MBA) at INSEAD University in France. He is fluent in English, French and Italian. He is the Chairman of the shipping company STAR BULK CARRIERS and the Chairman of the Board of Directors of Euroclinic. He has served as the Chairman of the Athens Exchange and CEO of HELEX Group companies, the Chairman of the Association of European Stock Exchanges, Deputy Governor of the National Bank of Greece, Vice Chairman of BANKERS TRUST COMPANY, Chairman of E.T.E.V.A., Astir Insurance Company, CEO of OCEANBULK CONTAINERS, EPIRUS S.A., and Bank of Athens. As an athlete he participated with the National Water Polo Team in the Olympic Games of Moscow in 1980 and Los Angeles in 1984, while he was Greek and Balkan champion in swimming from 1969 to 1975. In 2021 he was elected Chairman of the European Olympic Committees and in 2019 a member of the International Olympic Committee. He has been the Chairman of the Hellenic Olympic Committee (HOC) since 2009.
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(Amounts in thousands Euro, unless otherwise stated)
169
He was the Chairman of the Coordinating Committee for the European Games in Baku (2015) and Minsk (2019), participated in the HOC Plenary Session (1992-1996) and served as Head of the Greek Delegation to the Atlanta Olympic Games. In addition, he served as Member of the Board of Directors and Executive Director of the Organizing Committee of the Olympic Games "Athens 2004", while he also held the position of Deputy Head of Games Business Administration. In March 2004 he was appointed Secretary General of the Olympic Games of the Ministry of Culture by decision of the Prime Minister and was appointed City Manager during the Olympic Games.
Apostolos Tamvakakis
He is a graduate of the Athens University of Economics and Business, with postgraduate degrees in Econometrics and Financial Mathematics in Canada. He is the founder, Chairman and CEO of EOS Capital Partners S.A., managing company of the private equity fund "EOS Hellenic Renaissance Fund". He has served as CEO of the National Bank of Greece, Independent Non-Executive Vice Chairman of the Board of Directors of Piraeus Bank, Chairman and also CEO of LAMDA DEVELOPMENT, responsible for the strategic and business development of the Latsis Group in Geneva, Deputy Governor at the National Mortgage Bank and the National Bank of Greece. He has also worked at Mobil Oil Hellas, Investment Bank and ABN-AMRO Bank as Deputy General Manager. He has served on many boards and committees. He is the Vice-Chairman of the Board of Directors of Plaisio Computers, the Vice- Chairman of the Board of Directors of HELLENIC JUICES, member of the Board of Directors of EUROSEAS LTD., member of the Board of Directors of EURODRY LTD., member of the Board of Directors of MINERVA S.A., member of the Board of Directors of EUROCATERING S.A., member of the Board of Directors of ERGO Insurance, Chairman of the Regulations and Liquidations Committee of PQH Single Special Liquidation S.A. and member of the Marketing Committee of the Hellenic Olympic Committee.
Michael Gourzis
He holds a degree in Public Works Degree D ́ class, graduate of the School of Sub-Engineering of Athens. He worked as a freelance contractor – constructor of Public Works from 1969 to 1976. In 1977 he joined the construction company TERNA, participating since then in a number of large infrastructure projects as head of the construction sector, while since 2002 he is a Senior Executive and Executive Member of the Boards of Directors of TERNA S.A. and GEK TERNA S.A. From 2011 to 2023 he served as Executive Vice Chairman of GEK TERNA Group and from 2019 until 2023 he held the position of the Chairman of the Board of Directors at TERNA. He also holds the position of non-executive member of TERNA ENERGY and the position of Vice Chairman of TERNA MAG S.A., a company active in the mining sector. He has participated in a number of Corporate Social Responsibility actions throughout Greece, covering needs for the benefit of local communities in the geographical areas where large infrastructure projects are implemented.
Penelope Lazaridou
She is a graduate of the Athens University of Economics and Business (ASOE Department of Business Administration) and holds a M.Sc. in Finance from the University of Strathclyde (UK). She has more than 25 years of experience in the banking industry, holding for over 10 years the position of General Manager in the areas of Corporate and Investment Banking. At the same time – and in the context of the above responsibilities – she has served as (i) Chairman of the Board of Directors in subsidiaries and (ii) as an Executive Member in Senior Banking Committees. Through the above roles, she has contributed dynamically to the rapid development of the country's infrastructure and renewable
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170
energy sources. In 2017 she joined GEK TERNA Group holding the position of General Manager of Financial Services with main objectives (i) the determination of the financial strategy and (ii) the management of financial risks. In December 2019 she was appointed as Executive Member of the Board of Directors of GEK TERNA and since July 2021 she has been an Executive Member and Executive Director of GEK TERNA. She participates in the Boards of Directors of subsidiaries of GEK TERNA Group. She also actively participates in promoting issues related to diversity and inclusion both within the group through her participation in the ESG Committee of the Board of Directors of GEK TERNA, as well as outside the group through her participation in international fora (member of WOMEN ON BOARD (WOB) Harvard Business School and member of ICC Women Hellas -International Chamber of Commerce).
Benopoulos Angelos
He has been active in the fields of construction, Real Estate, renewable energy sources and business parks since 1995. He has experience in the organization and management of large companies, in corporate governance and in corporate affairs management. With studies at NTUA, he started his career at ARCHIRODON, before becoming founder and chairman of the DOMIKI ANAPTYXI GROUP (DOMIKI ANAPTYXI S.A.., ILIOCHORA S.A., DIKEVE S.A.), while in 1999 he acquired the public works company ERGODYNAMIKI S.A., companies which merged with the GEK and TERNA groups in 2002. As a result of this merger, he has since been a member of the Senior Management of GEK TERNA Group. He has served as Executive Director and BoD member of TERNA since 2002 and since 2011 until June 2021 he was Executive Vice Chairman of GEK TERNA Group, while since 2021 he is Executive Director and member of the Executive Committee of GEK TERNA. He has executive responsibilities in the management of central functions as General Director for Human Resources, Information Technology, Digital Transformation etc. He is appointed as Head of the Group IT Steering Committee and the Business Continuity System Incident Response Body. He has served for many years as Corporate Secretary and member of Nomination, Remuneration, ESG Committees. During the period 2010 to 2018 he undertook the organization of the licensing sector of RES projects, with the landmark licensing success of the emblematic project of the wind farm of the island of Agios Georgios. For a decade, he was a board member of the Centre for European Constitutional Law (CECL). Since 2008 he is the Chairman of the management body of the Thessaloniki Business Park. Since 2018 he is Vice Chairman of the Hellenic Association of Business Parks. Since 2020 he is an elected Member of the General Council of Business and Industry Association, participating in specialized Steering Committees, Corporate Governance, Spatial Planning and Urban Planning, Licensing, Networks and Infrastructure, Logistics, Business Parks. He has received honorary distinctions from the Ministry of Education, the Ministry of National Defense and the Municipality of Athens.
Souretis Petros
He studied Civil Engineering at the Aristotle University of Thessaloniki. He did postgraduate studies (MSc) at City University of London in 1994 and since 2004 he holds an MBA degree from the Athens University of Economics and Business. Until 2003 he was a manager of the ELLINIKI TECHNODOMIKI-TEB Group. He served as CEO of INTRAKAT from 2003 to July 2022. He served as member of the Board of Directors of INTRALOT S.A. Group from 2008 to 2019. Since 2010 he holds the position of CEO of KEKROPS S.A. and from 2019-2022 he served as Vice Chairman of the BoD of ATHENS RESORT CASINO HOLDINGS S.A. and HELLENIC CASINO S.A. At the same time, he held executive positions in subsidiaries
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(Amounts in thousands Euro, unless otherwise stated)
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of the INTRACOM HOLDINGS Group until 2022, while from 2014 to 2020 he served as Chairman of the Greek Church Property Development Fund of the Archdiocese of Athens. In 2022 he was elected as an Executive Member of the Board of Directors of GEK TERNA and in 2023 he was elected as Executive Director of the Company.
Antonakos Dimitrios
He graduated from Varvakeios School and holds a degree in Surveying Engineering from the Polytechnic School of the Aristotle University of Thessaloniki and a Civil Engineer from the National Technical University of Athens, while he holds a degree of the highest (D) class according to the Registry of Greek Constructors.
His professional activity started at GEK S.A. in 1979 of which he was a member of the Board of Directors since 1981, from 2000 to 2019 he was a member of the Board of Directors of TERNA S.A. (Chairman of BoD between 2011-2016), while since 2005 he was in charge of the Group's activities in the MENA area. From 2011 to 2015 he served as Executive Vice Chairman of the BoD, from 2015 to 2023 as Executive Member of the Board of Directors of GEK TERNA, and from 2023 until today as Non-Executive Member of the Board of Directors of the Company.
From 2017 until today he is the Compliance Officer, while since 2019 he has also held the position of Risk Manager of GEK TERNA Group. At the same time, he has been a director and/or member of the Board of Directors of subsidiaries and affiliated companies of GEK TERNA Group in Greece and ab road.
Lambrou Konstantinos
He holds a Master's degree in Business Administration (Ms in Business Administration), while he has also studied Journalism and Mass Media, as well as Communication, Public Relations and Management. He has been working at GEK TERNA Group since 2008 as Director of Strategic Communication, CSR and Sustainable Development of the Group and its subsidiaries TERNA and TERNA ENERGY. At the same time, he is a communication consultant to subsidiaries and affiliated companies of the Group (e.g. HERON, Nea Odos, Kentriki Odos). He has also served as Executive Director of GEK TERNA Group in Bulgaria (2009 – 2018) and member of the Board of Directors of its subsidiaries. During the period 2012 – 2014 he held the position of Vice Chairman of the Greek Business Council of B ulgaria.
In the past he has worked as a communication consultant with the Greek Government, while for many years he worked as a journalist and executive in various media.
Moustakas Emmanouil
He graduated from the School of Civil Engineering of NTUA in 1998. He worked as a freelancer in the design, supervision and construction of private projects until 2003, when he began his collaboration with the Group (TERNA S.A.), initially as a construction engineer and then in project management positions. Since 2005 he has been active mainly in the energy and concessions sectors. He is a member of the Board of Directors of affiliated companies of GEK TERNA Group.
Afentoulis Dimitrios
He joined the Latsis Group in 1993. From November 2005 until today he is a member of the Executive Board of the John S. Latsis Public Benefit Foundation, where he served as Secretary until March 2019. From February 2012 to November 2016 he served as a member of the Board of Directors of the National Bank of Greece and chaired the Bank's Corporate Governance and Nominations Committee, while he
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(Amounts in thousands Euro, unless otherwise stated)
172
was a member of the Audit, Strategy and Human Resources and Remuneration Committees. From the beginning of 2018 until July 2020 he served as a non-executive member of the Board of Directors of Lamda Development as well as a member of the Audit Committee of the company. In July 2021 he was elected as a non-executive member of the Board of Directors of GEK TERNA. He is also an independent and non-executive member of the Board of Directors of companies of the VIVA Wallet group and at the same time he is the Chairman of the Audit Committee and the Risk Committee of the same group of companies. He participates, in various capacities, in the Boards of Directors of companies and foundations in Greece and abroad. He holds the position of CEO of LATSCO Family Office, of the family of Mrs. Marianna I. Latsis. He studied Business Administration and Accounting at the Athens University of Economics and Business and holds a Master's degree in Business Administration (MBA) from the Athens University of Economics and Business.
Apkarian Gagik
He has more than 20 years of experience in private equity, investment banking and business consulting in the U.S., Europe, Australia and the Middle East. He is a judge on Harvard University's "Innovation Challenge" and a guest speaker at business schools and conferences internationally on issues related to businesses in transition and direct investment.
He is the founder and managing director of Tetrad Capital Partners, a London-based investment and specialist consulting firm with international activity. The company currently focuses on telecommunications, media, technology, engineering and procurement, oil and gas, alternative energy, credit institutions and general industries. Prior to joining Tetrad Capital, he was a co-founder and General Partner in Vulcan Capital – the investment office of Paul Allen (co-founder of Microsoft). He developed the team and established the procedures for developing and implementing a dual mandate: to optimize a complex investment portfolio of more than USD 10 billion in listed and unlisted companies and to pursue a range of investments in private companies, listed securities and i nfrastructure.
Prior to joining Vulcan Capital, he worked in investment banking at Morgan Stanley in London. During his career in New York and London, he managed more than US $100 billion in Mand A. , restructurings, financing and equity investments. Previously, he worked at McKinsey in New York and Australia with a focus on strategy, restructuring and operational consolidation following mergers in various business areas.
He holds a bachelor's degree in mathematics and physics, a bachelor's degree in electrical engineering with honors and a master's degree in Business Administration from Harvard Business School.
Delikoura Aikaterini
She is a C-level Banking Risk and Compliance Executive, with more than 20 years of experience in the markets of Central and Southeastern Europe, UK, USA, Turkey and Egypt. She is the General Manager at the Bank of the Council of Europe, specializing in the financing of major government projects. She is a member of the Executive, Risk Management, Major Project Credit and ESG Criteria Committees. She is the Central Investigator of Financial Crime, Fraud, Corruption, Business Ethics and Chairman of the Personal Data Protection Commission.
She has served as Group International Risk Head, EFG EUROBANK Group, External Central and Eastern Europe, United Kingdom and Luxembourg Network, EFG Representative at EBCI Vienna Initiative, Member of the Board of Directors of EUROBANK TEKFEN AS, Secretary General of EFG Group Risk
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(Amounts in thousands Euro, unless otherwise stated)
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Committee and Chairman of the Risk Committees of the subsidiaries of Bulgarian, Serbia, Cyprus and Turkey. She has served as Head of Group International Risk at Piraeus Bank Group, International Network, member of the Mergers and Acquisitions team and member of the Board of Directors of TIRANA LEASING S.A. She has worked at ALPHA BANK, as a Senior Risk Officer at ABN AMRO BANK in the Corporate Risk Department.
She holds an MBA from ALBA Graduate Business School and a Law Degree from the National and Kapodistrian University of Athens. She is also a Certified Financial Investigator and a Certified Data Protection Officer. In 2019 she received the international award "Woman Chief Compliance Officer 2019, IFIs and Private Sector". She speaks English, French, Spanish and Italian.
Skordas Athanasios
He is a graduate of the Athens University of Economics and Business (ASOEE) specializing in International Economic Relations. He was active in the field of private insurance and in the financial sector. General Manager of the Hellenic Association of Tugboat, Lifeguard, Antifouling and Offshore Vessel Owners and independent non-executive member of the Board of Directors of EPILECTOS TEXTILES S.A.
From 2015 to December 2019, he was the Chairman and also served as CEO of Selonda SA, listed on the Athens Stock Exchange, in which he successfully contributed to the achievement of the company's restructuring, the merger with third companies as well as the completion of the sale procedures by the systemic banks to the joint venture AMERRA CAPITAL MANAGEMENT (US) – MUBADALA PRIVATE EQUITY (UAE). He has served for two years as Deputy Minister of Development, Competitiveness, Infrastructure, Transport and Networks with responsibility for Trade and Industry, Secretary General of the Ministries of Development, Economy and Finance with responsibility for tax and customs issues, while he was also Secretary General of the Region of Central Greece.
He has been a seminar instructor at the Hellenic Institute of Insurance Studies, as well as at the Institute of Financial Studies.
He has been distinguished for his social action and Corporate Social Responsibility actions by actively participating in the Boards of Directors of recognized associations, while, among others, he has been honored in 2019 with the gold award "Health and Safety Awards" and the award "Top Industrial Export Company".
Staikou Sofia
She studied Political Sciences at Panteion University and Industrial Psychology at the University of Sussex in England.
She worked at CITIBANK, the Bank of Greece, the Minister of Finance in the Government of National Unity (1974) and then in the office of the then Prime Minister Konstantinos Karamanlis.
Since 1981 she has worked in the IONIAN BANK, in the Marketing and Public Relations Department, in the Press Office of the Ministry of Environment, Spatial Planning and Public Works and in the Advertising Company SOLID ADVERTISING.
From 1992 to 2000 she took over the Personnel, Promotion and Communication Division of Piraeus Bank as General Manager and from 2002 to 2018 she was the Chairman of the Piraeus Bank Group Cultural Foundation and Corporate Responsibility Manager of the Bank, implementing pioneering actions with a strong environmental and social footprint that later became the basis for compliance
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with ESG criteria.
Since 2019 she is the Vice-Chairman of the Board of Directors of LYKTOS HOLDING and is involved in the Group's business activities simultaneously with her appointment in 2020 as the Chairman of SEMELI WINERY. Since 2021 she holds the position of Chairman and CEO of the same company.
Tagmatarchis Angelos, Member of the Audit Committee
He is a graduate of the Athens University of Economics and Business – Department of Business Administration with training in Tax and Auditing. From 1971 to 1991 he worked as Financial Director in Multinational Commercial and Industrial Companies and in the meantime, from 1973 to 1977, as an Auditor – Accountant at the audit firm ARTHUR ANDERSEN. Then, from 1992 until 2004, he worked in the construction industry as Financial Director and Internal Auditor of the project ATHENS METRO (AEGEK 1992 ‐ 1996) and the J/V RIO ANTIRIO BRIDGE (J and P 1997 ‐ 2004). In 2005 he joined HSBC Bank as a Loan Consultant for Construction Companies and until today he continues to offer his services as a Bank Consultant for financing Construction Companies. He is a member of the Audit Committee of GEK TERNA.
Zaribas Christos
He is a graduate of the Athens School of Economics and Business (ASOEE), now Athens University of Economics and Business (AUEB), with many years of professional experience in various companies. He has served as Chief Financial Officer in large technical construction Joint Ventures (1980 – 2000) and from 2002 to 2005 he served as Chief Financial Officer in the listed company ATHENS S.A.
Since 2006 he has joined the financial services of GEK TERNA Group and from 2008 until today, he holds the position of Chief Financial Officer of GEK TERNA Group, with main responsibilities the compliance with tax and commercial legislation and any other related to the company's activities, as well as the preparation of individual and consolidated financial reports of budgets and reports, audited by external accountants.
In addition, he represents GEK TERNA before any natural or legal person, Private or Public Law, the Greek State, the Banks as well as generally before any person and any Authority, domestic or foreign, throughout its activity, by jointly signing with another authorized member of the BoD.
In the context of his duties he is a Member of the Board of Directors of the Group's subsidiaries: NEA ODOS S.A., ODOS KENTRIKTIS ELLADOS S.A., ILIOCHORA S.A. and GEK TERNA FTHIOTIDA S.A.
Dimitra Chatziarseniou, Corporate Secretary, Head of the Group's Legal Department
Ms. Dimitra Chatziarseniou is a lawyer, member of the Athens Bar Association since 1998. She holds the position of Head of the Legal Department of GEK TERNA Group and has been appointed Corporate Secretary of GEK TERNA S.A. and TERNA ENERGY S.A. She joined GEK TERNA Group in 2002. During her career she has organized the legal department of the Group and currently manages a team of four selected lawyers. She has successfully handled large real estate transactions, mergers and acquisitions, listings, PPP projects and EPC contracts and has gained extensive experience in project development and financing of RES projects in Greece, Southeastern Europe and the USA. She is a graduate of the Law School of Athens and holds a master's degree in Commercial Law from the same school. She is fluent in English and French.
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(Amounts in thousands Euro, unless otherwise stated)
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Aligizakis Alexandros, Director of Tenders and Quality Assurance
He holds a degree in Architecture from the Ecole Speciale D ' Architecture in Paris, France. He speaks English and French. His professional career started in 1983 in Libya with EDOK ETER S.A. and then with ETIP S.A. In Libya he was responsible for the construction of important infrastructure projects and then served as a senior executive of the latter until his withdrawal from Libya in 1992. From 1992 to 1996 he worked at PARNON S.A. as a construction manager of buildings and infrastructure projects.
He joined GEK TERNA Group in 1996. He is a member of the Board of Directors of subsidiaries of the Group.
Nika Angeliki, Head of Internal Audit Unit GEK TERNA
She is a graduate of the Athens University of Economics and Business (ASOEE) – Department of Accounting and Finance, holds a degree in Auditing and Accounting from the Training Institute of the Institute of Certified Public Accountants (2007-2011). She is a Certified Public Accountant. From 2006 until 2014 she worked as an external auditor at Ernst Young Greece with the object of regular audit of financial statements, audit for obtaining a tax certificate and participation checks on the issuance of bond loans. In 2014 he joined GEK TERNA Group.
5.
External professional commitments of BoD members
FULL NAME
EXTERNAL PROFESSIONAL COMMITMENTS
PERISTERIS GEORGIOS
· Chairman TERNA ENERGY S.A.
· Chairman Hellenic Olympic Committee
·Chairman STAR BULK CARRIERS
CAPRALOS SPYRIDON
· Chairman ATHENS EUROCLINIC
· Chairman and CEO EOS CAPITAL PARTNERS ALTERNATIVE INVESTMENT FUNDS MANAGEMENT SOCIETE ANONYME
· Vice-Chairman of the Board Plaisio Computers SA
· Member of the Board of Directors of EUROSEAS LTD
· Member of the BoD EURODRY LTD
· Member of the BoD EOS HELLENIC RENAISSANCE FUND GP, Sarl
· Member of the Board of Directors of ERGO ASFALISTIKI S.M.S.A.
· Member of the Board of Directors of MINERVA SOCIETE ANONYME OF OLIVE OIL and FOOD ENTERPRISES
· Member of the Board of Directors of EUROCATERING S.A.
· Vice-Chairman of the Board of Directors of HELLENIC JUICES S.A.
· Member of the Board of Directors of LATSCO SHIPPING LIMITED
· Member of the BoD of LATSCO MARINE MANAGEMENT
TAMVAKAKIS APOSTOLOS
· Member of the BoD EOS HELLENIC RENAISSANCE CIV GP
· GEK TERNA Group companies
Member of the Board of Directors of TERNA ENERGY S.A.
Vice Chairman TERNA MAG S.A.
GOURZIS MICHALIS
· Member of the Board of Directors of Heraklion International Airport S.A.
GEK TERNA GROUP
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(Amounts in thousands Euro, unless otherwise stated)
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FULL NAME
EXTERNAL PROFESSIONAL COMMITMENTS
· GEK TERNA Group companies
- Member of the Board of Directors of NEA ODOS CONCESSION SOCIETE ANONYME
- Member of the Board of Directors of CENTRAL GREECE MOTORWAY CONCESSION COMPANY S.A.
- Vice Chairman and CEO of GEK TERNA MOTORWAYS S.M.S.A.
- Vice Chairman and CEO Vice Chairman GEK TERNA KASTELLI S.M.S.A.
- Chairman THERMOILEKTRIKI KOMOTINIS S.A.
- Chairman GEK TERNA CONCESSIONS S.M.S.A.
- Vice Chairman and CEO INTEGRATED RESORT COMPLEX ELLINIKO S.A.
- Member of the Board of Directors of HERON ENERGY SERVICES SOCIETE ANONYME
- Member of the Board of Directors of NEA EGNATIA ODOS CONCESSION SOCIÉTÉ ANONYME
LAZARIDOU PENELOPE
· Member of the Board of Directors of THESEUS RECOVERY AND REHABILITATION CENTER S.A.
· GEK TERNA Group companies
Chairman VIPATHE S.A.
BENOPOULOS ANGELOS
Chairman CAR PARK PLATANOS KIFISSIA SQUARE S.A.
· GEK TERNA Group companies
Member of the BoD TERNA OVERSEAS LTD
Chairman CHIRON CONCESSIONS S.A.
Chairman CAR PARK PL. SAROKOU CORFU S.A.
· Vice-Chairman of KEKROPS S.A.
· Member of the BoD MALCEM CONSTRUCTION MATERIALS LTD
· Joint ventures
- AVAX S.A. - BIOTER S.A. - ILIOCHORA S.A.
- ETETH – TERNA – AVAX PANTECHNIKI
- TERNA SA – PANTECHNIKI S.A.
ANTONAKOS DIMITRIOS
- AVAX S.A. -TERNA S.A.
LAMBROU KONSTANTINOS
· Manager LAMBROU K.V. and SIA E.E.
· GEK TERNA Group companies
Vice Chairman NEA ODOS CONCESSION SOCIETE ANONYME (NEA ODOS S.A.)
Vice-Chairman CENTRAL GREECE MOTORWAY CONCESSION SOCIETE ANONYME (ODOS KENTRIKIS ELLADAS S.A.)
Chairman GEK TERNA MOTORWAYS S.M.S.A.
Chairman GEK TERNA KASTELLI S.M.S.A.
Member of the Board of Directors of OLYMPIA ODOS CONCESSION SOCIETE ANONYME
Member of the Board of Directors of OLYMPIA ODOS OPERATION SOCIETE ANONYME
MOUSTAKAS EMMANOUIL
Chairman GEK TERNA CONCESSIONS S.M.S.A.
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FULL NAME
EXTERNAL PROFESSIONAL COMMITMENTS
Member of the Board of Directors of HERON ENERGY SOCIETE ANONYME
CEO, PASIPHAE ODOS, VOAK PPP HERSONISSOS – NEAPOLI SPECIAL PURPOSE SOCIETE ANONYME
Member of the Board of Directors of TERNA MAG S.A.
Vice Chairman and CEO MANTOUDI BUSINESS PARK S.M.S.A.
· Member of the Board of Directors of Heraklion International Airport Crete S.A.
· Chairman GREEN OCEAN SOLUTIONS AG
· Member of the Board of Directors Civil Non-Profit Company GREEK INFRASTRUCTURE AND TOLL ROADS
· Manager GEK TERNA S.A.-TERNA S.A. - JV HELLAS TOLLS
· Manager MGGR LLC
· Chairman of the BOARD OF DIRECTORS IRC ELLINIKOU S.A.
· Member of the Board of Directors SARISSA, SUB-CONCESSION OF KAVALA PORT PHILIPPOS II SOCIETE ANONYME
·HOTEL - TOURIST - BUILDING and QUARRYING ENTERPRISES KEKROPS S.A.: Managing Director
· Director EDISUN HOLDING LTD
· Chairman Board of Directors and CEO EDICON REAL ESTATE DEVELOPMENT AND CONSTRUCTION SOCIETE ANONYME (EDICON).
· Director ESARUS and CO LTD
SOURETIS PETROS
Chairman of the Board of Directors 4 HS NEPA
· In companies of the Latsis Group
- CEO LATSCO FAMILY OFFICE SERVICES GREECE S.M.S.A.
- Chairman of the BoD of LATSCO SERVICES GREECE S.M.S.A.
- Member of the BoD LATSCO DIRECT INVESTMENTS S.À R.L.
- Consultant – Manager EKL LATSCO FAMILY OFFICE S.M.S.A.
- Consultant – Manager PKL LATSCO FAMILY OFFICE S.M.S.A.
- Consultant – Manager FKL LATSCO FAMILY OFFICE S.M.S.A.
- Member of the Executive Board JOHN S. LATSIS PUBLIC BENEFIT FOUNDATION
· Member of the Board of Directors SINGLE MEMBER REAL ESTATE COMPANY PALLAS ATHENS S.A.
· Member of the BoD 3L DOTS REAL ESTATE S.A.
· Member of the Board of Directors of VIVABANK SINGLE MEMBER BANKING SOCIETE ANONYME
· Member of the Board of Directors of VIVA WALLET HOLDINGS – SOFTWARE DEVELOPMENT SOCIETE ANONYME
· Member of the Board of Directors of VIVA PAYMENT SERVICES SINGLE MEMBER SOCIETE ANONYME
· Chairman of the BoD PHANOS RURAL PARK SOCIÉTÉ ANONYME
· Member of the Board of Directors of THESEUS RECOVERY AND REHABILITATION CENTER S.A.
AFENTOULIS DIMITRIOS
· Chairman of the BOARD OF DIRECTORS KALLISTI VOULIAGMENI S.A.
· Director TETRAD CAPITAL PARTNERS Ltd
APKARIAN GAGIK
· Director TETRAD CAPITAL PARTNERS Ltd (Cayman )
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
178
FULL NAME
EXTERNAL PROFESSIONAL COMMITMENTS
· Chairman of the BoD DEBTCO LIMITED (PARENT COMPANY OF FRIGOGLASS GROUP)
· Director NEWCO LIMITED (PARENT COMPANY OF DEBTCO LIMITED)
· Manager BETAGLASS PLC
· Administrator GLENDOWE PREPATORY SCHOOL
DELIKOURA AIKATERINI
-
SKORDAS ATHANASIOS
· Member of the Board of Directors of EPILECTOS TEXTILES S.A.
· Vice-Chairman of the BoD LYKTOS HOLDING S.A.
· Chairman and Managing Director SEMELI AGRICULTURAL WINERY S.A.
STAIKOU SOFIA
Vice-Chairman of the BoD LYKTOS MANAGEMENT S.M.S.A.
6.
Internal Audit System (internal audit, risk management, regulatory compliance) – Corporate Governance System
The Internal Audit System (IAS) is defined as the set of rules and procedures applied by the Company aiming at the preventive and ex-post audit of operations and procedures at all levels of the Group's hierarchy and organizational structure, in order to ensure: the legality and security of management and transactions, the accuracy and reliability of published financial statements and any other financial information and announcement, as well as the efficiency of the Company's operating systems and operations.
The Board of Directors utilizes the IAS in order to protect the Company's assets, to assess the emerging risks from all its operations and to provide accurate and comprehensive information to shareholders on the actual situation and prospects of the Company, as well as on ways to address the identified risks.
For the implementation of the above, the Board of Directors determines the operating framework of internal audit, approves the procedures for conducting and evaluating its results and decides on its staffing, in compliance with the requirements of the applicable legal and institutional framework as well as the Greek Corporate Governance Code. It establishes a special Internal Audit Unit, which is independent, does not belong hierarchically to any other organizational unit and is supervised by the Company's Audit Committee, ensuring its independence and effective operation and allocating appropriate financial and human resources.
With the contribution of the Audit Committee, it evaluates the adequacy and efficiency of the internal audit unit and the degree of utilization of its reports by the Board of Directors for the continuous improvement of the Company's operation at all levels and the effective management of business risks.
The Internal Audit Unit carries out audits in all Group activities, in all geographical areas, except for the activities of the listed subsidiary. The work of the Internal Audit Unit includes:
• Internal Audits of Head Office Divisions,
• Internal Project Audits (project audits also audit procedures of other divisions such as procurement, staff recruitment, mechanical equipment, regulatory compliance, etc.),
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• Audits (correctness, completeness, existence of accounting entries), reconciliation of accounts, etc
• Audits on compliance with the company's procedures,
• Internal Audits of subsidiaries of GEK TERNA Group,
• Audits in the procedures for the preparation of Financial Statements,
• Corporate governance audits,
• Information Systems,
• Provision of Consulting Services
The results of the audits are regularly presented to the Audit Committee and the Board of Directors is also informed, while quarterly and annual reports are sent.
Budgets / Reports / Transactions / Preparation of Financial Statements
The Company uses budgets and reports as an important internal audit tool. More specifically, budgets are prepared, monitored and updated per company / sector / activity / project and at Group level. Budgets and reports are a key Management tool for making both case-by-case and strategic decisions.
The safeguards used throughout the Group’s activities include both preventive and repressive measures to ensure legality / correctness of transactions, correctness of accounting entries, protection of assets taking into account the basic principles of an internal audit system such as segregation of duties, audit of operations by at least two persons (four eye principle).
More specifically:
For the implementation of transactions, signing contracts, making other decisions, there are relevant authorizations, procedures, bodies on the basis of which the above actions are implemented.
For the preparation of budgets and reports there are relevant procedures or departments per company where they contribute to the implementation of work.
For the accounting of transactions and other entries in the accounting records, there are relevant procedures that are followed preventively.
Ex posts audits are carried out by the financial management, such as audits of accounts, periodic reconciliations of accounts and periodic reviews of the correctness of account balances (customers, suppliers, banks, taxes, payroll, etc.). Finally, there are specific procedures for closing financial statements as described below.
The levels of audit and risk management in the process of preparing individual and consolidated Financial Statements are recorded in the process of preparing Group financial (and non-financial) statements, in the Group's Financial Services Obligations Calendar and in other procedures.
Initially, the Group's Financial Management communicates to the Group's companies the instructions and deadlines for the preparation of financial statements.
Specifically, for the individual financial statements of the parent company, the profit and loss statement and balance sheet (ledgers) are recorded in the information system and the Financial Statements (wording) are prepared by the competent accountant. Subsequently, the financial management audits, the recorded financial results and reviews, the profit and loss statement and
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balance sheet accounts and, if discrepancies are identified, the cause of the discrepancy is investigated, the adjustment of the entry is approved and the correctness of the financial statements is checked by the Chief Financial Officer.
Data is then collected from all subsidiaries and affiliated companies consolidated into the Group. The certificates of the chartered accountants of the subsidiary companies are received and the receipt of responses to the chartered officers of the Parent Company is monitored. Consolidation records are performed. The correctness of consolidated financial statements is checked. The audits and work are then carried out by the Group's chartered accountants.
The Audit Committee oversees the process of drafting the Company's financial statements and other financial reporting and examines their reliability. The Audit Committee holds regular meetings with the Chief Financial Officer and the Certified Public Accountants. After examining and confirming the correctness of the process of preparing the corporate and consolidated financial statements (interim and annual) following and briefing by the Chief Financial Officer, it recommends to the Board of Directors their approval and their execution and publication.
The purpose of the Risk Management Unit (RMU) is to identify, assess and manage the risks faced by the Company.
The RMU ensures the establishment of an effective risk management framework, aiming at the development, implementation and continuous improvement of risk management practices (including safeguards) at the level of processes, systems and the Company.
The RMU ensures that the risks undertaken by the Company's units are consistent with the risk appetite and tolerance limits set by senior management.
The RMU provides analyses and reports on the adequacy and effectiveness of risk management (including safeguards).
The RMU provides guidance and support services to Group companies to ensure adequate and effective risk management, with the exception of companies that have listed securities and have separate Risk Management Units, for which it is informed by their Management or the Head of the Risk Management Unit of the listed company.
The main categories of risks identified are:
• Strategy and Planning
• Financial
• Business environment
• Functional
• Governance
• Social
• Regulatory compliance and legal risks
The Risk Manager in cooperation with the CEO and the Unit Managers evaluate each risk based on the following criteria:
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• Likelihood of occurrence,
• Severity of impact.
This assessment is based on predefined criteria deriving from the degree of risk appetite.
The purpose of the Regulatory Compliance Unit (abbreviated as "RCU") is to ensure the Company's compliance with the applicable institutional and supervisory framework governing its business activities and operation. RCU protects the integrity and reputation of the Company through the establishment and implementation of a comprehensive compliance program that includes prevention, suppression and response measures regarding compliance issues.
The RCU provides guidance and support services to the Group's companies to ensure their adequate and effective compliance with the applicable institutional and supervisory framework and the Company's internal policies, with the exception of companies that have listed securities and have independent Compliance Units, for which it is informed by their Management or the Head of the Compliance Unit of the listed company.
The main axes of the RCU are the following:
• Business ethics
• Transparency of proceedings
• Integrity of operations
• Safeguarding shareholders' interests
• Customer / consumer protection
• Social integrity / sensitivity
The Company has a certified system of regulatory compliance (ISO 37301:2021) and anti-bribery (ISO 37001:2016).
During 2023, individual relevant Policies, Procedures and the Company's Code of Conduct were updated to comply with Directive (EU) 2019/1937 Law 4990/2022 and Law 4808/2021.
On an annual basis, the MoU informs the Board of Directors with the report of the previous year's actions and the planning for the next year.
6.1. Assessment of corporate strategy, key business risks and Internal Audit System
The annual review of the corporate strategy is made with reference to the update of business risks and the review of internal audit systems.
In the period of fiscal year 2023, the Audit Committee monitored:
(a) the Internal Audit, Risk Management and Compliance functions to ensure the soundness of their operation and their independence,
(b) the adequacy and effectiveness of the Internal Audit System and taking into account the content of the audit reports of the Internal Audit Unit, submitted relevant recommendations to the Board of Directors for its further improvement and reinforcement,
(c) the Risk Management process and taking into account the Risk Management reports, submitted
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recommendations to the Board of Directors regarding the identification, assessment and management of risks;
(d) the procedures for compliance of the Company and the Group with the laws and regulations regulating its organization, operation and activities and taking into account the reports of the Compliance Unit, submitted recommendations to the Board of Directors regarding the revision of the Company's internal regulatory framework .
In addition, a self-evaluation of the Board of Directors, an evaluation of the Audit Committee and the Internal Audit Unit (by an external consultant) has been carried out. The Internal Audit Unit received a report on its compliance with the International Standards for the Conduct of Internal Audit. The opinion was that the Internal Audit Unit (complies) operates in accordance with International Standards for the Conduct of Internal Audit.
According to Article 14 para. 3 approx. j' of Law 4706/2020 and no. No. 1/891/30.09.2020 decision of the Board of Directors of the Hellenic Capital Market Commission, as amended by no. EC 2/917/17.06.2021 decision of the Board of Directors of the Hellenic Capital Market Commission the first evaluation of the Internal Audit System should be completed by 31.03.2023 with reference date 31.12.2022 and reference period from the entry into force of article 14 of Law 4706/2020 (17.07.2021). The relevant report evaluation was received by the Company on 24.03.2023 (for details see section 6.4).
During 2024, the evaluation of the Corporate Governance System was completed (see section 6.5) through which the Internal Audit System was also evaluated.
6.2. Provision of non-audit services to the Company by its statutory auditors and assessment of the impact this may have on the objectivity and effectiveness of the statutory audit, taking into account the provisions of Law 4449/2017
The statutory auditors of the Company for the financial year 2023 are from the company "Grant Thornton" (AM SOEL 127), and were elected by the Annual General Assembly of the Company's Shareholders on 20.06.2023.
The Audit Committee maintains direct and regular contact with the external auditors, in order to be systematically informed about the adequacy and reliability of the operation of the internal audit and risk management systems, as well as the correctness and reliability of financial information. Finally, the Audit Committee pre-approves the non-audit services, which are provided by the statutory auditor to the Group and monitors all of them to ensure that the independence or objectivity of the Certified Auditors is not compromised. The Audit Committee examined the independence of the Certified Auditors in the following ways: 1. Completion of a predetermined list of questions based on Law 4449/2017 – Article 21, 2. The monitoring of non-audit work and 3. The supplementary report received by the Statutory Auditor (pursuant to Article 11 of EU Regulation 537/2014).
6.3. Assessment of the readiness of the Internal Audit System
Following the recommendation of the Audit Committee, it was decided by the Company to carry out an assessment of the readiness of the Internal Audit System. The evaluation took place during 2022. The results of the evaluation were communicated to the Audit Committee and the Company's Management. During 2023, the Audit Committee, where deemed necessary, monitored the corrective
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actions carried out by the Company's Management. In addition, monitoring of the corrective actions of the above evaluation was carried out in the context of the evaluation of the Corporate Governance System implemented by an external evaluator (see paragraph 6.5).
6.4. Evaluation of the Internal Audit System taking into account the provisions of Law 4706/2020
The Company, by virtue of decision of the Board of Directors, assigned to "Grant Thornton Societe Anonyme of Certified Auditors and Business Consultants" the project "Provision of Internal Audit System Evaluation Services", aiming at the evaluation of the adequacy and effectiveness of the Internal Audit System ("IAS") of the Company "GEK TERNA Holdings S.A." and its significant subsidiaries, "HERON ENERGY S.A.", "HERON II VIOTIAS S.A.", "NEA ODOS S.A.", "ODOS KENTRIKIS ELLADAS S.A.", "TERNA S.A.", with reference date 31.12.2022, in accordance with the provisions of per. I of para. 3 and para. 4 of article 14 of Law 4706/2020 and Decision 1/891/30.09.2020 of the Board of Directors of the Hellenic Capital Market Commission, as in force.
This evaluation of the Internal Audit System was successfully completed in March 2023 and covered the following areas: the Audit Environment, Risk Management, Audit Mechanisms and Audits, the Information and Communication System as well as the Monitoring of the Company's Internal Audit System.
The Conclusion of the Independent Evaluator, namely Ms. Athina Moustaki, Certified Public Accountant with egistry no. 28871 and Partner of Grant Thornton, which is included in the final report evaluating the adequacy and effectiveness of the IAS dated 24.03.2023, concludes that from the work carried out and the evidence obtained regarding the evaluation of the adequacy and effectiveness of the IAS of the Company and its significant subsidiaries, no weaknesses were identified that could be considered as material weaknesses in the IAS of the Company and its significant subsidiaries, in accordance with the Regulatory Framework.
This result is yet another confirmation that the Company is in constant compliance with the legislative and regulatory framework governing the Internal Audit System and adopts best practices for the lawful and smooth operation of the Group's IAS.
For the year 2023, through the evaluation of the Corporate Governance System, the effectiveness of the internal audit system has also been evaluated (see paragraph 6.5).
6.5. Evaluation of the Corporate Governance System taking into account the provisions of Law 4706/2020
The Board of Directors in relation to its obligations arising from para. 1 of article 4 of Law 4706/2020 evaluated the implementation and effectiveness of the Company's Corporate Governance System with reference date 31 December 2023 and this evaluation did not reveal any material weaknesses.
In the context of the above evaluation, the Board of Directors of the Company assigned, inter alia, to Grant Thornton S.A. Certified Auditors and Business Consultants the evaluation of the adequacy and effectiveness of the Company's Corporate Governance System. This assessment was carried out on the basis of the program of assurance procedures included in Decision I ́73/08b/14.02.2024 of the Supervisory Board of the Institute of Certified Public Accountants, in accordance with International Standard on Assurance Engagements 3000 (Revised), "Assurance Projects Beyond Audit or Review of
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Historical Financial Information". The above work of the Certified Public Accountants did not reveal any material weaknesses in the Company's Corporate Governance System.
7.
Remuneration of BoD members
7.1. Remuneration Policy
Initially, the Remuneration Policy was prepared by the competent Remuneration Committee of the Company "GEK TERNA S.A.", parent company of the GEK TERNA Group of Companies, in accordance with Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 on shareholder rights, as transposed into Greek law by Law 4548/2018 and in particular in accordance with article 110 of the said law and approved by the Extraordinary General Assembly of 09.12.2019. The Remuneration Policy includes the stock option plan approved by the General Assembly of 2019 for the provision of options for the five-year period 2019-2023, as well as the approved by the Annual General Assembly of 2023 for the share bonus program for the four-year period 2023-2027, with a potential maturity period of less than three (3) years in both.
The Remuneration Policy takes into account best practices for listed companies, the provisions of the Company's Articles of Association and the Company's Corporate Governance Code, while reflecting the applicable agreements regarding the remuneration of the members of the Board of Directors, including the respective General Managers-Senior Management. At the same time, it takes into account the salary and working conditions of all employees of the Company, which are fully harmonized with the principle of payment of remuneration based on the reasonable and fair measure to the persons selected as the most appropriate, taking into account the needs and nature of each position or functional role as well as the corporate interest.
The Remuneration Policy defines the scales of annual fixed remuneration for the Group's senior management / managers, BoD members or not of levels A, B, C, for the CEO, for independent non- executive members and non-executive members as well as the members of the mandatory statutory BoD Committees, in order to meet the salary levels of the market and the complexity of the sectors represented by the Group, such as construction, power generation, building materials, infrastructure management and operation, concessions, mining activities and electricity from thermal energy sources, electricity and gas trading. In addition, the variable remuneration components and the benefits that executive members of the Board of Directors and senior management of the Group may receive are determined. Thus, the Remuneration Policy shapes remuneration levels through the principle of meritocracy, while responding to the need to engage existing senior executives of the Group as well as attract new competent ones, in order to implement the Group's strategic objectives.
7.2. Annual Remuneration Report
According to article 112 of Law 4548/2018, the Board of Directors of the Company is obliged to prepare a clear and comprehensible Remuneration Report, which contains a comprehensive overview of the total remuneration for the year 2023 regulated in the Company's Remuneration Policy and the information required at least by the above article 112 of Law 4548/2018, as it will apply from time to time.
The report also includes all kinds of benefits granted or due to persons falling within the scope of the Remuneration Policy in the year 2023.
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The remuneration report for the year 2023 is submitted for discussion to the Annual General Assembly of shareholders, as an item of the agenda. The vote of the shareholders on the remuneration report shall be advisory.
7.2.1. Purpose of the Remuneration Report
The guiding principles of the Remuneration Policy governing Remuneration are illustrated as follows:
This Remuneration Report aims to review compliance with the approved Remuneration Policy, the current legislative framework and to enhance transparency regarding the payment of all types of remuneration in a way that is understandable, clear and comprehensible.
In particular, this Remuneration Report:
• presents in a transparent manner the structure of all kinds of remuneration covered or not by the Remuneration Policy.
• contributes to the dissemination and consolidation of the principles of transparency, meritocracy, justice, proportionality in the implementation of the remuneration framework from the top to the bottom of the Company's organization, taking into account for the type and level of remuneration the importance and weight of the responsibilities of each position and the performance of each executive.
• demonstrates the Company's ability to formulate and implement competitive remuneration packages, which are in line with market practices and at the same time are capable of attracting or retaining effective and valuable executives within corporate structures.
• It notes the reasonable and fair level of remuneration that should aim to create capital gains both in the long term and through the achievement of shorter-term objectives, with a view on the one hand to prevent decisions to be made with excessive business risk and, on the other hand, maintain viability and profitability.
• provides information on the total remuneration granted or paid, broken down into individual components, the distinct recording of fixed and any variable remuneration, including the audit of
Compliance
Company and Shareholders Interests
Meritocracy
Competitiveness
Transparency
FRAMEWORK OF PRINCIPLES
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any remuneration referred to in paragraph 2 of article 109 of Law 4548/18 and how the total remuneration complies with the approved remuneration policy.
• monitors the general implementation of the basic guidelines for the management and payment of remuneration to the members of the Board of Directors, the CEO and the General Managers – senior managers in accordance with the Company's Organizational Chart and the approved Remuneration Policy.
7.2.2. Remuneration Components (Remuneration/Benefits)
The remuneration presented in this report covers all types of remuneration, i.e. remuneration and benefits which may include monetary grants, stock options, expenses for attendance at Board meetings, provision of benefits (e.g. company car, insurance policies, etc.). both regular and variable. The report reflects the remuneration of any company belonging to the group, as defined in article 32 of Law 4308/2014.
The monetary amounts of both fixed and any variable remuneration are recorded in gross prices as defined in paragraph 4 of the European Commission Guidelines of 1 March 2019.
7.2.3. Approved remuneration based on remuneration policy
According to the Remuneration Policy, the Executive Members of the Board of Directors who are paid as Senior Management (CEOs) in Group companies, may receive annual fixed remuneration falling under the ranges from C (from 120,000 euros to 180,000 euros), B (from 150,000 euros to 215,000 euros), A (180,000 euros to 350,000 euros) to A + (over 350,000 euros) to which the CEO belongs.
In particular, the CEO, as a member of the BoD, may receive annually fixed remuneration that will not exceed the maximum limit of one million four hundred thousand euros (1,400,0 00 euros ).
The components of variable remuneration that may be paid to beneficiaries falling within the scope of the Remuneration Policy are the following:
• Short-term variable remuneration (bonus)
• Stock option plan pursuant to article 113 of the Law 4548/2018
• Share bonus program according to article 114 of Law 4548/2018.
In addition, additional benefits may be granted, such as:
• Company car
• Group Life and Health Insurance Policy, as well as Civil Liability Policy
• Pension Plan
7.2.4. Total Remuneration
The total remuneration for the fiscal year 2023 (Table 1) refers to the sum of a) the fixed remuneration, consisting of the remuneration of the Board of Directors and Committees of the Company and Group companies (1,133,750 euros and 750,000 euros respectively), b) the remuneration from the Company and Group companies, to which senior managers provide services as employees or under contracts of indefinite duration in accordance with paragraph 9 art.39 of Law 4387/16 (total 1,611,000 euros), c) other benefits and d) variable remuneration deriving from i)
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short-term benefits of the Company and Group companies and amounted to a total of 499,000 euros and ii) from long-term benefits, namely the stock option plan (Table 2) and the share bonus program of the Company.
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*According to the Remuneration Report of the listed TERNA ENERGY S.A., the remunera tion of 700,000 euros will be put to an advisory vote during the Annual General Assembly.
**The variable remuneration deriving from the Compan y's Stock Option Plan is detailed in Table 2.
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Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
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Fixed remuneration
Fixed Remuneration consists of remuneration through employment or agreements for service and the Annual Remuneration of the Board of Directors and Committees. The fixed remuneration for the members of the Board of Directors who received remuneration as members of the Board of Directors and Committees of the Company and its subsidiaries for the year 2023 amounts to a total of three million four hundred ninety-four thousand seven hundred and fifty euros (3,494,750 euros) and is broken down for each member into the individual components in Table 1 . Of the above amount, an amount of five hundred and eighty-three thousand seven hundred and fifty euros (583,750 euros) concerns fixed remuneration of non-executive members. Remuneration is within the approved limits of the Remuneration Policy and there is no deviation.
Variable Remuneration and Benefits: Short-term variable remuneration
According to the approved program for measuring and evaluating the individual performance of executives, the possibility of providing short-term variable remuneration (Bonus) up to the approved maximum total limit of two and a half million euros (2,500,000 euros) is foreseen. The objectives associated with the provision of short-term variable remuneration arise through the establishment of specific Performance Metrics (KPIs). For executives who have a group role, the participation takes into account the total activity of the Group based on specific metrics that are evaluated in total up to 80%. When the evaluation concerns executives who do not have a group role, these criteria are limited to a maximum of 40% and additional metrics are set concerning the specific characteristics of Business Units with a maximum participation of 40%. Finally, with a maximum participation limit of 20%, the individual role of each executive involved is evaluated, according to the responsibilities he/she has at Group and/or business unit level. Remuneration is within the approved limits of the Remuneration Policy and there is no deviation.
Stock Option Plan according to article 113 of Law 4548/2018:
According to the Stock Option Plan for the period 2019-2023, targets-criteria (KPIs) have been defined that are established once the target is achieved, either annually, at the end of the plan, or proportionally in the first three years and at the end of the plan. The performance date and the exercise period are set by the Board of Directors, each time due to the achievement of the corporate goal. The program is addressed to up to 20 managers. The issue price of the shares of the Plan has been set by decision of the General Assembly at euros 2 per share and there is an obligation to withhold the shares for two years.
In 2023 the achievement of targets related to the construction, energy, concessions and debt service ratio were confirmed, demonstrating the ability of the Company's executives as well as the Company's resilience and reliability, and vesting in accordance with the decision of the Board of Directors dated 29.03.2023, of options corresponding to a total of 846,700 treasury shares was effected. No shares were distributed to the beneficiaries during the financial year of 2023.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
190
* In addition, 559,263 rights have been exercised since the beginning of the plan by former BoD members and other Senior Management of 100% subsidiaries
** No shares were distributed during financial year 2023
*** The date of approval by the Board of Directors of the registration of a total of 846,700 shares due to the achievement of targets is indicated
Share bonus program of the subsidiary TERNA ENERGY:
Within the framework of the share bonus program, the Management of the company "TERNA ENERGY S.A." allocated to twenty-six (26) Executives a total of 2,250,000 New Shares, which resulted from increases of its share capital with capitalization of premium reserve accounts and represent 1.9% of the paid-up share capital. From this disposal, Chairman Mr. Peristeris Georgios received a number of shares of TERNA ENERGY amounting to 1,125,000. Lazaridou Penelope received 22,500 shares and Mr. Lambrou Konstantinos received 27,000 shares respectively.
Share bonus programme according to article 113 of Law 4548/2018:
The share bonus Programme for the period 2023-2027 was approved by virtue of decision of the Annual General Assembly of shareholders dated 20.06.2023.
No shares were vested or distributed during the period of the financial year 2023.
Benefits
In accordance with the the Remuneration Policy, a group life and health insurance policy is provided. The amounts listed in Table 1 refer to the premiums paid by the Company for group life and health insurance for each member of the Board of Directors. The car benefit (benefit in kind) has been granted to four (4) of the seven (7) current executive members, i.e. 57.1%. The amounts indicated refer to the payment of the leasing installments of the company car. Corporate credit cards issued to
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
191
BoD members relate solely to the coverage of corporate expenses, such as travel and overnight expenses and do not constitute a benefit but cover corporate expenses.
Independent non-executive members shall not be provided with variable remuneration or benefits in kind. Additional payments relate solely to the coverage of travel expenses from their place of residence to the Company's headquarters for their participation in the meetings of the Board of Directors and the General Assembly of the Company.
No pension plan has been implemented at present.
Comparative Table of Information
The Comparative Table of Total Annual Deviations in Remuneration of Members of the Board of Directors of the Company, Fixed, Variable (bonus) and benefits for the years 2019-2020-2021-2022- 2023 is presented below in accordance with article 187 of Law 4548/2018 (table 3).
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
192
* For the calculation of the adjustment 2021-2022, the comparative size of the total remuneration for 2021 has been reduced by 45,000 euros pursuant to the decision of the General Assembly of TERNA ENERGY dated 22.06.2022
** It is not possible to compare the figures of the years 2021 and 2022 due to his election to the Board of Directors in July 2022 and therefore there is a mismatch of the compared time periods
*** It is not possible to compare the figures of the years 2022 and 2023 due to his election to the Board of Directors on 30.11.2022 and therefore there is a mismatch of the compared time periods
**** She does not receive remuneration for her participation in the Board of Directors and the Committees of GEK TERNA
***** Modification occurs due to amendments in the composition of the Committees
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
193
Below are presented the variations of a) the performance of the Company and the Group and b) the average annual remuneration of employees for the years 2019-2020-2021-2022-2023 according to par. 7 of article 187 of Law 4548/2018.
a. PERFORMANCE VARIATIONS
Variation 2019 vs 2020
Variation 2020 vs 2021
Variation 2021 vs 2022
Variation 2022 vs 2023
Variation to €
Variation in %
Variation to €
Variation in %
Variation to €
Variation in %
Variation to €
Variation n %
a1. COMPANY
TURNOVER (€)
545.000
8,70%
52.028.000
89,25%
40.790.722
72,68%
9.690.000
9,78%
a2. GROUP
EBITDA (€)
6.292.221
2,26%
15.988.778
5,44%
242.681.000
82,30%
-9.941.000
-1,83%
*No interest and dividends receivable
b. AVERAGE REMUNERATION OF FULL-TIME EMPLOYEES
YEAR
NUMBER OF EMPLOYEES IN THE COMPANY
MIDDLE SEASONS
CHANGE
2019
25
51,055.81
N/A
2020
26
51,555.66
0.97%
2021
717
16,819.57
-206.52%
2022
728
19,338.24
14.97%
2023
716
20,515.80
6.09%
* In 2019 and 2020, mostly specialized senior executives with many years of experience in GEK TERNA worked. In 2021, a new Business Unit for the Operation of Concession Projects was organized in the Company, which employs a large number of employees, mainly non-specialized craftsmen and toll workers. This activity of the Company is creates the large adjustment in average earnings.
The above information is provided within the framework of the provisions of para. 7 of article 187 of Law 4548/2018.
7.2.5. Remuneration Derogations
According to Art. 112 para. 3 of Law 4548/18, no deviations from the approved remuneration policy were found pursuant to paragraph 7 of article 110. Therefore, explanations are not required for exceptional circumstances in respect of which a deviation of the remuneration policy has occurred.
7.2.6. Implementation Audit
The audit of the implementation of the Remuneration Policy and the preparation of the Remuneration Report is the responsibility of the Remuneration Committee and the Board of Directors.
The Report was reviewed by the statutory auditors of the audit firm Grant Thornton.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
194
7.2.7. Approval of the Remuneration Report Year 2022
According to Art. 112 para. 3 of Law 4548/18, the remuneration report for the year 2022 was submitted for discussion to the Annual General Assembly of 20.06.2023, as an item of the agenda.
The General Assembly with votes of 48,368,411 in favor (89.45%), 5,629,240 against (10.41%) and abstention of 78,000 (0.14%) approved the proposal of the Board of Directors for the approval of the Remuneration Report, pursuant to article 112 of Law 4548/2018, for persons falling within the scope of the approved Remuneration Policy for the year 2022.
The vote of the shareholders regarding the Remuneration Report is advisory.
7.2.8. Information on the use of the variable remuneration recovery feature
There is no case dictating the use of the right to recover variable remuneration during the financial year 2023.
7.2.9. Publication of the Remuneration Report
According to Art. 112 para. 4 of Law 4548/18, this Remuneration Report along with the date and results of the advisory vote of the General Assembly is submitted to publicity formalities and remains available on the Company's website for a period of ten (10) years as provided by the aforementioned provision. The Remuneration Report does not include special categories of personal data within the meaning of Article 9 para. 1 of Regulation (EU) 2016/679 of the European Parliament and of the Council (L 119/1) or personal data concerning the marital status of the members of the Company's board of directors. The Company processes personal data of the members of the Board of Directors included in the remuneration report pursuant to article 112 for the purpose of increasing corporate transparency regarding the remuneration of board members, with the aim of enhancing members' accountability and shareholder oversight of such remuneration. Without prejudice to any longer disclosure period provided for by a special provision, the Company shall not disclose personal data included in the remuneration report after ten (10) years have elapsed since the publication of this remuneration report. According to Art. 112 para. 6 of the aforementioned law, the members of the Board of Directors have ensured that the remuneration report has been prepared and is planned to be published, in accordance with the requirements of the provisions of this article.
8.
Eligibility Policy
The Company has a Suitability Policy for the Members of the Board of Directors, which was prepared by its Nomination Committee in accordance with the provisions of article 3 of Law 4706/2020 and the guidelines of Circular no. 60 of the Hellenic Capital Market Commission.
The Policy was approved by the General Assembly of the Company's shareholders dated 01.07.2021 following the approval of the Board of Directors on 09.06.2021 and entered into force from the date of its approval by the General Assembly.
For its compilation, the increased monitoring needs of the framework of Corporate Governance, of Risk Management, of Regulatory Compliance, were taken into account as well as the operation of Company Sectors such as Human Resources, Information Technology, Information Security Management, Health, Safety and Environment, by assigning management or supervision responsibilities to executive members of the BoD.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
195
The Suitability Policy aims to ensure quality staffing, effective operation and fulfillment of the role of the Board of Directors based on the overall strategy and medium to long-term business goals of the Company, with the aim of promoting the corporate interest.
The aim of the policy is to have a highly effective Board of Directors. As such, it is considered a Board of Directors with a structured team, working together with a shared commitment to protecting and enhancing shareholder value, rather than a typical gathering of executives who manage corporate affairs without the capacity for constructive cooperation and development prospects.
The Policy takes into account best practices and is harmonized with the corporate culture and what is provided for in the Articles of Association, the Internal Rules of Operation and the Hellenic Corporate Governance Code to which the Company is subject, is clear and adequately documented and is governed by the principle of transparency and proportionality while promoting diversity, meritocracy and efficiency in the selection and during the term of office of the members of the BoD.
Furthermore, during the preparation of the Policy, the size, internal organization, risk appetite, nature, scale and complexity of the Company's activities were taken into account, including, but not limited to , the sectors of construction, concessions, energy, real estate management and development, mining, waste management, services, PPP projects, the operation of large infrastructure projects.
The guiding principles governing the Suitability Policy are the following:
•
Compliance
•
Transparency
•
Proportionality
•
Diversity
•
Meritocracy
•
Effectiveness
•
Experience and historicity
9.
Diversity Policy
The Company has and implements a diversity policy in order to promote an appropriate level of differentiation in the Board of Directors and a diverse group of members. This Policy is drafted with the belief that a Board of Directors that has a wide range of perspectives and diversity is in a better position than other Boards of Directors with a limited scope, as the existence of diversity allows the Company to take advantage of market opportunities and effectively manage risks.
The Board can perform well if it consists of a wide range of members with diverse, but complementary skills or knowledge groups. Its culture is positively shaped by different approaches and views and will certainly be rather representative of the Group's values. In this way, the Board of Directors ultimately forms a progressive and thoughtful view of its affairs, while promoting prudent risk-taking.
Through the concentration of a wide range of qualifications and skills during the selection of BoD members, the diversity of views and experiences is ensured, in order to make sound d ecisions.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
196
In this context, adequate representation per gender is provided, at least as defined by the relevant legislation, as a percentage of the total members of the Board of Directors. At the same time, all necessary measures are taken so that there is no exclusion whatsoever due to discrimination based on sex, age, race, color, ethnic or social origin, religion or belief, birth, disability, age or sexual orientation, property and sole role of choice to have the criteria of individual suitability identified in this Policy.
The following table presents the profile of the Board of Directors.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
197
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
198
The achievement of substantial and not only formal diversity within the Boards of Directors is an important guarantee for their overall effectiveness. The above table shows the diversity in gender representation (12male/3female) in the Board of Directors, with the corresponding ratio among the Company's senior managers standing at 6male/3female. In addition, the table in combination with the CVs of the members reveals the width of knowledge and skills of the members of the Board of Directors, as well as the international experience transferred by many of them. The Board of Directors combines a mixture of competences, skills and diversity of personalities, knowledge and experience that strengthens its role and contributes to its success.
Transactions with related parties and relevant information of the Board of Directors
The Company has developed a procedure for identifying related party transactions and complying with applicable law. The process was drafted aiming at transparency and supervision of the Company's transactions with related parties. The purpose of the procedure is to record the actions performed in order to identify transactions of the Company, in which persons or legal entities participate, falling under the concept of related parties and to comply with the applicable legislation. The procedure provides for the recording and maintenance of a register of related parties and the recognition of related party transactions through the checking and cross-checking of data on the counterparty in accordance with articles 99-101 of Law 4548/2018.
1
0
.
Sustainable development policy
Sustainable Development for GEK TERNA Group is not only a practice of alignment with international good practices but a holistic strategic approach , which is based on the regular assessment of the most important social, economic and environmental impacts of the Group's activities and their review and/or modification if necessary, through a process of dialogue and consultation with stakeholders.
Furthermore, GEK TERNA Group acts in accordance with the United Nations (UN) Global Sustainable Development Goals (SDGs) and is an ally in the fight for social equality, prosperity and the development of a sustainable natural environment, since it has recognized that the seventeen (17) global goals are inextricably linked to the principles of Corporate Governance and Corporate Social Responsibility / Sustainable Development to which it is committed.
The responsible way of operation of the Group is reflected in the practices and procedures developed in the Group aiming at integrating the principles of Sustainable Development into its daily operation. At the same time , it is based on the strategic corporate values established by the Management , that is, respect for people and the natural environment, value creation for employees, customers, and shareholders, honesty, reliability and targeted social contribution.
The Group's policy for Sustainable Development is inextricably linked to the material issues that are regularly identified through the materiality analysis process, in order for the Group to constantly listen to the needs of stakeholders (internal and external) but also to take into account the current socio- economic trends in relation to its effects (positive or negative).
In this context, the Group's corporate responsibility is aligned with ESG (Environmental-Social- Governance) criteria/principles, in relation to four (4) axes of activity and is developed in eight (8) strategic directions/individual areas that incorporate the Group's specific approach-policy on the
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
199
identified material issues:
Axis 1: Environmental Protection
Strategic Direction / Area of Activity: Environmental protection and climate change
The achievement of sustainable development through the continuous reduction of the environmental footprint of the Group's activities in Greece and abroad, the continuous adaptation to the conditions for Climate Change and the implementation of the principles of Circular Economy in combination with the investment in innovative services and technologies and the faithful adherence to the existing environmental management system.
Environmental protection is an integral part of the Group's strategy and becomes visible through its policies, strategies and business decisions and actions. The Group acts in a targeted manner and takes measures that lead to the reduction of its environmental and energy footprint through the responsible management of energy and the natural resources it uses (e.g. water, energy, materials, tackling Climate Change and protecting and preserving biodiversity). It focuses on the transition to an economy that is less dependent on fossil fuels and ensures sustainable cities and societies for all its stakeholders.
Axis 2: Promotion of Human Value
Strategic Direction / Area of Activity: Health and Safety at Work
The recognition of the value of human health and life and the assurance of a working environment without risks of accidents.
Safeguarding Health and Safety is a priority for the Group, which is constantly improving the strategic framework within which issues related to the protection of Health and Safety of all its stakeholders are managed.
Strategic Direction / Area of Activity: Personnel development and protection of human rights
The recognition that surplus value is created by human capital. The aim is to develop a balanced and safe working environment of meritocracy, transparency, equal opportunities-benefits, which enhances diversity, ensures human - labor rights and at the same time invests in the continuous improvement of employees' skills, the development and retention of talents and the enhancement of youth entrepreneurship.
The Group applies and respects international principles and standards of Human Rights and has developed its framework of principles and values based on fundamental Human Rights.
Respecting all its employees and partners, it ensures the prevention of incidents of violation of their rights, through the adoption of policies, actions and audit mechanisms, which apply to all its activities, to all its subsidiaries and to all the projects it undertakes. The Group actively participates, supports and considers as a top priority the investment in its people by providing the necessary resources to promote the continuous improvement of the working environment.
Axis 3: Strengthening the Social Footprint
Strategic Direction / Area of Activity: Care for local communities
The continuous consultation with the social partners and the preparation of social impact studies with the ultimate goal of maximizing direct and indirect social benefits, the support of solidarity actions
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
200
such as donations and sponsorships and the constant cooperation with local suppliers to build long- term relationships of trust.
Through the adoption of responsible policies aimed at creating shared value to all its stakeholders, the Group supports the development of the local communities in which it operates and with which it interacts, through continuous consultation and efforts to identify and respond to the real needs that exist, but also through its own activity.
Strategic Direction/ Area of Activity: Emergency Response
The commitment to take measures and actions to deal with emergencies through the development of risk management plans, the implementation of readiness exercises and the realization of periodic internal and external audits.
Axis 4: Shaping a Responsible Market
Strategic Direction / Area of Activity: Creation and distribution of economic value
The creation of economic value - the main objective of the Group is to generate and distribute income for its stakeholders through the payment of salaries to employees, payments to suppliers and partners, direct and indirect taxes in the countries of operation, the distribution of dividends to shareholders and investments in local communities while avoiding uncertainties and risks, financial and non- financial, with the aim of safeguarding economic activity, sustainable development and improving living standards.
Strategic Direction/ Area of Activity: Business ethics and regulatory compliance
The Group ensures the existence of business ethics and regulatory compliance of all its operations and activities, having as a priority the detection and combating of potential corruption incidents, faithfully applying the procedures and policies incorporated into the corporate operation (Code of Conduct , Anti-Bribery Management System ISO 37001), and the regular training of human resources.
The fight against corruption is a critical pillar of the Group's operation, which is committed to showing zero tolerance to such incidents, through the promotion of transparency, ensuring business ethics and regulatory compliance, which are diffused across the spectrum of activities and affect the professional behavior of its people. To this end, the Group acts through the establishment of policies and procedures, but also through the establishment of audit mechanisms and compliance with these policies.
Strategic Direction / Area of Activity: Responsible supply chain management
Responsible supply chain management requires responsible partnerships. Therefore, it is mandatory for all suppliers and partners to fully comply with the Group's Regulatory Framework of Principles and Values, both in matters of corruption and respect for human rights, as well as in matters of Environmental Management and Social Corporate Policy.
Above all, the proper management of the supply chain starts from the responsible attitude of the Group towards all its stakeholders. The Group's business activities throughout its supply chain are carried out once the potential environmental, social and economic impacts have been assessed in order to maximize the positive impact. In order to address the new challenges brought by supply chain issues, the Group incorporates new criteria in the management procedures of supply chain issues, such as the
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
201
new terms of cooperation with suppliers and the preference it gives to domestic suppliers.
For the above issues, the Group sets individual Sustainable Development goals, which it evaluates on an annual basis in terms of their progress and revises them appropriately when necessary.
In order to achieve its objectives, the Group develops individual management systems, policies, procedures, measurement indicators and implements appropriate action plans / programs that contribute to the increase of positive effects or the reduction of negative ones.
The mandated corporate responsibility team is responsible for the effective management of Sustainable Development and corporate responsibility issues. The team consists of specialized executives coming from all key Group Divisions. The General Division for Corporate Affairs and Sustainable Development has the task of coordination.
The Chairman and CEO, through the direct reporting line of the General Division of Corporate Affairs and Sustainable Development to him, has undertaken the overall management / supervision of Sustainable Development issues, sealing the commitment of the Group's senior management towards a sustainable operation.
With a view to transparency and regular information to stakeholders, the results of the Group's performance on Sustainable Development issues are announced to the general public through the annual Sustainable Development Report.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
202
EXPLANATORY REPORT OF THE BOARD OF DIRECTORS ACCORDING TO ARTICLE 4 OF L. 3556/2007
The present Explanatory Report of the Board of Directors is submitted to the Regular General Meeting of Shareholders, according to paragraph 8 article 4 of L. 3556/2007 and has been prepared according to the provisions of paragraph 7, article 4 of the aforementioned Law.
a) Structure of Share Capital
The Extraordinary General Assembly held on the 13 th of February 2024 approved the increase of the Company's share capital, by the amount of 3,420,000 euros , through cash payment, with the issuance of 6,000,000 common shares, with a nominal value of 0.57 euros per share at the price of 13.20 euros per share, without pre-emptive rights of the existing shareholders of the Company, in accordance with article 27 par.1 of Law 4548/2018, and the amount of 75,780,000 euros was placed in the “share premium reserve account”. The same Extraordinary General Assembly approved the cancellation of 6,000,000 treasury shares of the Company, which correspond to a percentage of 5.8% of the Company's share capital, and, subsequently, the reduction of the Company's share capital by an amount of 3,420,000 euros. On the 11 th of March 2024 it was commenced the trading in the Main Market of the Athens Exchange (regulated market according to L. 4514/2018) of the 6,000,000 new common registered shares of the Company, resulting from the Company’s share capital increase, while on the same date the trading in the Athens Stock Exchange of 6,000,000 treasury shares ceased and the shares were cancelled. As a result of the above increase and decrease, the share capital of the Company remains unchanged.
The Company’s Share Capital amounts to fifty-eight million, nine hundred fifty-one thousand, two hundred seventy five euro and eighty seven cents (58,951,275.87 euros), is fully paid and is divided into one hundred and three million, four hundred twenty three thousand and two hundred and ninety one (103,423,291) common registered shares of a nominal value of fifty seven cents (0.57 euros) each.
The Company’s shares are listed and traded on the Securities Main Market of the Athens Exchange.
All the rights and obligations stipulated by Law and the Company’s Articles of Association emanate from each share.
b) Limitations on transfer of Company shares
Transfer of Company shares takes place according to Law and there is no limitation on their transfer according to the Articles of Association.
c) Significant direct or indirect participations according to the provisions of L. 3556/2007
The following Table of Shareholders holding a percentage over 5% as at 31.12.2023 is presented below as follows:
NAME/TITLE
No of Shares
%
GEORGE PERISTERIS
30,993,515
29.968%
GEK TERNA S.A.
7,968,340
7.705%
LATSCO HELLENIC HOLDINGS SARL
7,858,571
7.598%
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
203
d) Shares providing special control rights
According to the Company’s Articles of Association, there are no shares that provide special control rights.
e) Limitations on voting rights
According to the Company’s Articles of Association, there are no limitations on voting rights emanating from its shares.
f) Agreements between Shareholders
The Company is not aware of any agreements between its Shareholders, which imply limitations on transfer of its shares or exercise of voting rights emanating from its shares.
g) Rules for appointment and replacement of BoD Members and amendments to the Articles of Association
The Company’s Articles of Association are in compliance with the provisions of L. 3604/2007 and their provisions do not differ from those stipulated by L. 4548/2018 as in effect, both as regards appointment and replacement of Board Members and amendments to its articles.
h) Board of Directors authority issuing new shares or acquiring treasury shares
According to the provisions of par. 2 article 5 of the Articles of Association, the General Meeting may - through its decision - assign authority to the Board of Directors to increase - through its decision - the share capital in compliance with the provisions of L. 4548/2018.
According to the provisions of article 113 of L. 4548/2018, as in effect, the Board of Directors may increase the share capital by issuing new shares in the context of implementing the Stock Option Plan, approved by the General Meeting, for acquisition of Company shares by the beneficiaries.
According to the provisions of article 49 of L. 4548/2018, as in effect, following approval of the General Meeting, the Company’s Board of Directors may decide to acquire, through ATHEX, its treasury shares provided that the nominal value of the acquired shares, including the shares acquired previously and maintained by the Company, does not exceed 10% of its paid-up share capital.
The Extraordinary General Assembly as of February 13, 2024 decided to renew the share buyback program by the Company through ATHEX until the completion of 10% of the paid up share capital of the Company, for the purpose, established in article 49, L.4548/2018 as amended and effective, Regulation (EU)596/2014 of the European Parliament and authorised Regulation (EU) 2016/1052 of the European Committee, until February 12, 2026, at a minimum purchase price of fifty seven cents (0.57 euro) and a maximum price of forty (40 euro) per share and authorized the Board of Directors to implement the aforementioned decision.
i) Significant agreements put into effect, amended, or terminated in case of change in control following a takeover bid.
There are no agreements, which are put into effect, amended, or terminated in case of change in the
Company’s control following a takeover bid.
GEK TERNA GROUP
Annual Financial Report of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
204
j) Agreements with the Members of the Board of Directors or the Company’s Employees
There are no agreements of the Company with members of its Board of Directors or its employees, which include payment of indemnity, specifically in case of resignation or termination without reasonable cause or termination of term or employment due to a takeover bid.
Dear Shareholders,
2023 was a year during which the Group continued its stable trend of development. Moreover, the Group carefully continues implementing its investment plan, simultaneously maintaining adequate liquidity.
We would like to express our thanks to the Board or Directors, our Staff, Executives and Partners for their contribution to our work.
We also thank our Customers, Suppliers, and cooperating Banks and of course you, our Shareholders, for your trust in us.
The Board of Directors unanimously approves the above Management Report to be submitted to the Annual Ordinary General Meeting of Shareholders.
Athens , 29th April 2024
On behalf of the Board of Directors,
Georgios Peristeris
Chairman of the Board of Directors and Chief Executive Officer
© 2024 Grant Thornton Greece. All rights reserved.
205
III. INDEPENDENT AUDITOR’S REPORT
(This report has been translated from Greek original version)
To the Shareholders of the company “GEK TERNA SA”
Report on Separate and Consolidated Financial Statements
Opinion
We have audited the accompanying separate and consolidated financial statements of “GEK TERNA SA” (“the Company”), which comprise the separate and consolidated statement of financial position as at December 31, 2023, separate and consolidated statements of other comprehensive income, changes in equity and cash flows for the year then ended and notes to the financial statements, including material accounting policy information.
In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the financial position of the company “GEK TERNA SA ” and its subsidiaries (the Group) as at 31 December 2023, their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards that have been adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) incorporated into the Greek Legislation. Our responsibilities under those standards are described in the Auditor’s Responsibilities for the Audit of the Separate and Consolidated Financial Statements section of our report. We are independent of the Company within the entire course of our appointment, in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) incorporated into the Greek Legislation and ethical requirements relevant to the audit of separate and consolidated financial statements in Greece and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the audited period. These matters, as well as the related risk of significant misstatements, were addressed in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matters
How our audit addressed the key audit matter
Revenue recognition
The Group's and the Company's revenues are derived from diversified operating segments. Their recognition has been identified as an area of particular audit interest as they involve complexity related to the volume of transactions, the nature of contracts, the use of information systems and management judgements and estimates, which involve a degree of uncertainty.
In particular, the Group's revenues relating to the segments of Concessions and Thermal Energy Trading are determined through information systems and involve judgements and estimates in areas such as unbilled customer revenues. In addition, the Group's revenue relating to construction projects is determined based on the percentage of completion as determined by the ratio of costs incurred to the total estimated costs to completion of the project.
Taking into consideration the above and the significance of this financial statement item we assessed revenue recognition as a Key Audit Matter.
The Group’s disclosures regarding revenue recognition accounting policy, judgments and estimates used in respect of revenue recognition are included in notes 3.1(ii), 3.1(iii), 4.12, 6 and 35 to the financial statements.
The key audit procedures we carried out included, among others:
- Evaluation of the information systems environment supporting the major revenue sources, including the internal processes and security controls associated with them.
- Examination of the operational effectiveness of the key controls relating to the revenue recognition processes, particularly in the segments of Concessions and Thermal Energy Trading.
- Evaluation of the assumptions for the recognition of unbilled revenue at the end of the financial year 2023 in the Thermal Energy Trading segment.
- Evaluation of the revenue recognition assumptions, contract terms and budgetary elements used in the revenue recognition calculations, and recalculation of the percentage of completion of performance obligations from construction projects in the Construction segment.
- Verification, on a sample basis, of the construction costs incurred and recognized in the current fiscal year in the Construction segment, with the corresponding supporting documents / invoices.
- Check, on a sample basis, the correctness of revenue recognition in accordance with the relevant terms of the respective contracts and IFRS requirements.
- Assessment whether the policy and methodology applied by management is appropriate and consistent with IFRS 15 and IFRIC 12.
- Assessment of the adequacy of related disclosures in the accompanying financial statements, in relation to this matter.
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Assessment of impairment of non-current assets
As at 31 December 2023, the Group recognized goodwill of € 5.4 million, intangible assets with indefinite useful life of € 5.1 million and with definite useful life of € 677.1 million and Property, Plant and Equipment of € 1,502.4 million. Also, as at 31st December 2023, the Company has investments in subsidiaries of € 468.8 million and investments in associates and joint ventures amounting to € 5.4 million and € 16.4 million respectively.
In accordance with the requirements of IFRS, intangible assets with definite useful life, property, plant and equipment and investments in subsidiaries, associates and joint ventures are tested for impairment by the Management whenever there are relevant indications. The abovementioned assessment requires significant level of judgement. Goodwill and non-depreciable intangible assets are tested for impairment at least on an annual basis.
The impairment test requires the determination of the recoverable amount of each Cash Generating Unit (CGU) as the higher of the fair value less costs on disposal and value in use. Fair value calculation is based on acceptable valuation methods while the assessment of value in use is derived from the discounted cash flow method based on business plans which include key assumptions and Management estimates such as revenue growth, capital and operating costs and discount rates used.
Due to the significance of these financial statement items and management’s use of assumptions and estimates, we consider the impairment assessment of the abovementioned financial statement items as a Key Audit Matters. .
The Group’s and Company’s disclosures regarding the accounting policy and assumptions and estimates used in assessing any impairment of these assets and analysis of those items are included in Notes 3.2(ii), 3.2 (vii), 4.1, 4.5, 4.6, 4.7, 4.8,
The key audit procedures we carried out included, among others:
- Evaluation of procedures used by the Management to identify indications of impairment of non- current assets.
- Evaluation of the procedures used by the Management in order to prepare reliable business plans.
- For those CGUs that impairment indications existed, evaluation of: (i) the appropriateness of the methods applied for the determination of recoverable amount and (ii) the reasonableness of the key assumptions and estimates of Management.
- Review of the mathematical accuracy of discounted cash flow models.
- For the abovementioned procedures where it was deemed appropriate, we used Grant Thornton’s specialist contribution.
- Assessment of adequacy of the disclosures included in the notes to financial statements regarding this matter.
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8, 10, 12, 13 and 14 of the financial statements.
Other Information
Management is responsible for the other information. The other information included in the Annual Financial Report includes the Board of Director’s Report, the reference to which is made in the “Report on Other Legal and Regulatory Requirements” section of our Report and Statements of the Members of the Board of Directors, but does not include the separate and consolidated financial statements and our auditor’s report thereon.
Our opinion on the separate and consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our audit, we conclude that there is a material misstatement therein, we are required to communicate that matter to those charged with governance. No such issue has arisen.
Responsibilities of the Management and Those Charged with Governance for the Separate and Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with International Financial Reporting Standards that have been adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management’s intention is to proceed with liquidating the Company and the Group or discontinuing its operations or unless the management has no other realistic option but to proceed with those actions.
The Company’s Audit Committee (Article 44, Law 4449/2017) is responsible for overseeing the Company’s and the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Separate and Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as an aggregate, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs, incorporated into the Greek Legislation, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to affect the economic decisions of users taken on the basis of these separate and consolidated financial statements.
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As part of an audit in accordance with ISAs, incorporated into the Greek Legislation, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient and appropriate audit evidence regarding financial reporting of entities or business operations within the Group for the purpose of expressing an opinion on the separate and consociated financial statements. Our responsibility is to design, supervise and perform the audit of the Company and its subsidiaries. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters.
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Report on Other Legal and Regulatory Requirements
1. Board of Directors Report
Taking into consideration that management is responsible for the preparation of the Board of Directors’ Report which also includes the Corporate Governance Statement, according to the provisions of paragraph 5 of article 2 (part B) of L. 4336/2015, we note the following:
a. The Board of Directors’ Report includes the Corporate Governance Statement that provides the data and information defined under article 152, Law 4548/2018.
b. In our opinion, the Board of Directors’ Report has been prepared in compliance with the effective legal requirements of Article 150-151 and 153-154 and Paragraph 1 (cases c’ and d’) of 152, Law 4548/2018, and its content corresponds to the accompanying separate and consolidated financial statements for the year ended as at 31/12/2023.
c. Based on the knowledge we acquired during our audit, we have not identified any material misstatements in the Board of Directors’ Report in relation to the company “GEK TERNA SA” and its environment.
2. Additional Report to the Audit Committee
Our audit opinion on the separate and the consolidated financial statements is consistent with the additional report to the Audit Committee referred to in article 11 of EU Regulation 537/2014.
3. Provision of Non ‐ Audit Services
We have not provided to the Company and its subsidiaries any prohibited non-audit services referred to in article 5 of EU Regulation No 537/2014.
Authorized non ‐ audit services provided by us to the Company and its subsidiaries during the year ended as at December 31, 2023 are disclosed in Note 37 to the accompanying separate and consolidated financial statements.
4. Auditor’s Appointment
We were first appointed the Company’s Chartered Accountants following as of 28/06/2017 Decision of the Annual Regular General Meeting of the Shareholders. Our appointment has been renewed by the decision of the annual general meeting of shareholders for a total uninterrupted period of 7 years.
5. Internal Regulation Code
The Company has in effect Internal Regulation Code in conformance with the provisions of article 14 of Law 4706/2020.
6. Assurance Report on European Single Electronic Format
We examined the digital files of “GEK TERNA SA” (“the Company”), prepared in accordance with the European Single Electronic Format (ESEF) as defined by the European Commission Delegated Regulation 2019/815, amended by the Regulation (EU) 2020/1989 (ESEF Regulation), which comprise of the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2023, in XHTML format “2138003TO2MTRHWVP686-2023-12-31-en.xhtml”, as well as the provided XBRL file “2138003TO2MTRHWVP686-2023-12-31-en.zip” with the appropriate mark-up,
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on the aforementioned consolidated financial statements, including other explanatory information (Notes to the financial statements).
Regulatory Framework
The digital records of the ESEF are prepared in accordance with the ESEF Regulation and the Commission Interpretative Communication 2020/C379/01 of November 10, 2020, in conformance with Law 3556/2007 and the relevant announcements of the Hellenic Capital Market Commission and the Athens Stock Exchange (ESEF Regulatory Framework). In summary, this framework includes, inter alia, the following requirements:
- All annual financial reports shall be prepared in XHTML format.
- For the consolidated financial statements in accordance with IFRS, financial information included in the statements of comprehensive income, financial position, changes in equity and cash flows, as well as the financial information included in the other explanatory information, shall be marked- up with XBRL tags (XBRL “tags” and “block tag”), in accordance with the effective ESEF Taxonomy. ESEF technical specifications, including the relevant taxonomy, are set out in the ESEF Regulatory Technical Standards.
The requirements set out in the current ESEF Regulatory Framework constitute the appropriate criteria for expressing a conclusion of reasonable assurance.
Responsibilities of Management and Those Charged with Governance
Management is responsible for the preparation and submission of the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2023, in accordance with the requirements of ESEF Regulatory Framework, and for such internal controls as management determines necessary to enable the preparation of digital records that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities
Our responsibility is to design and conduct this assurance engagement in accordance with No. 214/4/11-02-2022 Decision of the Board of Directors of the Hellenic Accounting and Auditing Standards Oversight Board (HAASOB) and the "Guidelines on the auditors’ engagement and reasonable assurance report on European Single Electronic Format (ESEF) for issuers whose securities are admitted to trading on a regulated market in Greece" as issued by the Institute of Certified Public Accountants of Greece on 14/02/2022 (hereinafter "ESEF Guidelines"), in order to obtain reasonable assurance that the separate and the consolidated financial statements of the Company and the Group, prepared by the management in accordance with ESEF are in compliance, in all material respects, with the effective ESEF Regulatory Framework.
We conducted our work in accordance with the Code of Ethics for Professional Accountants (IESBA Code) issued by the International Ethics Standards Board for Accountants, as incorporated in Greek legislation and we have complied with the ethical requirements of independence, in accordance with Law 4449/2017 and EU Regulation 537/2014.
We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 “Assurance Engagements other than Audits or Reviews of Historical Financial Information” and our procedures are limited to the requirements of ESEF Guidelines. Reasonable assurance is a
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high level of assurance, but is not a guarantee that this work will always detect a material misstatement of non-compliance with the requirements of ESEF Regulation.
Conclusion
Based on the procedures performed and the evidence obtained, the separate and consolidated financial statements of the Company and the Group for the year ended December 31, 2023, in XHTML format “2138003TO2MTRHWVP686-2023-12-31-en.xhtml”, as well as the provided XBRL file “ 2138003TO2MTRHWVP686-2023-12-31-en.zip ” with the appropriate tagging on the above consolidated financial statements including the other explanatory information, have been prepared, in all material respects, in accordance with the requirements of the ESEF Regulatory Framework.
Athens, April 29, 2024
The Certified Public Accountant The Certified Public Accountant
George Panagopoulos Panagiotis Noulas
SOEL Reg. No 36471 SOEL Reg. No 40711
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
213
IV. ANNUAL SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AS AT DECEMBER 31 2023 (1 January - 31 December 2023)
Under the International Financial Reporting Standards (IFRS), as adopted by the European Union
The attached Financial Statements were approved by the Board of Directors of GEK TERNA S.A. at its meeting held as at 29th April 2024 and have been posted on the internet at the website http://www.gekterna.com as well as on the Athens Stock Exchange’s website.
The Annual Financial Statements of the consolidated subsidiaries, as provided by the Hellenic Capital Market Commission decision 8/754/14.04.2006, are available on the Internet at the website http://www.gekterna.com
214
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GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
215
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION AS OF 31 DECEMBER 2023
GROUP
COMPANY
Note
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Non-current assets
Intangible fixed assets
8.1
682,231
729,320
436
388
Right of use assets
9
91,603
55,396
415
346
Tangible fixed assets
10
1,502,397
1,423,774
14,718
12,437
Goodwill
8.2
5,359
6,375
0
0
Investment property
11
67,774
60,845
6,656
6,615
Participations in subsidiaries
12
0
0
468,804
373,823
Participations in associates
13
5,361
4,711
5,380
4,800
Participations in joint ventures
14
147,433
159,566
16,425
18,559
Financial Assets - Concessions
15
60,558
70,873
0
0
Investement in equity interests
21
103,550
91,069
99,932
88,972
Other long-term assets
16
94,766
47,318
142,870
162,170
Receivables from derivatives
31
128,757
124,639
0
0
Deferred Tax Assets
34
94,850
100,537
0
0
Total non-current assets
2,984,639
2,874,423
755,636
668,110
Current assets
Inventories
17
66,930
66,427
4,005
3,736
Trade receivables
18
556,115
535,924
29,412
13,277
Receivables from contracts with customers
19
578,936
391,313
5,138
7,216
Advances and other receivables
20
466,436
522,620
55,653
189,332
Income tax receivables
38,020
34,827
4,284
6,894
Financial assets at fair value through profit and loss
22
31,837
23,758
14,288
9,436
Short-term part of receivables from derivatives
31
20,767
36,516
0
0
Cash and cash equivalents
23
1,310,649
1,491,703
581,908
559,123
Total current assets
3,069,690
3,103,088
694,688
789,014
TOTAL ASSETS
6,054,329
5,977,511
1,450,324
1,457,124
EQUITY AND LIABILITIES
Share capital
32
58,951
58,951
58,951
58,951
Share premium account
348,187
368,872
169,678
190,363
Reserves
33
674,938
707,855
47,089
61,321
Retained earnings
(139,966)
(280,361)
172,355
146,745
Total equity attributable to the owners of parent
942,110
855,317
448,073
457,380
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
216
GROUP
COMPANY
Note
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Non-controlling interests
334,512
335,381
0
0
Total equity
1,276,622
1,190,698
448,073
457,380
Non-current liabilities
Long-term loans
24
2,737,058
2,672,299
913,787
911,442
Liabilities from leases
25
76,920
47,615
287
197
Other long-term liabilities
30
181,549
276,192
12,243
16,378
Other provisions
27
37,082
31,379
0
0
Provisions for staff leaving indemnities
26
3,462
2,917
400
293
Grants
28
171,648
176,232
0
0
Liabilities from derivatives
31
80,024
59,305
0
0
Deferred tax liabilities
34
135,742
114,209
14,631
6,489
Total non-current liabilities
3,423,485
3,380,148
941,348
934,799
Current liabilities
Suppliers
29
414,874
335,326
41,970
23,128
Short term loans
24
107,699
143,869
0
0
Long term liabilities payable during the next financial year
24
172,900
160,224
8,961
8,897
Short-term part liabilities from leases
25
13,891
7,648
139
153
Liabilities from contracts with customers
19
252,114
258,075
170
150
Accrued and other short term liabilities
30
371,034
385,950
9,585
32,617
Short-term part of liabilities from derivatives
31
12,678
35,308
0
0
Income tax payable
9,032
80,265
78
0
Total current Liabilities
1,354,222
1,406,665
60,903
64,945
Total Liabilities
4,777,707
4,786,813
1,002,251
999,744
TOTAL EQUITY AND LIABILITIES
6,054,329
5,977,511
1,450,324
1,457,124
The accompanying notes form an integral part of these Separate and Consolidated Financial Statements.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
217
CONSOLIDATED AND SEPARATE STATEMENT OF TOTAL COMPREHENSIVE INCOME 2023
GROUP
COMPANY
Profit and Loss
Note
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Continuing operations
Turnover
6,35
3,499,207
3,938,278
108,724
99,034
Cost of sales
36
(3,012,359)
(3,332,589)
(96,358)
(88,375)
Gross profit/(loss)
486,848
605,689
12,366
10,659
Administrative and distribution expenses
36
(106,669)
(153,324)
(10,288)
(12,450)
Research and development expenses
36
(11,791)
(9,881)
(3,516)
(534)
Other income/(expenses)
38
8,979
(32,903)
1,292
1,291
Results before taxes, financing and investing activities
377,367
409,581
(146)
(1,034)
Net financial income/(expenses)
42
(101,839)
(192,604)
(11,215)
(14,937)
Profit / (loss) from sale of participations and securities
39
(3,913)
(1)
(9)
91,500
Profit / (loss) from valuation of participations and securities
40
4,027
187
(8,680)
(11,324)
Profit from Acquisition of Control in subsidiaries
0
21,500
0
0
Income / (losses) from participations and other securities
41
1,376
1,774
54,937
45,802
Profit / (loss) from the consolidation of associates under the equity method
6,13
(4)
3,878
0
0
Profit / (loss) from the consolidation of joint ventures under the equity method
6,14
(8,541)
(1,029)
0
0
Earnings/(Losses) before taxes
6
268,473
243,286
34,887
110,007
Income tax
34
(81,149)
(65,938)
(9,153)
109
Net Earnings/(losses) after taxes
6
187,324
177,348
25,734
110,116
Other Comprehensive Income/(Expenses)
a) Other Comprehensive Income/(expenses) that will be transferred to Income Statement in subsequent periods
Proportion in Other comprehensive income of associates
13
74
0
0
0
Proportion in Other comprehensive income of joint ventures
14
(4,375)
0
0
0
Cash flow hedges
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
218
GROUP
COMPANY
Profit and Loss
Note
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
-Gain/(Losses) current period
31
(29,286)
192,624
0
0
Translation differences from incorporation of foreign entities
-Gain/(Losses) current period
3,668
(1,817)
0
0
Tax corresponding to the above results
34
6,449
(42,553)
0
0
Total
(23,470)
148,254
0
0
b) Other Comprehensive Income/(expenses) that will be not transferred to Income Statement in subsequent periods
Valuation of investments in equity interests
21
11,136
(1,931)
10,960
(1,823)
Actuarial gains/(losses) on defined benefit pension plan
26
(184)
70
(33)
20
Proportion in Other comprehensive income of associates
13
0
(5)
0
0
Proportion in Other comprehensive income of joint ventures
14
(1,870)
(89)
0
0
Tax corresponding to the above results
34
(2,413)
409
(2,404)
397
Total
6,669
(1,546)
8,523
(1,406)
Net Other Comprehensive Income
(16,801)
146,708
8,523
(1,406)
Total comprehensive income
170,523
324,056
34,257
108,710
Net earnings/(losses) attributed to:
Shareholders of the parent
147,813
136,523
Non-controlling interests
39,511
40,825
Net Earnings/(losses) after taxes
187,324
177,348
Total comprehensive income/(losses) attributed to:
Shareholders of the parent
137,909
273,477
Non-controlling interests
32,614
50,579
Total comprehensive income
170,523
324,056
Basic Earnings/(losses) per share (in Euro) attributed to shareholders of the parent
32
1.57004
1.42421
The accompanying notes form an integral part of these Separate and Consolidated Financial Statements.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
219
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS 2023
GROUP
COMPANY
Note
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Cash flows from operating activities
Profit/(loss) before tax from continued operations
6
268,473
243,286
34,887
110,007
Adjustments for the agreement of the net flows from the operating activities
Depreciation
8.1,9,10
146,510
134,362
1,788
1,382
Fixed assets grants amortization
38
(5,193)
(5,687)
0
0
Provisions
39,834
23,175
100
102
Impairments
38
29,727
51,161
11,648
11,520
Other non-cash expenses/(revenue)
(82)
(139)
0
0
Interest and related revenue
42
(34,766)
(13,530)
(19,244)
(15,867)
Interest and other financial expenses
42
161,425
129,790
30,459
30,804
Results from derivatives
42
(24,820)
76,344
0
0
Results from associates and joint ventures
8,545
(2,849)
0
0
Results from participations and securities
(1,490)
(23,459)
(58,282)
(137,487)
Results from investment property
(7,782)
378
(171)
10
Results from fixed assets
(220)
(119)
0
0
Foreign exchange differences
(316)
(5,537)
0
0
Cost of stock options
33
2,334
50,724
1,476
1,296
Operating profit/(loss) before changes in working capital
582,179
657,900
2,661
1,767
(Increase)/Decrease in:
Inventories
2,020
(333)
181
64
Investment property as main activity
837
1,275
130
1,028
Trade receivables
(215,588)
(196,620)
(14,119)
(8,271)
Blocked bank deposit accounts
(7,078)
(11,430)
0
0
Prepayments and other receivables
58,315
49,570
(5,658)
(10,748)
Increase/(Decrease) in:
0
Suppliers
84,604
(138,768)
18,842
2,466
Accruals and other liabilities
(144,279)
(86,203)
(37)
(6,637)
Income tax (Payments)/Receipts
(125,861)
(31,379)
(1,104)
(2,274)
Net cash flows from operating activities
235,149
244,012
896
(22,605)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
220
GROUP
COMPANY
Note
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Cash flows from investing activities
Proceeds from disposals of fixed assets
2,966
2,621
20
154
Payments for purchases of fixed assets
(164,697)
(255,134)
(3,821)
(1,990)
Payments for purchases of investment property
0
(27,474)
0
0
Proceeds from grants
16,20,28
1,462
100,000
0
0
Refunds of grants
30
(2,868)
(1,258)
0
0
Interest and related income received
15,936
3,572
13,142
12,038
Proceeds from loss of control of subsidiaries
20
0
0
81,500
200
Payments for acquisition of subsidiaries
12,16
(38,096)
(2,368)
(27,827)
(735)
Cash and cash equivalent of the companies acquired or whose consolidation was discontinued
0
90,293
0
0
Proceeds from sale or decrease in participating interest in associates and joint ventures (JVs)
14
30,448
0
12,316
0
Payments for acquisition or increase in participating interest in associates and joint ventures (JVs)
14
(35,604)
(99,668)
(10,993)
(14,648)
Payments for acquisition of shares, bonds and other securities
(4,214)
(20,914)
0
(7,325)
Receipts of Dividends
41
1,252
1,710
55,191
46,245
Proceeds from issued loans
1,815
5,046
83,112
322,249
Issued loans
(2,751)
(62,250)
(1,475)
(229,140)
Proceeds from lease receivables
10,102
1,626
0
0
Payments for acquisition of assets for issued leases
0
(27,292)
0
0
Net cash flows for investing activities
(184,249)
(291,490)
201,165
127,048
Cash flows from financing activities
Receipts from changes in subsidiaries without loss of control
12
0
0
3,484
33,545
Payments from changes in subsidiaries without loss of control
12
0
0
(110,119)
(93,187)
Payments for share capital refund
32
(18,930)
(12,411)
(20,685)
(12,411)
Payments for share capital refund of subsidiaries to non-controlling interests
0
(193)
0
0
Proceeds from sale or issue of treasury shares
0
680
1,416
680
Payments to acquire treasury shares
33
(30,441)
(10,512)
(25,902)
(4,928)
Payments to acquire treasury shares of subsidiaries
0
(6,609)
0
0
Proceeds from exercise of options
0
1,056
0
1,056
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
221
GROUP
COMPANY
Note
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Proceeds for short term loans
24
37,760
125,522
0
0
Payments for short term loans
24
(74,416)
(90,251)
0
0
Proceeds for long term loans
24
286,028
485,590
30,000
33,000
Payments for long term loans
24
(222,201)
(168,892)
(30,481)
(33,416)
Payments for leases
(13,811)
(8,097)
(312)
(270)
Dividends paid to non controlling interest
(37,575)
(26,799)
0
0
Interest and other financial expenses paid
(154,932)
(95,119)
(26,677)
(27,078)
Receipts from hedging derivatives
1,848
0
0
0
Payments for hedging derivatives
(5,755)
(20,932)
0
0
Net cash flows from financing activities
(232,425)
173,033
(179,276)
(103,009)
Net increase /(decrease) of cash and cash equivalents
(181,525)
125,555
22,785
1,434
Effect of foreign exchange rate differences in cash
471
1,797
0
0
Cash and cash equivalents at the beginning of the period
6,23
1,491,703
1,364,351
559,123
557,689
Cash and cash equivalents at the end of the period
6,23
1,310,649
1,491,703
581,908
559,123
The accompanying notes form an integral part of these Separate and Consolidated Financial Statements.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
222
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY 2023
COMPANY
Note
Share capital
Share premium
Reserves
Retained earnings
Total
1st January 2023
58,951
190,363
61,321
146,745
457,380
Total comprehensive income
0
0
8,523
25,734
34,257
Issue of Share Capital
32
20,685
(20,685)
0
(124)
(124)
Refund of Share Capital
32
(20,685)
0
1,416
0
(19,268)
Acquisition of treasury shares
33
0
0
(25,902)
0
(25,902)
Stock options
33
0
0
1,731
0
1,731
31st December 2023
58,951
169,678
47,089
172,355
448,073
COMPANY
Note
Share capital
Share premium
Reserves
Retained earnings
Total
1st January 2022
58,951
202,774
64,010
36,690
362,425
Total comprehensive income
0
0
(1,406)
110,116
108,710
Issue of Share Capital
12,411
(12,411)
0
0
0
Refund of Share Capital
(12,411)
0
680
(61)
(11,792)
Acquisition of treasury shares
0
0
(4,928)
0
(4,928)
Disposal of treasury shares
0
0
3,023
0
3,023
Stock options
0
0
(57)
0
(57)
31st December 2022
58,951
190,363
61,321
146,745
457,380
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
223
GROUP
Note
Share capital
Share premium
Reserves
Retained earnings
Sub-Total
Non- Controlling Interest
Total
1st January 2023
58,951
368,872
707,855
(280,361)
855,317
335,381
1,190,698
Total comprehensive income
0
0
(9,904)
147,813
137,909
32,614
170,523
Issue of Share Capital
32
20,685
(20,685)
0
(126)
(126)
0
(126)
Refund of Share Capital
32
(20,685)
0
1,879
0
(18,806)
0
(18,806)
Share capital increase of subsidiaries
0
0
0
0
0
12
12
Distribution of dividends and reserves to non- controlling interests
0
0
0
0
0
(37,571)
(37,571)
Acquisition of treasury shares
33
0
0
(30,441)
0
(30,441)
0
(30,441)
Stock options
33
0
0
(14,346)
16,298
1,952
381
2,333
Change in interest of consolidated subsidiary
0
0
0
(3,695)
(3,695)
3,695
0
Formation of reserves
33
0
0
19,912
(19,912)
0
0
0
Transfers/Other
0
0
(17)
17
0
0
0
31st December 2023
58,951
348,187
674,938
(139,966)
942,110
334,512
1,276,622
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
224
GROUP
Note
Share capital
Share premium
Reserves
Retained earnings
Sub-Total
Non- Controlling Interest
Total
1st January 2022
58,951
381,283
553,946
(393,842)
600,338
270,921
871,259
Total comprehensive income
0
0
136,954
136,523
273,477
50,579
324,056
Issue of Share Capital
12,411
(12,411)
0
0
0
0
0
Refund of Share Capital
(12,411)
0
826
0
(11,585)
0
(11,585)
Share capital increase of subsidiaries
0
0
0
0
0
100
100
Distribution of dividends and reserves to non- controlling interests
0
0
0
0
0
(26,799)
(26,799)
Acquisition of treasury shares
0
0
(10,512)
0
(10,512)
0
(10,512)
Disposal of treasury shares
0
0
3,023
0
3,023
0
3,023
Stock options
0
0
18,261
0
18,261
30,502
48,763
Change in interest of consolidated subsidiary
0
0
(3,565)
(14,120)
(17,685)
10,281
(7,404)
Termination in consolidation of joint entity
0
0
0
0
0
(203)
(203)
Formation of reserves
0
0
24,235
(24,235)
0
0
0
Transfers/Other
0
0
(15,313)
15,313
0
0
0
31st December 2022
58,951
368,872
707,855
(280,361)
855,317
335,381
1,190,698
The accompanying notes form an integral part of these Separate and Consolidated Financial Statements.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
225
NOTES ON THE FINANCIAL STATEMENTS
1 GENERAL INFORMATION ABOUT THE GROUP AND THE COMPANY
« GEK TERNA S.A. » (the “Company” or « GEK TERNA ») as the company GEK TERNA S.A. , was renamed according to the decision of the Extraordinary General Shareholders’ Meeting on 13.02.2024 and approved by the No. 3230817/01.03.2024 decision of the Ministry of Development and ΑΔΑ: ΨΘΤ346ΝΛΣΞ-ΧΦΡ, is registered in the General Commercial Registry of the Ministry of Development under Reg. No. 253001000 and in the Société Anonyme Registry of the Ministry of Development with Registration number 6044/06/Β/86/142. With the decision of the Extraordinary General Meeting of shareholders from 20.10.2022, the duration of the Company was changed to an indefinite period.
The company is based in the municipality of Athens and its head offices are located in 85, Mesogeion Avenue, Postal Code 11526 Athens (tel: 210‐6968200), following the decision of its Board of Directors on the 14th of March 2003.
The company was founded in 1960 under the title ERMIS HOTELS AND ENTERPRISES S.A. In the middle of the 1960s it was renamed to ERMIS REAL ESTATE CONSTRUCTIONS ENTERPRISES S.A. with its main activity being building constructions (ERMIS mansion, apartment buildings and maisonettes in various areas across the country). In 1969, the company listed its shares in the Athens Stock Exchange (28.08.1969). Following the Extraordinary General Shareholders’ Meeting on the 4th of August 1999 the company’s ownership status is altered. On 16.10.2000, the decision No. Κ2‐ 10469/16.10.2000 of the Ministry of Development is registered in the Société Anonyme Registry. This decision approved the amendment, by changing the numbering and the provisions of the Articles, and the codification of the company’s Articles of Association in accordance with the decision of the Extraordinary General Shareholders’ Meeting on 17.07.2000. On the same date, the completely new text of the Articles of Association, with the amendments, is registered in the Société Anonyme registry. On 10.02.2004 the Board of Directors decided that the company should merge with the company “General Construction Company S.A.” by absorbing it. The Extraordinary General Shareholders’ Meetings of both the acquiring and the absorbed company, that took place on 15.10.2004, approved the Merger Contract Plan. The merger was completed on 03.12.2004 with decision Κ2‐13956 of the Ministry of Development that was published in the Government Gazette under No. 14334/03.12.2004. At the same time, the change of the company’s title and the amendment to its corporate objective were approved.
On 23.12.2008 the merger through absorption of part of the other activities of the company TERNA SOCIETE ANONYME TOURISM TECHNICAL AND SHIPPING COMPANY, was approved by means of the decision by the Ministry of Development under Reg. No. Κ2-15458/23.12.2008.
The Company’s share capital amounts to Euro fifty eight million, nine hundred fifty one thousand, two hundred seventy five and eighty seven cents (58,951,275.87 euros ), and is divided to one hundred and three million, four hundred twenty three thousand and two hundred and ninety one (103,423,291) common registered shares with a nominal value of Euro fifty seven cents (0.57 euros ) each.
The main activity of the Company is the management of self-financed or co-financed projects, the construction of any kind of projects, its participation in companies having similar activities, as well as
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
226
the development and management of investment property.
The Group has a significant and specialized presence in construction, the construction and operation of energy projects, the management of self-financed or co-financed projects, the production and trading of energy as well as in the development, management and exploitation of investment property having a strong capital base.
The activities of the Group mainly take place in Greece , while at the same time it has significant presence in the Balkans, the Middle East, the Eastern Europe, and the North America. The Group's operations focus on the following operating segments:
• Constructions : almost exclusively, technical construction contracts.
• Electric energy from RES : production of electric energy arising from wind parks, solar and hydropower and biomass.
• Thermal energy trading in electric energy and natural gas : production of electric energy through fuels and natural gas and trading in electric energy and natural gas.
• Industry : refers to the production of quarry products and the exploitation of magnesite quarries.
• Real Estate : acquisition, development, and exploitation of real estate as well as investments for the purposes of acquisition of surplus value from the increase in the real estate items prices.
• Concessions : construction and operation of infrastructure (e.g. motorways, airports), other public interest projects (Unified Automatic Collection System and municipal waste treatment plant) and other facilities (e.g. parking stations, etc.) in exchange for provision of long-term exploitation services to the public.
• Holdings : supporting the Group's operating segments and trial operation of new operating segments.
At the end of the closing year, the total number of the Group's personnel worldwide was 5,053 and of the Company’s 716. Respectively, at the end of the previous year, Group’s personnel worldwide was 4,337 and the Company's 736.
The consolidated companies included in the consolidated Financial Statements and their unaudited FYs are analytically recorded in Note 5 to the Financial Statements.
The attached separate and consolidated Financial Statements as of 31st December 2023 were approved by the Board of Directors on 29th April 2024 and are subject to the final approval of the General Meeting of Shareholders. The Financial Statements in question are available to the investing public at the Company’s premises (Greece, Athens, 85 Mesogeion Ave.) and the Company's website on the Internet.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
227
2 BASIS FOR THE PRESENTATION OF THE FINANCIAL STATEMENTS
2.1 Basis for the Presentation of financial statements
The Company’s separate and consolidated Financial Statements as of 31 st December 2023 covering the annual period starting on January 1st until December 31st 2023 have been prepared according to the International Financial Reporting Standards (IFRS), published by the International Accounting Standards Board (IASB) and according to their interpretations, published by the International Financial Reporting Interpretations Committee (IFRIC) and adopted by the European Union until 31st December 2023.
The Group applies all the International Accounting Standards, International Financial Reporting Standards, and their Interpretations, which apply to the Group’s activities. The relevant accounting policies, a summary of which is presented below in Note 4, have been applied consistently in all the periods presented.
2.2 Going concern
The Group’s management estimates that the Company and its subsidiaries hold sufficient resources, which ensure their operation as “Going Concern” in the foreseeable future.
The decision of the Management to use the going concern principle is based on the estimates related to potential effects of the war conflict that is raging both in the wider region of Ukraine and in the Middle East.
The Management has estimated that there is no material uncertainty regarding the continuation of the activity of the Group and the Company, thus implementing the framework for preparing the financial statements for the financial year ended on 31.12.2023.
2.3 Basis of measurement
The accompanying separate and consolidated Financial Statements as of December 31st, 2023, have been prepared according to the principle of historical cost, apart from the cases of investment property, investments in equity securities, derivative financial instruments, financial assets recorded at fair value through profit or loss, and contingent consideration liabilities, which are measured at fair value.
2.4 Presentation currency
The presentation currency is Euro (the currency of the Group’s parent domicile) and all the amounts are presented in thousand Euro unless otherwise mentioned.
2.5 Comparability
The comparative items of the Financial Statements for the year ended 31.12.2023 have not been revised.
2.6 Use of estimates
The preparation of the Financial Statements according to IFRS requires the use of estimates and
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
228
judgments on the application of the Company’s accounting policies. Judgments, assumptions and estimates of the Management affect the amount of valuation of several asset and liability items, the amount recognized during the year regarding specific income and expenses as well as the presented estimates of contingent liabilities.
Assumptions and estimates are assessed on an on-going basis according to historic experience and other factors, including expectations of future event outcomes, considered reasonable given the current conditions. The estimates and assumptions relate to the future and, consequently, the actual results may differ from the accounting calculations.
The areas that require the highest degree of judgment as well as the areas in which estimates and assumptions have a significant effect on the Consolidated Financial Statements are presented in Note 3 of the Financial Statements.
2.7 New Standards, Interpretations and Amendments to Standards
The accounting principles applied for the preparation of the Financial Statements are the same as those applied for the preparation of the annual Financial Statements of the Group and the Company for FY ended as of 31 December 2022, apart from the adoption of several new accounting standards, whose application was mandatory in the European Union for FYs beginning as at January 1st, 2023(see Notes 2.7.1 and 2.7.2).
2.7.1 New Standards, Interpretations, Revisions and Amendments to existing Standards that are effective and have been adopted by the European Union
The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01.01. 2023.
Amendments to IAS 1 “Presentation of Financial Statements” (effective for annual periods starting on or after 01.01.2023)
In February 2021, the IASB issued narrow-scope amendments that pertain to accounting policy disclosures. The objective of these amendments is to improve accounting policy disclosures so that they provide more useful information to investors and other primary users of financial statements. More specifically, companies are required to disclose their material accounting policy information rather than their significant accounting policies. The amendments affect the consolidated and separate Financial Statements. The above have been adopted by the European Union with effective date of 01.01.2023.
Amendments to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates” (effective for annual periods starting on or after 01.01.2023)
In February 2021, the IASB issued narrow-scope amendments that clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. That distinction is important because changes in accounting estimates are applied prospectively only to future transactions and other future events, but changes in accounting policies are generally also applied retrospectively to past transactions and other past events. The amendments have no impact on the
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
229
consolidated and separate Financial Statements. The above have been adopted by the European Union, with effective date of 01.01.2023.
Amendments to IAS 12 “Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction” (effective for annual periods starting on or after 01.01.2023)
In May 2021, the IASB issued targeted amendments to IAS 12 to specify how companies should account for deferred tax on transactions such as leases and decommissioning obligations – transactions for which companies recognise both an asset and a liability. In specified circumstances, companies are exempt from recognising deferred tax when they recognise assets or liabilities for the first time. The amendments clarify that the exemption does not apply and that companies are required to recognise deferred tax on such transactions. The amendments do not affect the consolidated and separate Financial Statements. The above have been adopted by the European Union with effective date of 01.01.2023.
Amendments in IAS 12 "Income Taxes" - International Tax Reform - Pillar II Model Rules (effective immediately and for annual periods beginning on or after 01.01.2023)
In May 2023, the International Accounting Standards Board (IASB) issued amendments to IAS 12 “Income Taxes”: International Tax Reform - Pillar Two Model Rules. The amendments introduced a) a temporary exception to the requirements to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes and b) targeted disclosure requirements for affected entities. Companies may apply the temporary exception immediately, but disclosure requirements are required for annual periods commencing on or after 1 January 2023. Given the above exception, the amendments have no impact on the consolidated and company financial statements. The tax legislation for the application of the rules of the Pillar II Model is expected to enter into force in Greece in 2024. The Group is in the process of assessing the impact that may arise from the adoption of the Rules. The above have been adopted by the European Union with effective date of 01.01.2023.
Amendments to IFRS 16 “Leases: Lease Liability in a Sale and Leaseback” (effective for annual periods beginning on or after 01.01.2024)
In September 2022, the IASB issued narrow-scope amendments to IFRS 16 “Leases” which add to requirements explaining how a company accounts for a sale and leaseback after the date of the transaction. A sale and leaseback is a transaction for which a company sells an asset and leases that same asset back for a period of time from the new owner. IFRS 16 includes requirements on how to account for a sale and leaseback at the date the transaction takes place. However, IFRS 16 had not specified how to measure the transaction when reporting after that date. The issued amendments add to the sale and leaseback requirements in IFRS 16, thereby supporting the consistent application of the Accounting Standard. These amendments will not change the accounting for leases other than those arising in a sale and leaseback transaction. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01.01.2024.
Amendments in IAS 1 'Classification of Liabilities as Current or Long-Term' (effective for annual periods beginning on or after 01.01.2024)
In January 2020, the IASB issued amendments to IAS 1 that affect requirements for the presentation of liabilities. Specifically, they clarify one of the criteria for classifying a liability as non-current, the
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
230
requirement for an entity to have the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments include: (a) specifying that an entity’s right to defer settlement must exist at the end of the reporting period, (b) clarifying that classification is unaffected by management’s intentions or expectations about whether the entity will exercise its right to defer settlement, (c) clarifying how lending conditions affect classification and (d) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments. Furthermore, in July 2020, the IASB issued an amendment to defer by one year the effective date of the initially issued amendment to IAS 1, in response to the Covid-19 pandemic. However, in October 2022, the IASB issued an additional amendment that aim to improve the information companies provide about long-term debt with covenants. IAS 1 requires a company to classify debt as non-current only if the company can avoid settling the debt in the 12 months after the reporting date. However, a company’s ability to do so is often subject to complying with covenants. The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non- current at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with early adoption permitted. The Group will examine the impact of the above on its Financial Statements. The above have been adopted by the European Union with effective date of 01.01.2024.
2.7.2 New Standards, Interpretations, Revisions and Amendments to existing Standards that have not been applied yet or have not been adopted by the European Union until 31.12.2023
The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), but their application has not started yet or they have not been adopted by the European Union.
Amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments: Disclosures”: Supplier Finance Arrangements (effective for annual periods beginning on or after 01.01.2024)
In May 2023, the International Accounting Standards Board (IASB) issued Supplier Finance Arrangements, which amended IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures. The IASB issued Supplier Finance Arrangements to require an entity to provide additional disclosures about its supplier finance arrangements. The amendments require additional disclosures that complement the existing disclosures in these two standards. They require entities to provide users of financial statements with information that enable them a) to assess how supplier finance arrangements affect an entity’s liabilities and cash flows and b) to understand the effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it. The amendments to IAS 7 and IFRS 7 are effective for accounting periods on or after 1 January 2024. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
Amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (effective for annual periods starting on or after 01.01.2025)
In August 2023, the International Accounting Standards Board (IASB) issued amendments to IAS 21 “The Effects of Changes in Foreign Exchange Rates” that require entities to provide more useful
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
231
information in their financial statements when a currency cannot be exchanged into another currency. The amendments introduce a definition of currency exchangeability and the process by which an entity should assess this exchangeability. In addition, the amendments provide guidance on how an entity should estimate a spot exchange rate in cases where a currency is not exchangeable and require additional disclosures in cases where an entity has estimated a spot exchange rate due to a lack of exchangeability. The amendments to IAS 21 are effective for accounting periods on or after 1 January 2025. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
3 SIGNIFICANT ACCOUNTING ESTIMATES AND MANAGEMENT ASSESSMENTS
Preparation of Financial Statements in accordance with the International Financial Reporting Standards (IFRS) requires the Management to make judgments, estimates and assumptions which affect assets and liabilities, contingent receivables, and liabilities disclosures as well as revenue and expenses during the presented periods.
In particular, the amounts included in or affecting the financial statements, as well as the related disclosures, are estimated through making assumptions about values or conditions that cannot be known with certainty at the time of preparation of the financial statements and, therefore, actual results may differ from what has been estimated. An accounting estimate is considered significant when it is material to the financial position and income statement of the Group and requires the most difficult, subjective, or complex judgments of the Management. Estimates and judgments of the Management are based on past experience and other factors, including expectations for future events, judged to be reasonable in the circumstances. Estimates and judgments are continually reassessed on the basis of all the available data and information.
Key estimates and evaluations referring to the data whose development could affect the financial statements items in the upcoming 12 months are as follows:
3.1 Significant judgments of the Management
The significant accounting estimates and assumptions concerning future and other key sources of uncertainty at the date of the financial statements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
i) Acquisition of “business” according to the definition provided in IFRS 3 or acquisition of assets
In accordance with IFRS 3 "Business Combinations", the Group determines whether a transaction or other event constitutes a business combination in accordance with the relevant definition of the Standard, i.e. whether the assets acquired, and liabilities assumed constitute a "business". In the event the acquired assets do not constitute a business, then the Group manages the transaction or other event as an acquisition of an asset. According to IFRS 3, the term "business" is defined as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs, or other economic benefits directly to investors or other owners, members, or participants. The accounting treatment of a business combination is carried out
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in accordance with the accounting policy described in Note 4.2 , while the accounting treatment of acquisition of an asset (or group of assets) which do not constitute a "business" is carried out in accordance with the accounting policy described in Note 4.3.
ii) Recognition of revenue from construction contracts
Managing revenue and expenses from a construction contract, depends on whether the final result of the contract implementation can be reliably estimated (and is expected to bring profit to the constructor or the result of the implementation are expected to be loss-bearing). When the outcome of a construction contract can be reliably estimated, then revenue and expense of the contract are recognized over the term of the contract, respectively, as revenue and expense.
The Group uses the completion stage to determine the appropriate amount of revenue and expense which it will recognize in a specific period. In particular, based on the input method under IFRS 15, the construction cost at every reporting date is compared to the total budgeted cost in order to determine the percentage of completion. The completion stage is measured on the basis of the contractual costs incurred until the reporting date in relation to the total estimated cost of every construction project. The Group, therefore, makes significant estimates regarding the gross result with which every construction contract will be implemented (total budgeted cost of the construction contract implementation).
iii) Energy sector revenue recognition (non-invoiced revenue)
The Group estimates the consumption of electricity and natural gas, which has not yet been invoiced for retail customers. In particular, the Group measures and records specific revenues from sales for which final clearances have not been received from ADMIE and the Natural Gas Distribution Administrators. Such revenues are calculated using historical data and forecasts for the consumption of electricity and natural gas for each energy consumption meter.
iv) Consolidation of subsidiaries in which the Group holds a non-majority percentage of voting rights (de facto control)
The Group assesses in each reporting period the existence of control over subsidiaries in which it holds a participation percentage of voting rights of less than 50%, based on the conditions specified in IFRS 10. Specifically, the Group, based on its existing rights, assesses whether it has the possibility to direct any business activities that significantly affect the return of the subject companies, i.e. the relevant activities, assessing in addition any cases where the Group maintains significant participation / investment, has the right to receive variable returns from its participation in the subject companies and has the ability to influence the level of their returns.
3.2 Uncertainty of estimates and assumptions
Specific amounts that are either included or affect the Financial Statements and the related disclosures are estimated, necessitating to make assumptions about values or conditions that cannot be known with certainty during the period of the Financial Statements preparation. An accounting estimate is considered significant when it is material to the financial position and the income statement of the Group and requires most difficult, subjective or complex judgments of the Management. The Group assesses such estimates on an ongoing basis, based on historical results and experience, through
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meetings with specialists, applying trends and other methods considered reasonable in the circumstances, as well as making projections regarding potential changes in the future.
i) Recognition of deferred tax assets
The extent, to which deferred tax assets are recognized for unused tax losses, is based on the judgment regarding the extent, to which it is probable that sufficient taxable profits will be offset with these tax losses.
In order to determine the amount of a deferred tax asset that can be recognized, significant judgments and estimates of the Group’s Management are required, based on future taxable profits, combined with future tax strategies to be pursued, as well as the uncertainties dominating in various tax frameworks, within which the Group operates (for further information please refer to Note 34).
ii) Impairment of non-financial assets and goodwill
Non-financial assets are tested for impairment whenever events or changes in the effective conditions indicate that their book value may not be recoverable in accordance with the accounting policy described in Note 4.8. Goodwill, intangible assets with indefinite economic lives and intangible assets with finite economic lives for which amortization has not yet begun are tested for impairment at least annually.
iii) Useful lives of depreciated assets
For the purpose of calculating depreciation, the Group examines the useful life and residual value of tangible and intangible assets in every reporting period in the light of technological, institutional and economic developments as well as the experience of their exploitation. It is noted that during the financial year, the sub-group TERNA ENERGY decided to extend the useful life of the Wind Farms from 25 to 30 years, based on new estimates that emerged during the evaluation of the conditions that have developed in the operation and in general in the technological development of the wind turbines. This change was based on a careful analysis of the sub-group's data, as well as studies and industry practices, according to which the economic life of individual wind turbines or wind power plants as a whole can be safely redefined to 30 years without significant changes in their operation and maintenance strategy. The Management of the sub-Group considers that the extension of the useful life carried out during the financial year will protect the fair presentation of the financial statements by adjusting the depreciation period closer to reality. This change in accounting estimate resulted in a decrease in depreciation expense for the year by the amount of 2,510 compared to the depreciation that would have been incurred had the extension of useful life had not taken place. This effect will decrease in the following years, as the sub-group's older parks approach their originally defined twenty-five-year life, while from the moment of the end of their initially defined useful life and for the additional five years of its extension, the above positive effect will turn into a negative one. As at 31.12. 2023 the Management estimated that the economic life of the other depreciable assets represent their expected useful value.
iv) Fair value measurement of investment property
In order to measure the value of its investment property, in cases when active market prices are available, the Group determines the fair value based on the valuation reports prepared by independent valuers. If no objective data is available, in particular, due to economic conditions, the Management
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measures such values based on its past experience, taking into account the available data (further information is presented in Note 11).
v) Fair value measurement
The Management uses valuation techniques to determine the fair value of financial instruments (when no active market prices are available) and non-financial assets. This procedure involves making estimates and assumptions about the consideration that market participants would pay to acquire these financial instruments.
The Management bases its assumptions on observable data, but it is not always feasible. In such cases, the Management uses the best available information for its estimates, based on its past experience, also taking into account the available information. Estimated fair values may differ from the actual values that would be made in the context of an ordinary transaction at the reporting date of the financial statements (further information is provided in Note 47).
The Group uses derivative financial instruments to manage a range of risks including interest rate and commodity prices risks. For the purpose of determining an effective hedging rate, the Group requires both - to declare its hedging strategy and to estimate that the hedge will be effective throughout the term of the hedging instrument (derivative). Further information regarding the use of derivatives is provided in Note 31.
vi) Inventory
To facilitate valuation of inventories, the Group estimates, based on statistical valuation reports and market conditions, the expected selling prices and the costs of processing and disposing the items per inventory category.
vii) Estimates when calculating value in use of Cash Generating Units (CGU)
The Group conducts a related impairment test of investments in subsidiaries and associates whenever there is evidence of impairment in accordance with the provisions of IAS 36. If it is established that there are reasons for impairment, it is necessary to calculate value in use and fair value less costs to sell regarding every CGU. Recoverable amounts of CGUs are determined for impairment tests purposes, based on the value in use calculation, which requires making estimates. For the purpose of calculating value in use, estimated cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money as well as the risks associated with particular CGU (further information is provided in Note 12).
viii) Provision for income tax
Provision for income tax based on IAS 12 is calculated by estimating the taxes to be paid to tax authorities and includes the current income tax for every financial year and a provision for additional taxes that might arise during tax inspections.
The Group’s companies are subject to various income taxation legislations. Significant estimates are required in order to determine the total provision for income tax, as presented in the Statement of Financial Position.
The final tax determination is uncertain in respect of specific transactions and calculations. The Group recognizes liabilities for the projected tax issues based on the calculations as to the extent to which
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additional taxation will arise. In cases where the final tax result differs from the initially recognized amount, the differences affect the provisions for income tax and deferred tax for the period when it had been determined (for further information please refer to Note 34).
ix) Provisions for rehabilitation of environment
The Group makes provision for its related obligations to dismantle the technical equipment of wind farms and other productive facilities and restoration of the environment resulting from the applicable environmental legislation or from binding practices of the Group. Provision for rehabilitation of environment reflects the present value, as at the reporting date (based on the appropriate discount rate) of the rehabilitation obligation less the estimated recoverable amount of the materials, estimated to be disposed of and sold (further information is provided in Notes 4.15 and 27).
x) Provision for rehabilitation or maintenance obligation under the Motorways Concession Agreement
The concession agreement with the Greek State includes the contractual obligation of the concessionaire to maintain the infrastructure at a defined level of service provision or to restore the infrastructure to a specific condition before delivering it to the grantor at the end of the concession period. Calculating the amount to be considered as a provision for rehabilitation or maintenance obligation is a complex procedure, relying on judgments that have to do with the cost and timing of such projects implementation as well as the actual costs that may differ from the projected costs (further information is presented in Note 27).
xi) Contingent liabilities and receivables
The existence of contingent liabilities and receivables requires the management to make assumptions and judgments on on-going basis about the probability that future events will occur or not occur as well as the possible consequences that these events may have on the Company’s operations. Determining contingent liabilities and receivables is a complex procedure that includes judgments regarding future events, laws, regulations, etc. Changes in judgements or interpretations are likely to lead to an increase or decrease in the Company's contingent liabilities in the future. When additional information becomes available, the Group's Management reviews the facts, based on which it may also have to review its estimates (see Note 49).
xii) Provisions for expected credit losses from receivables from clients
The Group and the Company apply the simplified approach under the provisions of IFRS 9 for calculation of expected credit losses. Under the aforementioned approach, provision for impairment is measured at an amount equal to the expected lifetime loss for the receivables from customers and the contractual assets. The Group and the Company have made provisions for bad receivables in order to adequately cover the loss that can be reliably estimated and arises from these receivables. In every reporting period, the provision that has been made is adjusted and the changes are recognized in the income statement (further information is presented in Notes 16, 18, 19 and 20).
xiii) Acquisition of a company or business
At initial recognition, the assets as well as the liabilities of the acquired company are included in the consolidated financial statements at their fair values. In measuring fair values, Management uses estimates of future cash flows, however the actual results may differ. Any change in the measurement
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after initial recognition affects the measurement of goodwill (further information in Note 7).
xiv) Valuation of cash flow hedging agreements
The Group uses financial derivatives and specifically it enters into interest rate swaps to hedge its risk linked to fluctuations of interest rates and into contracts to hedge the risks associated with volatile energy sale prices. The swap agreements are valued according to market estimations regarding the trend of relevant interest rates for periods up to thirty years and with regard to the course of energy prices accordingly in each case. Based on these estimates, the cash flows are discounted in order to determine the liability or asset at the reporting date of the financial statements (further information in Note 31).
xv) Support of operation and recognition of financial instruments receivables
The subsidiary CENTRAL GREECE MOTORWAY S.A. regarded the contractual obligation of the Greek state to support operation as a hybrid financial instrument that includes an embedded derivative and a non-derivative host contract. Subsequently, the Group's subsidiary in question unbundled the embedded derivative from the host contract and, in accordance with IAS 39 (under the initial application) and IFRS 9, recognized a derivative financial item (receivables), i.e. the component of operating support that covers future payments of interest rate derivatives. Calculation of fair value of the receivable includes estimates of the credit risk of the counterparty (Greek State), an estimate of future outflows and the existence of a contingent time difference between the payments of the derivatives and the collection of operating support. The above estimates are re-evaluated on every reporting date. Further information is provided in Notes 4.10 and 31.
4 SUMMARY OF KEY ACCOUNTING PRINCIPLES
A. Significant Accounting Principles
The principal accounting policies adopted in the preparation of the accompanying Company and Consolidated Financial Statements are as follows:
4.1 Basis for consolidation
The accompanying consolidated financial statements include the financial statements of GEK TERNA and its subsidiaries as at 31.12.2023. The date of preparation of the financial statements of the subsidiaries coincides with that of the parent.
Intra-group transactions and balances have been eliminated in the accompanying consolidated financial statements. Where required, the accounting policies of subsidiaries have been amended to ensure consistency with the accounting policies adopted by the Group. Note 5 provides a complete list of consolidated subsidiaries in line with the participating interest, held by the Group.
Subsidiaries are consolidated from the date the Group acquires control over them and they cease to be consolidated at the date of termination of this control.
Non-controlling interests constitute the component of equity of a subsidiary not directly or indirectly attributable to the parent. Losses relating to non-controlling interests (minority interests) of a
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subsidiary may exceed the rights of non-controlling interests in the subsidiary's equity.
Gains or losses and every component of other comprehensive income are accounted for both by the owners of the parent and the non-controlling interests, even if, as a result, such non-controlling interests present deficit.
(a) Subsidiaries
Subsidiaries are all the companies, which the Parent has the power to control directly or indirectly through other subsidiaries and they are fully consolidated (full consolidation). The Company has and exercises control through its ownership of the majority of the subsidiaries’ voting rights. In order to define the control, the following conditions are examined, as recorded in IFRS 10:
i) The parent company has authority over the investee, since it can direct the related (operational and financial) activities. This is achieved through appointing the majority of the members of the Board of Directors and the directors of the subsidiary by the Management of the parent.
ii) The parent company holds rights with variable returns from its investment in the subsidiary. Other non-controlled investments are greatly dispersed and, therefore, cannot materially influence decision-making.
iii) The parent company may exercise its authority over the subsidiary to influence the amount of its returns. This is the result of decision-making on subsidiary’s related matters through controlling the decision-making bodies (Board of Directors and Directors).
Changes in ownership interest in a subsidiary
In case of changes in a parent’s ownership interest in a subsidiary, it is examined whether the changes result in a loss of control or not.
• Changes in a parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (i.e. transactions with owners in their capacity as owners). In such circumstances, the carrying amounts of the controlling and non-controlling interests shall be adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received shall be recognized directly in equity.
• In case the parents’ ownership interest changes in such a way that there is loss of control, then the parent shall record the necessary accounting entries and recognize the result from the sale (derecognition of the assets, goodwill and liabilities of the subsidiary as of the date of loss of control, derecognition of the book value of non-controlling interests, determination of the result from the sale).
• When determining the sale result, any amount previously recognized in other comprehensive income in respect of that company is accounted for using the same method as would be applied by the Group in the event of direct sale of its assets or liabilities. That is to say, the amounts previously recognized in other comprehensive income are reclassified to the income statement.
• Following loss of control of a subsidiary, any investment in the former subsidiary is recognized
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according to the provisions of IFRS 9.
Investments in subsidiaries in the separate financial statements
Investments of the parent in its consolidated subsidiaries are measured at acquisition cost less any accumulated impairment losses. Impairment test is carried out in accordance with the provisions of IAS 36 .
( b) Joint arrangements
The Group applies IFRS 11 to all its joint arrangements. Under IFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the contractual rights and obligations of each investor.
Jointly controlled entities are consolidated using the proportionate consolidation method (if it is a joint operation) in the Company or the equity method (if it is a joint venture) in the Group.
Joint operations: Joint operations are accounted for using the proportional consolidation method. In particular, the Group recognizes in the consolidated financial statements: (i) its assets (including its share in any of its assets it holds jointly), (ii) its liabilities (including its share of any jointly held liabilities), (iii) its share in the proceeds of the sale from disposal of joint venture, and (iv) its expenses (including its share in any jointly incurred expenses). Essentially, these are tax joint operations, which do not constitute a separate entity within the framework of the IFRS. Their assets and liabilities are incorporated according to the effective proportions in the financial statements of the Company.
Joint ventures: Joint ventures are accounted for using the equity method, under which participating interests in joint ventures are initially recognized at cost and subsequently readjusted in compliance with the Group's share of the profits (or losses) and other comprehensive income of the joint ventures. Under the joint venture model, joint venture schemes are the ones in which members have rights over the net assets of the investments and are liable up to the extent of their contribution to the capital of the company. If the Group's participating interest in joint venture losses exceeds the value of the participating interest, the Group discontinues recognizing further losses unless it has undertaken liabilities or has made payments on behalf of the joint venture. Allocation of operating results and other comprehensive results is proportional to the participating interest.
Unrealized gains on transactions between the Group and joint ventures are eliminated according to the Group's participating interest in joint ventures. Unrealized losses are also eliminated unless there is evidence of the transaction for impairment of the transferred asset.
Consolidation takes into account the percentage held by the Group, effective as at consolidation date. The structure of the business scheme is the key and determining factor in defining accounting treatment.
The accounting policies of jointly controlled entities are consistent with those adopted and applied by the Group. The date of preparation of the financial statements of jointly controlled entities coincides with that of the parent Company.
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Investments in jointly controlled operations in the separate financial statements
Investments of the parent in joint operations are included in the separate financial statements in proportion. In particular, assets and liabilities are proportionally incorporated in the Company's financial statements.
Investments in joint ventures in the separate financial statements
Investments of the parent in joint ventures are measured at acquisition cost less any accumulated impairment losses. Impairment test is carried out in accordance with the provisions of IAS 36.
(c) Associates
Associates are entities over which the Group exercises significant influence, but does not exercise control. The Group's investments in associates are accounted for using the equity method. The assumptions used by the Group suggest that holding participating interest of between 20% and 50% of a company's voting rights implies a significant influence over the investee unless it can be clearly demonstrated that this is not the case. Investments in associates are initially recognized at acquisition cost and then consolidated using the equity method. According to this method, investments in associates are recognized at acquisition cost less any changes in the Group's participating interest in Equity after the initial acquisition date, less any provisions for impairment of those participating interests’ value.
Consolidated statement of comprehensive income includes the proportion of the Group in the total income of associates. If the Group's participating interest in an Associate's loss exceeds the value of the participating interest, the Group discontinues recognizing further losses unless it has settled liabilities or made payments on the part of the affiliate and, in general, settled the payments arising from the shareholding. If the associate subsequently produces profits, the investor starts once again recognizing its share of profits only if its share of profits equals the share of losses it had not recognized.
Unrealized gains on transactions between the Group and associates are eliminated according to the Group's participating interest in associates. Unrealized losses are eliminated unless the transaction provides evidence of impairment of the transferred asset.
Accounting policies followed by associates do not differ from those used by the Group and the date of preparation of the financial statements of associates is the same as that of the parent.
Investments in associates in the separate financial statements
Investments of the parent in consolidated associates are measured at acquisition cost less any accumulated impairment losses. Impairment test is carried out in accordance with the provisions of IAS 36 .
4.2 Business Combinations
Subsidiaries are fully consolidated (full consolidation) applying the acquisition method from the date when control over them has been acquired and cease to be consolidated from the date when such control is no longer effective. The acquisition of a subsidiary by the Group is accounted for using the
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acquisition method. As at the acquisition date, the acquirer recognizes the goodwill arising on the acquisition transaction as the excess between:
• the aggregation of (i) the transferred consideration, measured at fair value; (ii) the amount of any non-controlling interests in the acquire (measured at fair value or the proportion of non- controlling interests in its net identifiable assets (iii) in a business combination that is completed in stages, the fair value at the date of acquisition of the acquirer's shareholding previously acquired in the acquire, less
• the net fair value of the acquired identifiable assets and liabilities as at the acquisition date.
Goodwill is tested for potential impairment on annual basis and the balance between its carrying amount and recoverable amount is recognized as an impairment loss, burdening the income statement for the period.
The costs arising under acquisition of investments in subsidiaries (e.g. fees of consultants, lawyers, accountants, appraisers and other professionals and consultant’s fees) are recognized as expenses and burden the income statement for the period when they are incurred.
Otherwise, when the acquire acquires participating interest, in which, at the acquisition date, net value of assets and assumed liabilities exceeds the transferred consideration, then the issue is classified as an acquisition opportunity. Following the necessary reviews, the excess arising from the above balance is recognized as profit in the income statement for the period.
Any potential consideration paid by the Group is initially recognized at fair value on the date of acquisition. Changes in the fair value of the contingent consideration that meet the conditions for their classification as an asset or liability are recognized in accordance with IFRS 9 in the results. Any consideration recognized in equity is not revised and the subsequent settlement is accounted for within equity.
4.3 Acquisition of entities that do not constitute a “business” according to the definition of IFRS 3 – Acquisition of assets
In accordance with IFRS 3 "Business Combination", the Group determines whether a transaction or other event constitutes a business combination as defined in the Standard, i.e. whether the assets acquired and liabilities assumed constitute a "business". In the event that the acquired assets are not a business, the Group shall account for the transaction or other event as an asset acquisition. According to IFRS 3, the term "business" identifies an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or to other owners, members or participants. The accounting treatment of a business combination (see accounting policy 4.2 "Business combination" does not apply to the acquisition of an asset (or group of assets) that does not constitute a "business".
In this context, in the case of acquisition of entities that do not meet the definition of "business" in IFRS 3:
- The acquirer shall identify the individual identifiable assets acquired (including those assets that meet the definition of, and recognition criteria for intangible assets in IAS 38) and liabilities
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assumed. In accordance with IFRS 3.2 (b), the cost of the group shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase.
- Goodwill or gain on a bargain purchase shall not be recognized in the transaction. The cost of the asset acquired (or group of assets) is allocated to the individual identifiable assets and liabilities based on their relative fair values at the date of purchase.
- In accordance with IAS 12.15, recognition of deferred tax is not permitted upon initial recognition of an asset or a liability in a transaction that is not a business combination. In this context, no deferred tax is recognized on the acquisition of assets.
- Costs associated with the acquisition of assets (e.g. fees of consultants, lawyers, accountants, appraisers and other professional and consulting fees) are recognized as an expense and are accounted for to profit or loss for in the period they are incurred.
Any contingent consideration given by the Group is initially recognized at its fair value at the acquisition date. Changes in the fair value of any consideration that meet the conditions for classification as an asset or liability are recognized by a corresponding change in the value of the recognized asset (e.g. IAS 38)
4.4 Operating segments
The Company’s BoD is the main corporate body responsible for business decision-making. The BoD reviews all of the internal financial reports in order to assess the Company’s and Group’s performance and resolve upon the allocation of resources. The Management has set the operating segments based on the said internal reports. The BoD uses different criteria in order to assess the Group’s operations, which vary according to the nature of every segment, taking into consideration the risks involved and their cash requirements.
GEK TERNA’s operating segments are defined as the segments in which the Group operates and on which the Group’s management internal information system is based (please refer to Note 6).
4.5 Goodwill
Goodwill arises from acquisition of subsidiaries and associates or acquisition of control in a company.
Goodwill is recognized as the balance between acquisition cost and fair value of assets, liabilities and contingent liabilities of the acquired entity as at the acquisition date. In the case of a subsidiary's acquisition, goodwill is recorded as a separate asset, while in the case of an associate's acquisition, goodwill is included in the value of the Group's investments in associates.
As at the acquisition date (or at the date of the completion of the relative consideration allocation), acquired goodwill is allocated to the cash-generating units or groups of cash-generating units that are expected to benefit from that business combination. After initial recognition, goodwill is measured at cost less accumulated impairment losses.
Goodwill is not amortized but is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that a potential impairment may have been incurred (see Note 4.8 regarding the procedures used to review goodwill impairment).
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If a segment of a cash-generating unit, to which goodwill has been allocated, is disposed of, then the goodwill attributable to the disposed segment is included in the carrying amount of that segment to facilitate determination of gains or losses. The value of goodwill attributable to the disposed segment is determined based on the relative values of the disposed segment and the remaining segment of the cash-generating unit.
4.6 Intangible assets
The intangible assets of the Group concern
i. Rights-of-use quarries and mines and operational development costs of land,
ii. Rights-of-use land plots characterized as forestry, where Wind Parks are located,
iii. licensees acquired for Wind Parks, the right acquired under the concession agreements concluded with the State
iv. providers invoicing rights arising from concessions and PPPs (see note 4.11) and
v. acquired software programs
vi. the customer base
vii. the trademark HERON
Upon initial recognition, the intangible assets acquired separately are recorded at cost. Intangible assets acquired as part of business combinations are recognized at fair value at the acquisition date.
Following initial recognition, the intangible assets are measured at cost less accumulated amortization and any impairment loss. Amortization is recorded based on the straight-line method during the useful life of the said assets. All the Group's intangible assets have a definite useful life, with the exception of the trademark HERON.
The period and method of amortization is redefined at least at the end of every reporting period. Changes in the expected useful life of each intangible asset are accounted for as a change in accounting estimates.
Methods of amortization and useful lives of the Group's intangible assets can be summarized as follows:
Category
Methods of amortization
Useful life in years
Software
Fixed
3
Customers – customer base
Fixed
6
Generation and energy units’ installation and operation licenses
Fixed
30
Rights to use quarries and mines
Fixed
50
Expenses incurred under Operational Development of Quarries –Mines Land Plots Exploitation
Fixed
50
Concessions (rights arising from concession arrangements)
NEA ODOS, CENTRAL GREECE MOTORWAY, HIRON CONSESSIONS S.A., PARKING LOT AT PLATANOU SQUARE
Note 4.11
Based on concession period
(20-38)
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Category
Methods of amortization
Useful life in years
KIFISIAS S.A., PARKING LOT AT SAROKOU SQUARE KERKYRAS S.A.
Amortization of concession arrangements rights obtained, is made based on the execution rate of the specific construction contracts.
Gains or losses arising from the write-off due to disposal of an intangible asset are calculated as the difference between the net proceeds of the disposal and the current value of the asset and are recognized in profit or loss for the period.
Intangible assets with indefinite economic life are recognized at their fair value when a business is acquired, and are subsequently monitored at cost less any impairment losses. These items are not amortized, but are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that a possible decrease in value may have occurred. The Group has only the trademark HERON in this category.
(a) Software
Maintenance of software programs is recognized as an expense when the expense is realized. On the contrary, the costs incurred for improving or prolonging the return of software programs beyond their initial technical specifications, or respectively the costs incurred for the modification of the software, are incorporated in the acquisition cost of the intangible asset, only if they can be measured reliably.
(b) Forestry plots use rights
The value of the land use rights of the forestry land where the Wind Farms are installed includes the acquisition cost of these items less the amount of accumulated amortization and any impairment of their value.
(c) Generation and energy units’ installation and operation licenses
Various types of licenses held by the Group enable it to construct energy units or generate the right to produce and sell energy. Effective market conditions provide the required indications regarding the recoverable amount of these licenses.
Upon acquisition, the Group recognizes these licenses as intangible assets at fair value and then measures them applying the cost model, according to which the asset is measured at cost (which is the acquisition fair value) less accumulated amortization and any accumulated provisions for impairment. Amortization is carried out on a straight-line basis over the useful life of those assets, which is 30 years for electricity generation from renewable energy sources. Regarding the impairment tests, please refer to Note 4.8.
(d) Rights to use quarries and mines
The value of the rights to use quarries and mines includes the acquisition cost of these assets less the accumulated depreciation and any potential impairment.
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(e) Concessions
In the capacity of concessionary companies, the Group's companies recognize an intangible asset and revenue to the extent they acquire the right to charge the users of utilities. Revenue recognition is based on the percentage of completion method. Furthermore, the intangible asset in question is subject to depreciation based on the time of the concession and impairment test, while revenue from the users of the infrastructure are recognized on an accrual basis to the extent they cover the operating costs of the Company. The additional component is recorded as a reduction of the intangible asset.
(f) Expenses incurred under Operational Development of Quarries – Mines Land Plots Exploitation
Such expenses concern query-mining operation development costs and mainly include procedures in respect of galleries surfacing costs, galleries opening coats and extracting sterile soil costs. During the operational development phase (before production starts), galleries surfacing costs are usually capitalized as part of the amortized cost of queries development and construction. Amortization of operating expenses incurred for development of mineral-ore extraction areas is calculated using the percentage recovery method of commercially recoverable mine. Amortization – expenses of capitalized operating costs arising from development of mines- queries include the costs of minerals mining and extraction costs. Operating costs arising from development of mines - queries are capitalized if, and only if, the following conditions are met:
• the Group will receive future economic benefits (improvement of access to mines) associated with the galleries surfacing activity.
• the Group can utilize the segment of the mine, the access to which has been improved, and
• the cost of the galleries surfacing activity associated with this segment can be measured reliably.
The asset arising from the galleries surfacing activity is added to the cost of the mine and is therefore valued at cost less accumulated depreciation and potential impairment.
(g) Clientele – Client base
It refers to the value of the Customer base acquired during the acquisition of a subsidiary company and which is enhanced by the cost of maintaining this base (customer retention cost, agent commissions, etc.).
(h) HERON Trademark
HERON Trademark was recognized during the acquisition of control of HERON ENERGY.
At the date of acquisition (or at the date of completion of the relevant purchase price allocation), the trademark is recognized at fair value. After initial recognition, the trademark is valued at cost less accumulated impairment losses.
The trademark is not amortized but is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that a possible decrease in value may have occurred (see Note 4.8 for the procedures followed for impairment testing).
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4.7 Property, plant and equipment
Tangible fixed assets are recognized in the financial statements at acquisition values, less accumulated depreciation and any potential impairment losses. The acquisition cost includes all directly reimbursable costs incurred for the acquisition of these assets.
Subsequent expenses are recorded as an increase in the book value of tangible assets or as a separate asset only to the extent that the said expenses increase the future economic benefits, expected to arise from the use of the fixed asset and that their cost can be measured reliably.
Repair and maintenance cost is recognized in the Income Statement when incurred.
Tangible assets are written off when they are sold or withdrawn or when no further economic benefits are expected from their ongoing use. Gains and losses, arising from the write-off of tangible fixed assets, are included in the income statement for the year in which the asset is written off.
Assets under construction include fixed assets under construction and are carried at cost. Assets under construction are not depreciated until the fixed asset is settled and put into operation.
Depreciation of tangible fixed assets (excluding land, which is not depreciated) is calculated based on the straight-line method over their estimated useful life as follows:
Property, plant and equipment
Useful life (in years)
Building and technical works
8 - 30
Machinery and technical installations
3 - 30
Vehicles
5 - 12
Furniture and fixtures
3 - 12
The useful lives of property, plant and equipment are subject to review at least at each end of every use. In this context, in fiscal year 2023 it was decided to extend the useful lives of wind farms from 25 to 30 years.
When the book values of the tangible fixed assets are higher than their recoverable value, then the difference (impairment) is recognized directly as an expense in the Income Statement (see Note 4.8). Upon sale of tangible assets, the differences between the received consideration and their book value are recognized as profits or losses in the Income Statement.
Interest accrued on loans specifically or generally issued in order to finance the construction of tangible fixed assets is capitalized in the year when incurred, during the tangible assets construction period, provided that the recognition criteria are met (please refer to Note 4.18).
4.8 Impairment of non-current assets (intangible and tangible assets/investments in consolidated companies)
In respect of tangible and intangible fixed assets subject to amortization/depreciation, an impairment test is performed when events or changes in circumstances indicate that their carrying amount may no longer be recoverable. When the net book value of tangible and intangible fixed assets exceeds their recoverable amount, then the excess amount relates to an impairment loss and is recognized directly as an expense in the income statement. Respectively, financial assets that are subject to
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impairment testing (if the relative indications are effective) are the assets measured at acquisition cost or under equity method (investments in subsidiaries and associates). The recoverable amount of investments in subsidiaries and associates is determined in the same way as that in respect of non- financial assets.
For the purpose of impairment test, assets are grouped at the lowest level for which cash flows can be separately identified. The recoverable amount of an asset is the higher of the asset's fair value less costs to sell and value in use. For the purpose of calculating value in use, Management estimates the future cash flows from the asset or cash-generating unit and selects the appropriate discount rate in order to calculate the present value of future cash flows.
Impairment loss is recognized for the amount, by which the book value of an asset or a Cash Generating Unit exceeds their recoverable amount. Discount factors are determined individually for every Cash Generating Unit and reflect the corresponding risk data, determined by the Management for every one of them.
Further assumptions are made that prevail in the energy market. The period, reviewed by the management exceeds five years - the period that is encouraged by IAS 36, since especially as for renewable energy units, even a longer period will be judged to be quite satisfactory.
Impairment losses of Cash Generating units first reduce the book value of goodwill allocated to them. Residual impairment losses are charged pro rata to the other assets of the particular Cash Generating Unit. With the exception of goodwill, all assets are subsequently reviewed for indications that their previously recognized impairment loss is no longer effective.
Apart from Goodwill and the Trademark, the Group does not possess intangible assets with indefinite useful life that are not amortized.
An impairment loss is reversed if the recoverable amount of a Cash Generating Unit exceeds its book value.
In such a case, the increased book value of the asset will not exceed the book value that would have been determined (net depreciation), if no impairment loss had been recognized, in the asset in previous years.
4.9 Financial instruments
4.9.1 Recognition and derecognition
Financial assets and financial liabilities are recognized in the Statement of Financial Position when and only when the Group becomes a party to the financial instrument.
The Group ceases to recognize a financial asset when and only when the contractual rights to the cash flows of the financial asset expire or when the financial asset is transferred and all the risks and benefits, associated with the particular financial asset, are substantially transferred. A financial liability is derecognized from the Statement of Financial Position when, and only when, it is repaid - that is, when the commitment set out in the contract is fulfilled, canceled or expires.
4.9.2 Classification and initial recognition of financial assets
With the exception of trade receivables that do not include a significant finance item and are measured
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at the transaction price in accordance with IFRS 15, other financial assets are initially measured at fair value by adding the relevant transaction cost except in the case of financial assets measured at fair value through profit or loss.
Financial assets, except those defined as effective hedging instruments, are classified into the following categories:
• Financial assets at amortized cost,
• Financial assets at fair value through profit and loss, and
• Financial assets at fair value through other comprehensive income without recycling cumulative profit and losses on derecognition (equity instruments)
Classification of every asset is defined according to:
• the Group's business model regarding management of financial assets, and
• the characteristics of their conventional cash flows.
All income and expenses related to financial assets recognized in the Statement of Comprehensive Income are included in the items "Other financial results", "Financial expenses" and "Financial income", except for the impairment of trade receivables included in operating results .
4.9.3 Subsequent measurement of financial assets
Financial assets at amortized cost
A financial asset is measured at amortized cost when the following conditions are met:
I. financial asset management business model includes holding the asset for the purposes of collecting contractual cash flows,
II. contractual cash flows of the financial asset consist exclusively of repayment of capital and interest on the outstanding balance (“SPPI” criterion).
Following the initial recognition, these financial assets are measured at amortized cost using the effective interest method. In cases where the discount effect is not significant, the discount is omitted.
The amortized cost measured category includes non-derivative financial assets such as loans and receivables with fixed or pre-determined payments that are not traded on an active market, as well as cash and cash equivalents, trade and other receivables.
Financial assets measured at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for sale, financial assets designated at initial recognition at fair value through profit or loss, or financial assets that are required to be measured at fair value.
Financial assets are classified as held for sale if they are acquired for sale or repurchase in the near future. Derivatives, including embedded derivatives, are also classified as held for sale, unless defined as effective hedging instruments.
Financial assets with cash flows that are not only capital and interest payments are classified and measured at fair value through profit or loss, irrespective of the business model.
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Financial assets classified at fair value through total income (equity interests)
In accordance with the relevant provisions of IFRS 9, at initial recognition, the Group may irrevocably choose to present in other results directly in equity the subsequent changes in the fair value of an equity investment that is not held for sale.
Gains or losses from these financial assets are never recycled to the income statement. Dividends are recognized as other income in the income statement when the payment entitlement has been proved, unless the Group benefits from such income as a recovery of part of the cost of the financial asset - then such profit is recognized in the statement of comprehensive income. Equity interests designated at fair value through total income are not subject to an impairment test. This option is effective for every equity interest separately.
The Group has chosen to classify investments in this category (please refer to Note 21).
4.9.4 Impairment of financial assets
Adoption of IFRS 9 led to a change in the accounting treatment of impairment losses for financial assets, as it replaced the treatment effective under IAS 39 for recognition of realized losses with recognition of expected credit losses.
Impairment is defined in IFRS 9 as an Expected Credit Loss (ECL), which is the difference between the contractual cash flows attributable to the holder of a particular financial asset and the cash flows expected to be recovered, i.e. cash deficit arising from default events, discounted approximately at the initial effective interest rate of the asset.
The Group and the Company recognize provisions for impairment for expected credit losses for all financial assets except those measured at fair value through profit or loss. The objective of provisions for impairment under IFRS 9 is to recognize the expected credit losses over the life of a financial instrument whose credit risk has increased since initial recognition, regardless of whether the assessment is made at a collective or individual level, using all the information that can be collected on the basis of both historical and present data, as well as data relating to reasonable future estimates of the financial position of customers and the economic environment.
To facilitate implementation of this approach, a distinction is made among:
• financial assets whose credit risk has not deteriorated significantly since initial recognition or which have a low credit risk at the reporting date (Stage 1) and for which the expected credit loss is recognized for the following 12 months,
• financial assets whose credit risk has deteriorated significantly since initial recognition, and which have no low credit risk (Stage 2). For these financial assets, the expected credit loss is recognized up to their maturity.
• financial assets for which there is objective evidence of impairment at the reporting date (Stage 3) and for which the expected credit loss is recognized up to maturity.
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Trade receivables, other receivables, and receivables from contracts with customers
The Group and the Company apply the simplified approach, stated in IFRS 9 to trade and other receivables as well as to receivables from on construction contracts and receivables from leases, calculating the expected credit losses over the life of the above items. In this case, the expected credit losses represent the expected shortfalls in the contractual cash flows, taking into account the possibility of default at any point during the life of the financial instrument. While calculating the expected credit losses, the Group uses a provisioning matrix, grouping the above financial instruments based on the nature and maturity of the balances and taking into account available historical data in relation to the debtors, adjusted for future factors in relation to the debtors and the economic environment. Further analysis is presented in Notes 16 , 18, 19 and 20.
4.9.5 Classification and measurement of financial liabilities
The Group's financial liabilities include mainly borrowings, suppliers and other liabilities, as well as derivative financial instruments.
Financial liabilities are initially recognized at cost, which is the fair value of the consideration received apart from borrowing costs. After initial recognition, financial liabilities are measured at amortized cost using the effective interest method, with the exception of derivatives that are subsequently measured at fair value with changes recognized in the income statement (except derivatives that operate as hedging instruments, see Note 4.9.6).
Financial liabilities are classified as short-term liabilities unless the Group has the unconditional right to transfer the settlement of the financial liability for at least 12 months after the financial statements reporting date.
In particular:
(i) Loan liabilities
The Group's loan liabilities are initially recognized at cost, which reflects the fair value of the amounts receivable less the relative costs directly attributable to them, where they are significant.
After initial recognition, interest bearing loans are measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account issuing expenses and the difference between the initial amount and the maturity amount. Gains and losses are recognized in the income statement when the liabilities are derecognized or impaired through the amortization procedure.
(ii) Trade and other liabilities
Balances of suppliers and other liabilities are initially recognized at their fair value and are subsequently measured at amortized cost using the effective interest method.
Trade and other short-term liabilities are not interest-bearing accounts and are usually settled on the basis of the agreed credits.
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4.9.6 Derivative financial instruments and hedge accounting
The Group's risk management policies are in line with the provisions of the standard IAS 39 and hedge accounting continues to apply.
In the context of risk management, the Group uses:
- derivative financial instruments for the exchange of interest rates to hedge the risks associated with the future fluctuation of variable loan interest rates,
- derivative financial instruments to hedge the risk of change in electricity prices (options, forward contracts for the sale of electricity)
- derivative financial instruments to hedge the risks associated with the future fluctuation of variable income.
These derivative financial instruments are initially recognized at their fair value at the date of the contract and are subsequently measured at their fair value. Changes in the fair value of financial derivative instruments are recognized at every reporting date either in the income statement or in other comprehensive income, depending on the extent, to which the derivative financial instrument meets the requirements of hedge accounting and, if so, according to the nature of the hedging object.
On the transaction date, the Group records the relationship between the hedging instrument and the hedging item, as well as the risk management objective and risk hedging transaction strategy. The Group also records both - when creating the hedging transaction and afterwards – the extent to which the instruments used in these changes are effective in offsetting fluctuations in the cash flows of hedging items.
Derivative financial products are measured at fair value at the reporting date and the changes are recognized in the income statement. The fair value of these derivatives is determined primarily on a market value and is confirmed by the counterparty credit institutions.
Exceptions are made regarding the derivatives that act as hedging instruments in cash flow hedges, for which special accounting is required. A hedging relationship is appropriate for hedge accounting when all the following criteria are met:
• the hedging relationship includes only eligible hedging instruments and eligible hedged items.
• at the inception of the hedging relationship there is a formal determination and documentation of the hedging relationship and the entity's risk management objective and its hedging strategy. The documentation includes determination of the hedging instrument, the hedged item, the nature of the hedged risk, and the manner in which the entity will assess whether the hedging relationship meets the effectiveness requirements (including an analysis of the sources of inefficiency of the hedge and how determination of the hedging factor).
• The hedging relationship covers all the following efficiency requirements: (a) there is an financial relationship between the hedged item and the hedging instrument, (b) the effect of the credit risk does not override the changes in value arising from this financial relationship, and (c) the hedging rate of the hedging relationship is the same resulting from the amount of hedged item actually hedged by the entity and the amount of the hedging instrument the entity actually uses to offset this amount of hedging item.
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The component of changes in fair value that is attributable to effective risk hedging is recognized in equity.
Any gain or loss arising from changes in fair value attributable to non-effective risk hedging is recognized directly in the statement of the comprehensive income in the item "Net financial Revenue/ (Expenses)". Cumulative amounts in equity are recycled through the Statement of Comprehensive Income to the income statement (from other comprehensive income to the income statement) in the periods in which the hedged item affects the income statement (when the projected hedged transaction is taking place).
Hedge accountancy is discontinued when the hedging instrument expires or is sold, terminated or exercised, or when the hedge no longer meets the hedge accountancy criteria. The cumulative amount of gains or losses recognized directly in equity until that date remains in the reserves until the hedged item affects the Statement of Comprehensive Income. In the event that a hedged transaction is no longer expected to be realized, the net accumulated gains or losses recorded in the reserves are directly transferred to the Statement of Comprehensive Income .
4.9.7 Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is recorded the Statement of Financial Position only if there is the present legal right to offset the recognized amounts and the entity intends to settle them on a net basis or to require the asset and settle the liability simultaneously.
4.10 Receivables on Embedded Derivatives
In the context of the operation of the concession company CENTRAL GREECE MOTORWAY, the Group recognizes a receivable for an embedded derivative. Specifically, according to article 25 of the Concession Agreement, as of 1 January 2016, the State has undertaken the obligation to provide Operating Support to CENTRAL GREECE MOTORWAY (hereinafter referred to as "E-65") to cover its eligible costs in each Calculation Period, to the extent that these costs are not covered by own revenues. The Calculation Period is defined as every successive six-month period (starting January 1st and July 1st of each year) and the Operating Support for every Calculation Period is the difference between the aggregate of the eligible project costs and the distributable base performance less the net revenue of that period. At the latest twenty (20) days before the end of each calculation period, E- 65 submits to the State the Support Notification for the same calculation period. Upon the submission of the Support Notification, the Company is entitled in each calculation period to undertake, unconditionally and without limitations, from the Recipient an Account, from the next business day, regarding the payments by the State, and hence, any amount corresponding to the amounts described in the Support Notification up to the amount of the Beneficiary's balance. Payments by the State will be deposited five (5) days before the end of each Calculation Period, as defined in the Concession Agreement.
The Support Notification includes the following three distinct parts: (a) a part corresponding to the eligible project costs; (b) a part corresponding to the distributable base performance; and (c) a part corresponding to the additional interest margin, if applicable. Eligible project costs include, but are not limited to, the following categories: debt servicing account reserve and heavy maintenance movements, operating costs, debt servicing, all of which are deducted from direct income in order to
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calculate the amount of support. Both the distributable base performance and the additional interest margin are included as additional support amounts.
Debt servicing includes, but is not limited to, payments resulting from the six-month clearing of the liabilities of hedging instruments (exchange rate swaps).
In accordance with paragraphs 4.3.1, 4.3.3 and 4.3.4 of IFRS 9, it is determined to be a synthetic component of a hybrid of a financial instrument that also includes a non-derivative master contract resulting in some of the cash flows of the synthetic instrument ranging in the same way as a stand- alone derivative. The embedded derivative affects some or all cash flows that would otherwise have to be adjusted based on a specified interest rate, financial instrument price, commodity price, exchange rate, price or interest rate index or other variables. A derivative that accompanies a financial instrument but which under the contract may be transferred independently of that instrument or that has a different counterparty from that instrument is not an embedded derivative but a separate financial instrument.
An embedded derivative will be separated from the master contract and treated as a derivative (receivable) only if the following conditions are met:
i. The embedded derivative meets the definition of the derivative,
ii. the economic characteristics and risks of the embedded derivative are not closely linked to the financial characteristics and risks of the main contract,
iii. the hybrid (synthetic) instrument is not measured at fair value through recognition of changes in profit or loss (i.e. a derivative embedded in a financial asset or financial liability through profit or loss is not segregated). If an embedded derivative is segregated, the principal contract, if it is a financial instrument, shall be accounted for in accordance with this Standard and other appropriate IASs, if it is not a financial instrument.
The Group has assessed the above requirements of IFRS 9 and has considered the Greek State's contingent liability for Operating Support as a hybrid financial instrument that includes an embedded derivative (the Operating Support Part covering the payments of interest rate swaps) and a non- derivative contract (the remaining part of the Operating Support). It then separates the embedded derivative from the master contract and treats it as a derivative (receivable). See analytical information presented in Note 31 to the financial statements.
4.11 Service concession agreements
Under the terms of the contracts, the operator acts as a service provider. The operator constructs or upgrades an infrastructure (manufacturing or upgrading services) used to provide a utility service and deals with the operation and maintenance of that infrastructure (operation services) for a specified period of time.
According to IFRS, such infrastructure is recognized as a financial asset or as an intangible asset, depending on the contractually agreed terms. The Group companies recognize both - an intangible asset from the concession and a financial asset (bifurcated model) - or recognize a financial asset only.
Intangible assets
The Group companies operating as concessionaires recognize an intangible asset and an income to the
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extent that they acquire the right to charge the users of utilities. Revenue recognition is based on the completion rate method. Furthermore, the intangible asset is amortized on the basis of the time of the concession and an impairment test, while the revenues from the infrastructure users are recognized on the accrual basis.
For more information on the concession of right, see Note 8.1.
Financial assets
The Group companies that act as concessionaires recognize a financial asset as they have an unconditional contractual right to receive cash or other financial asset from the grantor for the construction services.
In the case of concessions, the concessionaire has an unconditional right to receive cash if the grantor contractually guarantees to pay to the concessionaire:
i. specific or fixed amounts, or
ii. the deficit which may arise between the amounts received by the users of the public service and the specific or fixed amount provided for in the Concession Agreement.
The Group recognizes the Financial Contribution of the State as a financial asset under the provisions of IFRIC 12 "Service Concession Arrangements". In particular, the Group recognizes a financial asset receivable and income based on the proportional completion rate method and the asset is measured at amortized cost less any impairment losses. More information is provided in Note 15.
4.12 Revenue
IFRS 15 established the core principle by applying the following steps for identifying revenue from contracts with customers:
1. Identify the contract(s) with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognize revenue when (or as) the Group satisfies a performance obligation
Revenue is recognized at the amount by which an entity expects to have in exchange for the transfer of the goods or services to a counterparty. When assigning a contract, the accounting treatment is also defined regarding the additional costs and the direct costs required to complete the contract.
Revenue is defined as the amount that an entity expects to be entitled to in exchange for the goods or services it has transferred to a customer. If the promised consideration in a contract includes a variable amount, the entity estimates the consideration amount it would be entitled versus the transfer of the promised goods or services to customer. The consideration amount may vary due to discounts, price subsidies, refunds, credits, price reductions, incentives, additional performance benefits, sanctions or other similar items. The promised consideration may also change if the entity's entitlement to the consideration depends on the occurrence or non-occurrence of a future event. For example, a consideration amount will be variable if the product has been sold with a refund option or if a fixed
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amount promise has been given as an additional performance benefit to achieve a specific milestone.
The volatility associated with the consideration promised by a customer may be expressly stated in the contract. An entity estimates the amount of the variable consideration using one of the following methods, whichever method it considers best suited to the amount of consideration to which it will be entitled:
(a) Estimated value - the estimated value is equal to the sum of the probability-weighted amounts in a range of possible consideration amounts. Estimated value is an appropriate estimate of the variable amount if the entity has a large number of contracts with similar characteristics.
b) Most probable amount - the most probable amount is the only most probable amount in a range of possible consideration amounts (i.e., the only likely outcome of the contract). The most probable amount is an appropriate estimate of the variable amount if the contract has only two possible outcomes (for example, the entity provides additional performance or not).
The Group and the Company recognize revenue, when it satisfies the performance of the contractual obligation by transferring the goods or services on the basis of this obligation. Acquisition of control by the client occurs when it has the ability to direct the use and to derive virtually all the economic benefits from this good or service. Control is transferred over a period or at a specific time. Revenue from the sale of goods is recognized when the goods are transferred to the customer, usually upon delivery to the customer, and there is no obligation that could affect the acceptance of the good by the customer.
Commitments for implementation performed over time
The Group recognizes revenue for a performance obligation implemented over time only if it can reasonably measure its performance in full compliance with the obligation. The Group is not in a position to reasonably measure progress in meeting a performance obligation when it does not have the reliable information required to apply the appropriate method of measuring progress. In some cases (e.g. during the initial stages of a contract), the entity may not be able to reasonably measure the outcome of a performance obligation, but it at least expects to recover the costs incurred to meet it.
In such cases, an entity shall recognize revenue only to the extent of the cost incurred until it is able to reasonably measure the outcome of the implementation obligation.
Revenue from rendering services is recognized in the accounting period in which the services are provided and measured according to the nature of the services to be provided. The receivable from client is recognized when there is an unconditional right for the entity to receive the consideration for the contractual obligations performed to the client.
A contractual asset is recognized when the Group or the Company has settled its liabilities to the counterparty before the latter has paid or before the payment is due, for example when the goods or services are transferred to the customer prior to the right of the Group or the Company to issue an invoice. The contractual obligation is recognized when the Group or the Company receives a consideration from the counterparty as an advance or when it reserves the right to a consideration which is postponed before the performance of the contractual obligations and transfer of goods or services. The contractual obligation is derecognized when the contract obligations are met and the revenue is recorded in the income statement.
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Commitments for implementation performed at a specific time
When a commitment for implementation is not met over time (as outlined above), then the entity enforces the implementation commitment at a particular time. In determining when the client acquires control of a promised asset and the entity settles an implementation commitment, the entity examines the requirements for the acquisition control, as analytically recorded in IFRS 15.
The main categories of revenue are as follows :
i. Revenue from contracts with customers related to construction operations
It relates to revenue from contracts with customers and results from implementation commitments that are fulfilled over time. Subsidiaries and joint ventures that undertake the execution of constructions, recognize the revenue from the construction contracts in their tax records based on the invoices released to the customers, which result from relevant gradual certifications of the execution of projects issued by the pertinent engineers and correspond to the works performed until the respective closing date. For the purpose of complying with IFRS, the proceeds from the construction activity are accounted for progressively during construction, based on the input method of measurement in accordance with the provisions of IFRS 15 "Revenue from Contracts with Customers".
The input method recognizes revenue based on the entity's efforts or inflows towards fulfilling an implementation commitment (for example, the resources consumed, the hours worked, the costs incurred the time spent or the hours of operation of the machines consumed) in relation to the total expected inputs to fulfil this implementation commitment.
ii. Sale of goods
Revenue is measured at the fair value of the price received or receivable and represents amounts receivable for goods sold and services rendered in the normal course of the Group's operations, net of discounts, VAT and other sales-related taxes. The Group recognises sales of goods in profit or loss at the time the benefits and risks associated with ownership of those goods are transferred to the customer.
iii. Revenue from car stations
It relates to revenue from contracts with clients and results from execution commitments that are fulfilled over time. This revenue comes from the concessions for the operation of car stations.
iv. Revenue from sale of Electric Energy and Natural Gas
The Group provides electricity and natural gas. In addition, it participates in auctions for the allocation and assignment of physical transmission rights in all interconnections in Greece and is thus active in the electricity markets abroad.
The Group has assessed that the supply of electricity and gas are two distinct performance obligations. Since the supply of these products is made over a period of time, the Group concluded that the sale of electricity and natural gas should be treated as two separate performance obligations which are fulfilled on a continuous basis throughout the duration of the contract. Revenue for each of the aforementioned separate performance obligations is recognised over time as the customer receives and simultaneously recognises the benefits arising from the supply of electricity or natural gas or from the supply of electricity and natural gas, as appropriate.
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For renewable energy power plants, revenue from the sale of electricity is recognized on the basis of the quantity of electricity delivered at market prices for transactions, where all the revenue recognition criteria are met.
The metering of the amount of electricity/gas consumed by customers is carried out with a given frequency, which means that it can be done either on a monthly basis or cyclically up to every four months depending on the product and type of customer. The Group applies the output method to measure progress towards full settlement for each discrete performance obligation and recognises revenue as progress is made. The Group has assessed that the output method for measuring progress towards fulfilment, which is based on measuring the quantity of products delivered to customers, provides a faithful representation of the transfer of performance obligations. In particular, the estimation of the quantity of products delivered is based on the use of a specific algorithm which takes into account historical consumption data, such as the consumption of the corresponding period of the previous year.
The Group recognises a contract asset for the amount of accrued revenue that has not yet been invoiced to customers, applying the output method described above. A trade receivable is recognised by the Group when the related invoice is issued, as the Group's right to the consideration is unconditional in the sense that only the passage of time is required for the payment of that consideration to become due.
Certain customer contracts provide for discounts on the price list and discounts for late payments which are variable consideration. Variable consideration is estimated at inception of the contract and some or all of it is included in the transaction price to the extent that there is an increased likelihood that there will be no significant reversal in the amount of cumulative revenue recognised when the uncertainty associated with the variable consideration is subsequently eliminated.
In order to reduce its exposure to changes in energy prices in this markets, the Group uses the derivative instruments described in Note 4.9.6 above.
The proceeds from the liquidation of these derivatives are included in the proceeds from the sale of electricity.
Renewable Energy Credits ("RECs") and/or Green Certificates constitute an economic benefit achieved through the operation of a wind farm. RECs are generated by the wind power generation of wind farms and can be sold either through REC's organized markets or directly to individual buyers under contracts. As RECs are generated they are classified as inventories recognized at fair value and the related revenue deferred until sale. When RECs are sold, they are recognized as a component of revenue at fair market value. Gains and losses from the sale of RECs are recognized in the Turnover.
v. Revenue from Motorways Concession Arrangements
Revenue is classified into two sub-categories, i.e.: (a) Revenue from construction of concession projects; and (b) Revenue from exploitation of concession projects.
According to the concession arrangements, the Group's companies have undertaken research, construction, financing, operation, maintenance and exploitation of the projects "Ionia Odos Motorway from Antirio to Ioannina, PATHE Athens (Metamorfosis Motorway) - Maliakos (Skarfia) PATHE Schimatari - Chalkida "and” Central Greece Motorway (E65)”
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Under IFRIC 12 "Service Concession Arrangements", revenue from construction arrangements is recognized in accordance with the impute method of measurement as defined in IFRS 15 and analyzed in (i) above.
Revenue from exploitation of concession arrangements is recognized on the basis of intangible asset and financial asset model and applies to:
(a) Revenue from toll collection through manual or electronic toll payment systems, and
(b) Revenue from rental of Car Service Stations (CSS) or other premises.
As defined in Note 15, under the intangible asset model, the Group recognizes revenue to the extent it acquires the right to charge the users of utilities. The Group recognizes the amount received or receivable option on the part of the operator at its fair value, which is considered to be the payments received from the infrastructure users, based on the accrual principle.
The relevant concession arrangements include all rights and obligations in relation to the infrastructure and rendered services.
vi. Revenue from construction and disposal of real estate
It pertains to revenue from contracts with clients and arises from implementation commitments settled over time. The Group's real estate property items under construction are recorded as inventory. From the amount of the performed sales, supported by a statutory document or a notarial sales agreement (as the relevant risks under the Company's guarantee liabilities are covered by insurance), the consideration attributable to the respective cost incurred by the end of the same year regarding the relative constriction of the sold building or part thereof, is recognized in every year revenue, based on the percentage of completion method.
vii. Income from Rentals
The income in question pertains to revenue from contracts with customers and arises from implementation commitments that are fulfilled over time. Income from rentals (operating leases) is recognized using the straight-line method according to the terms of the lease.
viii. Dividends
Dividends are accounted for when the right of recovery is finalized, it is possible that the financial benefits associated with the transaction will flow to the entity and the amount of revenue can be calculated reliably.
ix. Interest
Interest income is recognized on an accrual basis.
x. Revenue from other PPP concession agreements
At the construction stage, revenue is recognized based on the percentage of completion, in accordance with the Group's accounting policy for recognizing revenue from construction contracts.
During the operating phase, the revenue is recognized in the period in which the related services are provided by the Group. If a concession agreement includes revenue for more than one service, the consideration is allocated to the different services based on the relative fair values of the services provided.
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Contract acquisition costs: According to IFRS 15, contract acquisition costs are defined as those costs incurred by an entity to obtain a contract with a customer. Depending on the extent to which the entity expects to recover the above costs, then the entity may recognize an asset and amortize it in accordance with the rate at which it expects to recover the benefits of the contract with the customer. Otherwise, these costs are expensed in the subject financial year. In application of the above, the Group recognizes an asset for the commission cost of intermediaries, also known as "Agency costs". More specifically, the Group uses intermediaries to promote sales. The expenses of achieving a first connection fee from the intermediaries are recognized as an asset and amortized according to the annual customer turnover rate. This item is depicted in the “Other Long-Term Receivables” of the Statement of Financial Position.
4.13 Income tax
Income tax burden for the year consists of current tax, deferred tax and tax differences from previous years.
Current Income Tax
Current tax is calculated on the basis of the tax Statements of Financial Position of every company, included in the consolidated Financial Statements, according to the tax regulation effective in Greece or other tax frameworks under which the foreign subsidiaries operate. Expenditure on current income tax includes income tax that is based on the profits of each company as restated in its tax returns and provisions for additional taxes and is calculated according to the statutory or substantially statutory tax rates.
Deferred Income Tax
Deferred taxes are taxes or tax relief related to financial burdens or benefits accruing in the year but already been accounted for or to be accounted for by the tax authorities in different years.
Deferred income taxes are calculated using the liability method in temporary differences at the date of the financial statements between the tax base and the carrying amount of assets and liabilities. Deferred tax liabilities are recognized for taxable temporary differences.
Deferred income tax is not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that, when the transaction took place, did not affect either the accounting or the tax profit or loss.
Deferred tax assets are recognised to the extent that there will be a future taxable profit for the utilisation of the temporary difference that gives rise to the deferred tax asset.
Deferred tax assets are measured at every reporting date of the financial statements and are reduced to the extent that it is unlikely that there will be sufficient taxable profits against which part or all of the deferred income tax assets may be used.
Deferred tax assets and obligations are calculated at the tax rates expected to be effective for the year in which the asset is incurred or the liability will be settled and are based on the tax rates (and tax laws) that are in effect or effectively in force as at the financial statements reporting date. In the event the time of reversing temporary differences cannot be clearly identified, the tax rate applicable on the next FY date of the Statement of Financial Position will be applied.
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Income tax related to items, recognized in other comprehensive income, is also recognized in other comprehensive income.
4.14 Share capital, reserves and distribution of dividends
Common registered shares are recorded as equity. Costs, directly attributable to a component of equity net of tax effect, are monitored as a deduction to the Balance of Retained Earnings in equity. Otherwise, this amount is recognized as an expense in the period in question.
In cases when the Company or its subsidiaries acquire part of the Company's share capital (treasury shares), the amount paid, including any expense, net of tax, is deducted from equity until the shares are derecognized or sold. The number of treasury shares held by the Company does not reduce the number of shares in circulation but affects the number of shares included in the calculation of earnings per share. Treasury shares held by the Company do not incorporate a right to receive a dividend.
In particular, the reserves are divided into:
Statutory reserves
In compliance with the Greek Commercial Law, companies shall transfer at least 5% of their annual net profits to a statutory reserve until such reserve equals 1/3 of the paid-up share capital. This reserve cannot be distributed during the Company's operations.
Development legislation reserves and other tax exempted reserves
These reserves refer to profits not taxed at the applicable tax rate in accordance with the applicable tax framework in Greece and include reserves arising from taxable profits and pertaining to the company’s participation in development laws. These reserves will be taxable at the tax rate applicable at the time of their distribution to the shareholders or their conversion into share capital under certain circumstances.
Cash flows risk hedging reserves
The risk hedge reserve is used to record profits or losses on derivative financial products, which can be classified as future cash flow hedges and are recognized in other comprehensive income.
Reserves of foreign currency translation differences from incorporation of foreign operations
Foreign exchange differences arising on foreign currency translation are recognized in other comprehensive income and accumulated in other reserves. The cumulative amount is transferred to the income statement of the year when the amounts were transferred .
Treasury shares reserves
The Company has proceeded with successive acquisitions of treasury shares through implementing the approved share buy-back plan in accordance with article 49 of Law 4548/2018. The total value of these acquisitions is presented in reserves as a deduction from Equity.
Other reserves
The category of other reserves comprises:
(1) Actuarial gains/(losses) from defined benefit pension schemes arising from (a) actual adjustments (the effect of differences between previous actuarial assumptions and those eventually occurring) and
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(b) changes in actuarial assumptions.
(2) Changes in fair value of investments classified as equity investments.
(3) Reserves formed based on the expenses recognized by the Company and the Group from services acquired in exchange for shares (equity settled transactions) or stock options. See more detailed Note 4.22(c).
Dividends-Distribution
Dividends distributed to the Company's shareholders are recognized in the financial statements as a liability in the period in which the distribution proposal of the Management is approved by the Annual General Meeting of the Shareholders.
Also, at the same time, the financial statements reflect the effect of the disposal of the results approved by the General Meeting and the possible formation of reserves.
4.15 Provisions, Contingent Assets and Liabilities
Provisions are recognized when the Group has present legal or imputed liabilities as a result of past events; their settlement is possible through resources’ outflow and the exact liability amount can be reliably estimated. The provisions are reviewed on the reporting date of the Financial Statements and are reviewed and adjusted accordingly on evert financial statements reporting date to reflect the present value of the expense expected for the settlement of the liability.
When the effect of the time value of money is significant, the provision is calculated as the present value of the expenses expected to be incurred in order to settle this liability.
If it is no longer probable that an outflow will be required in order to settle a liability for which a provision has been made, then it is reversed.
In cases where the outflow of economic resources due to current commitments is considered improbable or the provision amount cannot be reliably estimated, no liability is recognized in the financial statements. Contingent liabilities are not recognized in the financial statements but are disclosed unless the probability of an outflow of resources incorporating financial benefits is minimal. Potential inflows from economic benefits for the Group which do not meet the criteria of an asset are regarded as contingent assets and are disclosed when the inflow of the economic benefits is probable.
Provisions for motorways heavy maintenance
Regarding provisions of the concessions, and, in particular, provision for the obligation to restore or maintain the motorway under the concession, the Group has contractual obligations it has to fulfill as a condition for obtaining the licenses to (a) maintain the infrastructure at a defined level or (b) restore the infrastructure to a defined condition before delivering it to the concessionaire upon termination of the service concession agreement.
These contractual obligations that pertain to maintaining or restoring infrastructure are recognized and measured using the best possible estimates of the costs that would be required to settle the present obligation at the financial statements reporting date if obligation for maintenance and restoration arises within the year at the operational stage. Construction or upgrading services are charged to contractual revenue and expenses.
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Provisions for rehabilitation of natural landscape
Concerning restoration of natural landscapes, the Group recognizes the provisions made by the entities of the Group's energy sector for decommissioning wind turbines from Wind Farms and restoring the surrounding area. Decommissioning and remediation provisions reflect the present value at the reporting date of the estimated cost less the estimated residual value of the recoverable materials. Provisions are reviewed at every reporting date of the Statement of Financial Position and are adjusted in order to reflect the present value of the expense, expected to be disbursed for settling the lability regarding decommissioning and remediation. The related provision is recognized as an increase in the acquisition cost of wind turbines and is depreciated on a straight-line basis over the 25-year term of the energy production contract. Amortization and disposal of the capitalized decommissioning and restoration costs is included in the Statement of Comprehensive Income together with depreciation of Wind Farms. Any changes in estimates with respect to the estimated cost or the discount rate are added to or deducted from, respectively, the cost of the asset. The effect of discounting the estimated cost is recognized in the income statement as an interest expense.
Furthermore, these provisions include certain provisions of the Group's industrial entities in order to cover the costs of rehabilitation of the natural landscape where the power plants and quarry operators are installed at the end of the holding, which lasts 20- 30 years, according to the licenses received from the state.
Emissions obligation
Emissions are recognized based on the net obligation method according to which the Group recognizes an obligation from emissions when the actual emissions exceed the emission rights allocated by the European Union. The amount is measured at fair values to the extent that the Group has the obligation to cover the deficit through purchases. Rights purchased in excess of those required to cover deficits are recognized as intangible assets at cost.
4.16 Leases
Recognition and initial measurement of the right-of-use asset
The Group applies a single recognition and measurement approach for all leases (including short-term and low-value leases). The Group recognises lease liabilities for lease payments and right-of-use assets representing the right to use the underlying assets.
At the lease period commencement date, the Group recognizes a right-of-use asset and a lease liability, measuring the right-of-use asset at cost, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of a low-value underlying asset. For these leases, the Group recognises rentals as operating expenses using the straight-line method over the lease term.
The cost of the right-of-use asset comprises:
• the amount of the initial measurement of the lease liability (see below),
• any lease payments made at or before the commencement date, less any lease incentives received,
• the initial direct costs incurred by the lessee, and
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• an estimate of costs to be incurred by the Group in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
The Group undertakes the obligation for those costs either at the lease period commencement date or as a consequence of having used the leased asset during a particular period.
Initial measurement of the lease liability
At the lease period commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. When the interest rate implicit in the lease can be readily determined, the lease payments shall be discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the Group shall use the Group’s incremental borrowing rate.
At the lease period commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right-of-use asset during the lease term that are not paid at the lease commencement date:
1. fixed payments less any lease incentives receivable,
2. any variable lease payments that depend on the future change in index or a rate, initially measured using the index or rate as at the lease period commencement date
3. amounts expected to be payable by the Group under residual value guarantees,
4. the exercise price of a purchase option if the Group is reasonably certain to exercise that option and
5. payments of penalties for terminating the lease, if the lease term reflects the Group exercising an option to terminate the lease.
Subsequent measurement
Subsequent measurement of the right-of-use asset
After the lease period commencement date, the Group measures the right-of-use asset applying a cost model.
The Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses, and adjusted for any subsequent measurement of the lease liability.
The Group applies the requirements set in IAS 16 regarding the depreciation of the right-of-use asset, which it reviews for potential impairment.
Subsequent measurement of the lease liability
After the lease period commencement date, the Group measures the lease liability by
1. increasing the carrying amount to reflect financial cost on the lease liability,
2. reducing the carrying amount to reflect the lease payments made, and
3. re-measuring the carrying amount to reflect any lease reassessment or modification.
Financial cost of a lease liability is allocated over the lease term in such a way that it results in a constant
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periodic rate of interest on the remaining balance of the liability.
After the lease period commencement date, the Group recognizes in profit or loss, (unless the costs are included in the carrying amount of another asset applying other applicable Standards), both:
1. financial cost of the lease liability, and
2. variable lease payments not included in the measurement of the lease liability in the period in which the event or condition that triggers those payments occurs.
The Group as lessor
Leases in which the Group is the lessor are classified as either finance or operating leases. When the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the lease is classified as a finance lease. All other leases are classified as operating leases.
When the Group is an intermediate lessee, it accounts for the master lease and sublease as two separate contracts. A sublease is classified as either a finance lease or an operating lease depending on the right-of-use asset arising from the headlease.
Revenue from operating leases is recognised on a straight-line basis over the term of the lease. The initial direct costs of negotiating and arranging an operating lease agreement are added to the carrying amount of the underlying asset and recognised using the straight-line method over the lease term.
Amounts due from lessees under finance leases are recognised as receivables in the amount of the Group's net investment in the finance lease. The finance income from the lease is allocated to the reporting periods to reflect the Group's constant periodic rate of return on its remaining net investment in the finance leases.
When the lease includes both leasehold and non-leasehold elements, the Group applies IFRS 15 in order to allocate the contract price to each element separately.
In addition, the Group as a developer provides its customers with the option to lease an asset, in addition to option of purchasing the asset. The ultimate lessee has the right to purchase the leased asset at a price sufficiently below its fair value on the exercise date so that, at the commencement of the lease, it is reasonably certain that the right will be exercised.
The aforementioned transactions bear the characteristics of an alternative form of sale, where the Company acknowledges the following:
- Income from the sale, which is recognized at the beginning of the lease period at the lower value between the fair value and the present value of the receivables to which the Company is entitled, discounted at an interest rate deemed appropriate based on market standards.
- Financial income recognized throughout the lease period from the subsequent measurement of the receivable at amortized cost.
The receivables recognized, as a result of the above contracts, are included in their long-term part in the "Other long-term financial receivables" fund and in their short-term part in the "Advances and other receivables" item. At the same time, the collections of the related receivables and of the corresponding interest income are presented as inflows from investment activities.
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Β. Other accounting principles
The other accounting policies adopted in the preparation of the accompanying Company and Consolidated Financial Statements are as follows:
4.17 Foreign currency conversion
Functional and reporting currency
The consolidated financial statements are presented in Euro, which is the functional currency of the Group’s as well as the Parent Company’s reporting currency.
Transactions and balances in Foreign Currency
Foreign currency transactions are converted into the functional currency by using the exchange rates applicable on the date when the said transactions were performed. The monetary assets and liabilities which are denominated in foreign currency are converted into the Group’s functional currency on the Statement of Financial Position reporting date using the prevailing exchange rate on that day. Any gains or losses due to translation differences that result from the settlement of such transactions during the period, as well as from the conversion of monetary assets denominated in foreign currency based on the prevailing exchange rates on the Statement of Financial Position reporting date, are recognized in the Income Statement.
Non-monetary assets which are denominated in foreign currency and which are measured at fair value are converted into the Group’s functional currency using the prevailing exchange rate on the date of their fair value measurement. The FX translation differences from non-monetary items measured at fair value are considered as part of the fair value and thus are recorded in the same account as the fair value differences.
Gains or losses arising from transactions in foreign currency as well as from the end of period valuation of monetary assets, denominated in foreign currency, which meet the criteria for cash flow hedges are recognized in other comprehensive income and cumulatively in equity.
Foreign operations
The functional currency of the Group’s foreign subsidiaries is the official currency of the country in which every subsidiary operates. For the preparation of consolidated financial statements, assets and liabilities of foreign subsidiaries, including goodwill and fair value adjustments due to business combinations, are translated into Euro at the exchange rates effective at the Statement of Financial Position reporting sate. Revenue and expenses are translated into the presentation currency of the Group based on the average exchange rates for the reported period. Any differences arising from this procedure are charged/ (credited) to foreign operations currency translation reserves differences, equity, and are recognized in other comprehensive income in the Statement of Comprehensive Income. Upon the disposal, write off or derecognition of a foreign subsidiary, the above reserves are transferred to profit or loss for the period.
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4.18 Borrowing costs
Borrowing costs that are directly attributable to acquisition, construction, or production of qualifying assets, which will require considerable time until the assets are ready for the proposed use or disposal, are added to the acquisition cost of those assets until the assets are ready for the proposed use or disposal. In other cases, the borrowing costs burden gains or losses of the period when incurred.
4.19 Investment property
Investment property relates to investments in properties which are held (through acquisition) by the Group, either to generate rent from their lease or for the increase in their value (increased capital) or for both purposes and are not held: a) to be used for production or distribution of raw materials / services or for administrative purposes; and b) for the sale as part of the company’s regular operations.
Investment property is initially measured at acquisition purchase cost including transaction expenses. Subsequently, it is recognized at fair value. Independent appraisers with adequate experience in the location and in the nature of investment properties define the fair value.
The book value recognized in the Group’s Financial Statements reflects the market conditions on the Statement of Financial Position reporting date. Gains or losses, arising from changes in the fair value of investment property constitute results and are recognized in the Income Statement for the period in which it has been recognized. Repairs and maintenance are recognized as expenses in the period when incurred. Significant subsequent expenses are capitalized when they increase the useful life of the property and its production capacity or reduce its operating costs.
Property transfers from investment property to fixed assets take place only when there is a change in the use of the said property which is proven by the Group’s own use of the property or by the Group’s commencement to develop this property for sale.
Investment property is derecognized (eliminated from the Statement of Financial Position) when it is sold or when it is permanently withdrawn from use and is not expected to generate future economic benefits from its sale. Gains or losses from withdrawal or sale of investment property pertain to the balance between the net proceeds from the sale and the book value of the asset and are recognized in the Income Statement for the period in which the asset was sold or withdrawn.
Constructed or developed investment property items are monitored, as well as completed items, at fair value.
4.20 Inventory
Inventory items include constructed or real estate property items kept for sale, idle mines and quarries materials, building materials, spare parts and raw and auxiliary materials. Inventories are measured at the lower amount between the cost and net realizable value. The cost of raw materials, semi-finished and finished products is determined applying the weighted average cost method.
The cost of finished and semi-finished products includes all the costs incurred in order to bring the products to their current state, condition and processing stage and contains raw materials, labor, general industrial expenses and other costs directly affecting acquisition of materials.
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The net realizable value of finished products is their estimated selling price during the Company’s normal course of business less the estimated costs for their completion and the estimated necessary costs for their sale.
The net realizable value of raw materials is their estimated replacement cost during the normal course of business.
Appropriate provisions are formed for obsolete inventory, if necessary. Impairment of inventory in net realizable value and other losses from inventory are recognized in profit or loss for the period in which they are incurred.
4.21 Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, sight deposits, term deposits, bank overdrafts and other highly liquid investments that are directly convertible into particular amounts of cash equivalents which are not subject to significant value change risk.
The Group considers term deposits and other highly liquid investments less than three months maturity as cash available, as well as time deposits over three months maturity for which it has the right to early liquidation without loss of capital.
For the purposes of preparing the consolidated Statements of Cash Flows, cash and cash equivalents consist of cash in hand, bank deposits as well as cash equivalents as defined above.
The Group’s restricted deposits, irrespective of the nature of their commitment, are not included in the cash and cash equivalents but are classified in the item "Prepayments and other receivables" (please refer to Note 20).
4.22 Employee benefits
Short-term benefits: Short-term employee benefits (except for termination of employment benefits) in cash and in kind are recognized as an expense when deemed accrued. Any unpaid amount is recorded as a liability, whereas in case the amount already paid exceeds the benefits’ amount, the entity identifies the excessive amount as an asset (prepaid expense) only to the extent that the prepayment shall lead to a future payments’ reduction or refund.
Retirement Benefits: Benefits following termination of employment include lump-sum severance grants, pensions and other benefits paid to employees after termination of employment in exchange for their service. The Group’s liabilities for retirement benefits cover both defined contribution plans and defined benefit plans. The defined contribution plan’s accrued cost is recognized as an expense in the period to which it relates. Pension plans adopted by the Group are partly financed through payments to insurance companies or state social security funds.
(a) Defined Contribution Plan
Defined contribution plans pertain to contribution payment to Social Security Organizations and therefore, the Group does not have any legal obligation in case the Fund is incapable of paying a pension to the insured person. The employer’s obligation is limited to paying the employer’s contributions to the Funds. The payable contribution by the Group in a defined contribution plan is
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identified as a liability after the deduction of the paid contribution, while accrued contributions are recognized as expenses in the income statement.
(b) Defined Benefit Plan (non-funded)
Under Laws 2112/20 and 4093/2012, the Company must pay compensation to its employees upon their dismissal or retirement. The amount of compensation paid depends on the years of service, the level of wages and the way of leaving service (dismissal or retirement). The entitlement to participate in these plans is carried out through the distribution of benefits in the last 16 years until the date of retirement of employees following the scale of Law 4093/2012.
The liability recognized in the Statement of Financial Position for defined benefit plans is the present value of the liability for the defined benefit less the plan assets’ fair value (reserves from payments to an insurance company), the changes deriving from any actuarial profit or loss and the previous service cost. The defined benefit commitment is calculated on an annual basis by an independent actuary through the use of the projected unit credit method. Regarding FY 2023 the selected interest rate follows the tendency of European Bonds of 10-year maturity as at December 31 2023, which is regarded as consistent with the provisions of IAS 19, i.e. is based on bonds corresponding to the currency and the estimated term relative to employee benefits as well as appropriate for long-term provisions.
A defined benefit plan establishes, based on various parameters, such as age, years of service and salary, the specific obligations for payable benefits. Provisions for the period are included in the relative staff costs in the accompanying separate and consolidated Income Statements and comprise the current and past service cost, the relative financial cost, the actuarial gains or losses and potentially arising additional charges. Regarding unrecognized actuarial gains or losses, the revised IAS 19 is applied, which includes a number of changes to accounting treatment of defined benefit plans, including as follows:
i. recognition of actuarial gains/losses in other comprehensive income and their permanent exclusion from the Income Statement,
ii. non-recognition of the expected returns on the plan investment in the Income Statement but recognition of the relative interest on net liability/(asset) of the benefits calculated based on the discount rate used to measure the defined benefit obligation,
iii. recognition of past service cost in the Income Statement at the earliest between the plan modification date or when the relative restructuring or terminal provision are recognized,
iv. other changes including new disclosures, such as quantitative sensitivity analysis.
(c) Share-based Payments (IFRS 2)
The Company and the Group have implemented share-based payment agreements for their employees and executives. In particular, based on the existing agreements, the employees and executives of the Company and the Group are granted the right to receive equity securities (shares) of the parent company and its subsidiary, given that specific vesting conditions have been met. None of the existing equity-based payment agreements are cash-settled. Services received in exchange for granting equity- based payments are measured at their fair value. The fair value of the services of executives and employees, on the date the stock options’ granting, is recognized in accordance with IFRS 2 as an
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expense in the income statement, with a corresponding increase in equity (in the account "Reserves for stock options") during the period when the services that correspond to the stock options are being received. The total expense of the stock options during the vesting period is calculated according to the fair value of the options on the date of granting. The expense is allocated over the vesting period, based on the best available estimate of the number of stock options expected to be granted. Non- market conditions are included in the assumptions for determining the number of options expected to be exercised. The fair value of options is measured by adopting an appropriate valuation model to reflect the number of options for which the performance conditions of each plan are expected to be met. Estimates of the number of options expected to be exercised are revised if there is any indication that the number of stock options expected to be granted differs from previous estimates. Any adjustment made to the cumulative share-based compensation resulting from a review is recognized in the current period.
The above Stock Option Plans take into account the following variables: Exercise Price, Share Price on the granting date, Granting Date, Maturity Date(s) of Options, Expected Volatility of Stock Price, Dividend Yield, and Risk Free Rate.
For transactions related to benefits based on the Company's equity securities towards executives of the subsidiaries, such transactions are recognized in the separate financial statements of the Company as an increase of the Company's participation in subsidiaries according to the cost of the benefits granted to the executives of subsidiary companies.
As of 31.12. 2023, the following are in place: a) an active program for the allocation of the Company's Treasury Shares and b) an active program for the distribution of bonus Shares in a subsidiary of the Group (see Note 33).
4.23 Government grants
Government grants are recognized at fair value when there is reasonable assurance that the grant will be collected, and the Group will comply with all relevant conditions.
Government grants related to the grants for tangible fixed assets are recognized when there is reasonable assurance that the grant will be collected, and all relevant conditions will be met. These grants are recognized as deferred income and are transferred to the income statement during the period based on the expected useful life of the asset, for which the grant was received.
Government grants, relating to expenses, are recorded in transit accounts and recognized in the income statement over the period necessary to balance the expenses they are intended to compensate.
In particular, concerning the grant for concession contracts of motorways, the Group recognized the total of financial contribution, approved through the concession agreement, as financial asset reducing the value of intangible asset, that had been created based on the same agreement, and amortized at the same period and in a way similar to the transfer of the book value of the intangible asset to the income statement.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
269
4.24 Earnings per share
Basic earnings per share are calculated dividing net earnings by the weighted average number of common shares outstanding during the period, excluding the weighted average number of the common shares acquired by the Group as treasury shares.
Earnings per share are calculated dividing the net profit attributable to shareholders by the weighted average number of shares outstanding during the year.
In the periods presented, the Group has no conditional issuable ordinary shares, i.e. ordinary shares issuable for a minimum amount of cash or without cash after the fulfillment of certain conditions of a potential shareholder agreement and therefore does not report diluted earnings per share.
5 GROUP AND COMPANY STUCTURE
The following tables present the total participating, direct and indirect, interests of the parent company GEK TERNA SA in the economic entities as at 31.12.2023 per segment, which were included in the consolidation or incorporated as joint operations. In cases of indirect participation, the subsidiary, in which the participating interest is consolidated, is presented.
5.1 Company’s Structure
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
CONSTRUCTION SEGMENT - JOINT OPERATIONS
J/V GEK TERNA - TERNA ENERGY (INSTALLATION AND OPERATION ASSK)
Greece
50.00
50.00
100.00
Proportional consolidation
ΤΕRΝΑ ENERGY SA
2018-2023
ALTE ATE - TERNA SA GP
Greece
50.00
0.00
50.00
Proportional consolidation
-
2018-2023
5.2 Group’s Structure
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
CONSTRUCTION SEGMENT - SUBSIDIARIES
ΤΕRΝΑ S.A.
Greece
100.00
0.00
100.00
Full
-
2018-2023
J/V EUROΙΟΝΙΑ
Greece
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2018-2023
J/V CENTRAL GREECE MOTORWAY Ε-65
Greece
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2018-2023
J/V HELLAS TOLLS
Greece
95.00
5.00
100.00
Full
ΤΕRΝΑ SA
2018-2023
ILIOHORA S.A.
Greece
70.55
29.45
100.00
Full
ΤΕRΝΑ SA
2018-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
270
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
GEK SERVICES S.A.
Greece
100.00
0.00
100.00
Full
-
2018-2023
TERNA OVERSEAS L.T.D.
Cyprus
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2014-2023
TERNA QATAR L.L.C.
Qatar
0.00
35.00
35.00
Full
ΤΕRΝΑ SA
2013-2023
TERNA BAHRAIN HOLDING W.L.L.
Bahrain
0.00
99.99
99.99
Full
ΤΕRΝΑ SA
-
TERNA CONTRACTING CO W.L.L.
Bahrain
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
-
TERNA VENTURES W.L.L.
Bahrain
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
-
J/V GEK TERNA - TERNA ENERGY (INSTALLATION AND OPERATION A.S.S.K.)
Greece
50.00
50.00
100.00
Full
ΤΕRΝΑ ENERGY SA
2018-2023
J/V GEK TERNA - GEK SERVICES
Greece
95.00
5.00
100.00
Full
GEK SERVICES S.A.
2021-2023
Α.Ε.ROZEPHIROS L.T.D.
Cyprus
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2019-2023
CONSTRUCTIONS SEGMENT - JOINT OPERATIONS
J/V AVAX SA-VIOTER SA-ILIOHORA SA
Greece
0.00
37.50
37.50
Proportional consolidation
ILIOHORA SA
2018-2023
J/V TERNA - AKTOR - POWELL (CHAIDARI METRO)
Greece
0.00
66.00
66.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - IMPEGILOSPA (TRAM)
Greece
0.00
55.00
55.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ALPINE MAYREDER BAU GmbH-TERNA (ANCIENT OLYMPIA BYPASS)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - WAYSS (PERISTERI METRO)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ETETH-TERNA-AVAX -PANTECHNIKI HORSE RIDING CENTRE
Greece
0.00
35.00
35.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - PANTECHNIKI (ΟΑΚΑ SUR. AREAS)
Greece
0.00
83.50
83.50
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ΤΕRΝΑ-ΜICHANIKI AGRINIO BY-PASS
Greece
0.00
65.00
65.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ALPINE MAYREDER BAU GmbH-TERNA SA (CHAIDARI METRO STATION, PART Α')
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ALPINE MAYREDER BAU GmbH-TERNA SA (PARADEISIA TSAKONA)
Greece
0.00
49.00
49.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR-DOMOTECHNIKI-THEMELIODOMI- TERNA-ETETH (THESSAL. MEG. MUNICIPALITY)
Greece
0.00
25.00
25.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - AKTOR (SUBURBAN SKA)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - AKTOR (R.C. LIANOKLADI - DOMOKOS)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA SA- THALES AUSTRIA (ETCS SYSTEM PROCUREMENT)
Greece
0.00
37.40
37.40
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA SA-AKTOR ATE - ΑVAX-TREIS GEFYRES
Greece
0.00
33.33
33.33
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ΜΕΤΚΑ-TERNA
Greece
0.00
90.00
90.00
Proportional consolidation
ΤΕRΝΑ SA
2019-2023
J/V APION KLEOS
Greece
0.00
28.60
28.60
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V ΤΕRΝΑ SA-SICES CONSTRUCTIONS (HELPE REF. UPGR.)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
271
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
J/V AKTOR-TERNA-PORTO KARRAS (Florina-Niki road)
Greece
0.00
33.33
33.33
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR-TERNA (PATHE at Stylida road)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA - Α.Ε.GEK Constructions (Promachonas road)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR-TERNA (Patras Port)
Greece
0.00
70.00
70.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR ATE-AVAX- TERNA SA (Koromilia- Kristalopigi project)
Greece
0.00
33.33
33.33
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V IMPREGILO SpA-TERNA SA (Cultural center of Stavros Niarchos Foundation)
Greece
0.00
49.00
49.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR ATE - TERNA SA (Lignite works)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR ATE - TERNA SA (Thriasio B’)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR SA - AVAX - TERNA SA (Tithorea Domokos)
Greece
0.00
33.33
33.33
Proportional consolidation
ΤΕRΝΑ SA
2021-2023
J/V AKTOR SA - AVAX - TERNA SA (Bridge RL 26, TITHOREA - DOMOKOS)
Greece
0.00
44.56
44.56
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR SA - TERNA SA (Thriasio B’ ERGOSE)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AKTOR - TERNA (Joint Venture ERGOSE No. 751)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V RENCO TERNA (Construction of compression Station of TAP in Greece and in Albania)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2022-2023
J/V AVAX SA-TERNA SA-AKTOR ATE-INTRAKAT (Mosque)
Greece
0.00
25.00
25.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V AVAX-TERNA INTRAKAT-MYTILINAIOS (Construction of an artificial barrier on the Greek-Turkish border of Evros)
Greece
0.00
25.00
25.00
Proportional consolidation
ΤΕRΝΑ SA
2020-2023
JV TERNA CC CHR D CONSTANTINIDIS
Greece
0.00
55.00
55.00
Proportional consolidation
ΤΕRΝΑ SA
2021-2023
J/V TERNA-THEMELI (Extention of the tram station in Hellinikon)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2022-2023
J/V TERNA-MYTILINEOS (ELECTRICAL OPERATION OF RAILROAD KIATO-RODODAFNI)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2022-2023
J/V TERNA-DAMCO
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2022-2023
J/V TERNA-MYTILINEOS (ELECTRICAL OPERATION OF RAILROAD RODODAFNI-RIO)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2022-2023
J/V VINCI TERNA DOO
Serbia
0.00
49.00
49.00
Proportional consolidation
ΤΕRΝΑ SA
2018-2023
J/V TERNA-FOTAGONLED (IOANNINA LICHTING)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V TERNA-INTRAKAT (Evros fence)
Greece
0.00
65.00
65.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V TERNA-EKTER (Construction of Ionian Center)
Greece
0.00
70.00
70.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V TERNA-P and C DEVELOPMENT (Construction of Lamia Exhibition)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V TERNA-AKTOR-INTRAKAT (VOAK SDIT)
Greece
0.00
55.00
55.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V TERNA-AKTOR-METKA (PANATHINAIKOS STADIUM)
Greece
0.00
40.00
40.00
Proportional consolidation
ΤΕRΝΑ SA
2023
JV TERNA–ΙΝΤRΑΚΑΤ (EGNATIA ROAD-EAST SECTOR OPEREATION AND MAINTAINANCE)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
272
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
JV TERNA–ΙΝΤRΑΚΑΤ (EGNATIA ROAD-EAST SECTOR OPEREATION AND MAINTAINANCE)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2023
JV THALIS-TERNA–CONSTANTINIDIS (E.E.N AMARIOU)
Greece
0.00
30.00
30.00
Proportional consolidation
ΤΕRΝΑ SA
2023
JV TERNA–ΙΝΤRΑΚΑΤ (EGNATIA ROAD-EAST SECTOR 6061 OPEREATION AND MAINTAINANCE)
Greece
0.00
50.00
50.00
Proportional consolidation
ΤΕRΝΑ SA
2023
J/V RENCO - TERNA - Albania branch
Cyprus
0.00
40.00
40.00
Proportional consolidation
ΤΕRΝΑ SA
2019-2023
CONSTRUCTIONS SEGMENT - JOINT VENTURES
AIGISTOS SA
Greece
0.00
49.99
49.99
Equity
ΤΕRΝΑ SA
2018-2023
J/V TENERGY - INDIGITAL -AMCO
Greece
0.00
25.75
25.75
Equity
ΤΕRΝΑ ENERGY SA
2020-2023
RES ENERGY SEGMENT - SUBSIDIARIES
ΤΕRΝΑ ENERGY S.A.
Greece
36.79
0.00
36.79
Full
-
2019-2023
AIOLIKI PANORAMATOS DERVENOCHORION S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
PPC RENEWABLES - TERNA ENERGY S.A.
Greece
0.00
18.76
18.76
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI SERVOUNIOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
IWECO HONOS CRETE S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY EVROU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI RACHOULAS DERVENOCHORION S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI DERVENOCHORION S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI MARMARIOU EVIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI DYSTION EVIAS S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI KAFIREOS EVIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI STYRON EVIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI NEAPOLEOS LAKONIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI MALEA LAKONIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY S.A. AND CO ENERGEIAKI VELANIDION LAKONIAS G.P.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI EASTERN GREECE S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΑIOLIKI PASTRA ATTICA S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI PELOPONNISOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI PROVATA TRAIANOUPOULEOS S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
273
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
AIOLIKI DERVENI TRAIANOUPOLEOS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGIAKI FERRON EVROU S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY S.A. AND CO ENERGIAKI ARI S.A.PPON G.P.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY S.A. AND Co AIOLIKI POLYKASTROU G.P.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ENERGEIAKI XIROVOUNIOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI ILIOKASTROU S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EUROWIND S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
DELTA AXIOU ENERGEIAKI S.A.
Greece
0.00
29.43
29.43
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY S.A. AND VECTOR GREECE WIND PARKS - TROULOS WIND PARK G.P.
Greece
0.00
33.11
33.11
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY SEA WIND PARKS S.A.
Greece
0.00
31.27
31.27
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY WIND PARKS XIROKAMPOS AKRATAS S.A.
Greece
0.00
28.33
28.33
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY SAPPON PC
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2020-2023
AIOLIKO PARKO VOIOTIAS TARATSA SMSA
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
VATHICHORI ENVIRONMENTAL S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
VATHICHORI ONE PHOTOVOLTAIC S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ALISTRATI ENERGY L.T.D.
Greece
0.00
29.43
29.43
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ ENERGY AI-GIORGIS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA AIOLIKI XEROVOUNIOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ AIOLIKI AITOLOAKARNANIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ AIOLIKI AMARINTHOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ ILIAKI PANORAMATOS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ ILIAKI PELLOPONISSOU S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΤΕRΝΑ ILIAKI VIOTIAS S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
AIOLIKI CENTRAL GREECE S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
VATHICHORI TWO ENERGY S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY OMALIES S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EVOIKOS ANEMOS S.A.
Greece
0.00
25.75
25.75
Full
ΤΕRΝΑ ENERGY SA
2020-2023
KEY ILIAKI ENERGIAKI P.C.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2020-2023
KASTRAKI ILIAKI ENERGIAKI P.C.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2020-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
274
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
TERNA ENERGY-PUMPED STORAGE I S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2022-2023
TERNA ENERGY FIVE TOWERS G.P.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
HAOS INVEST 1 E.A.D.
Bulgaria
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ECO ENERGY DOBRICH 2 E.O.O.D.
Bulgaria
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ECO ENERGY DOBRICH 3 E.O.O.D.
Bulgaria
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ECO ENERGY DOBRICH 4 E.O.O.D.
Bulgaria
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EOLOS NORTH sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EOLOS NOWOGRODZEC sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EOLOS POLSKA sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EOLOS EAST sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
JP GREEN sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
WIRON sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
BALLADYNA sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
EOLOS DEVELOPMENT SP. Z O.O.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2021-2023
ΑΕGIS RENEWABLES, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
MOUNTAIN AIR HOLDINGS L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
TERNA RENEWABLE ENERGY PROJECTS L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
TERNA DEN L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
FLUVANNA I INVESTOR, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
FLUVANNA INVESTMENTS 2, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
CI-II BEARKAT QFPF, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
CI-II BEARKAT HOLDING B, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
SPONSOR BEARKAT I HOLDCO, L.L.C.
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
TERNA ENERGY USA HOLDING CORPORATION
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
TERNA ENERGY USA HOLDING CORPORATION
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
TERNA ENERGY USA HOLDING CORPORATION
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
COOPER-MONITEAU ENERGY, LLC
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
RICHLAND CREEK ENERGY, LLC
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2023
FIER HELIOS SH.P.K
Albania
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2022-2023
FAETHON SH.P.K
Albania
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2022-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
275
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
RES ENERGY SEGMENT - JOINT OPERATIONS
ILIAKI PIKROLIMNIS S.A.
Greece
0.00
18.76
18.76
Proportional consolidation
ΤΕRΝΑ ENERGY SA
2020-2023
ILIAKA VAKOUFIA P.C.
Greece
0.00
18.76
18.76
Proportional consolidation
ΤΕRΝΑ ENERGY SA
2020-2023
PHOTOVOLTAIC KILKIS P.C.
Greece
0.00
18.76
18.76
Proportional consolidation
ΤΕRΝΑ ENERGY SA
2020-2023
RES ENERGY SEGMENT - JOINT VENTURES
ΕΝ.ΕR.ΜΕL S.A.
Greece
0.00
18.40
18.40
Equity
ΤΕRΝΑ ENERGY SA
2018-2023
ATLAS 1 ENERGY SINGLE MEMBER IKE
Greece
0.00
18.40
18.40
Equity
ΤΕRΝΑ ENERGY SA
2021-2023
RES ENERGY SEGMENT - ASSOCIATES
CYCLADES RES ENERGY CENTER S.A.
Greece
0.00
16.56
16.56
Equity
ΤΕRΝΑ ENERGY SA
2018-2023
ARMONIA ENERGY SOCIETY
Greece
0.00
4.60
4.60
Equity
ΤΕRΝΑ ENERGY SA
2019-2023
TRADING ELECTRICITY SEGMENT - SUBSIDIARIES
OPTIMUS ENERGY S.A.
Greece
0.00
51.00
51.00
Full
HERON ENERGY S.A.
2018-2023
TERNA ENERGY TRADING E.O.O.D.
Bulgaria
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2018-2023
TETRA DOOEL SKOPJE
FYROM
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2020-2023
TERNA ENERGY TRADING D.O.O.
Serbia
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2018-2023
TERNA ENERGY TRADING S.H.P.K.
Albania
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2018-2023
ELECTRICITY FROM THERMAL ENERGY, TRADING OF ELECTRIC POWER AND NATURAL GAS SEGMENT - SUBSIDIARIES
GEK TERNA FTHIOTIDAS S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2021-2023
HERON ENERGY S.A.
Greece
86.18
13.82
100.00
Equity
ΤΕRΝΑ SA
2019-2023
FIER THERMOELECTRIC S.H.A.
Albania
70.00
0.00
70.00
Full
-
2022-2023
ELECTRICITY FROM THERMAL ENERGY, TRADING OF ELECTRIC POWER AND NATURAL GAS SEGMENT - JOINT VENTURES
THERMOELECTRIC KOMOTINIS S.A.
Greece
50.00
0.00
50.00
Equity
GEK TERNA CONCESSIONS SINGLE MEMBER SA
2021-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
276
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
REAL ESTATE SEGMENT - SUBSIDIARIES
IOANNINON ENTERTAINMENT DEVELOPMENT S.A.
Greece
84.65
0.00
84.65
Full
-
2018-2023
MONASTIRIOU TECHNICAL DEVELOPMENT S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2018-2023
VIPA THESSALONIKI S.A.
Greece
100.00
0.00
100.00
Full
-
2018-2023
ICON E.O.O.D.
Bulgaria
83.62
16.38
100.00
Full
ΤΕRΝΑ SA
2018-2023
ICON BOROVEC E.O.O.D.
Bulgaria
0.00
100.00
100.00
Full
ICON EOOD
2016-2023
DOMUS DEVELOPMENT E.O.O.D.
Bulgaria
0.00
100.00
100.00
Full
ICON EOOD
2016-2023
SC GEK ROM S.R.L.
Romania
0.00
100.00
100.00
Full
ICON EOOD
2016-2023
HIGHLIGHT S.R.L.
Romania
0.00
100.00
100.00
Full
ICON EOOD
2016-2023
MANTOUDI BUSINESS PARK S.M.S.A.
Greece
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2018-2023
AVLAKI I B.V.
Netherland
100.00
0.00
100.00
Full
-
2018-2023
AVLAKI I B.V.
Netherland
100.00
0.00
100.00
Full
-
2018-2023
AVLAKI I B.V.
Netherland
100.00
0.00
100.00
Full
-
2018-2023
AVLAKI I B.V.
Netherland
100.00
0.00
100.00
Full
-
2018-2023
ARGOLIKI RIVIERA S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2022-2023
KASSIOPI REAL ESTATE S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2022-2023
REAL ESTATE SEGMENT - ASSOCIATES
KEKROPS S.A.
Greece
37.48
0.00
37.48
Equity
-
2018-2023
GEKA S.A.
Greece
0.00
33.34
33.34
Equity
ΤΕRΝΑ SA
2018-2023
DI TERNA SA
Greece
19.00
0.00
19.00
Equity
-
2023
CONCESSIONS SEGMENT - SUBSIDIARIES
MGGR L.L.C.
U.S.A.
100.00
0.00
100.00
Full
-
2021-2023
HIRON CONCESSIONS S.A.
Greece
99.56
0.44
100.00
Full
ILIOHORA SA
2018-2023
KIFISIA PLATANOU SQ. CAR PARK S.A.
Greece
90.64
9.36
100.00
Full
ILIOHORA SA
2018-2023
PARKING STATION SAROKOU SQUARE CORFU S.A.
Greece
85.25
14.75
100.00
Full
ILIOHORA SA
2018-2023
HELLAS SMARTICKET S.A.
Greece
35.00
12.88
47.88
Full
ΤΕRΝΑ ENERGY SA
2018-2023
PERIVALLONTIKI PELOPONNISOU S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
ΑΕIFORIKI EPIRUS S.M.S.A.S.P.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2018-2023
NEA ODOS S.A.
Greece
0.00
100.00
100.00
Full
GEK TERNA MOTORWAYS SINGLE MEMBER SA
2018-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
277
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
CENTRAL GREECE MOTORWAY S.A.
Greece
0.00
100.00
100.00
Full
GEK TERNA MOTORWAYS SINGLE MEMBER SA
2018-2023
GEK TERNA MOTORWAYS S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2021-2023
GEK TERNA KASTELI S.M.S.A.
Greece
0.00
100.00
100.00
Full
GEK TERNA CONCESSIONS S.M.S.A.
2021-2023
CONCESSIONS SEGMENT - JOINT VENTURES
PARKING OUIL S.A.
Greece
50.00
0.00
50.00
Equity
-
2018-2023
ATHENS CAR PARK S.A.
Greece
29.00
0.00
29.00
Equity
-
2018-2023
THESSALONIKI CAR PARK S.A.
Greece
24.70
0.00
24.70
Equity
-
2018-2023
AG. NIKOLAOS PIRΑ.Ε.US CAR PARK S.A.
Greece
36.52
0.00
36.52
Equity
-
2018-2023
POLIS PARK S.A.
Greece
30.21
0.00
30.21
Equity
-
2018-2023
METROPOLITAN ATHENS PARK S.A.
Greece
25.70
0.00
25.70
Equity
-
2018-2023
INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A.
Greece
0.00
32.46
32.46
Equity
GEK TERNA KASTELI SINGLE MEMBER SA
2019-2023
WASTE CYCLO S.A.
Greece
0.00
18.76
18.76
Equity
ΤΕRΝΑ ENERGY SA
2018-2023
SARISA YPO-PARACHORISI S.A.
Greece
35.00
0.00
35.00
Equity
2022-2023
ΤΕRΝΑ FIBER SPECIAL PURPOSES SOCIETE ANONYME
Greece
0.00
18.43
18.43
Equity
ΤΕRΝΑ ENERGY SA
2022-2023
IRC HELLINIKON S.A.
Greece
35.00
14.00
49.00
Equity
MGGR L.L.C.
2022-2023
PASIFAI ODOS S.A.
Greece
55.00
0.00
55.00
Equity
-
2023
INDUSTRIAL-MINES SEGMENT - SUBSIDIARIES
TERNA MAG S.A.
Greece
51.02
48.98
100.00
Full
ΤΕRΝΑ SA
2018-2023
EUROMETALL AGENCIES S.A.
Greece
0.00
100.00
100.00
Full
ILIOHORA SA
2018-2023
VRONDIS QUARRY PRODUCTS S.A.
Greece
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2018-2023
CEMENT PRODUCTION AND EXPORT F.Z.C.
Libya
0.00
75.00
75.00
Full
ΤΕRΝΑ SA
-
MALCEM CONSTRUCTION MATERIALS L.T.D.
Malta
0.00
75.00
75.00
Full
ΤΕRΝΑ SA
2013-2023
SEGMENT OF HOLDINGS - SUBSIDIARIES
QE ENERGY EUROPE LTD
Cyprus
0.00
100.00
100.00
Full
ΤΕRΝΑ SA
2014-2023
TERNA ENERGY USA HOLDING CORPORATION
U.S.A.
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
TERNA ENERGY TRANSATLANTIC sp.z.o.o.
Poland
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2015-2023
TERNA ENERGY TRADING L.T.D.
Cyprus
0.00
100.00
100.00
Full
HERON ENERGY S.A.
2015-2023
TERNA ENERGY FINANCING S.M.S.A.
Greece
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
GALLETTE L.T.D.
Cyprus
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2015-2023
TERNA ENERGY OVERSEAS L.T.D.
Cyprus
0.00
36.79
36.79
Full
ΤΕRΝΑ ENERGY SA
2016-2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
278
ECONOMIC ENTITY
DOMICILE
DIRECT PARTI- CIPATION %
INDIRECT PARTI- CIPATION %
TOTAL PARTI- CIPATION %
CONSOLI- DATION METHOD
SUBSIDIARY OF INDIRECT PARTICIPATION
TAX UNAUDITED YEARS
GEK TERNA CONCESSIONS S.M.S.A.
Greece
100.00
0.00
100.00
Full
-
2021-2023
The percentages of voting rights of GEK TERNA SA in all the above participations coincide with the percentage the Company holds on the outstanding share capital of the companies .
Assessing the control
The companies TERNA ENERGY and TERNA QATAR LLC are fully consolidated as subsidiaries as the Group exercises control over them in accordance with the requirements of IFRS 10. Within the current period, no changes were made to the above estimates, compared to 31.12.2022 (see analytically note 12.2).
The following table presents the joint ventures for the construction of technical projects and other companies, in which the Group participates. These joint ventures have already concluded the projects they were established for, their guarantee period has expired, their relations with third parties have been settled and their final liquidation is pending. Therefore, they are not included in the consolidated financial statements.
COMPANY NAME
TOTAL PARTICIPATION % (Indirect)
J/V MAIN ARROGATION CANAL D 1
75.00%
J/V ΑKTOR, ΑΕGΕΚ, ΕΚΤΕR, TERNA AIRPORT INSTAL. SPATA
20.00%
J/V FRAGMATOS PRAMORITSA
33.33%
J/V AVAX SA – TERNA SA – EFKLEIDIS
35.00%
J/V AVAX-VIOTER-TERNA (OLYMPIC VILLAGE CONSTRUCTION)
37.50%
J/V TERNA-MOCHLOS-AKTOR TUNNEL KIATO-AIGIO
35.00%
J/V AVAX-TERNA-AKTOR PLATANOS TUNNEL
33.33%
J/V ALPINE MAYREDER BAU GmbH-TERNA SA (PARAD. TSAKONA RING ROAD)
49.00%
J/V TERNA SA-NEON STAR SA-RAMA (OPAP 1)
51.00%
J/V EBEDOS-PANTECHNIKI-ENERGY
50.10%
J/V TERNA-Al OMAIER
60.00%
TERNA ENERGY AVETE AND SIA LP
26.94%
Moreover, given that the consolidation has nullified the value of the associate, presented below, it has no effect on the Group’s financial statements.
ATTIKAT T.S.A.
Greece
22.15
0.00
22.15
Equity
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
279
5.3 Changes in the Group structure within the Year 2023
During the financial year of 2023 the following changes were made in the structure of the Group compared to the year 2022:
- On 10.02.2023, the subsidiary ΤΕRΝΑ ENERGY S.A. acquired all the shares of the company ANAX INDIVIDUAL CEMPLE COMPANY , which was renamed into TERNA ENERGY SAPPON PC. The company develops a Photovoltaic Plant with a capacity of 246.35 MW in the wider area of the prefecture of Evros, Greece. (see Note 7) .
- On 15.02.2023, the J/V TERNA-FOTAGONLED (Lighting of Ioannina) was founded with the purpose of constructing a technical project. TERNA sub-group holds 50% of the joint venture.
- On 01.03.2023, the J/V TERNA-INTRAKAT (Evros Fence) was founded with the purpose of constructing a technical project. TERNA sub-group holds 65% of the joint venture.
- On 20.03.2023, the J/V of TERNA-EKTER (Construction of the Ionic Center) was founded with the purpose of constructing a technical project. TERNA sub-group holds 70% of the joint venture.
- On 27.03.2023, the J/V TERNA - P and C DEVELOPMENT (Construction of the Panhellenic Exhibition of Lamia) was founded with the purpose of constructing a technical project. TERNA sub-group holds 50% of the respective joint venture.
- On 11.04.2023, the company PASIFAI ODOS S.A. was founded with the purpose of the study, construction, financing, operation and maintenance of Hersonissos-Neapolis section of the Northern Road Axis of Crete through PPP. The Company participates with 55% in respective joint venture.
- On 20.04.2023, the J/V TERNA-AKTOR-INTRAKAT (VOAK PPP) was founded with the purpose of the construction of a technical project. TERNA sub-group holds 55% of the joint venture.
- On 17.05.2023, the subsidiary company of the Group, ΤΕRΝΑ ENERGY S.A. jointly with the company GRID TELECOM SINGLE MEMBER SOCIETE ANONYME established the company under the name TERNA FIBER SPECIAL PURPOSE SOCIETE ANONYME COMPANY. The company is a vehicle company for the execution of the Partnership Agreement that will be signed between the Greek State through the Minister of Digital Governance (hereinafter "the Contracting Authority"), the Company and the founders – initial shareholders of the Company as third parties, for the execution of the "ULTRA FAST BROADBAND infrastructures through PPP" project for Geographical Zones 2, 4, 5 and 6, as referred to in the Invitation to Expression of Interest and in the Issue of Invitation to Submit Binding Offers.
- On 19.05.2023, the J/V TERNA-AKTOR-METKA (PANATHINAIKO STADIUM) was founded with the purpose of constructing a technical project. TERNA sub-group holds 40% of the joint venture.
- During the first half of 2023, MGE HELLINIKON was sold to SHRE/SHRI L.L.C.. The price was set at 12,316. This had the effect of changing the percentage of the Group's indirect participation in IRC HELLENIC S.A. from 65% to 14%. As a consequence of the above, the total percentage of
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
280
participation was formed at 49% and is analyzed into direct participation of 35% and indirect participation of 14% through the 100% subsidiary of the Company MGGR L.L.C.
- During the financial year of 2023, ΤΕRΝΑ ENERGY Sub-Group established the companies TERNA DER L.L.C., TERNA DER 2 L.L.C., TERNA DER 3 L.L.C., COOPER-MONITEAU ENERGY LLC and RICHLAND CREEK ENERGY LLC which are based in the USA, for the development of new RES projects and liquidated the companies MOHAVE VALLEY ENERGY L.L.C., FLUVANNA INVESTMENTS L.L.C., FLUVANNA HOLDINGS L.L.C. and TERNA HOLDCO INC which had no assets and no liabilities as of 31.12.2023.
- During the first half of 2023, the liquidation of the joint operation J/V TERNA GCC WAC was completed, in which TERNA subsidiary indirectly held 30% without having a substantial impact on the Group.
- During the second half of the year, the Group's subsidiary company, TERNA ENERGY S.A. acquired 50% of the shares of the company ATLAS1 ENERGY SINGLE PERSON I.K.E. for a symbolic consideration. This company has not carried out any business activity, neither does the company possess any assets, and intends to develop electricity production units. This participation was included in the Energy Production Operating Segment from RES - Joint Ventures.
- On 11.07.2023, the company DI TERNA S.A. was founded with its objective being the construction and operation of a commercial property in Marousi, Attica, Greece, in which the company participates with 19% and was treated as an associate for consolidation purposes.
- On 12.09.2023, the J/V TERNA-INTRAKAT (EGNATIA ODOS – EASTERN SECTION OPERATION AND MAINTENANCE) was established. TERNA sub-Group owns 50% of the joint venture.
- On 12.09.2023, the J/V TERNA-INTRAKAT (EGNATIA ODOS – WESTERN SECTION OPERATION AND MAINTENANCE) was established. TERNA sub-Group owns 50% of the joint venture.
- On 08.11.2023, as part of the restructuring process concerning the business activities of TERNA ENERGY sub-Group, the merger via absorption of the company AIOLIKI KARYSTIAS EVOIAS SA from the company ENERGEIAKI KAFIREEOS EVIAS SA was completed. During the above process, there were no changes in the Group's net position and there was no impact on the Group's financial results.
- On 06.12.2023, the partial divestiture of a branch of AIOLIKI PROVATA TRAIANOUPOLEOS SA was completed with the establishment of the company AIOLIKO PARKO TARATSA SA. The latter inherited the assets and liabilities of the Wind Park of the same name. During the above process, there were no changes in the Group's net position and there was no impact on the Group's financial results.
- On 20.12.2023, the J/V THALIS-TERNA–KONSTANTINIDIS (E.E.N. AMARIOU) was founded. TERNA sub-Group owns 30% of the joint venture.
- On 20.12.2023, the J/V INTRAKAT-TERNA (EGNANTIA ODOS – EASTERN SECTION 6061 OPERATION AND MAINTENANCE) was established. TERNA sub-Group owns 50% of the joint venture.
- On 21.12.2023, the transfer of the entire share capital of NK GEKTERNA from the Group's subsidiary GEK TERNA CONCESSIONS M.A.E. was completed. The total consideration
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
281
accounted for 18,092, whereas the particular transaction resulted into a loss of 3,908 which has been recorded in the item "Profit/(Loss) from sale of participations and securities" in the Statement of Comprehensive Income.
- On 21.12.2023, a merger was completed via the absorption of GEK TERNA’s subsidiary company HERON II THERMOELECTRIC STATION VIOTIAS SA by the company HERON ENERGY SA. From the exchange taking place between old and new shareholders, it emerged that the subsidiary company TERNA SA which held 25% of the shares of HERON II THERMOELECTRIC STATION VIOTIAS SA, will now own an equity stake of 13.82% of HERON ENERGY S.A. whereas the parent company GEK TERNA will own the remaining equity stake of 86.18%. During the above process, there were no changes in the Group's net position and there was no impact on the Group's financial results.
- On 28.12.2023, the acquisition of 49.99% of the share capital of the company AIGISTOS SA from the subsidiary company TERNA SA was completed. The new company is active in the construction segment and treated as a joint venture for consolidation purposes at Group level. The consideration accounted for 20,000, of which an amount of 10,000 was paid by 31.12.2023, while an amount of 10,000 is to be paid within the financial 2024.
- During the second half of 2023, the liquidation of the joint operation JV TERNA-CGCE JOINT VENTURE (AMAS 3) was completed. The Group’s subsidiary TERNA indirectly held 50% in the above company, without however having any substantial impact on the Group.
6 OPERATING SEGMENTS
An operating segment is a component of an economic entity: a) that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses that concern transactions with other components of the same economic entity) and, b) whose operating results are regularly reviewed by the chief operating decision maker of the entity to make decisions about resources to be allocated to the segment and assess of its performance.
The term “chief operating decision maker” defines the Board of Directors that is responsible for the allocation of resources and the assessment of the operating segments.
The Group presents separately the information on each operating segment that fulfils certain criteria of characteristics and exceeds certain quantitative limits.
The amount of each element of the segment is that presented to the “Chief operating decision maker” with regard to allocation of resources to the segment and evaluation of its performance.
The above information is presented in the attached statements of financial position, total comprehensive income and cash flows according to IFRS.
The Group recognizes the following operating reporting segments, whereas if less significant other segments exist are consolidated in the participations category (other segments). Transactions between the operating segments are carried out at purchase prices similar to the prices applied in transactions with third parties.
Constructions: refers, almost exclusively, to contracts for the construction of technical projects.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
282
Electricity from RES: refers to the electricity production from wind generators (wind farms), from
hydroelectric projects and other renewable energy sources.
Electricity from thermal energy and HP trading: refers to the electricity production using natural gas as
fuel, trading of electric energy and natural gas.
Real estate: refers to purchase, development, and management of real estate as well as to investments
for value added from an increase of their price.
Mining/Industry refers to the production of quarry products and the exploitation of magnesite
quarries.
Concessions: concerns the construction and operation of infrastructure (e.g. motorways, airports),
other public interest projects (Unified Automatic Collection System and municipal waste treatment plant) and other facilities (e.g., car stations, etc.) in exchange for their long-term exploitation in relation to the services offered to the public.
Holdings : refers to the supporting operation of all of the segments of the Group .
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
283
Business segments 31.12.2023
Constructions
Electricity from RES
Electricity from thermal energy and HP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Sales of products and merchandise
0
244,676
1,700,022
2,665
20,579
0
0
0
1,967,942
Sales of services
17,951
0
0
812
0
52,494
966
0
72,223
Revenues from operation of motorways
0
0
0
0
0
171,825
0
0
171,825
Revenues from construction services
1,283,407
0
0
0
0
0
0
0
1,283,407
Income from leases
0
0
0
637
0
3,172
1
0
3,810
Revenue from external customers
1,301,358
244,676
1,700,022
4,114
20,579
227,491
967
0
3,499,207
Inter-segmental turnover
111,988
5,267
10,934
581
0
0
2,791
(131,561)
0
Revenue
1,413,346
249,943
1,710,956
4,695
20,579
227,491
3,758
(131,561)
3,499,207
Cost of sales
(1,265,886)
(101,637)
(1,581,726)
(4,566)
(17,348)
(157,959)
(4,659)
121,422
(3,012,359)
Gross profit/(loss)
147,460
148,306
129,230
129
3,231
69,532
(901)
(10,139)
486,848
Administrative and distribution expenses
(21,364)
(32,117)
(28,052)
(616)
(5,017)
(8,978)
(10,381)
(144)
(106,669)
Research and development expenses
(1,826)
(6,180)
0
0
(276)
(1)
(3,516)
8
(11,791)
Other income/(expenses)
(5,875)
10,835
(12,270)
7,749
(885)
18,419
121
6,744
24,838
Results (EBIT)
118,395
120,844
88,908
7,262
(2,947)
78,972
(14,677)
(3,531)
393,226
Other income/(expenses)
(1,208)
(1,312)
(1,109)
(3,860)
(8,366)
(3)
(1)
0
(15,859)
Results before taxes, financing and investing activities
117,187
119,532
87,799
3,402
(11,313)
78,969
(14,678)
(3,531)
377,367
Financial income
3,897
1,208
9,131
47
0
12,358
18,959
(10,834)
34,766
Financial expenses
(12,735)
(48,716)
(12,549)
(245)
(2,323)
(65,678)
(30,239)
11,060
(161,425)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
284
Business segments 31.12.2023
Constructions
Electricity from RES
Electricity from thermal energy and HP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Gains / (Losses) from financial instruments measured at fair value
0
1
30,386
0
0
(5,567)
0
0
24,820
Results from associates and Joint Ventures
(3)
(55)
(8,501)
29
0
(15)
0
0
(8,545)
Results from participations and securities
466
507
0
0
0
(3,906)
4,423
0
1,490
Earnings/(Losses) before taxes
108,812
72,477
106,266
3,233
(13,636)
16,161
(21,535)
(3,305)
268,473
Income tax
(30,543)
(17,288)
(29,076)
(1,883)
890
5,712
(8,961)
0
(81,149)
Net Earnings/(Losses) after taxes
78,269
55,189
77,190
1,350
(12,746)
21,873
(30,496)
(3,305)
187,324
Business segments 31.12.2023
Constructions
Electricity from RES
Electricity from thermal energy and HP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Assets
1,169,486
1,823,869
857,368
121,859
101,092
1,344,551
582,695
(99,385)
5,901,535
Investments in associates
0
0
0
5,361
0
0
0
0
5,361
Investments in joint ventures
20,000
2,671
1,602
0
2,716
120,444
0
0
147,433
Total Assets
1,189,486
1,826,540
858,970
127,220
103,808
1,464,995
582,695
(99,385)
6,054,329
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
285
Business segments 31.12.2023
Constructions
Electricity from RES
Electricity from thermal energy and HP/NG trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidation
Consolidated Total
Liabilities
938,854
1,297,376
489,058
97,699
176,627
1,002,561
798,568
(23,036)
4,777,707
Loans
154,173
1,080,626
132,597
90,659
120,767
820,897
662,618
0
3,062,337
Cash and Cash Equivalents
241,075
224,795
82,172
6,221
5,695
217,196
533,495
0
1,310,649
Net debt / (surplus)
(86,902)
855,831
50,425
84,438
115,072
603,701
129,123
0
1,751,688
Capital expenditure for the period 31.12.2023
22,581
218,327
2,574
1,528
6,589
12,662
24
(69,520)
194,765
During the year ended 31 December 2023, an amount of 388.5 million (11.1%) (941.7 million euros (23.9%) the year ended 31 December 2022) of the Group's turnover comes from an external customer of the electricity segment from RES and the electricity segment from thermal energy and HP/NG trading (Customer).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
286
Business segments 31.12.2022
Constructions
Electricity from RES
Electricity from thermal energy and HP trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidatio n
Consolidated Total
Sales of products and merchandise
0
247,325
2,629,826
1,932
18,637
0
0
0
2,897,719
Sales of services
19,102
0
0
892
0
37,221
471
0
57,687
Revenues from operation of motorways
0
0
0
0
0
162,078
0
0
162,078
Revenues from construction services
817,696
-0
0
0
0
0
-0
0
817,697
Income from leases
0
0
0
482
0
2,615
0
0
3,097
Revenue from external customers
836,798
247,325
2,629,826
3,306
18,637
201,915
471
0
3,938,278
Inter-segmental turnover
187,424
(11,149)
31,239
625
28
113
2,334
(210,614)
0
Revenue
1,024,222
236,176
2,661,065
3,931
18,665
202,028
2,805
(210,614)
3,938,278
Cost of sales
(929,415)
(93,811)
(2,334,224)
(4,359)
(16,144)
(146,345)
(2,465)
194,174
(3,332,589)
Gross profit/(loss)
94,807
142,365
326,841
(428)
2,521
55,683
340
(16,440)
605,689
Administrative and distribution expenses
(27,261)
(76,252)
(23,493)
(633)
(5,772)
(9,233)
(14,183)
3,503
(153,324)
Research and development expenses
(2,146)
(6,982)
0
0
(257)
0
(534)
38
(9,881)
Other income/(expenses)
(2,592)
12,570
(27,367)
186
222
(5,358)
(1,293)
(3,044)
(26,676)
Results (EBIT)
62,808
71,701
275,981
(875)
(3,286)
41,092
(15,670)
(15,943)
415,808
Other income/(expenses)
4,658
945
(94)
122
(11,890)
32
0
0
(6,227)
Results before taxes, financing and investing activities
67,466
72,646
275,887
(753)
(15,176)
41,124
(15,670)
(15,943)
409,581
Financial income
5,798
856
1,492
48
0
7,648
15,866
(18,178)
13,530
Financial expenses
(7,344)
(39,504)
(14,459)
(306)
(2,010)
(54,744)
(29,981)
18,558
(129,790)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
287
Business segments 31.12.2022
Constructions
Electricity from RES
Electricity from thermal energy and HP trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidatio n
Consolidated Total
Gains / (Losses) from financial instruments measured at fair value
0
173
(1,769)
0
0
(74,748)
0
0
(76,344)
Results from associates and Joint Ventures
(31)
(89)
(856)
3,903
0
(78)
0
0
2,849
Results from participations and securities
549
(1)
0
0
0
0
23,186
(274)
23,460
Earnings/(Losses) before taxes
66,438
34,081
260,295
2,892
(17,186)
(80,798)
(6,599)
(15,837)
243,286
Income tax
(18,504)
(16,102)
(61,936)
(311)
862
29,739
286
28
(65,938)
Net Earnings/(Losses) after taxes
47,934
17,979
198,359
2,581
(16,324)
(51,059)
(6,313)
(15,809)
177,348
Business segments 31.12.2022
Constructions
Electricity from RES
Electricity from thermal energy and HP trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidatio n
Consolidated Total
Assets
1,014,544
1,860,149
1,076,047
119,159
100,282
1,219,655
596,687
(173,289)
5,813,234
Investments in associates
0
34
0
4,677
0
0
0
0
4,711
Investments in joint ventures
0
2,672
(27)
0
2,716
154,205
0
0
159,566
Total Assets
1,014,544
1,862,855
1,076,020
123,836
102,998
1,373,860
596,687
(173,289)
5,977,511
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
288
Business segments 31.12.2022
Constructions
Electricity from RES
Electricity from thermal energy and HP trading
Real Estate
Mining / Industry
Concessions
Holdings
Eliminations on consolidatio n
Consolidated Total
Liabilities
842,132
1,344,754
766,002
95,957
163,037
934,712
740,317
(100,098)
4,786,813
Loans
79,989
1,030,806
232,545
89,012
108,192
763,536
689,219
0
2,993,299
Cash and Cash Equivalents
200,734
362,464
238,699
5,687
2,054
144,695
537,370
0
1,491,703
Net debt / (surplus)
(120,745)
668,342
(6,154)
83,325
106,138
618,841
151,849
0
1,501,596
Capital expenditure for the period 1.1- 31.12.2022
7,929
244,526
59,937
28,258
6,414
4,907
93
(13,706)
338,358
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
289
Geographical segments 31.12.2023
Greece
Balkans
Middle East
Eastern Europe
USA
Other regions
Consolidated total
Turnover from external customers
3,234,577
209,546
378
23,996
0
30,710
3,499,207
Non-current Assets (excl. deferred tax assets and financial assets)
2,409,966
13,984
25
97,880
904
0
2,522,759
Capital expenditure
193,860
255
0
650
0
0
194,765
Geographical segments 31.12.2022
Greece
Balkans
Middle East
Eastern Europe
USA
Other regions
Consolidated total
Turnover from external customers
3,669,335
207,480
567
30,382
850
29,663
3,938,278
Non-current Assets (excl. deferred tax assets and financial assets)
2,321,384
29,229
69
97,869
2,494
0
2,451,046
Capital expenditure
337,486
213
0
0
660
0
338,358
7 BUSINESS COMBINATION AND ASSETS ACQUISITION
On 10 February 2023, the subsidiary company, TERNA ENERGY S.A., acquired the entire shareholding of the company ANAX INDIVIDUAL CEMPLE COMPANY, which was subsequently renamed TERNA ENERGY SAPPON P.C.
The mentioned company is developing Photovoltaic Stations in the area of the Regional Unit of Evros with a total capacity of 246,35 MW.
The purpose of this acquisition is the subsequent implementation of new investments of the Group in the production of energy from renewable sources. Upon examination of the requirements of IFRS 3, it was determined that the acquired assets and assumed liabilities of the above company do not constitute an "enterprise" as defined by IFRS 3 and therefore do not fall within the scope of that Standard, but these transactions are accounted for as an acquisition of assets. The accounting policy for the recognition of the transaction is described in the explanatory note 4.3 of the Annual Consolidated and Company Financial Statements as at 31.12.2023. The cost of the acquisition was
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
290
allocated to the individual identifiable assets and liabilities based on their relative fair values at the date of acquisition, and no goodwill arises from this type of transaction.
Details of the items relating to the acquisition of the above company are presented below:
TERNA ENERGY SAPPON PC
Fair Values at the date of obtained control
ASSETS
Intangible assets and Right-of-use assets
6,278
Tangible fixed assets
2
Prepayments and other receivables
145
Cash and cash equivalents
0
Total assets
6,425
LIABILITIES
Suppliers and Liabilities from contracts with customers
21
Accrued and other short‐term liabilities
98
Total liabilities
119
Book Value of acquired net assets
6,306
Cash paid up to 31 December 2023 (a)
829
Less: Cash acquired (b)
0
Total cash outflow until December 31, 2023 (a) - (b)
829
The estimated total consideration for the acquisition amounted to 6,306 thousand euros . The calculation was carried out using an appropriate discount rate of 7.95%. Of the total consideration, 829 thousand euros was settled in cash and 5,477 thousand euros was the contingent consideration liability (at discounted value) at the acquisition date.
The estimated total acquisition price subsequently, considering the change in the conditions prevailing in the energy market, and particularly the significant delays observed in the granting of terms for the connection of new renewable energy plants, was revalued at 4.425 thousand euros with the difference reducing the present value of the Company's Contingent Liability by (see note 30) 1,104 thousand euros and the intangible assets (licenses of photovoltaic production plants) respectively.
The fair value of the contingent consideration liability will be measured at each reporting date and up to the estimated date of final measurement and payment, i.e. until 30.09.2026.
As a result of the above acquisition, the Group recognized intangible assets (licenses of photovoltaic production plants) amounting to 4.717 thousand euros . The fair value of the intangible assets has been based on a report by an independent appraiser. During the period from the date of acquisition of the company until 31 December 2023, the results related to this company amount to a loss of 471 thousand euros .
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
291
8 INTANGIBLE ASSETS AND GOODWILL
8.1 Intangible assets
Group’s intangible assets presented in the attached financial statements and their movement for the periods from 1 January to 31 December 2023 and 2022, are analyzed as follows:
GROUP
Concessions and other Rights
Clientele
Brand name HERON
Software
Development Costs
Other
Total
Acquisition Value
1st January2023
1,119,109
58,333
5,099
20,238
21,075
88,355
1,312,209
Additions
8,878
0
0
493
4,290
578
14,239
Addition due to acquisition of entity (note7)
6,278
0
0
0
0
0
6,278
Write offs
(5)
0
0
(75)
0
0
(80)
Transfers
(2,223)
0
0
927
0
0
(1,296)
Foreign exchange differences
5
0
0
(8)
0
0
(3)
31st December 2023
1,132,042
58,333
5,099
21,575
25,365
88,933
1,331,347
Accumulated
amortization and
impairments
1st January 2023
(471,053)
(8,523)
0
(13,231)
(3,165)
(86,917)
(582,889)
Amortization
(41,759)
(9,722)
0
(2,704)
(1,921)
0
(56,106)
Write offs
3
0
0
51
0
0
54
Impairments
(9,682)
0
0
0
0
0
(9,682)
Transfers
(498)
0
0
0
0
0
(498)
Foreign exchange differences
(3)
0
0
8
0
0
5
31st December 2023
(522,992)
(18,245)
0
(15,876)
(5,086)
(86,917)
(649,116)
Net book value
31st December 2023
609,050
40,088
5,099
5,699
20,279
2,016
682,231
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
292
GROUP
Concessions and other Rights
Clientele
Brand name HERON
Software
Development Costs
Other
Total
Acquisition Value
1st January2022
1,113,617
0
0
13,020
14,759
88,021
1,229,417
Additions
3,998
0
0
1,318
4,735
211
10,262
Addition due to acquisition of entity
8,221
58,333
5,099
5,309
0
0
76,962
Sales
(103)
0
0
(14)
0
0
(117)
Write offs
(6,623)
0
0
(149)
0
0
(6,772)
Transfers
0
0
0
736
1,581
123
2,440
Foreign exchange differences
(1)
0
0
18
0
0
17
31st December 2022
1,119,109
58,333
5,099
20,238
21,075
88,355
1,312,209
Accumulated
amortization and
impairments
1st January2022
(424,554)
0
0
(8,145)
(1,939)
(86,917)
(521,555)
Amortization
(41,688)
(8,523)
0
(2,355)
(1,226)
0
(53,792)
Addition due to acquisition of entity
0
0
0
(2,825)
0
0
(2,825)
Sales
20
0
0
0
0
0
20
Write offs
6,308
0
0
127
0
0
6,435
Impairments
(11,139)
0
0
0
0
0
(11,139)
Foreign exchange differences
0
0
0
(33)
0
0
(33)
31st December 2022
(471,053)
(8,523)
0
(13,231)
(3,165)
(86,917)
(582,889)
Net book value
31st December 2022
648,056
49,810
5,099
7,007
17,910
1,438
729,320
Amortization for years 2023 and 2022 has been recorded in the Cost of sales by 54,916( 31.12.2022: 52,598), in Administrative and distribution expenses by 656 ( 31.12.2022: 767), in Research and development expenses by 129 ( 31.12.2022: 99), in Other Income/(expenses) by 19 ( 31.12.2022: 76) and in Inventory by 386 ( 31.12.2022: 252).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
293
The intangible assets of the Company, with a net book value of 436 ( 31.12.2022: 388), concern software with an acquisition value of 1,169 ( 31.12.2022: 990) and accumulated amortization of 733 ( 31.12.2022: 602). The amortization of year 2023 amounting to 42 ( 31.12.2022: 57), has been recorded in the Administrative and distribution expenses and in the Cost of sales by 89 ( 31.12.2022: 62)
The research and development expenses mainly refer to costs incurred in the Group’s mining activities (magnesium).
The item "Concessions and other rights" includes: (a) rights from concession contracts which amount to 545,703 ( 31.12.2022: 578,079), (b) purchased rights to exploit quarries and magnesium mines, with a net book value of 3,566( 31.12.2022: 12,249) and (c) paid installation rights for wind farms with net book value of 59,557( 31.12.2022: 57,586).
Regarding the paid installation rights of wind parks, it is noted that within the financial year of 2023, TERNA ENERGY sub-Group extended the economic life of the wind parks from 25 to 30 years The action took place in the last quarter of the year 2023, resulting into the reduction of depreciation cost by an amount of 92 in relation to the depreciation that would have occurred if the extension of the economic life had not taken place.
The Group recognized the financial contribution of the State as a deduction to the value of the right recognized under the Concession Arrangements of Motorways, in accordance with the relevant provisions of IFRIC 12 “Service Concession Arrangements”.
For the construction of the Deferred Department A '(ATA), the State will pay as a Financial Contribution to the subsidiary CENTRAL GREECE MOTORWAY S.A. a total amount of 305,735 in equal instalments. For the construction of the Deferred Section B (ATB), signed in 2021, the State will pay as much as 442,142 in equal instalments. In the year 2023, the Group through the subsidiary CENTRAL GREECE MOTORWAY S.A. received an amount of 89,456 ( 31.12.2022: 64,362) which concerns the financial contribution of the State, as a subsidy for the construction of the project of the two deferred sections (ATA and ATB) of the "Central Greece Motorway (E65)" which is in the form of a capital subsidy.
Based on the terms of the Concession Arrangement regarding the construction and operation of the Deferred Section A '(southern section E65 - connection of PATHE highway with Xiniada A / C) and the Deferred Section B (A / C Trikala - A / C Grevena and Grevena – Egnatia Section), the project is 100% financed by the State through European resources and no return is provided for the Concessionaire from the operation of these departments. Based on the above and the provisions of IFRIC 12, the Concessionaire does not recognize a profit during construction and the fair value of the concession from construction is equal to zero because the cost of construction services is fully covered by the financial contribution of the Greek State.
The unamortized value of the rights from the concession arrangements amounting to 545,703 ( 31.12.2022: 578,079) and is analyzed as follows.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
294
COMPANY
CONCESSION
COST
31.12.2023
NET BOOK VALUE 31.12.2023
REMAINING CONCESSION PERIOD
NOTES
NEA ODOS SA
Ionia Odos and PATHE, parts of Athens – Skarfeia and Shimatari - Chalkida
579,426
236,235
14
In operation
CENTRAL GREECE MOTORWAY SA
Central Greece Motorway (Ε-65) and PATHE, part of Skarfeia - Raches
421,248
294,820
14
In operation
HERON CONCESSIONS SA
Tsalapata preserved pottery Center in Volos
6,672
276
6
In operation
HERON CONCESSIONS SA
Car park station
2,916
1,909
31
In operation
AEIFORIKI EPIRUS MAEES
Waste management in Ioannina
1,801
1,507
20
In operation
PARKING STATION PLATANOU SQ. KIFISIA S.A.
Parking station in Kifisia Square
8,020
3,151
14
In operation
PARKING STATION SAROKOU SQ. CORFU S.A.
Parking station in Corfu
101
101
-
Termination of development
PERIVALLONTIKI PELOPONNISOU MAE
Waste management in Peloponnese
7,782
7,704
25
In operation
TOTAL
1,027,966
545,703
The rights from concession arrangements on 31.12.2022, are as follows:
COMPANY
CONCESSION
COST
31.12.2022
NET BOOK VALUE 31.12.2022
REMAINING CONCESSION PERIOD
NOTES
NEA ODOS SA
Ionia Odos and PATHE, parts of Athens – Skarfeia and Shimatari - Chalkida
579,426
254,777
15
In operation
CENTRAL GREECE MOTORWAY SA
Central Greece Motorway (Ε-65) and PATHE, part of Skarfeia - Raches
421,248
315,879
15
In operation
HERON CONCESSIONS SA
Tsalapata preserved pottery Center in Volos
6,672
312
7
In operation
HERON CONCESSIONS SA
Car park station
2,916
1,939
32
In operation
AEIFORIKI EPIRUS MAEES
Waste management in Ioannina
1,801
1,579
21
In operation
PARKING STATION PLATANOU SQ. KIFISIA S.A.
Parking station in Kifisia Square
8,020
3,492
15
In operation
PARKING STATION SAROKOU SQ. CORFU S.A.
Parking station in Corfu
101
101
-
Termination of development
TOTAL
1,020,184
578,079
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
295
Impairment test of non-amortizable intangible assets
For non-amortizable intangible assets, the Group carries out impairment tests at each reporting date. With regard to the amortizable intangible assets, the Group's Management carries out relevant impairment tests in accordance with the requirements of IAS 36, only when and where relevant indications indicate potential need for impairment.
Within the financial year 2023, total impairment losses were recognized on the value of intangible assets amounting to 9,682 ( 31.12.2022: 11,139) which burdened the Group's consolidated results and have been recognized in the "Other Income/(Expenses)" of the Income Statement of the year (Note 38).
An amount of 8,397 concerns impairment losses on exploitation rights for quarries and magnesium mines of the subsidiary company TERNA MAG S.A. (operational segment “Industry”). The assumptions applied in determining the value in use and the factors that led to the recognition of the related loss are set out in section 12.3.
For the impairment test of the assets of RES energy parks of the Group, the recoverable amount is determined according to the value in use of the park. This calculation uses cash flow forecasts, based on financial budgets, which have been approved by the Group's management and cover the remaining useful life of the park. The impairment test of the RES sector resulted into the need to recognize related impairment losses amounting to 1,285, due to the stoppage of the implementation process of certain projects.
Regarding the rights deriving from the Concession Agreements, the management assessed that there are no indications of impairment of their value, as there are no deviations to their business plan .
8.2 Goodwill
The movement of goodwill in the consolidated Financial Statements for the year ended 31.12.2023 and 31.12.2022 is as follows:
Constructions
Electricity from thermal energy and HP trading
Total
Net book value at 01.01.2022
2,381
3,994
6,375
Addition
0
0
0
Impairment of Goodwill
0
0
0
Net book value at 31.12.2022
2,381
3,994
6,375
Net book value at 01.01.2023
2,381
3,994
6,375
Addition
0
0
0
Impairment of Goodwill
0
(1,016)
(1,016)
Net book value at 31.12.2023
2,381
2,978
5,359
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
296
Constructions
Electricity from thermal energy and HP trading
Total
Gross book value at 31.12.2023
9,759
3,994
13,753
Accumulated impairment losses
(7,378)
(1,016)
(8,394)
Net book value at 31.12.2023
2,381
2,978
5,359
The goodwill that has been recognized in the "Construction" operating segment refers to an acquisition made by the Group in previous year. More specifically, the subsidiary company TERNA SA acquired 66.7% of the construction joint venture EUROIONIA and E-65, which would perform additional major construction project according to existing construction contracts.
The goodwill that has been recognized in the operating segment "Electricity from thermal energy and HP trading" refers to the acquisition of control of OPTIMUS ENERGY S.A. by TERNA ENERGY on 25.10.2021 as a result of the amendment of the shareholders' agreement and the elimination of rights which previously did not allow the exercise of control, in accordance with the requirements of IFRS 10. On 11.11.2022, the subsidiary company TERNA ENERGY S.A. sold all shares of societe anonyme company OPTIMUS ENERGY S.A. which the former previously owned, i.e. 51%, to the other subsidiary company HERON II THERMOELECTRIC STATION VIOTIA S.A. It is noted that within the year 2023, the above company has been absorbed and now exists as HERON ENERGY SA.
Goodwill Impairment Test
Management reviews goodwill for impairment annually (on December 31) or more frequently if events or changes in circumstances indicate that the carrying amount may have depreciated, in accordance with the accounting practice as described in note 4.5.
The Group reviewed the goodwill for impairment on 31.12.2023 and the key assumptions used to determine the recoverable amount are disclosed below. The audit did not reveal any impairment loss. The recoverable values of cash-generating units are determined according to value in use calculations using appropriate estimates regarding future cash flows and discount rates.
In particular, the goodwill that arises during the consolidation process of subsidiaries resulting from an acquisition has been divided into the following cash flow generation units (CFUs) per operating segment according to the above Table. The goodwill impairment test is carried out at the subsidiary company level.
The recoverable value of each Cash Flow Generating Unit is determined according to value in use calculations. The determination is made through the present value of the estimated future cash flows, as expected to be generated by each unit (discounted cash flow method – DCF). Cash flows are extracted from the most recent budgets approved by the management. Cash flow projections beyond the period covered by the most recent budgets are estimated by discounting the projections based on the budgets, using a constant or declining growth rate for the following years, which does not exceed the long-term average growth rate for the broader business sectors in which the Group operates. The cash flow projections are based on reasonable and justified assumptions, which represent the best possible information available and most updated at the reporting date of the Financial Statements.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
297
The management evaluates the rationality of the underlying assumptions with regard to the projected cash flows by examining the causes of differences between past projected cash flows and currently projected cash flows. Also, the management ensures that the assumptions underlying the currently projected cash flows are consistent with past actual results. From the carried out impairment test, a need arose to derecognize a goodwill impairment loss of 1,016 ( 2022:0).
Assumptions used to determine value in use
The Group, in order to determine the recoverable value of each Cash Flow Generating Unit, calculates the value in use, through the method of the present value of the estimated future cash flows. The main assumptions that the Group uses to determine the estimated future cash flows are as follows:
Construction Segment:
This methodology of determining value-in-use is based on the following key assumptions as adopted by the Management to determine future cash flows: (a) the projected revenue under the existing construction contracts of two joint ventures, b) the budgeted operating profit margins of construction projects, which are also calculated on the basis of the results of the last years. Estimated future cash flows are determined up to the completion of the construction projects of the joint ventures and have been discounted at a discount rate of 8.0%.
Segment of Electricity Generation from Thermal Energy Sources - Sale of electricity:
The determination of value-in-use is based on significant assumptions not observable in the market. The main estimates and assumptions are related to the evolution of the future income of the company which is expected to be formed based on the estimated representation that the company is expected to achieve in the total estimated electricity production of the country as planned by the National Energy and Climate Plan. The estimated future cash flows have been discounted at a discount rate of 10.8%.
The Group analyzed the sensitivity of recoverable amounts per operating segment according to a 0.5% change in the basic assumption of the discount rate. From the relevant analysis, it appears that an additional amount of impairment (loss) of 719.4 may arise in the case of OPTIMUS ENERGY S.A.
9 RIGHT OF USE ASSETS
Right of use assets and changes for the periods 1 January to 31 December 2023 and 2022, presented in the accompanying financial statements, are analyzed as follows:
GROUP
Land- Plots
Buildings and Installations
Technological and mechanical equipment
Vehicles
Other
Total
Acquisition Value
1st January 2023
28,380
20,544
17,420
5,966
339
72,650
Additions
5,638
6,633
23,853
12,030
1,240
49,394
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
298
Termination of contracts
(592)
(1,239)
(39)
(51)
0
(1,921)
Foreign exchange differences
305
(46)
0
3
0
262
31st December 2023
33,731
25,892
41,234
17,948
1,579
120,385
Accumulated amortization
and impairments
1st January 2023
(2,739)
(10,573)
(691)
(2,961)
(290)
(17,254)
Amortization
(1,655)
(4,611)
(2,972)
(2,191)
(878)
(12,307)
Transfers
0
0
0
0
(48)
(48)
Termination of contracts
63
726
34
45
0
868
Foreign exchange differences
(73)
33
0
(1)
0
(41)
31st December 2023
(4,404)
(14,425)
(3,629)
(5,108)
(1,216)
(28,782)
Net book value
31st December 2023
29,327
11,467
37,605
12,840
363
91,603
GROUP
Land- Plots
Buildings and Installations
Technological and mechanical equipment
Vehicles
Other
Total
Acquisition Value
1st January 2022
18,802
15,181
226
2,653
0
36,863
Additions
9,347
4,099
17,194
2,945
0
33,585
Addition due to acquisition of entity
489
2,386
0
552
339
3,766
Termination of contracts
(200)
(1,175)
0
(184)
0
(1,559)
Foreign exchange differences
(58)
53
0
0
0
(5)
31st December 2022
28,380
20,544
17,420
5,966
339
72,650
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
299
Accumulated amortization
and impairments
1st January 2022
(1,747)
(6,796)
(160)
(1,512)
0
(10,215)
Amortization
(1,144)
(3,423)
(531)
(1,134)
(59)
(6,291)
Addition due to acquisition of entity
0
(974)
0
(420)
(231)
(1,625)
Termination of contracts
148
659
0
105
0
912
Foreign exchange differences
4
(39)
0
0
0
(35)
31st December 2022
(2,739)
(10,573)
(691)
(2,961)
(290)
(17,254)
Net book value
31st December 2022
25,641
9,971
16,729
3,005
49
55,396
COMPANY
Land- Plots
Buildings and Installations
Technological and mechanical equipment
Vehicles
Other
Total
Acquisition Value
1st January 2023
0
531
0
416
0
947
Additions
0
0
0
387
0
387
Termination of contracts
0
0
0
(33)
0
(33)
31st December 2023
0
531
0
770
0
1,301
Accumulated amortization
and impairments
1st January 2023
0
(345)
0
(256)
0
(601)
Amortization
0
(92)
0
(224)
0
(316)
Termination of contracts
0
0
0
31
0
31
31st December 2023
0
(437)
0
(449)
0
(886)
Net book value
31st December 2023
0
94
0
321
0
415
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
300
COMPANY
Land- Plots
Buildings and Installations
Technological and mechanical equipment
Vehicles
Other
Total
Acquisition Value
1st January 2022
0
529
0
442
0
971
Additions
0
2
0
9
0
11
Termination of contracts
0
0
0
(35)
0
(35)
31st December 2022
0
531
0
416
0
947
Accumulated amortization
and impairments
1st January 2022
0
(254)
0
(101)
0
(355)
Amortization
0
(91)
0
(160)
0
(251)
Termination of contracts
0
0
0
5
0
5
31st December 2022
0
(345)
0
(256)
0
(601)
Net book value
31st December 2022
0
186
0
160
0
346
The Group's depreciation for the financial year 2023 has been recorded in the cost of sales by 7,775 ( 31.12.2022: 3,563 ), in the administrative and distribution expenses by 2,732 ( 31.12.2022: 1,867), in research and development expenses by 252 ( 31.12.2022: 142) in the other income/(expense) by 474 ( 31.12.2022: 452) and in the inventory by 1,074 ( 31.12.2022: 267).
The Company's depreciation for the financial year 2023 has been recorded in the cost of sales by 230 ( 31.12.2022: 174), and in the administrative expenses by 86 ( 31.12.2022: 77).
The additions of the year mainly concern the commencement of new bank related lease contracts for machineries of the subsidiary company TERNA SA which are used in the construction projects carried out by the subsidiary company.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
301
10 TANGIBLE FIXED ASSETS
The Group's and the Company's tangible fixed assets and their movements for the periods from 1 January to 31 December 2023 and 2022, in the accompanying financial statements, are analyzed as follows:
GROUP
Quarries/Land- Plots
Buildings and Facilities
Technological and mechanical equipment
Vehicles
Other
Assets under construction and prepayments for acquisition of fixed asset
Total
Acquisition Value
1st January 2023
30,343
218,687
1,568,054
50,280
45,419
430,412
2,343,195
Additions/Changes in advances to suppliers of fixed assets
734
13,390
136,513
2,323
3,906
(10,784)
146,082
Addition due to acquisition of entity (note7)
0
0
0
0
0
2
2
Cost of borrowing
0
0
11,958
0
0
6,378
18,336
Provisions for restoration
0
0
(1,651)
0
0
0
(1,651)
Sales
0
(286)
(965)
(664)
(519)
(1,326)
(3,760)
Write offs
0
(47)
(9)
(1,132)
(42)
(630)
(1,860)
Transfers
(1,132)
179,876
78,130
13
508
(262,259)
(4,864)
Foreign exchange differences
0
443
9,187
(6)
12
(40)
9,596
31st December 2023
29,945
412,063
1,801,217
50,814
49,284
161,753
2,505,076
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
302
Accumulated amortization and
impairments
1st January 2023
(8,261)
(96,244)
(743,193)
(37,570)
(33,071)
(1,083)
(919,421)
Depreciation
(280)
(11,224)
(63,158)
(1,803)
(3,357)
0
(79,822)
Sales
0
43
487
427
432
0
1,389
Write offs
0
22
6
1,132
42
0
1,202
Impairments
0
(4,209)
0
0
0
(287)
(4,496)
Reversal of Impairments
254
104
0
0
0
0
358
Transfers
906
1,469
(13)
11
48
0
2,421
Foreign exchange differences
0
(188)
(4,122)
6
(6)
0
(4,310)
31st December 2023
(7,381)
(110,227)
(809,993)
(37,797)
(35,912)
(1,370)
(1,002,679)
Net book value
31st December 2023
22,565
301,837
991,224
13,017
13,372
160,383
1,502,397
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
303
GROUP
Quarries/Land- Plots
Buildings and Facilities
Technological and mechanical equipment
Vehicles
Other
Assets under construction and prepayments for acquisition of fixed asset
Total
Acquisition Value
1st January 2022
25,162
193,955
1,506,544
48,642
38,998
222,284
2,035,585
Additions/Changes in advances to suppliers of fixed assets
2,796
6,698
11,558
2,055
4,383
206,273
233,763
Addition due to acquisition of entity
2,385
16,889
52,793
22
1,913
489
74,491
Cost of borrowing
0
0
194
0
0
7,131
7,325
Provisions for restoration
0
0
894
0
0
0
894
Sales
0
0
(1,263)
(494)
(187)
(1,113)
(3,057)
Write offs
0
(1,309)
(69)
(82)
(79)
0
(1,539)
Transfers
0
2,545
(537)
67
305
(4,821)
(2,441)
Foreign exchange differences
0
(91)
(2,060)
70
86
169
(1,826)
31st December 2022
30,343
218,687
1,568,054
50,280
45,419
430,412
2,343,195
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
304
Accumulated depreciations and
impairments
1st January 2022
(7,977)
(74,237)
(636,648)
(35,719)
(28,548)
(1,083)
(784,211)
Depreciation
(280)
(7,589)
(62,128)
(2,078)
(2,919)
0
(74,994)
Addition due to acquisition of entity
0
(15,464)
(46,031)
(22)
(1,629)
0
(63,146)
Sales
0
0
826
226
42
0
1,094
Write offs
0
1,178
36
78
67
0
1,359
Impairments
(57)
(270)
0
0
0
0
(327)
Reversal of Impairments
53
101
0
0
0
0
154
Foreign exchange differences
0
37
752
(55)
(84)
0
650
31st December 2022
(8,261)
(96,244)
(743,193)
(37,570)
(33,071)
(1,083)
(919,421)
Net book value
31st December 2022
22,083
122,444
824,861
12,710
12,348
429,329
1,423,774
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
305
COMPANY
Quarries/Land- Plots
Buildings and Facilities
Technological and mechanical equipment
Vehicles
Other
Assets under construction and prepayments for acquisition of fixed asset
Total
Acquisition Value
1st January 2023
3,083
13,596
36
2,900
3,059
24
22,698
Additions/Changes in advances to suppliers of fixed assets
0
145
30
1286
627
1553
3,641
Sales
0
0
0
(38)
0
0
(38)
Transfers
0
0
0
24
0
(24)
0
31st December 2023
3,083
13,741
66
4,172
3,686
1553
26,301
Accumulated depreciation and
impairments
1st January 2023
0
(7,671)
(14)
(502)
(2,074)
0
(10,261)
Depreciation
0
(422)
(21)
(324)
(574)
0
(1,341)
Sales
0
0
0
19
0
0
19
31st December 2023
0
(8,093)
(35)
(807)
(2,648)
0
(11,583)
Net book value
31st December 2023
3,083
5,649
31
3,364
1,038
1553
14,718
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
306
COMPANY
Quarries/ Land- Plots
Buildings and Facilities
Technological and mechanical equipment
Vehicles
Other
Assets under construction and prepayments for acquisition of fixed asset
Total
Acquisition Value
1st January 2022
3,083
13,373
10
2,215
2,358
0
21,039
Additions/Changes in advances to suppliers of fixed assets
0
223
26
693
833
24
1,799
Sales
0
0
0
(8)
(132)
0
(140)
31st December 2022
3,083
13,596
36
2,900
3,059
24
22,698
Accumulated depreciation and
impairments
1st January 2022
0
(7,258)
(7)
(267)
(1,717)
0
(9,249)
Depreciation
0
(413)
(7)
(235)
(357)
0
(1,012)
31st December 2022
0
(7,671)
(14)
(502)
(2,074)
0
(10,261)
Net book value
31st December 2022
3,083
5,926
22
2,397
985
24
12,437
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
307
The additions / changes of suppliers’ advance payments for the year 2023 of the Group amounting to 146,082 in total mainly concern investments of the sub-Group TERNA ENERGY, amounting to 132,913 for Technological and Mechanical equipment of the wind farm complex in Kafirea area of Municipality of Karystos, Evoia, Greece.
The amount of construction period interest capitalized by the Group in financial years 2023 and 2022 as part of the cost of qualifying assets amounts to 18,336 and 7,325 respectively. These amounts were calculated with an average capitalization rate, which amounts to 5.8% for the year 2023 ( 2022: 4.3%).
For the calculation of depreciation, the Group examines in each reporting period the economic life and the residual value of the tangible assets based on the respective technological, regulatory and financial developments, as well as the evidence from their exploitation. In this context, TERNA ENERGY sub- Group extended the economic life of the wind parks from 25 to 30 years. The particular action took place during the last quarter of the financial year 2023, resulting into the reduction of the depreciation cost by an amount of 2,642 compared to the depreciation that would have arisen if the extension of economic life had not taken place. This effect will evolve on a declining trend in the following years as the older wind parks of the Group will approach their originally defined twenty-five-year economic life, while from the end of their initially defined economic life and for the additional five years, the above positive effect will turn negative.
On 31.12.2023, the Management estimates that the economic lives of the other depreciable assets represent their expected value in use.
The depreciation of the Group for the year 2023 has been recorded in the Cost of Sales by 75,005 ( 31.12.2022: 70,885), in the Administration and Distribution Expenses by 3,291 ( 31.12.2022: 3,032), in the Research and Development Expenses 190 ( 31.12.2022: 161) and in Other Income / (Expenses) by 1,070 ( 31.12.2022: 722) as well as in Inventories by 265 ( 31.12.2022: 194).
The depreciation charge of the Company is depicted in the Statement of total comprehensive income in the Cost of sales by 1,311 ( 31.12.2022: 985) and in the Administration and Distribution Expenses by 30 ( 31.12.2022: 27) .
The account “Technological and mechanical equipment” includes Wind Farm wind generators of the Energy Segment, totaling 842,065. For the new project financing needs, a notional lien has been created on the movable equipment, as well as liens (usually a mortgage note) on privately owned property to secure the lenders.
The categories “Land-plots”, “Buildings and installations” and “Technological and mechanical equipment”, include fixed assets of a net book value of 98,016 ( 2022: 68,093), respectively, which concern Installations of Distribution Networks constructed by TERNA ENERGY and as stipulated by contracts with A.D.M.I.E./D.E.D.D.I.E., are transferred to the latter parties, at no cost, during the initial operation of each Wind Farm. However, ever after their transfer, such installations continue to serve the purpose, for which they had been constructed, namely the sale of the produced electric energy to D.E.D.D.I.E. and D.A.P.E.E.P., remaining at the exclusive use of the Group, and thus the net book value after the transfer date will continue to be depreciated, as previously, until the end of the 30-year period of economic life of Wind Farms.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
308
11 INVESTMENT PROPERTY
The Group's and the Company's investment property for years 2023 and 2022, is analyzed as follows:
GROUP
COMPANY
2023
2022
2023
2022
Balance 1st January
60,845
34,699
6,615
7,653
Additions
261
27,476
0
2
Fair value adjustments
7,646
(378)
163
(10)
Sales
(963)
(1,277)
(122)
(1,030)
Transfers
0
324
0
0
Foreign exchange differences
(15)
1
0
0
Balance 31st December
67,774
60,845
6,656
6,615
Investment property is measured at fair value according to IAS 40. Measurement at fair value has been determined taking into account the Company's ability to achieve its maximum and best use by assessing the use of each item that is legally permissible and economically feasible. The Group made a revaluation of the fair value of its property portfolio in 2023 assigning its valuation projects to independent property appraisers. Revaluation of fair value of investment property resulted into a total gain of 7,646 ( 2022: total loss 378) (see Note 38).
The following table presents data regarding the key assumptions taken into consideration for the valuation of the investment property on 31.12.2023:
Property
Fair Value 31.12.2023
Method
Market value
Interest rate
Inflation
Return
Cost of development
Port of Thessaloniki - Parking spaces
900
Real estate market
7,200.00 per parking lot
-
-
10.00%
-
Palaia Volos - Mall
4,280
Capitalization of revenues with cash flow discounting and replacement cost
500-750 euro per sqm
12,25%- 12,50%
-
9,0% - 10,0%
-
Oropos –Site plot
184
Real estate market
15.00 euro per sqm
-
-
-
-
Ipiros street (Athens)- transfer right of building factor
140
Real estate market
44 euro per sqm
-
-
-
-
Site plot, Agios Stefanos, Attica
1,152
Real estate market
Sale 300-800 euro per sqm
-
-
-
-
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
309
Property
Fair Value 31.12.2023
Method
Market value
Interest rate
Inflation
Return
Cost of development
Monastiriou street, (Thessaloniki) – Site plot
7,270
Exploitation/Real estate market
180-1450 euro per sqm
6.90%
-
5,75%-9,0%
5-11,25 euro per sqm/month
Lakeside (Ioannina)- Mall
5,660
Capitalization, replacement cost
2 - 10 euro per sqm
300 - 550 euro per sqm for the building and 50-200 euro per sqm for the land
11,40%- 12,40%
1.90%
9,5% - 10,5%
-
Kos - Land
976
Real estate market
35.0 euro per sqm
-
-
-
-
Building and Plot position of Lezides Aliveri Evoia
1,119
Income based on Direct Capitalization
Building 161.00/sq.m. , plot 5.85 euros/sq.m., building rent 1.64 euros. /sq.m.
12.25%
-
12.25%
-
Plot in Posidonia position, Laurio, Attica
13
Real estate market
1.87 euro per sqm
-
-
-
-
Madoudi, (Evoia) – Plots
624
Real estate market
5.50 euro per sqm
-
-
-
-
Argolida plots
34,923
Residual
160-629 euro per sqm
-
-
-
-
Bulgaria-Plots for Logistics
677
Real estate market
15,44 euro per sqm
-
-
-
-
Bulgaria-Plots (Batac)
590
Real estate market /Exploitation
16-20 euro per sqm, 35.94 euro per sqm
-
-
-
-
Bulgaria-Plots for Logistics/Bulga ria-Plots (Batac)
248
Real estate market /Exploitation
19-20 euro per sqm
-
-
-
-
Bulgaria-Plots
5,420
Real estate market /Exploitation
34.85 euro per sqm
-
-
-
-
Bulgaria-Sofia –Plot
263
Real estate market
31.53 euro per sqm
-
-
-
Bulgaria-Sofia –Plot
534
Real estate market /
2,158 euro per sqm
-
-
-
-
Romania-Plot
421
Real estate market
6,6 euro per sqm
-
-
-
-
Romania-Plot
2,380
Real estate market
340 euro per sqm
-
-
-
-
67,774
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
310
The relevant data regarding the key assumptions taken into consideration for the valuation of the investment property 31.12.2022, are as follows:
Property
Fair Value 31.12.2022
Method
Market value
Interest rate
Inflation
Return
Cost of development
Port of Thessaloniki - Parking spaces
900
Capitalization of revenues with cash flow discounting and replacement cost
60 euro per sqm per month
-
-
10%
-
Metaxourgeio- Apartments and Stores
122
Real estate market for apartments
Prices are based on offers as the whole property is for sale
-
-
-
-
Palaia Volos -Mall
4,280
Capitalization of revenues with cash flow discounting and replacement cost
850-1,100 euro per sqm
8,4%-11,06%
-
8,5% - 9,5%
-
Oropos –Site plot
184
Real estate market
20.50 euro per sqm
-
-
-
-
Ipiros street (Athens)-transfer right of building factor
140
Real estate market
44 euro per sqm
-
-
-
-
Site plot, Agios Stefanos, Attica
989
Real estate market
Sale 350 euro per sqm
-
-
-
-
Monastiriou street, (Thessaloniki) – Site plot
7,954
Exploitation
550-1,150 euro per sqm
3.95%
-
7,5%- 8,0%
5-12 euro per sqm,per month
Lakeside (Ioannina)- Mall
5,660
Capitalization, replacement cost
2 - 10 euro per sqm
300 - 550 euro per sqm for the building and 50-200 euro per sqm for the land
11,40%- 12,40%
0.019
9,5% - 10,5%
-
Kos - Land
905
Real estate market
28 euro per sqm
-
-
-
-
Building and Plot position of Lezides Aliveri Evoia
1,100
Real estate market and capitalization of revenues
Building 1.50-4 euro/sqm, land 6- 10.5 euro/sqm, lease of building 1.66 euro/sqm
12.25
-
12.25%
-
Plot in Posidonia position, Laurio, Attica
13
Real estate market
1.87 euro per sqm
-
-
-
-
Madoudi, (Evoia) – Plots
624
Real estate market
5.50 euro per sqm
-
-
-
-
Argolida plots
27,474
Real estate market
161 euro per sqm
-
-
-
-
Bulgaria-Plots for Logistics
677
Real estate market
15,44 euro per sqm
-
-
-
-
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
311
Property
Fair Value 31.12.2022
Method
Market value
Interest rate
Inflation
Return
Cost of development
Bulgaria-Plots (Batac)
590
Real estate market /Exploitation
16-20 euro per sqm, 35.94 euro per sqm
-
-
-
-
Bulgaria-Plots for Logistics/Bulgaria- Plots (Batac)
248
Real estate market /Exploitation
19-20 euro per sqm.
-
-
-
-
Bulgaria-Plots
5,421
Real estate market /Exploitation
34.85 euro per sqm
-
-
-
-
Bulgaria-Sofia –Plot
263
Real estate market
31,53 euro per sqm
-
-
-
Bulgaria-Sofia –Plot
534
Real estate market /
2,158 euro per sqm
-
-
-
-
Romania-Plot
457
Real estate market
13 euro per sqm
-
-
-
-
Romania-Plot
2,310
Real estate market
331 euro per sqm
-
-
-
-
60,845
The Group recognized rental income from investment properties by 637 and 482 in the financial years 2023 and 2022 respectively.
Generally, a change in the assumptions about the estimated rental value of investment properties is accompanied by a similar commensurate change in the annual increase of the rent and in the discount rate, and by an opposite change in the long-term lease availability rate.
12 PARTICIPATIONS IN SUBSIDIARIES
12.1 Analysis of changes of investments in subsidiaries for the year 2023
The subsidiaries of the Company are presented in details in Note 5.
The change in the book value of investments in subsidiaries in the Company’s financial statements is as follows:
COMPANY
2023
2022
Balance 1st January
373,823
285,628
Additions
110,119
121,916
Sales / Write Off
0
(20,000)
Capital return
(3,484)
(3,744)
Impairment loss
(11,983)
(11,510)
Recovery of impairment
240
0
Transfer from/(to) participations in joint ventures
0
1,208
Other movements
89
325
Balance 31st December
468,804
373,823
The additions of the item within the year 2023 are analyzed in:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
312
• amount of 110,119 for share capital increases in the subsidiary companies IOANNINON ENTERTAINMENT DEVELOPMENT S.A. , GEK TERNA CONCESSIONS S.M.S.A., MGGR LLC, TERNA MAG S.A.
Additionally, during the financial year 2023, an amount of 27,827 was paid in full, in relation to the acquisition of 50% of HERON ENERGY S.A. from the parent company GEK TERNA during the financial year 2022. The amount as of 31.12.2022 had been classified in the account "Accrued and other short- term financial liabilities" (see note 30).
Within the financial year 2023, the parent company collected in the form of a return of capital an amount of 3,484 from the subsidiary companies GEK TERNA MOTORWAYS S.A., CHIRON CONCESSIONS S.A. and KIFISIA PLATANOU SQ. CAR PARK S.A.
Impairment losses and gains from impairment recovery recognized within the year amounted to 11,983 and 240 respectively and are further analyzed in Note 12.3 below.
12.2 Assessment of control under IFRS 10
• As at 31.12.2023, the Group holds 36.79% ( 31.12.2022: 37.51%) in the issued share capital of TERNA ENERGY S.A. According to the requirements of IFRS 10, the parent company has power over TERNA ENERGY as it has the ability to direct the respective activities through appointing the members of the Board of Directors. The parent company also holds rights with variable returns from its participation in the subsidiary. GEK TERNA holds the largest share among the shareholders. The remaining percentage of shares not owned by the Company and/or its affiliated parties is highly dispersed and therefore cannot materially influence decision-making.
Furthermore, the parent company can use the power over the subsidiary to influence the amount of its returns. This is the result of the decision-making on subsidiary’s matters through the control of the decision-making bodies.
• The company TERNA QATAR LLC, in the share capital of which the Group participates by 35% (through the wholly owned subsidiary TERNA S.A.), is consolidated as a subsidiary, as a control is documented in accordance with the requirements of IFRS 10 "Consolidated Financial Statements". More specifically, due to contract, the Group has the control over the management and operation of the company.
Within the current reporting period, no changes were made in the estimates versus 31.12.2022.
12.3 Impairment test
In accordance with the applied accounting policies and in line with provisions of IAS 36, the Company performs an impairment test on the assets at the end of each annual reporting period if there is any indication of impairment. The test can be performed earlier if any evidence of impairment arises. The arising evaluation focuses on both - extrinsic and intrinsic factors. In addition, the Company, in the case of participations that have already been impaired and when there is evidence of reversal, compares the book value with their recoverable amount and evaluates the possibility of reversing part or all of the impairment recognized in prior periods.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
313
Assumptions used to determine the value in use
a. For subsidiaries that are a separate and distinct Cash Flow Generating Unit (CFGU), the determination of recoverable amount was based on value in use. The value in use was calculated using the discounted cash flow method, i.e. cash flow projections based on Management's budgets and forecasts. The determination is made through the present value of the estimated future cash flows, as expected to be produced by each CFGU (discounted cash flow method). The specific method for determining the value in use is affected by (is sensitive to) the following basic assumptions, as these were adopted by the Management to determine the future cash flows: a) Preparation of business plans per CFGU: The calculations to determine the recoverable value of the CFGU were based on business plans approved by the Management, which are based on recently prepared budgets and estimates made by the Management from which budgeted operating profit and EBITDA margins are being extracted and applied, as well as future estimates using reasonable assumptions. b) Weighted average cost of capital (WACC): WACC reflects the discount rate of future cash flows of each CFGU, according to which the cost of equity and the cost of long-term borrowing are weighted, in order to calculate the company's total cost of capital. The discount rate used for the purpose of determining the value in use for the impairment test of the subsidiary TERNA LEYKOLITHOI was 9.7%.
b. For the subsidiaries that are principally engaged in holding one or more investment properties, from which no income from leases arises (ex. Land plots), the recoverable amount was based on the fair value of the net assets, as determined by a study of independent valuers. Consequently, their impairment losses and/or reversals resulted in changes in the fair value of the investment property. In particular, the fair value of investment property is based solely on reports of independent valuers and is determined on a case-by-case basis, either individually or in combination, based on the method of depreciated replacement cost, the replacement cost method, the revenue capitalization method, the valuation method and the comparative data method. The assumptions used for fair value measurement are analytically recorded above, in Note 11.
Impairment test results
Within the year ended 31.12.2023 there was an impairment of the value of the participations in subsidiaries totaling 11,983 ( 31.12.2022: 11,510).
This amount is included in the account "Profits / (Losses) from valuation of participations and securities" of the separate Income Statement (see Note 40) and is further analyzed in losses as follows: of TERNA MAG S.A. for amount 6,158 ( 31.12.2022: 10,883), ICON E.O.O.D. for amount 5,611 ( 31.12.2022: 96), VIPA THESALLONIKI S.A. for amount 0 ( 31.12.2022: 394) , MONASTIRIOU TECHNICAL DEVELOPMENT S.M.S.A. for amount 0 ( 31.12.2022: 80), IOANNINON ENTERTAINMENT DEVELOPMENT S.A. for amount 214 ( 31.12.2022: 57). In addition, profits arose from the recovery of impairment amounting to 240 of HIRON CONCESSIONS S.A.
Within the current year, the indications that led the Management to perform a test for any impairments of these subsidiaries were the recorded losses from the measurement at fair values of the investment properties of the subsidiaries of the real estate sector. With regard to the subsidiary company TERNA MAG S.A., the Management within the financial year 2023 considered that there were indications of impairment on the assets due to deviations observed in its estimates, and for this reason it carried out a relevant impairment test in accordance with the requirements of IAS 36 (the company as a whole is a separate and individual Cash Flow Generating Unit - CFGU).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
314
Sensitivity analysis of recoverable amounts
The Management is not currently aware of any other events or conditions that would reasonably and likely cause a change in any of the key assumptions on which the determination of the recoverable amount of CFGU was based. Despite the above, on 31.12.2023, the Company analyzed the sensitivity of the recoverable amounts per CFGU in relation to a change in some of the basic assumptions presented previously. For example, a change of (i) 0.25 percentage point in the Weighted Average Cost of Capital (WACC), (ii) 25 percentage in the EBITDA margin to perpetuity, or (iii) 0.25 percentage point in the growth rate in perpetuity may affect the valuation by an amount of impairment for the Company between 0.4 million euros to a maximum of 5.2 million euros.
12.4 Subsidiaries with significant percentage of non-controlling interest
The data and the accounts of the financial statements of the significant subsidiary, in which there are minority interests concern TERNA ENERGY S.A., in which as at 31.12.2023 GEK TERNA holds participating interest of 36.79% ( 31.12.2022: 37.51 %). The scope of this subsidiary’s operations is production of electricity from wind, hydroelectric power and other renewable sources and construction services.
The financial data of the consolidated sub-group TERNA ENERGY, in which the minority interest hold significant percentage are as follows:
31.12.2023
31.12.2022
Percentage of non-controlling interests
63.21%
62.49%
Capital return and dividends paid to non-controlling interests
29,734
26,799
Statement of Financial Position
Non-current assets
1,548,455
1,386,804
Current assets
530,377
648,612
(Long-term liabilities)
(1,341,117)
(1,236,443)
(Short-term liabilities)
(231,509)
(307,797)
Net fixed assets
506,206
491,176
Total equity attributable in non-controlling interests
(324,027)
(310,700)
Total equity attributable to the owners of the parent
182,179
180,476
Statement of Comprehensive Income
Turnover
327,831
298,045
Shareholders of the parent from continuing operations
21,951
7,040
Non-controlling interests from continuing operations
40,135
14,604
Net Earnings
62,086
21,644
Shareholders of the parent from continuing operations
21,598
12,863
Non-controlling interests from continuing operations
39,526
24,318
TOTAL COMPREHENSIVE INCOME
61,124
37,181
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
315
31.12.2023
31.12.2022
Statement of Cash Flows
Net cash flows from operating activities
139,127
108,005
Net cash flows from investing activities
(208,696)
(155,413)
Net cash (outflows) /inflows from financing activities
(75,107)
40,571
Net increase/(decrease) in cash and cash equivalents
(144,676)
(6,837)
Opening cash and cash equivalents
391,896
397,409
Effect of exchange rate changes on cash and cash equivalents
807
1,324
Closing cash and cash equivalents
248,027
391,896
The above financial data of the subsidiary are prior to consolidation entries of the broader Group and concern amounts from continuing and discontinued operations.
13 PARTICIPATIONS IN ASSOCIATES
The Group has participations in affiliated companies that are classified as associates because of their significant influence and are consolidated in the consolidated financial statements on the basis of the equity method (the object of the activity and the Group's shareholdings in these investments are presented in Note 5 of the financial statements).
The Group, based on the associate's contribution to the Group's Profits/ (Loss) before taxes, considered that each of the associates individually is immaterial and therefore it discloses in the table below only its aggregate share in these associates :
GROUP
31.12.2023
31.12.2022
Profit/(loss) after tax from continuing operations
(4)
3,878
Other comprehensive income
74
(5)
Total comprehensive income
70
3,873
Change in investments in associates in 2023 and 2022 is as follows:
GROUP
COMPANY
2023
2022
2023
2022
Balance 1st January
4,711
838
4,800
4,800
Additions
581
0
580
0
Results from the application of the equity consolidation method
70
3,873
0
0
Balance 31st December
5,361
4,711
5,380
4,800
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
316
Investments in associates mainly include the investment in KEKROPS SA, a listed company on the Athens Exchange, Greece, with a book value recorded at 4,771 in the Group and 4,800 in the Company. The market capitalization of KEKROPS SA on 31.12.2023 according to the percentage held by the Group amounted to 14,398 ( 31.12.2022: 7,051).
The addition concerns the participation of the parent company in the company DI TERNA SA, which was established during the financial year with the purpose of building and operating a commercial real estate.
14 INVESTMENTS IN JOINT ARRANGEMENTS
14.1 Investments in joint ventures
The Group holds rights in joint ventures, consolidated under equity method in accordance with the provisions of IAS 28 and presented in Note 5 to the Financial Statements.
Changes in investments in joint ventures in 2023 and 2022 are presented below as follows:
GROUP
COMPANY
2023
2022
2023
2022
Balance 1st January
159,566
67,318
18,559
5,119
Additions
45,034
107,668
10,483
14,648
Sales / Write Off
(42,306)
0
(12,250)
0
Capital return
(75)
(60)
(75)
0
Impairment loss
0
0
(291)
0
Total Comprehensive Income from the application of the equity consolidation method
(14,786)
(1,118)
0
0
Transfer from/(to) investments in subsidiaries
0
(14,242)
0
(1,208)
Balance 31st December
147,433
159,566
16,425
18,559
The additions for the Group mainly concern: an amount of 20,000 for the acquisition of a 49.99% stake in AIGISTOS S.A. from the subsidiary company TERNA SA (of which an amount of 10,000 has been paid until 31.12.2023), a total amount of 12,900 for the participation in the share capital increases of IRC HELLINIKON SA (via MGGR) and MGE HELLINIKON B.V. and an amount of 12,000 for the participation in the share capital increase of THERMOELECTRIC KOMOTINIS S.A.. On the Company level, the additions mainly concern an amount of 10,380 for the participation in the share capital increases of IRC HELLINIKON S.A. and MGE HELLINIKON B.V.
Sales/Write-offs for the current year mainly relate to the following:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
317
a) the sale of MGE HELLINIKON BV to SHRE/SHRI L.L.C. The price was set at 12,241 and the reduction in the participation cost amounted to 12,250 for the Company and 12,253 for the Group. This in turn led to a change in the percentage of the Group's indirect participation in IRC HELLINIKON S.A. from 65% to 14%. As a consequence of the above, the total participation rate settled at 49% consisting of a direct participation of 35% and an indirect participation of 14% through the fully owned by 100% subsidiary company MGGR L.L.C.
b) the sale of NK GEK TERNA LTD in which the subsidiary company GEK TERNA CONCESSIONS S.M.S.A. participated by 50%, participation cost of 30,000, of which an amount of 8,000 had not been paid and was included in the account "Payables due business acquisitions" and in the item "Accrued and other short-term liabilities". The sale price amounted to 18,092, whereas the transaction resulted into a loss of 3,908 which has been recorded in the item "Profit/(Loss) from sale of participations and securities" of the Statement of Comprehensive Income.
The change in the account " Total Comprehensive Income from the application of the equity consolidation method " is mainly due to the recognition of losses amounting to 10,372 in proportion to the participation rate of 50% in the company THERMOELECTRIC KOMOTINIS S.A. and due to the recognition of losses amounting to 5,376 in proportion to the participation rate of 55% in the company PASIFAI ODOS SA. It is noted that the result of losses mainly derived from the valuation of derivatives (VPPA and IRS) that have been recognized in the above mentioned companies.
As of 31.12.2023, , the most significant joint ventures included in this account were the following: THERMOELECTRIC KOMOTINI S.A., INTERNATIONAL AIRPORT OF HERAKLION CRETE CONCESSION S.A. and IRC HELLINIKON S.A. (See note 5). The items by 100% of the financial statements of these joint ventures during the year 2023 were as follows:
THERMOELEKTRI KI KOMOTINIS S.A.
HERAKLION CRETE INTERNATIONAL AIRPORT SA CONCESSION
IRC HELLINIKON SA
Partcipation
50.00%
32.46%
49.00%
31.12.2023
31.12.2023
31.12.2023
Non-current assets
339,729
253,197
364,308
Cash and cash equivalents
3,340
176,389
68,913
Other current assets
19,381
42,233
3,155
Total assets
362,450
471,819
436,375
Long-term financial liabilities (less trade and other liabilities and provisions )
336,710
378
330,672
Other long-term liabilities
47
263,356
0
Short-term financial liabilities (less trade and other liabilities and provisions )
100
196
5,017
Other short-term liabilities
22,390
28,566
6,114
Total liabilities
359,247
292,496
341,803
Net assets
3,203
179,323
94,572
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
318
THERMOELEKTRI KI KOMOTINIS S.A.
HERAKLION CRETE INTERNATIONAL AIRPORT SA CONCESSION
IRC HELLINIKON SA
Partcipation
50.00%
32.46%
49.00%
31.12.2023
31.12.2023
31.12.2023
Carrying amount of investments in financial statements
1,602
106,128
14,945
Turnover
0
98,386
0
(Depreciation / Amort.)
4
(198)
(53)
(Financial expenses)
(19,889)
(25)
(130)
Financial income
0
3,755
0
Tax expenses
4,480
57
525
Results from continuing operations
(16,858)
5,069
(2,200)
Other comprehensive income
(3,741)
1
0
Total Results
(20,600)
5,070
(2,200)
Share in the results of the Group
(8,501)
1,646
(1,173)
Share in the other comprehensive results of the Group
(1,871)
0
0
Share in the total comprehensive results of the Group
(10,372)
1,646
(1,173)
The respective data and items of the financial statements of these significant joint ventures during the year 2022 are as follows:
THERMOELEKTRIKI KOMOTINIS S.A.
HERAKLION CRETE INTERNATIONAL AIRPORT SA CONCESSION
IRC HELLINIKON SA
Interest
50.00%
32.46%
100.00%
31.12.2022
31.12.2022
31.12.2022
Non-current assets
195,736
170,772
364,319
Cash and cash equivalents
4,352
212,605
178
Other current assets
8,359
29,216
165
Total assets
208,447
412,593
364,661
Long-term financial liabilities (apart from trade and other liabilities and provisions)
0
396
341,382
Other long-term liabilities
0
235,879
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
319
THERMOELEKTRIKI KOMOTINIS S.A.
HERAKLION CRETE INTERNATIONAL AIRPORT SA CONCESSION
IRC HELLINIKON SA
Interest
50.00%
32.46%
100.00%
31.12.2022
31.12.2022
31.12.2022
Short-term financial liabilities (apart from trade and other liabilities and provisions)
178,878
129
5,015
Other short-term liabilities
29,622
1,937
2,808
Total liabilities
208,500
238,341
349,204
Net fixed assets
(53)
174,252
15,458
Proportion in the net fixed assets
(26)
104,482
7,298
Turnover
0
47,914
0
(Depreciation / Amort.)
(17)
(158)
(14)
(Financial expenses)
(58)
(22)
(1)
Financial income
0
21
0
(Expense)/Income from income tax
0
(186)
0
Results from continuing operations
(128)
375
(452)
Other comprehensive income
0
3
(90)
Total Results
(128)
378
(542)
Share in the results of the Group
(64)
122
(452)
Share in the other comprehensive results of the Group
0
1
(90)
Share in the total comprehensive results of the Group
(64)
123
(542)
During years 2023 and 2022 no dividends were collected from the above joint ventures.
The major items of the Other Joint Ventures (with credit net equity), and the proportion in their equity, are as follows:
31.12.2023
31.12.2022
Non-current assets
14,426
156,318
Current assets
25,379
5,130
Long-term liabilities
(13,242)
(11,732)
Short-term liabilities
(22,574)
(6,637)
Net fixed assets
3,989
143,079
Proportion in the net fixed assets
24,758
47,812
1.1-31.12.2023
1.1-31.12.2022
Turnover
815
8,167
Results from continuing operations
(544)
683
Other comprehensive income
(4,375)
119,990
Total results
(4,919)
120,673
Share in the results of the Group
(513)
(634)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
320
Share in the other comprehensive results of the Group
(4,375)
0
Share in the total comprehensive results of the Group
(4,888)
(634)
14.2 Investments in joint operations – Proportional consolidation
The companies, accounted for using the proportionate consolidation method in the Company's consolidated and separate financial statements are analytically presented in Note 5. These companies pertain in schemes with joint operation with the other shareholders and in essence they are mainly tax construction consortiums that do not constitute a separate entity under IFRS. Their assets and liabilities are consolidated, in accordance with the proportion of the participating interest, in the Group and Company financial statements.
The following amounts are included in the consolidated and separate Financial Statements for FYs 2023 and 2022 and represent the Group's share in assets and liabilities and profit after tax of the jointly controlled entities.
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Non-current assets
5,374
9,732
77
74
Other current assets
131,315
108,348
1,708
1,792
Total assets
136,688
118,079
1,785
1,866
Long-term liabilities
2,051
8,151
38
18
Other short-term liabilities
168,421
128,356
368
307
Total liabilities
170,471
136,507
406
324
Equity
(33,783)
(18,428)
1,379
1,542
Turnover
106,380
97,332
2,357
2,126
Total income after tax
(11,325)
(16,907)
1,077
963
Profit after tax
(12,695)
(15,321)
737
646
15 FINANNCIAL ASSETS - CONCESSIONS
The Group, through its sub-group TERNA ENERGY, constructs and operates the following concession agreements:
Α . Unified Automatic Fare Collection System: On 29.12.2014, a partnership agreement (PPP) for study, financing, installation, maintenance and technical management of a Unified Automatic Fare Collection System was signed between OASA (Athens Transport) Group and the Company’s subsidiary HST SA for the companies of OASA Group. The total duration of the agreement is 12 years and 6 months. The construction and installation were completed in 2017, while during the first half of 2017, the operation
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
321
started, which is expected to last 10 years and 4 months. During the term of the project, the company is performing additional construction works on the toll collection system on the OASA line extensions.
Β . Urban Waste Treatment Plant of the Region of Epirus: On 21.07.2017 a partnership agreement (PPP) was signed between the EPIRUS REGION and the subsidiary company AEIFORIKI EPIRUS MONOPROSOPI SPECIAL PURPOSE SOCIETE ANONYME, for the implementation of the project for the urban waste treatment plant of the Region of Epirus. The agreement is executed in two periods, the period of project and the service period and is of a duration of 27 years.
C. Urban Waste Treatment Plant of Peloponnese Region : On 14.06.2018, a public and private partnership agreement was signed between the Peloponnese Region and the subsidiary company "PERIVALLONTIKI PELOPONNESE SINGLE MEMBER S.A. for the implementation of the project for the “Integrated Urban Waste Treatment Plant of the Peloponnese Region” for construction and operation of waste management plants comprising three (3) Waste Treatment Units (WTUs) and an equal number of Landfills in Arcadia, Messinia and Laconia, as well as two (2) Waste Transfer Stations (WTS) in Corinthia and Argolida. The Partnership Agreement includes study, licensing, financing, construction, insurance, operation, and maintenance of the project for the next 28 years.
During 2023, the Integrated Management Unit of Arcadia, the Waste Transfer Stations of Argolis and Corinthia and the Transitional Management Units of Messinia and Laconia were put into commercial operation, while the construction of the IWMS Units of Messinia and Laconia are under progressive and are expected to be completed within 2024.
Financial Contribution of Peloponnese Region
During the financial year 2023, the Peloponnese Region paid the amount of 33,817 within the framework of the Partnership Agreement. This amount has reduced the item "Financial Assets - Concessions" and is specifically included in the line of the following table "Decreases in financial item".
Analytical information on the accounting policy followed and the concession agreements mentioned above is presented in Note 4.11.
The analysis of the changes of the generated Concession Financial Statements as well as the revenue per category are analyzed as follows:
Financial Assets - Concessions
Unified Automated System for Ticket Collection
Installation of civil waste processing Epirus Region
Installation of civil waste processing Peloponnese Region
Total
Opening balance 01.01.2022
23,428
17,129
20,796
61,353
(Decreases)/Increases in financial item
(6,488)
(1,713)
17,827
9,626
Reversal of discount
3,549
1,301
3,089
7,939
Impairment/Reverse of impairment under IFRS 9
1
(2)
9
8
Closing balance as of 31.12.2022
20,490
16,715
41,721
78,926
Opening balance 01.01.2023
20,490
16,715
41,721
78,926
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
322
Financial Assets - Concessions
Unified Automated System for Ticket Collection
Installation of civil waste processing Epirus Region
Installation of civil waste processing Peloponnese Region
Total
(Decreases)/Increases in financial item
(6,901)
(1,770)
(3,769)
(12,440)
Reversal of discount (note 42)
3,640
1,283
2,855
7,778
Impairment/Reverse of impairment under IFRS 9
(2)
(7)
(11)
(20)
Closing balance as of 31.12.2023
17,227
16,221
40,796
74,244
Financial Assets - Concessions Non Current Portion
8,431
15,873
36,254
60,558
Financial Assets - Concessions Current Portion (note19)
8,797
347
4,542
13,686
Analysis of revenues per category 1.1-31.12.2022
Income from construction services
217
0
38,278
38,495
Income from operation services
10,339
4,945
4307
19,591
Reversal of discount (note 42)
3,549
1,301
3,089
7,939
Total
14,105
6,246
45,674
66,025
Analysis of revenues per category 1.1-31.12.2023
Income from construction services
0
0
40,475
40,475
Income from operation services
10,962
6,595
11,411
28,968
Reversal of discount (note 42)
3,640
1,283
2,855
7,778
Total
14,602
7,878
54,741
77,221
16 OTHER LONG-TERM ASSETS
The account “Other long-term receivables” on 31.12.2023 and 31.12.2022 in the accompanying financial statements is analyzed as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
323
GROUP
COMPANY
Other long-term financial receivables
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Loans to subsidiaries, joint ventures and other related companies
60,361
9,476
141,238
162,158
Receivables from financial leasing
0
12,422
0
0
Given guarantees
8,432
8,920
1,640
20
Withheld amounts of invoiced receivables
4,269
3,354
0
0
Other long-term financial assets
2,260
3,246
0
0
Provision for impairment of long-term financial assets
(1,158)
(1,158)
(8)
(8)
Total (a)
74,164
36,260
142,870
162,170
GROUP
COMPANY
Other long-term non financial receivables
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Long-term advance payments to suppliers
0
3,353
0
0
Agents’ commissions cost
11,762
6,870
0
0
Long-term receivables from approved grants
0
835
0
0
Advance payments for businesses acquisition
8,840
0
0
0
Total (b)
20,602
11,058
0
0
Total Other long-term assets (a+b)
94,766
47,318
142,870
162,170
The Company participates in the issuance of bond loans to subsidiaries, joint ventures and other related companies, which will be repaid either by obtaining a bank loan or through early repayments or at their maturity. The change on the Company level in the account " Loans to subsidiaries, joint ventures and other related companies " is mainly due to the collection of loans amounting to 83,112. An additional amount of 62,012 was reclassified from the item of "Advances and Other Receivables", as during the current financial year there were amendments signed for the loan agreements which extended the duration of the particular loans beyond 12 months.
On the Company level, the change in the account "Given guarantees" is due to fees paid in the financial year for participating in tenders of the Greek State within the framework of standard proposals.
The change in the account " Loans to subsidiaries, joint ventures and other related companies" on consolidated level is mainly due to the reclassification of loans from the subsidiary company GEK TERNA CONCESSIONS S.M.S.A. to the affiliated company THERMOELECTRIC KOMOTINI S.A. with a percentage of 50%, which is consolidated according to the equity method in the amount of 53,447 from the "Advances and Other Receivables" account, since in the current financial year, there were amendments signed for the loan contracts, which extended the duration of loans beyond 12 months.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
324
The account "Receivables from financial leases" of the Group refers to a reclassification in "Advances and other receivables" as the subject receivable is to be collected within 2024.
The account "Advances for the acquisition of participations in companies" refers to advances paid within the financial year 2023 and are related to the Group's investment plans in the sectors of Construction and RES.
The account "Agents’ commissions cost" is related to the cost of commission of agents, also called "Agency costs" and concerns the subsidiary company HERON ENERGY SA. The change of the account "Agents’ commissions cost" is analyzed below:
GROUP
Agency costs
2023
2022
Balance 1st January
6,870
0
Additions
7,758
8,470
Amortization
(2,866)
(1,600)
Balance 31st December
11,762
6,870
Provisions for impairment of other long-tern receivables under IFRS 9 are analyzed as follows:
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
821
0
821
Provision of credit loss
0
340
0
340
Recovery of provision of credit loss
0
(3)
0
(3)
Βalance 31.12.2022
0
1,158
0
1,158
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
1,158
0
1,158
Βalance 31.12.2023
0
1,158
0
1,158
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
8
0
8
Βalance 31.12.2022
0
8
0
8
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
8
0
8
Βalance 31.12.2023
0
8
0
8
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
325
17 INVENTORIES
The account “Inventories” on 31.12.2023 and 31.12.2022 in the accompanying financial statements is analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Raw-auxiliary materials
5,273
9,811
168
471
Spare parts of fixed assets
17,994
15,790
417
669
Merchandise and Finished and semi- finished products
25,513
23,733
0
0
Properties (Land-Buildings) as inventories
37,910
36,732
6,202
5,828
Impairment
(19,760)
(19,639)
(2,782)
(3,232)
Total
66,930
66,427
4,005
3,736
The account "Merchandise and Finished and semi-finished products” mainly pertains to mined magnesite ore (processed and unprocessed).
The account “ Properties (Land-Buildings) as inventories” includes property for development intended for sale.
Overall, the Group recognized during the annual process of reviewing the net realizable value of inventory and real estate assets a gain 400 ( 31.12.2022: gain 482) in "Other income/(expenses)" of the Statement of comprehensive income (see note 38).
With the exception of the above cases, there was no need for impairment of inventories on 31.12.2023.
The inventories are not burdened with liens.
18 TRADE RECEIVABLES
Trade receivables of the Group and the Company on 31.12.2023 and 31.12.2022 , in the accompanying financial statements are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Trade receivables
644,231
610,200
29,852
13,645
Customers – Doubtful and litigious
13,952
21,301
0
0
Notes / Checks Receivable overdue
4,347
4,347
0
0
Checks Receivable
5,272
7,160
252
262
Minus: Provisions for doubtful trade receivables
(111,687)
(107,084)
(692)
(630)
Total
556,115
535,924
29,412
13,277
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
326
The balance of the account derives by 296,372 ( 31.12.2022: 202,678) from the construction sector, by an amount of 213,557 ( 31.12.2022: 298,196) from the operating segment "Electricity from thermal energy sources, trading of electricity and natural gas" and by an amount of 46,187 ( 31.12.2022: 35,050) from the remaining operating segments of the Group.
The increase in trade receivables in the construction sector is due to the delay in repayment of debts mainly from the public and from customers of the wider public sector. Already within 2024 a large part of the trade receivables have been collected.
The book values of trade receivables represent their fair value.
At every reporting date, the Group examines the need to recognize potentially arising impairment and expected credit losses, in accordance with the requirements of IFRS 9. The maximum exposure to credit risk at the financial statements reporting date is the book value of every category of receivables as recorded above. Provisions for impairment of trade receivables regarding 2023 and 2022 are analyzed as follows:
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
1,547
44,292
45,839
Provision of credit loss
0
23,266
10,933
34,199
Provision of credit loss due to acquisition of entity
0
21,708
15,261
36,969
Recovery of provision of credit loss
0
(304)
(866)
(1,170)
Eliminations
0
(7)
(1,672)
(1,679)
Other transfers
0
(7,159)
0
(7,159)
Foreign exchange differences
0
43
42
85
Βalance 31.12.2022
0
39,094
67,990
107,084
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
39,094
67,990
107,084
Provision of credit loss
0
12,609
2,031
14,640
Recovery of provision of credit loss
0
(37)
(1,451)
(1,488)
Eliminations
0
0
(6,790)
(6,790)
Other transfers
0
(1,779)
0
(1,779)
Foreign exchange differences
0
(19)
39
20
Βalance 31.12.2023
0
49,868
61,819
111,687
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
59
572
631
Eliminations
0
(1)
0
(1)
Βalance 31.12.2022
0
58
572
630
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
58
572
630
Provision of credit loss
0
62
0
62
Βalance 31.12.2023
0
120
572
692
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
327
The following table analyzes the total of trade receivables as well as the maturity of outstanding overdue trade receivables:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Non outstanding balances
370,800
366,287
22,568
3,207
Outstanding balances
297,002
276,721
7,536
10,700
Total trade receivables
667,802
643,008
30,104
13,907
The maturity of balances of the outstanding overdue trade receivables is analyzed as follows:
GROUP 2023
Non outstanding balances
less than 6 month s
6 - 12 months
12 - 24 months
up to 24 months
Total
Total amount of receivables
370,800
120,82 3
71,527
37,091
67,561
667,802
Expected credit loss
(8,079)
(10,95 5)
(16,908)
(20,632)
(55,113)
(111,687)
Total
362,721
109,86 8
54,619
16,459
12,448
556,115
GROUP 2022
Non outstanding balances
less than 6 month s
6 - 12 months
12 - 24 months
up to 24 months
Total
Total amount of receivables
366,287
144,87 2
53,478
17,341
61,030
643,008
Expected credit loss
(9,597)
(15,93 0)
(21,048)
(12,185)
(48,324)
(107,084)
Total
356,690
128,94 2
32,430
5,156
12,706
535,924
COMPANY 2023
Non outstanding balances
less than 6 month s
6 - 12 months
12 - 24 months
up to 24 months
Total
Total amount of receivables
22,568
941
5,229
657
709
30,104
Expected credit loss
(14)
0
0
(21)
(657)
(692)
Total
22,554
941
5,229
636
52
29,412
COMPANY 2022
Non outstanding balances
less than 6 month s
6 - 12 months
12 - 24 months
up to 24 months
Total
Total amount of receivables
3,207
2,373
4,692
2,997
638
13,907
Expected credit loss
0
0
0
0
(630)
(630)
Total
3,207
2,373
4,692
2,997
8
13,277
Not overdue amounts include an amount of Euro 41.0 million ( 31.12.2022: 36.7 million euros) which relates to good performance retentions (withheld guarantees).
Impaired and post-dated receivables after impairments that are overdue for more than 12 months amount to 28,907 (17,862 for 2022) for the Group and 688 (3,005 for 2022) for the Company. These
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
328
receivables relate to Public Bodies, Related Parties and Third Parties and are, according to the Management's estimates, recoverable.
In the context of the Group's operations, necessary measures are taken on a case basis to ensure collectability of receivables.
Finally, the factor, ensuring collectability of balance, is the received prepayments concerning construction contracts, which on 31.12.2023 amounted to 231.1 million euros ( 31.12.2022: 296 million euro).
19 RECEIVABLES / LIABILITIES FROM CONTRACTS WITH CUSTOMERS
The receivables from contracts with customers are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Receivables from construction contracts with customers
313,538
217,725
0
0
Receivables from other contracts with customers
260,836
172,931
5,138
7,216
Financial Assets - Concessions Current Portion (note15)
13,686
8,053
0
0
Less: Impairments of receivables from contracts with customers
(9,124)
(7,396)
0
0
Total
578,936
391,313
5,138
7,216
The increase of the account “Receivables from construction contracts with customers” is due to the delay in approval of certification of completed works, mainly from the public and from customers of the wider public sector, despite the intensification of operations in the fourth quarter of 2023. Already within 2024 the approval procedures have progressed and part of the relevant works have been invoiced.
The account "Receivables from other contracts with customers" includes an amount of 205.4 million concerning unbilled receivables from the sector "Electricity from thermal energy sources, trading of electricity and natural gas" and is mainly due to the acquisition of the subsidiary company HERON ENERGY S.A..
Provisions for impairment of receivables from contracts with customers in Group level are analyzed according to the IFRS 9 as following:
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
93
76
169
Provision of credit loss
0
144
0
144
Recovery of provision of credit loss
0
0
(76)
(76)
Other transfers
0
7,159
0
7,159
Βalance 31.12.2022
0
7,396
0
7,396
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
329
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
7,396
0
7,396
Provision of credit loss
0
1
0
1
Recovery of provision of credit loss
0
(47)
0
(47)
Other transfers
0
1,779
0
1,779
Foreign exchange differences
0
(5)
0
(5)
Βalance 31.12.2023
0
9,124
0
9,124
At the Company level there was no provision for impairment of receivables from contracts with customers in accordance with IFRS 9
Liabilities in relation to contracts with customers are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.202 2
Customer advances
166,066
155,829
105
82
Non-completed liabilities from construction contracts
85,921
101,881
65
68
Non-completed liabilities from other contracts with customers
127
365
0
0
Total
252,114
258,075
170
150
The change in the account "Customer advances" mainly concerns advances in the construction operating segment for the execution of projects undertaken by the subsidiary company TERNA SA.
Changes in Receivables and liabilities from Construction Contracts with customers (short-term and long-term (note 30)) within the current fiscal year are due to the following factors:
Receivables from construction contracts with customers
GROUP
Balance 01.01.2022
145,401
Effect due to execution of existing contracts
63,856
Income for the period from new contracts
8,449
Foreign exchange differences
20
Βalance 31.12.2022
217,725
Balance 01.01.2023
217,725
Effect due to execution of existing contracts
82,003
Income for the period from new contracts
13,813
Foreign exchange differences
(3)
Βalance 31.12.2023
313,538
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
330
Liabilities due to construction contracts with customers
GROUP
Balance 01.01.2022
142,121
Effect due to execution of existing contracts
33,307
Income for the period from new contracts
9,345
Foreign exchange differences
69
Βalance 31.12.2022
184,842
Liabilities due to construction contracts with customers-Short term portion
101,881
Liabilities due to construction contracts with customers-Long term portion (note 30)
82,961
Balance 01.01.2023
184,842
Effect due to execution of existing contracts
(42,574)
Income for the period from new contracts
3,916
Βalance 31.12.2023
146,184
Liabilities due to construction contracts with customers-Short term portion
85,921
Liabilities due to construction contracts with customers-Long term portion (note 30)
60,263
20 ADVANCES AND OTHER RECEIVABLES
The account “Advances and other receivables” on 31 December 2023 and 31 December 2022 in the accompanying financial statements are analyzed as follows:
GROUP
COMPANY
Prepayments and other short-term non-financial receivables
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Advances to suppliers
89,486
161,087
3,959
3,446
VAT for rebate – offsetting
71,457
69,452
0
366
Receivables from Wind Parks’ grants
0
627
0
0
Prepayment to insurance funds (Social Security Organization of technical works)
8,669
5,550
0
0
Transitional asset accounts
48,691
46,655
5,498
1,782
Other non-financial receivables
1,023
966
6
5
Total (a)
219,326
284,337
9,463
5,599
GROUP
COMPANY
Other short-term financial receivables
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Receivables from J/V, related companies and other associates
8,980
7,392
6,652
7,373
Short-term part of granted long-term loans
5,047
53,404
10,910
67,111
Short-term part of receivables from financial leasing
12,422
10,102
0
0
Financial receivables from other various debtors
39,043
13,602
4,369
84,975
Receivables from to indemnities in relation to concession projects
43,191
23,412
0
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
331
GROUP
COMPANY
Other short-term financial receivables
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Operational support of Concession projects
6,821
4,528
0
0
Blocked bank deposit accounts
146,133
139,055
25,500
25,500
Doubtful – Litigious other receivables
141
141
0
0
Less: Impairments of other short-term financial receivables
(14,668)
(13,353)
(1,241)
(1,226)
Total (b)
247,110
238,283
46,190
183,733
Total prepayments and other receivables (a+b)
466,436
522,620
55,653
189,332
The change in the account "Advances to Suppliers" of the Group mainly concerns the reduction of advances to suppliers in the construction sector due to the amortization of the above advances within the financial year under consideration as a result of progress in the execution of works.
The change in the account "Short-term part of granted long-term loans" of the Group is mainly due to the reclassification of a loan of 53,447 that had been granted by the subsidiary company GEK TERNA CONCESSIONS SMSA towards a joint venture that is consolidated via the equity method. As far as the Company is concerned, the change in the account is related to the classification of an amount of 62,012 to the item “Other Long-Term Receivables”, due to extension of the duration of existing loan agreements.
The change in the account "Financial receivables from various other debtors" in the Group mainly concerns an amount of 18,615 related to receivables from the Greek State for construction of the motorways managed by the subsidiary companies NEA ODOS SA and CENTRAL GREECE MOTORWAY SA. As far as the Company is concerned, the change in the account is due to the collection of a receivable amounting to 81,500, which concerned the Company's claim from the subsidiary company GEK TERNA CONCESSIONS S.M.S.A., as a result of the sale of the shares held by the Company in GEK TERNA KASTELI S.M.S.A. The sale had taken place within 2022.
The account "Receivables from indemnities in relation to concession projects" amounting to 23.412 on 31.12.2023 includes compensations related to events of Greek State’s Delay (toll stations that have not been put into operation under the responsibility of the State, loss of revenue due to natural disaster DANIEL, loss of revenue due to no increase in toll rate).
The movement in the provision for impairment of these current assets of the Group and the Company, following the application of the requirements of IFRS 9, is as follows:
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
193
11,592
11,785
Provision of credit loss
0
0
1,912
1,912
Recovery of provision of credit loss
0
(20)
(107)
(127)
Eliminations
0
0
(231)
(231)
Other transfers
0
0
12
12
Foreign exchange differences
0
1
1
2
Βalance 31.12.2022
0
174
13,179
13,353
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
332
GROUP
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
174
13,179
13,353
Provision of credit loss
0
52
1,362
1,414
Recovery of provision of credit loss
0
(1)
(112)
(113)
Other transfers
0
0
15
15
Foreign exchange differences
0
0
(1)
(1)
Βalance 31.12.2023
0
225
14,443
14,668
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2022
0
15
1,198
1,213
Other transfers
0
0
13
13
Βalance 31.12.2022
0
15
1,211
1,226
COMPANY
Stage 1
Stage 2
Stage 3
Total
Balance 01.01.2023
0
15
1,211
1,226
Other transfers
0
0
15
15
Βalance 31.12.2023
0
15
1,226
1,241
21 INVESTMENT IN EQUITY INTERESTS
The movement in investments in securities in 2023 and 2022, is analyzed as follows:
GROUP
COMPANY
2023
2022
2023
2022
Balance 1st January
91,069
90,194
88,972
89,095
Additions
1,345
2,806
0
1,700
Fair value through the Other Comprehensive Income
11,136
(1,931)
10,960
(1,823)
Balance 31st December
103,550
91,069
99,932
88,972
All the above investments refer to shares of unlisted securities, the most important of which are analytically described in Note 47.
Profit from fair value measurement was included in Other Comprehensive Income account in the Statement of Comprehensive Income, not reclassified in the Income Statement in later periods.
22 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Financial assets at fair value through profit and loss are presented as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
333
GROUP
COMPANY
2023
2022
2023
2022
Balance 1st January
23,758
5,386
9,436
3,625
Additions
2,874
18,107
0
5,625
Acquisition of shares with loan capitalisation
1,497
0
1,497
0
Adjustment at fair through Earnings
3,862
187
3,356
186
Foreign exchange differences
(154)
78
0
0
Balance 31st December
31,837
23,758
14,288
9,436
On 31.12.2023 the amount of 31,837 of the Group is further broken down into mutual funds amounting to 4,576 and equity shares amounting to 27,261 ( 4,504 and 19,254 on 31.12.2022 respectively).
23 CASH AND CASH EQUIVALENTS
С ash and cash equivalents of the Group and the Company on 31 December 2023 and 31 December 2022, in the accompanying financial statements are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Cash in hand
3,770
2,953
0
0
Sight Deposits
748,520
1,058,547
81,908
144,123
Term Deposits
558,359
430,203
500,000
415,000
Total
1,310,649
1,491,703
581,908
559,123
Term deposits have a usual duration of 3 months and carry interest rates ranged during the year between 1.00%-3.875% (0.01%-3.00% during the previous year, respectively).
On 31.12.2023, the Company's cash and cash equivalents included the unallocated amount of 287.2 million euros from the issuance of the bond issue of 500 million euros (see section VI) as well as the amount of 183.2 million euros from the issuance of the common bond loan of EUR 300 million euros (see section VII).
Furthermore, the Group possesses blocked deposits amounting to 146,133 ( 139,055 in the previous financial year), which are held in specific bank accounts in order to settle its short-term operating and financial liabilities. These blocked deposits are classified in the account "Advances and other receivables" (see Note 20).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
334
24 BORROWINGS
Long-term loans in the accompanying separate and consolidated financial statements are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Long-term loans
2,909,958
2,832,523
922,748
920,339
Less: Long term liabilities payable during the next financial year
(172,900)
(160,224)
(8,961)
(8,897)
Long-term part of loan
2,737,058
2,672,299
913,787
911,442
Repayment period of long-term loans is analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Up to 1 Year
172,900
160,224
8,961
8,897
Between 1 - 5 Years
1,640,360
900,787
909,971
110,277
Over 5 Years
1,096,698
1,771,512
3,816
801,165
Total
2,909,958
2,832,523
922,748
920,339
T he Group has the obligation to maintain specific financial ratios relating to bond loans. As of December 31, 2023, the Group was in full compliance with the required limits of these ratios, according to the provisions of the respective loan agreements .
The total financial cost of long-term and short-term loan liabilities, for the year 2023, and the corresponding comparative period of 2022, is included in the item "Net financial income / (expenses)" of the consolidated and separate Income Statement. The average interest rate for the Group for the period ended 31.12.2023 stood at 4.40% ( 31.12.2022: 3.65%).
The Group’s long-term debt is 99.62% in euro (99.44% at the end of the previous year) and by 0.38% in PLN (0.56% at the end of the previous year) and represents approximately 96.43% of the Group’s total debt (95.17% at the end of the previous year). The long-term debt mainly covers the investment financing needs for all segments of the Group.
Within the year 2023, the amount of 222.2 million euros ( 2022: 168.9 million euros) was paid for the repayment of long-term loan debt, whereas the amount of 286.0 million euros ( 2022: 485.6 million euros) was collected from new loans.
It is noted that the total borrowing includes subordinated, non-recourse loans granted to the parent company at the amount of 1,998.9 million euros (versus 1,961.8 million euros on 31.12.2022), while the amounts of recourse loan debt stood at 1,018.7 million euros (versus 1,014.6 million euros on 31.12.2022).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
335
The significant changes in the Group's loans for the period ended 31.12.2023 are described in the following paragraphs.
(a) Loans of the Company (GEK TERNA)
As at 31.12.2023, the total loan liabilities of the Company amount to 922,748 (of which an amount of 916,741 relates to common publicly traded bond loans and an amount of 6,007 to intragroup loans), whereas an amount of 8,961 relates to long-term loan liabilities payable in the next 12 months. During the year under consideration, the Company was granted a new loan of 30,000, which subsequently it fully paid.
(b) Loans of the sub-group TERNA ENERGY
The TERNA ENERGY sub-Group’s loans pertain to financing its business activities and mainly concern the financing of construction and the operation of installations in relation to renewable energy sources. The short‐term loans of the sub-Group TERNA ENERGY pertain to bank borrowings of predetermined due dates and renewable in proportion to the needs. Collected amounts are mainly used to cover liquidity needs during the Wind Farms construction period of the energy operating segment of sub-Group TERNA ENERGY .
Within the year 2023, new loans of 256,028 were undertaken by the sub-Group TERNA ENERGY (versus 373,767 in the previous comparative year 2022). The liquidity raised was mainly used to finance investments in wind farms of subsidiaries, and repayment of short-term bank loans, issued to finance uninterrupted and timely compliance with the construction program, as well as the implementation of the construction of the urban waste management facilities of the Peloponnese Region.
Specifically:
i. Regarding wind farms and construction of the urban waste management facilities, TERNA ENERGY sub-Group utilized the bank debt lines through its subsidiaries in Greece of nominal value 256,028 repaying at the same time outstanding borrowings of 155,580.
ii. TERNA ENERGY sub-Group issued domestic short-term bank loans amounting to 60,000 .
(c) Loans of the sub-group TERNA
As at 31.12.2023, the total bank loan liabilities of TERNA sub-group amounted to 94,173 (versus 69,910 in the previous year) and are analyzed in: (a) amount of 51,043 (54,871 in the previous year) which relates to long-term bond loans, (b) amount of 4,560 (2,921 in the previous year) which relates to long- term loan liabilities payable in the next 12 months and (c) an amount of 38,570 (12,118 in the previous year) which relates to short-term loans. During the year, TERNA sub-group repaid bank loan liabilities amounting to 2,700.
Furthermore within the year 2023 , TERNA Group undertook new short-term bank borrowing of 37,760 from financial institutions whereas it repaid an amount of 11,616 .
(d) Loans of motorways concession companies
As of 31.12.2023, the bank bond loans of the companies NEA ODOS SA, CENTRAL GREECE MOTORWAY S.A., GEK TERNA MOTORWAY S.M.S.A. and GEK TERNA KASTELI S.M.S.A. amount to 770,503 (versus 798,421 in the previous year), of which an amount of 47,095 (versus 37,799 in the previous year) relates to loan liabilities payable in the next financial year. The companies NEA ODOS SA and CENTRAL
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
336
GREECE MOTORWAY S.A. have signed bond loan agreements amounting to 241,700 and 470,915 respectively, which have covered their needs for approved project costs during the T1 motorways construction period.
Within the financial year 2023, the above companies made a repayment of bank loan liabilities amounting to 33,922.
(e) Loans of the companies HERON ENERGY S.A.
As of 31.12.2023, the company's bank loans amounted to 69,127 (versus 71,119 in the previous year) and concerned short-term loans.
Within the financial year 2023, the subsidiary company proceeded to repay a short-term bank loan amounting to 1,400.
Loan guarantees
To secure some of the Group's and other affiliated companies’ loans:
- The sub-group TERNA ENERGY, for the needs of financing new projects, establishes a fictitious pledge on its mobile equipment (wind turbines of wind farms) as well as encumbrances (usually a mortgage note) on real estate owned by it to secure the lenders,
- Insurance contracts, receivables from the sale of electric energy to DAPEEP or DEDDIE and from construction services, motorways concession contracts and cash have been assigned to lending banks,
- Shares and secondary loans of subsidiaries and other related companies have been provided as collaterals with a nominal value of 266,309 ( 31.12.2022: 212,397).
The table below presents in summary the changes in the Group and Company's short-term and long- term loans in the years 2023 and 2022:
GROUP
COMPANY
Long-term loans
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Opening balance
2,832,523
2,500,281
920,339
917,915
Capital withdrawals
286,028
485,589
30,000
33,000
Capital payments
(222,201)
(168,892)
(30,481)
(33,416)
Interest payments
(135,328)
(77,388)
(25,889)
(25,999)
Loan interest in financial results (note 42)
129,580
85,989
28,779
28,839
Loan interest capitalised
18,337
7,325
0
0
Addition due to acquisition of entity
0
75,231
0
0
Elimination of intercompany loan acquired company
0
(75,231)
0
0
Foreign exchange differences
1,019
(381)
0
0
Closing balance
2,909,958
2,832,523
922,748
920,339
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
337
GROUP
Short-term loans
31.12.2023
31.12.2022
Opening balance
143,869
95,557
Capital withdrawals
37,760
125,522
Capital Payments
(74,416)
(90,251)
Interest payments
(6,171)
(2,884)
Loan interest in financial results (note 42)
6,621
3,839
Interest capitalised
36
27
Addition due to acquisition of entity
0
12,059
Closing balance
107,699
143,869
25 LEASE LIABILITIES
Lease liabilities as of 31 December 2023 and 31 December 2022 are analyzed as following in the accompanying financial statements:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities from bank leases (long- term)
38,568
14,662
0
0
Liabilities from bank leases (short- term)
6,112
2,245
0
0
Sub-total of bank leases (a)
44,680
16,907
0
0
Liabilities from third parties leases (long-term)
38,352
32,953
287
197
Liabilities from third parties leases (short-term)
7,779
5,403
139
153
Sub-total of third parties leases (b)
46,131
38,356
426
350
Total leases (a)+(b)
90,811
55,263
426
350
The repayment period of lease liabilities is analyzed in the tables below as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Up to 1 Year
13,891
7,648
139
153
Between 1 - 5 Years
50,142
24,859
287
197
Over 5 Years
26,778
22,756
0
0
Total
90,811
55,263
426
350
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
338
Changes in these liabilities in 2023 and 2022 are presented below as follows:
GROUP
COMPANY
Liabilities from leases
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Opening balance
55,263
27,446
350
638
Repayments of lease contracts
(13,811)
(6,888)
(312)
(270)
Payments of interest
(2,426)
(1,388)
(17)
(20)
Liabilities from new contracts
48,897
32,735
387
11
Foreign exchange differences
244
(41)
0
0
Financial cost for the period (note 42)
3,499
1,388
18
20
Interest capitalised
212
186
0
0
Addition due to acquisition of entity
0
2,133
0
0
Change due to sale of existing entity
0
29
0
0
Termination in consolidation of subsidiary
0
(18)
0
0
Termination of lease
(1,067)
(319)
0
(29)
Closing balance
90,811
55,263
426
350
Long-term liabilities from leases
76,920
47,615
287
197
Short-term liabilities from leases
13,891
7,648
139
153
26 PROVISIONS FOR EMPLOYEE COMPENSATION
According to Greek labor law, each employee is entitled to a lump‐sum indemnity in case of dismissal or retirement. The amount of the indemnity depends on the length of service with the company and the employee’s wages the day he/she is dismissed or retires. Employees that resign or are justifiably dismissed are not entitled to such an indemnity.
The indemnity payable in case of retirement in Greece is equal to 40% of the indemnity calculated in case of dismissal. According to the practices in the countries where the subsidiaries of the Group are operating in, staff indemnity programs are usually not funded.
Estimates for staff indemnity liabilities were determined through an actuarial study. The following tables present an analysis of the net expenditure for the relevant provisions recorded in the consolidated Statement of Comprehensive Income for the year ended on 31 December 2023 and the change of the relevant provision accounts for staff indemnities presented in the attached consolidated Statement of financial position for the year ended on 31 December 2023.
The expense for employee compensation, recognized by the Group in the Income Statement and recorded in Cost of sales by 912 , in administrative and distribution expenses by 342, in the other income / (expenses) by 10 and in the financial expenses at 66 ( 671 , 601, 21 and 12 during the previous year, respectively), and by the Company in administrative and distribution expenses (during the closing and previous year), is analyzed as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
339
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Current service cost
724
737
100
70
Financial cost
66
12
8
1
Effect of cut-backs or settlements
550
557
0
32
Recognition of actuarial (profits) / losses
175
(70)
33
(20)
Total
1,515
1,236
141
83
The changes in the relative provisions in the Statement of Financial Position are as follows:
2023
2022
2023
2022
Balance as at 1 January
2,917
2,387
293
247
Provision recognized in Net earnings
1,330
1,305
108
103
Provision recognized in Other Comprehensive Income
175
(70)
33
(20)
Provision recognized in inventories
10
1
0
0
Addition due to acquisition of subsidiaries (Note 7.1)
0
54
0
0
Foreign exchange differences
(17)
14
0
0
Compensation payments
(953)
(774)
(34)
(37)
Balance 31 December
3,462
2,917
400
293
The key actuarial assumptions for the years 2023 and 2022 are as follows:
2023
2022
Discount rate
2.98%
2.90%
Future salaries increases
2.50%
2.50%
Inflation
2.10%
2.80%
Mortality
EVK 2000
EVK 2000
Movement of salaried workers (departure under their own will)
Table 1
Table 1
Table 1
Years of Service
Leaving rate
From 0 to 1 years
1.50%
From 1 to 5 years
1.00%
From 5 to 10 years
0.50%
From 10 years and above
0.00%
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
340
27 OTHER PROVISONS
Changes in other provisions of the Group and the Company in 2023 and
2022 are as follows :
GROUP
Provisions for environmental rehabilitation
Other provisions
Total
1st January 2023
20,776
10,603
31,379
Provision recognized in the results
1,241
38,568
39,809
Provision recognized in fixed assets
(1,651)
0
(1,651)
Provisions used
0
(30,360)
(30,360)
Interest from provisions recognized in results
118
0
118
Transfer from/ (to) another account
0
(2,370)
(2,370)
Foreign exchange differences
183
(26)
157
31st December 2023
20,667
16,415
37,082
GROUP
Provisions for environmental rehabilitation
Other provisions
Total
1st January 2022
18,442
12,305
30,747
Provision recognized in the results
132
20,905
21,037
Provision recognized in fixed assets
894
0
894
Provisions used
0
(21,552)
(21,552)
Interest from provisions recognized in results
967
0
967
Transfer from/ (to) another account
0
(708)
(708)
Write off for the period
0
2
2
Unused provisions recognized in profit
0
(357)
(357)
Addition from company acquisition
385
0
385
Foreign exchange differences
(44)
8
(36)
31st December 2022
20,776
10,603
31,379
The item “Other provisions” in the above table is analyzed as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
341
GROUP
31.12.2023
31.12.2022
Provisions for tax for tax non-inspected years
3,610
3,610
Provisions for litigations
5,757
5,534
Provision for major maintenance of motorways
5,606
0
Other provisions
1,442
1,459
Total
16,415
10,603
The tables, presented above, record analysis of provisions based on the nature of the commitment as well as their analysis based on the expected timing of the outflow of financial resources. In particular, provisions are presented as a total as long-term ones.
The item “Provisions for rehabilitation of the natural landscape" records the provisions made by the companies of the Group’s energy segment, as well as some provisions made by the companies of the industrial segment for the purposes of covering the costs of rehabilitation of the natural landscape where the power plants and quarry operators are installed, at the end of the holding period, according to the licenses received from the State. The above provision of 20,667 ( 31.12.2022: 20,776) reflects the cost of dismantling equipment and restoring the land where they are installed, applying modern technology and materials.
Other provisions also include the evolution of item "Provision for heavy maintenance of motorways" which includes the contractual obligation of NEA ODOS and CENTRAL GREECE MOTORWAY SA to maintain the infrastructure on the basis of heavy maintenance planning. Moreover, in compliance with the concession agreement, the Group is under obligation to deliver the infrastructure to the concessionaire in the previously defined condition at the end of the service concession agreement. Within the financial year 2023 additional provisions of 40,585 ( 31.12.2022: 25,923) were formed, while a total amount of 34,336 ( 31.12.2022: 29,705) is recorded in accrued and other liabilities, as the Group estimates that the respective operations will be carried out within 2024.
28 GRANTS
The movement of grants of the Group in the Statement of financial position for the years 2023 and 2022 is as follows:
GROUP
2023
2022
Balance 1st January
176,232
87,431
Recognition of grants
391
100,000
Write-off of grants due to reimbursement
0
(1,535)
Write off due to sale of tangible assets
0
(3,882)
Foreign exchange differences
246
(66)
Amortization of grants on fixed assets recognized in net results (Note 38)
(5,193)
(5,687)
Amortization of grants on fixed assets recognized in inventories
(28)
(29)
Balance 31st December
171,648
176,232
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
342
The Group’s grants mainly refer to those provided by the State for the development of wind parks and other electricity production units from renewable energy sources (pumped storage) of TERNA ENERGY sub-group at 162,812 ( 31.12.2022: 167,146), industrial / trade zones, car park stations and industrial development. The grants are amortized in accordance with the granted assets’ depreciation or utilization rates.
29 SUPPLIERS
The item «Suppliers» as of 31 December 2023 and 31 December 2022, in the accompanying financial statements are analyzed as follows :
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Suppliers
414,813
333,380
41,970
23,128
Checks and notes payable
61
1,946
0
0
Total
414,874
335,326
41,970
23,128
The balance of the account derives by an amount of 293,589 ( 31.12.2022: 189,315) from the construction sector, by an amount of 24,891 ( 31.12.2022: 44,862) from the RES sector, by an amount of 17,529 ( 31.12.2022: 17,588) from the concessions sector, by amount of 65,147 ( 31.12.2022: 71,490) from the sector "Electricity from thermal energy sources, electricity and gas trading" and by an amount of 13,719 ( 31.12.2022: 12,071) from the other operating segments of the Group.
30 ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities (long term and short term) as of 31 December 2023 and 31 December 2022 in the accompanying financial statements, are analyzed as follows:
GROUP
COMPANY
Other long-term financial liabilities
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities from acquisition of companies
22,575
23,680
12,034
16,183
Guarantees of leased property
445
474
209
195
Other long-term financial liabilities
8
12
0
0
Total (a)
23,028
24,166
12,243
16,378
The account "Liabilities from acquisition of companies" in the Group pertains to:
(i) by an amount of 12,034 ( 31.12.2022 :16,183) to the present value of the credited consideration for the acquisition by the parent GEK TERNA of percentages of the companies NEA ODOS CONCESSION SA
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
343
and CENTRAL GREECE MOTORWAY CONCESSION SA, which took place in a previous year from the parent entity GEK TERNA. The consideration will be repaid gradually through installments till 2028, with the next payment effective in 2024.
(ii) by an amount of 10,541 to the contingent consideration recognized by the subsidiary company TERNA ENERGY from the acquisition of companies the last two years. Especially for the company ANAX INDIVIDUAL CEMPLE COMPANY, which was subsequently renamed TERNA ENERGY SAPPON PC and acquired within the fiscal year 2023 . (see Note 7).
GROUP
COMPANY
Other long-term non-financial liabilities
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Collected advances from contracts with customers
93,348
165,368
0
0
Liabilities from construction agreements
60,263
82,961
0
0
Liabilities from other contracts with customers
4,910
3,697
0
0
Total (b)
158,521
252,026
0
0
Total other long-term liabilities (a+b)
181,549
276,192
12,243
16,378
T he balance of the account “Collected advances from customers” concerns mainly:
(i) an advance payment from the client for the project of INTERNATIONAL AIRPORT OF HERAKLION CRETE amounting to 53,689 .
(ii) collected advances from other private projects.
The balance in "Liabilities from construction agreements" refers to invoicing of project advances which are expected to be executed beyond the next 12 months.
GROUP
COMPANY
Accrued and other short-term financial liabilities
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities from dividends payable and capital return
738
495
28
0
Liabilities to members of j/v and other associates
3,042
2,555
47
45
Accrued expenses
193,371
209,209
1,358
2,176
Acquisition under settlement
3,370
7,150
0
0
Liabilities from acquisition of companies
26,590
47,021
5,000
27,992
Sundry Creditors*
13,475
6,748
616
724
Total (a)
240,586
273,178
7,049
30,937
GROUP
COMPANY
Other short-term non-financial liabilities
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities from taxes and duties*
85,625
66,504
1,688
903
Social security funds
8,857
6,088
848
777
Liabilities for litigations
404
368
0
0
Amounts allocated for capital increase
3
24
0
0
Income carried forward and other transit accounts
53
3,401
0
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
344
GROUP
COMPANY
Other short-term non-financial liabilities
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Approved and collected grants to be returned
0
3,260
0
0
Provisions for loss-bearing construction contracts
1,170
3,422
0
0
Provision for major maintenance of motorways
34,336
29,705
0
0
Total (b)
130,448
112,772
2,536
1,680
Total Accrued and other short-term liabilities (a+b)
371,034
385,950
9,585
32,617
*An amount of 37,467 which refers to Municipal Fees and ERT (State TV) reimbursable fees from subsidiary company HERON ENERGY was reclassified on 31.12.2022 from the account “Sundry Creditors” to the account “Liabilities from taxes and duties".
Out of the balance of account “Accrued expenses”, amount 166,918 refers to accrued transactions in respect of electricity sale within Segment of production and trading of electricity from thermal energy.
The change in the account "Liabilities from acquisitions of companies" relates to the following:
(i) a decrease due to repayment of an amount of 27,827 from the acquisition of 50% of HERON ENERGY SA by from the parent company GEK TERNA that took place during 2022.
(ii) an increase of 10,000 which concerns the acquisition of 49.99% of the shares of the company AIGISTOS SA by the parent company GEK TERNA (see Note 5)
(iii) a reclassification of 5,000 from “Other long-term financial liabilities“ to “Accrued and other short- term financial liabilities”.
The account "Liabilities from taxes and duties" includes an amount of 48,053 ( 31.12.2022: 37,467) which refers to Municipal Fees and ERT (State TV) reimbursable fees from subsidiary company HERON ENERGY .
31 FINANCIAL DERIVATIVES
The Group and the Company financial derivatives as of 31.12.2023 and 31.12.2022 are analyzed as follows:
GROUP
Liabilities from derivatives
31.12.2023
31.12.2022
- Hedging cash flows
Interest rate swaps (note 31.1)
15,671
10,329
Interest rate swaps CENTRAL GREECE MOTORWAY (note 31.2)
62,286
48,335
Fixed for floating swap contract-(program E.NA. and VPPA's with RES producers) (note 31.3)
10,900
8,253
- For trading purposes
Natural gas futures contracts (note 31.4)
1,755
14,214
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
345
GROUP
Liabilities from derivatives
31.12.2023
31.12.2022
Future contract of electric energy (note 31.4)
2,090
13,483
Total Liabilities from Derivatives
92,702
94,613
- Long-term liabilities from derivatives
80,024
59,305
- Short-term liabilities from derivatives
12,678
35,308
GROUP
31.12.2023
31.12.2022
Receivables from derivatives
- Hedging cash flows
Interest rate swaps (note 31.1)
62,841
90,065
Fixed for floating swap contract-(program E.NA. and VPPA's with RES producers) (note 31.3)
1,441
6,346
- For trading purposes
Natural gas futures contracts (note 31.4)
0
4,249
Future contract of electric energy (note 31.4)
24,242
15,659
Total
88,523
116,319
Embedded derivative according to the concession agreement (CENTRAL GREECE MOTORWAY) (note 31.2)
61,001
44,836
Total Receivables from Derivatives
149,524
161,155
- Long-term Receivables from derivatives
128,757
124,639
- Short-term Receivables from derivatives
20,767
36,516
All the aforementioned financial instruments are measured at their fair value (see Notes 4.9.6 and 4.10).
In particular, during the year 2023, from the above derivatives, a total loss of 24,821 ( 31.12.2022: loss of 76,344) was recognized in the income statement of the year from changes in fair value, which is included in the item "Net financial income / (expenses)" as analyzed in note 42 in the item "Result of valuations of derivatives from continuing operations". Furthermore, the total changes in fair value recognized in other comprehensive income amounted to a total profit of 29,286 ( 31.12.2022: profit of 192,624). For the financial year 2023, an amount of 265 was recycled in the results of the period, which is also included in the item of Financial Expenses (see analytical note 31.1), while an amount of 4,987 referred to collections of the embedded derivative (see analytical note 31.2).
More analytically :
31.1 Forward Interest Rate Swaps
In order to manage the interest rate risk it is exposed to, the Group has entered into forward interest rate swaps.
The objective of interest rate swaps is to offset the risk of adverse cash flows of future cash flows arising from interest on loan contracts entered into as a result of activities, mainly the electricity generation sector and the concessions sector. Specifically, interest rate swaps relate to contracts
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
346
whereby the variable interest rate on the loan is converted to fixed rate over the entire term of the loan, so that the Company is protected against any increase in interest rates. The fair value of these contracts was estimated by displaying the effective interest rate (euribor) curve as of 31.12.2023, throughout the time horizon of such contracts.
The fair value of these contracts on 31.12.2023 amounted to a total net asset of 47,170 (the total nominal value of the contracts amounts to 722,334 for Greece and Bulgaria). On 31.12.2023, those derivatives met the requirements for cash flow hedging, in accordance with the provisions of IFRS 9 and from their measurement at fair values, a profit of 92,462 and a profit of 761 from the ineffective part were recognized in other comprehensive income and in the results of the period. These financial liabilities are classified in the fair value hierarchy at level 2 (see Note 47).
In forward interest rate swap contracts that incorporate an option (Interest rate CAP), the Group has chosen to determine only the intrinsic value of the option as a means of hedging the loan’s flows, recognizing the time value of the options as "compensation cost". The cost of hedging is initially recognized in the Other Comprehensive Income and it is then recycled from the Other Comprehensive Income in the Results over the hedging period. For the year 2023, an amount of 265 was recycled in the Results of the period and is included in the Financial Expenses.
31.2 Liabilities and Receivables on derivatives of CENTRAL GREECE MOTORWAY: Derivative financial instruments and Operational Support
The Group has recognized, through the fully owned by 100% subsidiary company CENTRAL GREECE MOTORWAY S.A., a derivative obligation of interest rate swaps of 62,286, (nominal value 341,950, with commencement in year 2008 and termination in year 2036 and with interest rate 4.766% and floating euribor rate) and respectively a receivable from an embedded derivative financial asset (i.e. the part of the Operating Support Scheme covering future payments of the interest rate swaps) of 61,001. Detailed information on the Concession Agreement and the basis for recognition of the imbedded derivative receivable, since the Group (through the 100% subsidiary company CENTRAL GREECE MOTORWAY SA) has contractually transferred the risk arising from the obligation of interest rate swaps to the State, are set out in note 4.10 of the accounting policies of the annual financial statements for the period ended on 31 December 2023.
• The fair value of the financial asset/receivable from embedded derivative on 31.12.2023 of 61,001 reflects the present value from future payments on interest rate swaps ( 31.12.2022: 44,836). The Group has taken into account the following for discounting future flows: a) future outflows as derived from the financial model of CENTRAL GREECE MOTORWAY SA, approved by all parties (Lenders, State, and Company), b) Government credit risk as embodied in the multi-maturity Greek government bond yield curve, c) Potential time difference between Derivative Payments and Operational Support Collection. The Group, at each reporting date, reviews the financial asset for impairment. The Group assessed that there is no indication of impairment as of 31 December 2023.
In each Calculation Period, from the total Operating Support income, the amount relating to payments for interest rate swaps is recognized as deductible from the financial derivative receivable at 31 December 2023 amounting to 4,987 ( 31.12.2022: 17,521). Subsequently, any change in the valuation of the derivative is recognized in profit or loss in the period it arises, i.e. as of 31 December 2023 the arising loss of 21,152 which substantially reflects the change in interest
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
347
rates, was recognized in the "Net financial income/(expense)" item of the consolidated Income Statement (see Note 42). This financial asset is classified at fair value hierarchy level 3 (see Note 47).
• Interest rate swaps are contracts where the variable interest rate on the loan is converted to fixed rate over the entire term of the loan so that the subsidiary is protected against any interest rate rise. These contracts meet the requirements for cash flow hedging in accordance with IAS 39.
The fair value of these contracts was estimated by projecting the applicable, on 31.12.2023, interest rate curve (based on euribor) throughout the time horizon of the subject contracts. The fair value of the contracts amounted to 62,286 in total. On 31.12.2023, the above derivatives met the conditions for cash flow risk hedging, in accordance with the requirements of IAS 39 and from their measurement at fair values, a gain of 10,623 was recognized in the other comprehensive income and a loss of 24,574 from the ineffective part was recognized in the results of the period. This financial liability has been classified in terms of fair value hierarchy at level 2.
The fair value of the financial asset from the embedded derivative, the change of which is recorded in the Profit and Loss, reflects the present value of the future payments on the interest rate swap derivatives, the valuation of which is recorded mainly in the Other Comprehensive Income. For the current period, as a consequence of the of the gradual deceleration in the six-month Euribor, the future payments of the interest rate swap derivatives increased, a fact which contributed to the higher valuation of the liability arising from them and, correspondingly, to the higher valuation of the embedded derivative asset that reflects them. In addition, for the valuation of the embedded derivative, the borrowing rates of the Greek State are taken into account, the decrease of which in this period is not linked to any change in the credit risk of the embedded derivative. On the contrary, it is part of the general downward trend of interest rates at the European and global level, a consequence of geopolitical developments in general.
31.3 Derivatives for hedging changes in energy market prices
Fixed for floating swap contract HERON EN.A program
Within 2021, the subsidiary company HERON ENERGY SA, in cooperation with the subsidiary company TERNA ENERGY SA, introduced "HERON EN.A" to the Greek market. Within the financial year 2022, HERON ENERGY S.A., in collaboration with third-party RES producers, proceeded in order to enter into long-term PPA, i.e. power purchase agreements.
Within the framework of "HERON EN.A" and "HERON EN.A BUSINESS" plans and the other PPA agreements, HERON ENERGY SA collects fixed cash flows from the contracted final energy consumers, while paying to them the fluctuating cash flows (Proxy Market Revenues) collected by the Group through the RES operations of the subsidiary TERNA ENERGY SA that do not have an energy sale contract at a locked price. The duration of "HERON EN.A" contracts between HERON ENERGY SA and the final consumers is 20 years, with the possibility on behalf of the Company for further extension, while in the case of the program "HERON EN.A BUSINESS" the relevant contracts between the Company and large energy consumers that have the typical form of long-term virtual power purchase agreements (VPAA) have an indicative duration of around 7 to 12 years.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
348
The subject derivatives met the requirements of the principle of cash flow hedging risk on the Group level, in accordance with the requirements of IAS 39 and from their measurement at fair value, a gain of 2,203 was recognized in the item "Net financial income / (expense)" as analyzed in note 42 in the item "Result from derivative valuations from continuing operations" and also a loss of 9,754 was recognized in the other comprehensive income. The respective financial liability amounting to 9,459 has been classified in the hierarchy of fair value at level 3 (see Note 47).
31.4 Future Contracts on purchase and sale of natural gas and electricity for commercial purposes
Future Contracts on purchase and sale of natural gas and electricity
The Group, through its subsidiary HERON ENERGY SA, in the context of its operation, has entered into forward contracts for the purchase and sale of natural gas and electricity for trading purposes, allowing the stabilization of the cost of buying or part of selling energy when the referred Company wishes to submit competitive offers to sell or buy energy, respectively.
For these derivatives from their measurement at fair value, a profit of 18,288 was recognized in the item "Net financial income / (expenses)" as analyzed in note 42 in the item "Result of derivative valuations from continuing operations". This net financial asset amounting to 10,500 has been classified in the hierarchy of fair value at level 3 (see Note 47).
Forward Contract on Purchase of Energy VPPA
During the current financial year, the subsidiary company HERON ENERGY S.A. signed a Virtual Power Purchase Agreement (VPPA) with the related company (J/V) Thermoelectric Komotini. The duration of this contract has been set at 10 years. This contract is considered a financial instrument, similar to a contract for difference (CFD), as it has been agreed to exchange the difference of cash flows on a fixed energy price and correspondingly variable energy prices.
From their measurement of this derivative at fair value, a profit of 9,897 was recognized in the item "Net financial income/(expenses)", as analyzed in note 42 in the line " Derivatives valuation results". The net financial receivable for the current period amounted 9,897. To calculate the present value of the Virtual Power Purchase Agreement (VPPA), the discounted cash flow (DCF) method was selected. Given the lack of liquidity in the energy market as far as long-duration futures contracts were concerned, it was decided for this particular item to be classified as Level 3 in the fair value hierarchy (see Note 47).
32 SHARE CAPITAL – EARNINGS PER SHARE
On 31.12.2023 the share capital of the Company amounted to 58,951,275.87 euros, was fully paid and divided into 103,423,291 common shares of a nominal value of 0.57 euro each. Each share of the Company entitles one vote. The share premium account on 31.12.2023 stands at 348,187.
In addition, on 31.12.2023 the Group held directly through the parent 7,968,340 treasury shares and indirectly through subsidiaries 2,312,066, a total of 10,280,406 treasury shares of a total acquisition value of 75,424, i.e. 9.9401% of the Share Capital (see Note 33).
Corporate Events of the Year 2023
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
349
With the decision of the Ordinary General Meeting of Shareholders on 20.06.2023, it was decided to increase the share capital of the Company by the amount of 20,684,658.20 euros by capitalizing part of the special share premium reserve, with an increase in the nominal value of each share from fifty- seven cents of the euro (0.57 euros) to seventy-seven cents of the euro (0.77 euros) and with a simultaneous reduction of the Company's share capital by the amount of 20,684,658.20 euros via a reduction in the nominal value of each share from seventy -seven cents of the euro (0.77 euros) to fifty-seven cents of the euro (0.57 euros) and the return of the above reduction to the shareholders. After the above corporate action, the Company's share capital amounts to a total of 58,951,275.87 euros and is divided into 103,423,291 common registered shares with voting rights, with a nominal value of fifty-seven cents (0.57 euros) per share.
The issuing expenses concerning the above share capital increase amounted to 124 and have been transferred as deductions from the balance of “Retained earnings" .
Earnings per share
Basic earnings per share for the period 01.01.- 31.12.2023 and the corresponding comparative period were calculated as follows:
GROUP
(a) Basic earnings / (losses) per share (Amounts in Euro / Share)
1.1-31.12.2023
1.1-31.12.2022
Profit / (Losses)
Net gains / (losses) attributable to the shareholders of the parent for basic earnings per share (Amounts in Euro)
147,813
136,523
Number of Shares
Average Weighted Number of Common Shares Used to Calculate Basic Earnings / (Losses) Per Share
94,146,018
95,858,598
Basic earnings / (losses) per share (Amounts in Euro / Share)
1.57004
1.42421
The earnings per share were calculated applying the weighted average number of common shares, subtracting the weighted average number of treasury shares. No adjustments have been made to earnings (numerator). Finally, no diluted earnings per share are effective for the Group and the Company for the period ended on 31.12.2023 and the respective comparative period.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
350
33 RESERVES
The reserves of the Group and the Company for the years 2023 and 2022, in the accompanying financial statements, are analyzed as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
351
GROUP
Statutory reserves
Treasury Shares
Reserves from fair value difference of assets through Other Comprehensive Income
Differences from cash flows risk hedges reserves
Reserves from participating interest in other comprehensive income of associates and joint ventures
Reserves of foreign currency translation differences from incorporation of foreign operations
Development and tax legislation reserves
Actuarial revenue/losses from defined benefit plan reserves and other reserves
Total
1st January 2022
39,089
(39,198)
45,861
(127)
(3,980)
(823)
508,015
5,109
553,946
Earnings from other comprehensive income
0
0
(1,451)
140,599
(94)
(2,142)
0
41
136,954
Formation of reserves
1,867
0
0
0
0
0
22,368
0
24,235
Distribution of reserves
0
826
0
0
0
0
0
0
826
Acquisition of treasury shares
0
(10,512)
0
0
0
0
0
0
(10,512)
Granting stock options
0
0
0
0
0
0
0
18,261
18,261
Disposal of treasury shares
0
3,023
0
0
0
0
0
0
3,023
Consolidated Subsidiary Percentage Change
0
0
0
0
0
0
(3,565)
0
(3,565)
Transfers to minority interest and other changes
0
0
0
0
(2)
30
(15,339)
0
(15,311)
31st December 2022
40,956
(45,862)
44,410
140,472
(4,076)
(2,935)
511,479
23,412
707,855
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
352
1st January 2023
40,956
(45,862)
44,410
140,472
(4,076)
(2,935)
511,479
23,412
707,855
Earnings from other comprehensive income
0
0
8,599
(13,639)
(6,171)
1,447
0
(140)
(9,904)
Formation of reserves
1,956
0
0
0
0
0
17,956
0
19,912
Distribution of reserves
0
1,879
0
0
0
0
0
0
1,879
Acquisition of treasury shares
0
(30,441)
0
0
0
0
0
0
(30,441)
Granting stock options
0
0
0
0
0
0
0
(14,345)
(14,345)
Transfers to minority interest and other changes
0
0
0
0
0
(25)
0
8
(17)
31st December 2023
42,912
(74,424)
53,009
126,833
(10,247)
(1,513)
529,435
8,933
674,938
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
353
COMPANY
Statutory reserves
Treasury Shares
Reserves from fair value difference of assets through Other Comprehensive Income
Differences from cash flows risk hedges reserves
Reserves from participating interest in other comprehensiv e income of associates and joint ventures
Reserves of foreign currency translation differences from incorporation of foreign operations
Development and tax legislation reserves
Actuarial revenue/losses from defined benefit plan reserves and other reserves
Total
1st January 2022
7,007
(32,465)
45,996
(1)
0
0
38,472
4,998
64,010
Earnings from other comprehensive income for the year
0
0
(1,422)
0
0
0
0
16
(1,406)
Distribution of reserves
0
680
0
0
0
0
0
0
680
Acquisition of treasury shares
0
(4,928)
0
0
0
0
0
0
(4,928)
Granting stock options
0
0
0
0
0
0
0
(57)
(57)
Disposal of treasury shares
0
3,023
0
0
0
0
0
0
3,023
31st December 2022
7,007
(33,690)
44,574
(1)
0
0
38,472
4,957
61,321
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
354
1st January 2023
7,007
(33,690)
44,574
(1)
0
0
38,472
4,957
61,321
Earnings from other comprehensive income for the year
0
0
8,549
0
0
0
0
(26)
8,523
Distribution of reserves
0
1,416
0
0
0
0
0
0
1,416
Acquisition of treasury shares
0
(25,902)
0
0
0
0
0
0
(25,902)
Granting stock options
0
0
0
0
0
0
0
1,731
1,731
31st December 2023
7,007
(58,176)
53,123
(1)
0
0
38,472
6,664
47,089
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
355
Statutory Reserves
In compliance with the Greek Commercial Law, companies shall transfer at least 5% of their annual net profits to a statutory reserve until such reserve equals 1/3 of the paid-up share capital. This reserve cannot be distributed but can be used for loss write off.
Development and tax legislation reserves
These reserves relate to profits that have not been taxed at the effective tax rate according to the applicable tax framework. Such reserves will be taxable at the tax rate applicable at the time of their distribution to the shareholders or their transfer to equity under specific circumstances.
The reserves in question also include reserves of 2 motorway concessions. In particular, under the provisions of Article 36.1.7 of the Concession Agreement, the companies NEA ODOS and CENTRAL GREECE MOTORWAY S.A. amortize the total investment cost for tax purposes, including the cost of interests within the Period T1. The portion of the State Financing Facility, corresponding to the construction cost for the fiscal year and, in particular, to the accounted for amortizations, is deducted from the amortizations in question as a proportion of the capital grant used (as Article 36.1.2 of the Concession Agreement). The amount of the proportion of the capital grant used as above is transferred to the account of tax exempted reserves. In the case the reserves are distributed, the State Financing Facility will be taxed at the tax rate applicable at the time of distribution to the shareholders. Within the current year, the aforementioned reserves increased by 13,300.
Cash flows risk hedging reserves
Cash flows hedging reserves are used to record profit or losses on derivative financial instruments, which may be designated as cash flow hedges and recognized in other comprehensive income. When the transaction to which the hedging relates affects the statement of comprehensive income, then the corresponding amounts are also transferred from the other comprehensive income to the statement of income. During the financial year 2023, the Group recognized as an increase to these reserves, derivative losses of 29,286 (profit of 192,624 in financial year 2022), which after taxes and the deduction of non-controlling interest amounted to a loss of 13,639 (profit of 140,599 in financial year 2022). The total reserves on 31.12.2023 amounted to a credit balance of 126,833 (see detailed Note 31).
Treasury shares
On 31.12.2022, the Company directly held 5,843,244 treasury shares, i.e. a percentage of 5.6498% with an acquisition value of 33,691,047.49 euros. Within the financial year 2023, the Company acquired 2,125,096 treasury shares for an amount of 25,901,871.24 euros, i.e. a percentage of 2.0548%, while at the same time it collected a capital return for the treasury shares it held amounting to 1,416,374.20 Euros. The subsidiary company TERNA S.A. acquired within the financial year 2023 386,836 shares of GEK TERNA for an amount of 4,538,631.44 euros and therefore it holds a total of 1,695,231 treasury shares, i.e. a percentage of 1.6391% with an acquisition cost of 11,882,891.4 euros. The subsidiary company ILIOCHORA S.A. owns 616,835 shares of GEK TERNA, i.e. a percentage of 0.5964% with an acquisition value of 3,751,325 euros.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
356
In the context of the above corporate actions, on 31.12.2023 GEK TERNA S.A. owned directly and indirectly through its subsidiaries a total of 10,280,406 treasury shares, i.e. 9.9401% of the share capital with a total acquisition value of 74,423,924.11 euros.
Stock options of GEK TERNA GROUP:
1. Stock options of the Company:
The Extraordinary General Meeting of GEK TERNA S.A. held on 09.12.2019 approved the Company's Remuneration Policy, in accordance with Articles 110 and 111 of Law 4548/2018. In the context of the preparation of the Remuneration Policy, a new plan (abolishing the plan approved on 27.06.2018 by the General Meeting) was introduced to provide stock options up to the limit of 4,000,000 shares of the Company for the five-year period 2019-2023, which will address up to 20 executives.
As of 20.02.2020, during the meeting of the Company’s Board of Directors the sale price of the shares to the beneficiaries at the amount of 2.00 euro per share was approved and the Board of Directors appointed numerically 16 executives to be included in the Plan, as well as defined the specific conditions of the plan, mainly related to meeting the performance conditions, not related to the market (e.g. EBITDA of operating segment, distributions in the parent company, etc.). On 08.07.2020, at a new meeting, the Board of Directors approved further terms of the plan, related to meeting the terms of market performance (share price). Furthermore, there is an obligation of two years to hold the shares.
At the meeting held as of 23.12.2020, the Board of Directors determined the final beneficiaries of the plan and the allocation percentage according to the proposal of the Nomination and Remuneration Committee (hereinafter "NRC").
Within the financial year 2023, the partial achievement of certain corporate goals and objectives related to the construction, energy and concessions sectors as well as to the Company’s debt ratio was confirmed. The stock option plan based on 31.12.2023 has expired whereas the respective rights have been vested for a total of 4,000,000 shares.
In the corresponding comparative financial year of 2022, the partial achievement of certain corporate goals and objectives related to the construction, energy and concessions sectors as well as to the Company’s debt ratio was confirmed as well. According to the decision of the Board of Directors on 28.04.2022, a total of 528,034 treasury shares were vested and subsequently allocated to 17 beneficiaries, for a total price of 1,056,068 euros. The rights were exercised through an over-the- counter transaction on 01.07.2022, with a share price of 9.38 euros. In more detail, 422,644 treasury shares were allocated to senior executives and members of the Board of Directors of the parent company GEK TERNA and 105,390 shares were allocated to the other beneficiaries of the stock option plan, i.e. to executives of subsidiary companies of the Group, corresponding to the financial year 2021.
For valuation of shares related to other non-market equity (KPIs), the fair value was determined using the Black-Scholes valuation model. The entry data in this model are the share price, standing at 6.20 euros on the announcement date, the exercise price (2.00 euros), the discount rate or risk-free return (-0.447%) and its volatility share price, standing at 49.824%. Based on the above, the fair value was determined within the range of 4.20 to 4.34.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
357
In summary, the movements of stock options in relation to the Company’s plan is presented below:
GROUP
2023
2022
Number of shares
Weighted average exercise price per share in €
Number of shares
Weighted average exercise price per share in €
1st January
1,568,816
4.32 €
2,116,853
4.32 €
Shares vested and exercised
0
(528,034)
3.53 €
Change in estimations
27,150
(20,003)
31st December
1,595,966
4.32 €
1,568,816
4.32 €
Shares vested and not exercised
1,595,966
4.30 €
275,000
4.30 €
Shares to be vested
0
4.33 €
1,293,816
4.33 €
2. Plan of Bonus Shares of subsidiary TERNA ENERGY S.A.:
The Extraordinary General Meeting on 16.12.2020 of the subsidiary company TERNA ENERGY S.A. approved the distribution of up to two million five hundred thousand (2,500,000) new shares to be issued with capitalization of share premium reserve to Executive Members of the Board of Directors and senior management of the subsidiary company due to their contribution to the achievement of financial goals, the implementation of new projects as well as to the increase of the subsidiary company’s profitability within the three-year period 01.01.2021-31.12.2023. The Board of Directors of the subsidiary company was authorized to further determine the beneficiaries, the way to exercise the right and the conditions of the plan, as well as to arrange for all relevant procedural issues towards the implementation of the decision.
The Board of Directors of the subsidiary company at its meeting of 19.03.2021, in implementation of the above decision of the Extraordinary General Meeting of Shareholders of the subsidiary company, accepted the recommendation of the Nominations and Remuneration Committee (henceforth “NRC”) of the subsidiary regarding the Revision of the Remuneration Policy, the Review of the Plan Implementation Period (extension of the Scheme by one year, i.e. ending on 31.12.2024 – the extension of the duration of the scheme, in combination with its inclusion in the Remuneration Policy was approved by the Regular General Meeting of the subsidiary company’s Shareholders on 23.06.2021), the conditions for the implementation of the Plan, as well as the Criteria – Objectives of the Plan (refer to the fulfilment of performance conditions not related to the market - namely project construction objectives, EBITDA, etc.), as well as regarding the Distribution of the shares by Criterion - Objective. At the meeting of 26.01.2022, the Board of Directors of the subsidiary company proceeded with the selection of the beneficiaries of the bonus-share distribution plan as well as the allocation percentages in accordance with the recommendation of the Nominations and Remuneration Committee (NRC) of the subsidiary company.
The Board of Directors of the subsidiary company, with its decisions of 18.01.2023 and 24.05.2023, approved the Company's Share Capital increase by the amount of Euro Six Hundred Seventy Five thousand euros (675,000.00 euros) by issuing Two Million Two Hundred Fifty Thousand (2,250,000) new ordinary registered shares with voting rights, based on a nominal value of thirty cents of the euro (0.30 euros) per share, through capitalization of share premium reserves and also approved the free distribution of the shares to Executive Members of the Board of Directors and the senior management
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
358
of the subsidiary company. The above was made in accordance with the approved Bonus Share Distribution Program. This decision is related to the achievement of the targets representing 90% of all shares included in the Bonus Share Distribution Program.
In summary, the changes recorded in the distribution of bonus shares of the subsidiary is as follows:
GROUP
2023
2022
Number of shares
Number of shares
1st January
2,500,000
0
Shares vested and exercised
(2,250,000)
0
Shares from new bonus issue
0
2,500,000
31st December
250,000
2,500,000
Bonus shares to be vested
250,000
2,500,000
From the above transactions under 1. Stock Options on Company’s shares and 2. Program for distribution of bonus shares of subsidiary TERNA ENERGY S.A. the cost to the Group and the Company is analyzed as follows:
GROUP
COMPANY
1.1-31.12.2023
1.1-31.12.2022
1.1-31.12.2023
1.1-31.12.2022
Expense of stock options valuation
1,731
(57)
1,476
(383)
Expense of exercised stock options
0
1,968
0
1,967
Expense of bonus shares valuation
603
48,814
0
0
Total
2,334
50,725
1,476
1,584
34 INCOME TAX – DEFERRED TAX
The tax rate for legal entities in Greece both for the year 2023 and for the year 2022 after the enactment of Law 4799/2021 which amended par. 1, no. 58 of Law 4172/2013 is set at 22%.
The effective tax rate differs from the nominal. The calculation of the effective tax rate is affected by several factors, the most important of which are non‐exemption of specific expenses, depreciation rates differences, arising between the fixed asset’s useful life and the rates defined under CL 4172/2013, and the ability of companies to generate tax‐exempted discounts and tax‐exempted reserves.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
359
(a) Income Tax Expense
Income tax in the Statement of comprehensive income is analyzed as follows:
GROUP
COMPANY
1.1-31.12.2023
1.1-31.12.2022
1.1-31.12.2023
1.1-31.12.2022
Current tax
47,737
93,926
724
(324)
Tax adjustments of previous years
1,884
1,109
2,691
0
Adjustments for tax audit differences
510
(129)
0
0
Total
50,131
94,906
3,415
(324)
Deferred tax expense/(income)
31,018
(28,968)
5,738
215
Total income tax expense/(income)
81,149
65,938
9,153
(109)
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Profit before income tax expense from continued operations
268,473
243,286
34,887
110,007
Nominal tax rate
22%
22%
22%
22%
Income tax expense/(income) from continued operations based on the nominal tax rate
59,064
53,523
7,675
24,202
Results not included in the calculation of tax
12,281
(6,333)
(2,693)
(21,326)
Impact due to change in tax rate
0
(10)
0
0
Adjustments of tax of previous years and additional taxes
1,956
1,109
2,691
0
Difference in taxation of foreign companies
(6,978)
(899)
0
0
Write-off/(Offsetting) of tax losses
14,460
1,580
323
(4,418)
Adjustments for tax audit differences
510
(129)
0
0
Taxable differences of previous years for which no deferred tax has been recognized
2,200
1,751
0
0
Effect of net temporary tax differences for which no deferred tax has been recognized
(4,491)
15,999
1,157
1,433
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
360
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Taxation of reserves
286
0
0
0
Effect of participating in net results of associates and joint venture
1,861
(653)
0
0
Income tax expense
81,149
65,938
9,153
(109)
Tax return statement is submitted on an annual basis but declared profits or losses remain provisional until the tax authorities inspect the taxpayer’s books and records and issue an audit report. The Group annually estimates any contingent liabilities, expected to arise from the audit of past years, making relevant provisions where appropriate. Information on the unaudited tax years is listed in Notes 5 and 49.1 of the Financial Statements.
Legislation relating to Pillar II rules has been enacted or substantially enacted in certain jurisdictions where the Group operates. The legislation will be implemented for the Group’s fiscal year commencing on January 1, 2024. As the Pillar II legislation was not implemented at the reporting date, the Group has no relevant current output tax. The Group applies the exception to the recognition and disclosure of information on deferred tax assets and liabilities related to Pillar II income taxes, as provided for in the amendments of IAS 12 issued in May 2023.
According to the legislation, the Group is required to pay additional tax on the difference between the actual GIoBE tax rate per jurisdiction and the minimum rate of 15%. Most of the Group’s entities have an effective tax rate that exceeds 15%. The Group does not expect significant exposure to Pillar II income taxes.
(b) Deferred Tax
Deferred income tax is calculated on all the temporary tax differences between the book value and the tax basis of the assets and liabilities.
A deferred tax asset is recognized for the transferred tax losses to the extent that a respective tax benefit can be realized via future taxable profit.
It is noted that a deferred tax asset amounting to 316,506 ( 31.12.2022: 335,576) has been recognized in the particular part of the tax losses where according to the Management their offsetting against future taxable earnings is relatively certain over the next 5-year period. The above Deferred Tax Asset on the recognized losses for taxation purposes, includes a deferred tax asset for an amount of 312,687 ( 31.12.2022: 325,075) in relation to the reported tax losses of NEA ODOS SA and CENTRAL GREECE MOTORWAY SA, which mainly derive from performing accelerated amortization charges in the construction cost of the Projects. These tax losses based on the provisions of the Concession Agreements offset future earnings without any time limit (meaning that the limit of the 5-year period is not required).
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
361
From the approved Financial Models of the particular companies, it is demonstrated that until the end of the concession period, meaning until 2037, there will be taxable earnings, which can be offset against the accumulated tax losses.
The Group offsets deferred tax assets and obligations, when there is an effective legal right to offset the current tax assets against current liabilities provided that the deferred taxes relate to the same tax authority. The offset amounts in 31.12.2023 and 31.12.2022 for the Group and the Company are analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Deferred tax assets
94,850
100,537
0
0
Deferred tax liabilities
(135,742)
(114,209)
(14,631)
(6,489)
Net deferred asset/ (liability)
(40,892)
(13,672)
(14,631)
(6,489)
The change of the net deferred tax asset / (liability) in the Statement of Financial Position is analyzed as follows:
GROUP
COMPANY
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Net deferred tax asset / (liability)
(40,892)
(13,672)
(14,631)
(6,489)
Opening Balance
(13,672)
1,267
(6,489)
(6,671)
Addition due to acquisition of entity
0
(1,955)
0
0
(Expense)/Income recognized in net earnings
(31,018)
28,968
(5,738)
(215)
(Expense)/Income recognized in Other comprehensive income
4,036
(42,144)
(2,404)
397
Foreign Exchange Differences
(238)
192
0
0
Closing Balance
(40,892)
(13,672)
(14,631)
(6,489)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
362
Deferred taxes (assets and liabilities) in 2023 and 2022 are analyzed as follows:
GROUP
Deferred tax
01.01.2023
Acquisition, sale of a Subsidiary
Statement of Profit or loss (Debit)/Credit
Other comprehensive income (Debit)/Credit
Foreign exchange differences
31.12.2023
Investment property
(198)
0
(1,649)
0
0
(1,847)
Tangible and Intangible Assets
(66,277)
0
(4,413)
0
(358)
(71,048)
Investments
(10,895)
0
1,556
(2,356)
0
(11,695)
Contract Assets/Contract Liabilities
(12,999)
0
(35,615)
0
0
(48,614)
Recognized tax losses
335,576
0
(19,070)
0
0
316,506
Recognition of assets from concession contracts
(298,409)
0
26,139
0
17
(272,253)
Other non-current liabilities
4,558
0
943
0
61
5,562
Provision for staff indemnities
504
0
64
75
0
643
Companies’ acquisitions and sales
8,443
0
696
0
0
9,139
Derivatives
(14,634)
0
(4,179)
6,322
0
(12,491)
Trade receivables
11,900
0
4,183
0
0
16,083
Other Provisions
22,067
0
405
0
18
22,490
Lease Contracts
2,220
0
(409)
0
18
1,829
Other
4,472
0
331
(5)
6
4,804
Total
(13,672)
0
(31,018)
4,036
(238)
(40,892)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
363
GROUP
Deferred tax
01.01.2022
Acquisition, sale of a Subsidiary
Statement of Profit or loss (Debit)/Credit
Other comprehensive income (Debit)/Credit
Foreign exchange differences
31.12.2022
Investment property
349
0
(547)
0
0
(198)
Tangible and Intangible Assets
(59,936)
(10,846)
4,421
0
84
(66,277)
Investments
(18,851)
0
7,532
424
0
(10,895)
Contract Assets/Contract Liabilities
(6,739)
(4,081)
(2,179)
0
0
(12,999)
Recognized tax losses
352,531
4,466
(21,421)
0
0
335,576
Recognition of assets from concession contracts
(308,032)
0
9,627
0
(4)
(298,409)
Other non-current liabilities
3,533
0
902
0
123
4,558
Provision for staff indemnities
423
12
84
(15)
0
504
Companies’ acquisitions and sales
7,995
0
448
0
0
8,443
Derivatives
5,958
1,307
20,653
(42,552)
(0)
(14,634)
Trade receivables
5,710
6,348
(158)
0
(0)
11,900
Other Provisions
9,944
835
11,288
0
(0)
22,067
Lease Contracts
4,689
4
(2,462)
0
(11)
2,220
Other
3,693
0
780
(1)
0
4,472
Total
1,267
(1,955)
28,968
(42,144)
192
(13,672)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
364
COMPANY
Deferred tax
01.01.2023
Statement of Profit or loss (Debit)/Credit
Other comprehensive income (Debit)/Credit
31.12.2023
Investment property
295
(189)
0
106
Tangible and Intangible Assets
(282)
(53)
0
(335)
Investments
(14,665)
(738)
(2,411)
(17,814)
Contract Assets/Contract Liabilities
(1,256)
186
0
(1,070)
Recognized tax losses
7,328
(5,129)
0
2,199
Provision for staff indemnities
64
17
7
88
Trade receivables
107
14
0
121
Other Provisions
1,973
(746)
0
1,227
Lease Contracts
1
1
0
2
Other
(54)
899
0
845
Total
(6,489)
(5,738)
(2,404)
(14,631)
COMPANY
Deferred tax
01.01.2022
Statement of Profit or loss (Debit)/Credit
Other comprehensive income (Debit)/Credit
31.12.2022
Investment property
518
(223)
0
295
Tangible and Intangible Assets
(169)
(113)
0
(282)
Investments
(15,025)
(41)
401
(14,665)
Contract Assets/Contract Liabilities
(1,429)
173
0
(1,256)
Recognized tax losses
7,328
0
0
7,328
Provision for staff indemnities
54
14
(4)
64
Trade receivables
104
3
0
107
Other Provisions
1,986
(13)
0
1,973
Lease Contracts
5
(4)
0
1
Other
(43)
(11)
0
(54)
Total
(6,671)
(215)
397
(6,489)
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
365
35 TURNOVER
Company’s turnover of years 2023 and 2022 in the accompanying financial statements is analyzed as follows:
COMPANY
1.1-31.12.2023
1.1-31.12.2022
Revenues from Operation and Maintenance Services
101,293
92,650
Revenues from real estate exploitation
849
865
Revenues from operation of ticket system
2,353
1,996
Administrative Support Revenues and Other Revenues
4,229
3,523
Total
108,724
99,034
Group’s turnover of years 2023 and 2022 in the accompanying financial statements is analyzed as follows:
Revenues from contracts with customer per segment
GROUP
1) Revenues from contracts with customer per segment
1.1-31.12.2023
1.1-31.12.2022
Revenues from construction services’ segment
Infrastructure Projects– Motorways - Airport
676,872
454,006
Industrial –Energy
606,535
363,690
Other services of construction services’ segment
17,951
19,102
Total
1,301,358
836,798
Revenues of electric power energy production from RES
Electric power energy production from wind parks and hydro-electric plants
244,547
245,750
Other revenues of electric power energy segment from RES
129
1,575
Total
244,676
247,325
Revenues from real estate segment
Revenues from real estate exploitation segment
4,114
3,306
Total
4,114
3,306
Revenues from concession exploitation segment
Revenues from motorways’ tolls
171,825
162,078
Revenue from the operation of waste management plants
18,112
8,976
Revenues from operation of ticket system
15,669
14,331
Other services from concession exploitation segment
21,885
16,530
Total
227,491
201,915
Revenues from industry segment
Sales of industrial products - quarries
20,579
18,637
Total
20,579
18,637
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
366
Revenues from contracts with customer per segment
GROUP
1) Revenues from contracts with customer per segment
1.1-31.12.2023
1.1-31.12.2022
Revenues from thermo-electric energy power production and trading
of electric energy
Production of electric energy
288,269
777,709
Trading of electric energy and gas
1,407,954
1,850,695
Other revenues
3,799
1,421
Total
1,700,022
2,629,825
Revenues from Holding segment and other presented operating
segments
Other revenues of Holding segment
967
472
Total
967
472
Total revenues from contracts with customers
3,499,207
3,938,278
GROUP
2)The analysis of turnover from contracts with customers at the time of income recognition is analyzed as follows:
1.1-31.12.2023
1.1-31.12.2022
Transfer of goods and services at a specific time
2,201,517
3,106,077
Services rendered with the passage of time
1,297,690
832,201
Total
3,499,207
3,938,278
3) The backlog of Group’s construction contracts amounts to 2,791 million euro on 31.12.2023 (see Note 49.2). The predicted execution course of backlog is analyzed as follows: (a) Euro 1,376 million in 2024, and b) Euro 1,415 million for a period until 2028.
4) The turnover breakdown for the period by country and by operating segment is presented below :
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
367
GROUP
1.1-31.12.2023
Greece
Balkans
Middle East
Eastern Europe
USA
Other regions
Total
Revenue of Construction Segment
1,249,766
51,214
378
0
0
0
1,301,358
Revenue of Electricity from RES Segment
215,910
6,032
0
22,734
0
0
244,676
Revenue of Real Estate Segment
1,842
2,272
0
0
0
0
4,114
Revenue of Concessions Segment
227,491
0
0
0
0
0
227,491
Revenue of Industry Segment
4,641
20
0
1,262
0
14,656
20,579
Revenue of Electricity from thermal energy and ΗΡ trading
1,533,960
150,008
0
0
0
16,054
1,700,022
Revenue of Holding and other presented operating segments
967
0
0
0
0
0
967
Total
3,234,577
209,546
378
23,996
0
30,710
3,499,207
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
368
GROUP
1.1-31.12.2022
Greece
Balkans
Middle East
Eastern Europe
USA
Other regions
Total
Revenue of Construction Segment
787,845
48,635
318
0
0
0
836,798
Revenue of Electricity from RES Segment
217,308
0
0
29,167
850
0
247,325
Revenue of Real Estate Segment
829
2,477
0
0
0
0
3,306
Revenue of Concessions Segment
201,915
0
0
0
0
0
201,915
Revenue of Industry Segment
598
79
249
1,215
0
16,496
18,637
Revenue of Electricity from thermal energy and ΗΡ trading
2,460,368
156,289
0
0
0
13,168
2,629,825
Revenue of Holding and other presented operating segments
472
0
0
0
0
0
472
Total
3,669,335
207,480
567
30,382
850
29,664
3,938,278
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
369
36 COST OF SALES - ADMINISTRATIVE AND DISTRIBUTION EXPENSES - RESEARCH AND DEVELOPMENT EXPENSES
The cost of sales for the years 2023 and 2022 in the accompanying financial statements, is analyzed as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1-31.12.2022
1.1- 31.12.2023
1.1-31.12.2022
Cost of sales electricity, gas and inventory consumption
2,025,883
2,515,180
1,233
707
Cost of CO2 Emission Rights
57,070
66,601
0
0
Employee remuneration
115,508
89,727
17,625
16,190
Fees and expenses of third parties
446,996
350,777
56,983
49,001
Other third-party expenses
18,334
15,525
6,901
10,470
Leases
31,311
22,202
111
97
Insurance costs
22,474
20,842
5,236
4,359
Repairs-Maintenance expenses
32,426
26,471
1,678
1,435
Taxes-duties
18,485
35,749
135
172
Promotion and advertising expenses
233
145
16
11
Transportation and travel expenses
40,506
21,018
1,560
1,681
Provisions
38,333
20,903
0
0
Depreciation
137,696
127,046
1,630
1,221
Commissions and other financial expenses
12,189
11,346
1,327
617
Other
14,915
9,057
1,923
2,414
Total
3,012,359
3,332,589
96,358
88,375
The change in the Group's cost of sales is due to the following: a) the reduced costs related to the sector of "Electricity from thermal energy sources, electricity trading and natural gas" and b) the increased costs of the construction sector as a result of the execution of construction contracts.
Specifically, the Group's account under the caption "Cost of electricity sales, natural gas sales and inventory consumption" mainly includes the cost of purchasing electricity and natural gas respectively of the sector "Electricity from thermal energy sources, electricity trading and natural gas" and recorded a downtrend in line with the market prices.
In addition, the increase in the construction activity was mainly accompanied by a corresponding increase in inventory consumption costs, third party fees and expenses related to subcontractor fees, personnel fees and transportation costs.
The increase in the Group's account of provisions is related to the higher provisions for heavy maintenance of motorways of the subsidiary companies NEA ODOS S.A. and CENTRAL GREECE MOTORWAY S.A.
The change in "Taxes and duties" account concerns the amounts that were recognized during the comparative financial year in relation to the sector of Electricity from thermal energy sources, electricity trading and natural gas .
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
370
Administrative and distribution expenses for the years 2023 and 2022 in the accompanying financial statements are analyzed as follows:
GROUP
COMPANY
1.1-31.12.2023
1.1-31.12.2022
1.1-31.12.2023
1.1-31.12.2022
Employee remuneration
20,262
20,625
2,192
2,037
Fees and expenses of third parties
40,172
41,687
1,524
4,686
Stock options expense (note 33)
2,334
50,724
1,476
1,584
Remuneration of BoD
2,998
2,895
1,241
1,312
Other third-party expenses
2,863
3,186
81
91
Leases
927
1,476
5
4
Insurance costs
4,384
1,338
36
74
Repairs - Maintenance
804
700
55
19
Taxes - Duties
2,724
2,320
202
372
Promotion and advertising expenses
12,484
9,662
2,615
1,741
Transportation and travel expenses
3,599
4,363
190
113
Depreciation
6,679
5,666
158
161
Other
6,439
8,682
513
256
Total
106,669
153,324
10,288
12,450
The decrease of the account "Cost of stock options" which is related to the program of distribution of bonus shares by the subsidiary TERNA ENERGY S.A. is due to the fact that during the financial year 2023 the distribution of a total of 2,250,000 New Shares was finalized. The objectives of the program concerning 90% of the shares to be distributed have been achieved and within the year 2023 the above bonus shares were distributed to the holders of the stock options.
Research and Development expenses for the years 2023 and 2022 in the accompanying financial statements are analyzed as follows:
GROUP
COMPANY
1.1-31.12.2023
1.1-31.12.2022
1.1-31.12.2023
1.1-31.12.2022
Employee remuneration
278
345
0
0
Fees and expenses of third parties
8,970
5,961
3,420
532
Other third party expenses
6
9
0
0
Leases
70
15
0
0
Insurance Premiums
2
1
0
0
Repairs - Maintenance
251
352
0
0
Taxes - Duties
886
2,096
0
0
Transportation and travel expenses
152
115
0
2
Depreciation
571
402
0
0
Other
605
585
96
0
Total
11,791
9,881
3,516
534
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
371
Research and development costs relate mainly to expenses in the construction and renewable energy segments. Specifically, the account "Taxes and duties" is related to fees for issuing and maintaining production licenses and certificates paid to regulatory authorities for which the conditions for receiving the relevant installation licenses have not yet matured. Furthermore, the account “Fees and expenses of third parties” concerns the expenses of environmental impact studies, construction studies, studies of connection to electricity transmission networks, as well as of measurement of wind dynamics.
37 AUDITORS’ FEES
GROUP
COMPANY
1.1-31.12.2023
1.1-31.12.2022
1.1-31.12.2023
1.1-31.12.2022
Total
1,606
1,286
195
134
The above fees relate to all Group companies and are related to the statutory audit, tax audit and other permitted services provided by all audit firms.
For the year ended on December 31, 2023, the fees related to permitted non-audit services (excluding statutory and tax audit services) of the audit company that conducts the audit of the separate and consolidated financial statements amount to 97 ( 2022: 92) for the Group and to 11 ( 2022: 7) for the Company.
38 OTHER INCOME/(EXPENSES)
Other income/ (expenses) for the period, in the accompanying financial statements in the years 2023 and 2022 are analyzed as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Other income
Amortization of grants on fixed assets
5,193
5,687
0
0
Operational support income of Motorway Concession
27,624
12,951
0
0
State’s indemnities towards Motorway Concession companies
44,245
22,229
0
0
Income from insurance and legal indemnities
6,971
7,136
0
0
Income from the forfeiture of guarantees received and penalty clauses
15
148
0
151
Foreign exchange differences on payments
0
5,551
0
0
Recovery of impairments of fixed, intangible assets, right of use assets and goodwill
367
213
0
0
Recovery of impairments of inventories
1,653
482
450
0
Recovery of impairments of assets
1,654
1,384
0
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
372
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Recovery of other provisions
0
357
0
0
Gains from valuation of Investment Property
11,338
303
163
58
Earnings from elimination of liabilities
88
139
0
0
Gains from CO2 right sales
5
494
0
0
Other revenue
8,578
14,470
756
1,162
Total other income
107,731
71,544
1,369
1,371
Other Expenses
Depreciation not included in the cost
(1,563)
(1,250)
0
0
Operational support expense of Motorway Concession
(49,244)
(41,418)
0
0
Expenses related to insurance indemnities
(121)
(170)
0
0
Foreign exchange differences on payments
(352)
0
(1)
0
Impairments/Write off of fixed, intangible assets, right of use assets and goodwill
(15,875)
(11,992)
(2)
(2)
Impairments/Write off of inventories
(1,253)
(227)
0
0
Impairments/Write off of receivables
(16,273)
(41,018)
(62)
(8)
Other provisions
(235)
0
0
0
Loss from valuation of Investment Property
(3,692)
(681)
0
(68)
Other expenses
(10,144)
(7,691)
(12)
(2)
Total other expenses
(98,752)
(104,447)
(77)
(80)
Total other income/(expenses)
8,979
(32,903)
1,292
1,291
The change in the account “State’s indemnities towards Motorway Concession companies” refers to compensation for loss of revenue from the subsidiary companies NEA ODOS SA and CENTRAL GREECE MOTORWAY SA.
The account "Impairments/Write off of fixed, intangible assets, right of use assets and goodwill" contains mainly impairment losses on rights to exploit quarries and magnesium mines in relation to the subsidiary TERNA MAG S.A. (see note 8.1) as well as impairment losses on the property of a subsidiary company of the Real Estate Sector.
The change in the account "Impairments/Write off of receivables" is mainly due to provisions for doubtful trade receivables recognized within 2022 by the subsidiary company HERON ENERGY.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
373
39 PROFIT/(LOSSES) FROM SALE OF PARTICIPATIONS AND SECURITIES
Profit/ (losses) from the sale of participations and securities in the accompanying financial statements for the years 2022 and 2021, are analyzed as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Profit / (loss) from disposal of subsidiaries
0
(1)
0
91,500
Profit / (loss) from liquidation of associates, joint ventures and joint operations
(3,913)
0
(9)
0
Total
(3,913)
(1)
(9)
91,500
During the year 2023, the subsidiary company GEK TERNA CONCESSIONS S.M.S.A. sold its share rights
to the joint venture NKGEKTERNA L.T.D. for an amount of 18,092. A loss of 3,908 resulted from this
transaction (see note
14).
During 2022, the Company sold the fully owned by 100% subsidiary GEK TERNA KASTELI S.M.S.A. to the fully owned by 100% subsidiary GEK TERNA CONCESSIONS S.M.S.A. recognizing a profit of 91,500.
40 GAINS/(LOSSES) FROM VALUATION OF INTERESTS AND SECURITIES
Gains / (Losses) from valuation of interests and securities, for the financial years 2023 and 2022, in the accompanying financial statements, are analyzed as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Profit / (loss) from valuation of financial assets at fair value through profit and loss (Note 22)
4,027
187
3,354
186
Loss /reverse of loss from valuation on interest in subsidiaries (Note 12)
0
0
(11,743)
(11,510)
Loss/reverse of loss from valuation on interest in joint ventures (Note 14)
0
0
(291)
0
Total
4,027
187
(8,680)
(11,324)
41 GAINS / (LOSSES) FROM PARTICIPATIONS AND OTHER EQUITY INSTRUMENTS
Gains / (Losses) from participations and other equity instruments, for the financial years 2023 and 2022, in the accompanying financial statements, are analyzed as follows:
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
374
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Dividends and capital return of subsidiaries
0
0
53,949
44,242
Dividends on joint ventures and equity instruments
1,376
1,774
988
1,560
Total
1,376
1,774
54,937
45,802
The account "Dividends and capital return of subsidiaries" includes mainly amounts of 16,410 from the subsidiary TERNA ENERGY, 6,987 from the subsidiary company GEK TERNA MOTORWAYS S.A. and a return of capital amounting to 30,000 from the subsidiary HERON II THERMOELECTRIC STATION VIOTIA S.A. All amounts have been collected within the fiscal year 2023.
42 FINANCIAL INCOME/(EXPENSES)
Financial income/ (expenses) for years 2023 and 2022, are analyzed as follows in the accompanying financial statements:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Deposit interest
15,086
2,362
10,686
1,339
Loan interest
3,293
2,108
8,523
14,497
Finance income from lease contracts
682
483
0
0
Other financial income
7,925
638
34
31
Income from unwinding of long-term receivables
7,778
7,940
0
0
Total financial income
34,764
13,531
19,243
15,867
Interest and expenses of short-term loans
(6,621)
(3,839)
0
0
Interest and expenses of long-term loans
(129,580)
(85,989)
(28,779)
(28,839)
Finance cost from lease contracts
(3,499)
(1,388)
(18)
(20)
Financial instruments swaps services expenses
(6,019)
(20,932)
0
0
Commissions and Other financial expenses
(15,705)
(17,643)
(1,661)
(1,945)
Total financial expenses
(161,424)
(129,791)
(30,458)
(30,804)
Net interest income/(expenses)
(126,660)
(116,260)
(11,215)
(14,937)
Gains from derivatives financial instruments measured at fair value (Note 31)
30,433
20,695
0
0
Losses from derivatives financial instruments measured at fair value (Note 31)
(5,612)
(97,039)
0
0
Derivatives valuation results
24,821
(76,344)
0
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
375
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Net financial income/(expenses)
(101,839)
(192,604)
(11,215)
(14,937)
The change in the Group's net financial income/(expenses) is mainly due to positive derivative valuations, in contrast to the increased Loss on embedded derivative in the comparative year (see Note 31).
The decrease in the 'Loan interest' account relates to the repayment of intra-group loans in 2022, which were granted in the context of the allocation of the EUR 500 million and EUR 300 million CBL drawn funds.
The change in the Group's " Interest and expenses of long-term loans" account is mainly due to the increase in interest rates and the raising of new borrowings mainly from the RES sector, as far as the Company is concerned, the loans (CBL) are fixed rate.
The account "Other financial income" includes an amount of approximately EUR 6 million which relates to an interest charge on overdue receivables from the subsidiary company HERON ENERGY SA.
43 PAYROLL COST
Payroll cost expenses in 2023 and 2022 are analyzed as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Wages and related employee benefits
110,933
90,363
16,309
14,844
Social security fund contributions
26,769
20,960
3,408
3,281
Provision for employee indemnities
1,264
1,293
100
102
Total
138,966
112,616
19,817
18,227
At the end of the closing period, the Group employed 5,053 people worldwide and the Company 716. Respectively, at the end of the previous year, the Company employed 736 and the Group employed 4,337 people worldwide.
The change in both the number of personnel and payroll expenses for the Group is related to the increase in the construction activity of the subsidiary TERNA S.A..
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
376
44 TRANSACTIONS WITH RELATED PARTIES
The transactions of the Company and the Group with related parties for the period ended 31.12.2023 and 31.12.2022, as well as the balances of receivables and liabilities arising from such transactions as of 31.12.2023 and 31.12.2022 are as follows:
Period 31.12.2023
GROUP
COMPANY
Related party
Revenue
Purchases
Debit Balances
Credit Balances
Inflows / (Outputs) from Loans
Capital Inflow / (Outflow)
Revenue
Purchases
Debit Balances
Credit Balances
Inflows / (Outputs) from Loans
Capital Inflow / (Outflow)
Subsidiaries
0
0
0
0
0
0
167,414
43,486
191,346
40,925
81,823
(106,635)
Joint Ventures
239,224
783
118,061
82,392
5
(9,408)
278
0
25
0
5
(6,838)
Associates
46
0
1,211
0
(260)
0
46
0
1,196
0
(260)
0
Period 1.1- 31.12.2022
Year 31.12.2022
GROUP
COMPANY
Related party
Revenue
Purchases
Debit Balances
Credit Balances
Inflows / (Outputs) from Loans
Capital Inflow / (Outflow)
Revenue
Purchases
Debit Balances
Credit Balances
Inflows / (Outputs) from Loans
Capital Inflow / (Outflow)
Subsidiaries
0
0
0
0
0
0
245,741
38,510
331,044
25,134
90,295
(119,380)
Joint Ventures
156,417
285
71,940
91,755
(15,000)
(75,428)
527
0
550
0
0
(14,648)
Associates
41
0
891
6
0
0
41
0
891
0
0
0
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
377
Transactions with related parties take place under the same terms effective for transactions with third parties. The balances with related parties at the end of the financial year are unsecured and non- interest bearing. They are expected to be settled in the near future with cash.
Transactions and remuneration of the Board of Directors members and senior executives: The remuneration of the Board of Directors members and senior executives of the Group and Company, recognized for the periods ended on 31.12.2023 and 31.12.2022, as well as the balances of receivables and liabilities that have emerged from such transactions on 31.12.2023 and 31.12.2022 are as follows:
GROUP
COMPANY
1.1- 31.12.2023
1.1- 31.12.2022
1.1- 31.12.2023
1.1- 31.12.2022
Remuneration for services rendered
7,758
5,644
782
926
Remuneration of employees
2,580
1,843
966
756
Remuneration for participation in Board of Directors meetings
2,705
2,622
1,138
1,252
Stock options expense
2,334
50,725
1,476
1,584
Total
15,377
60,834
4,362
4,518
31.12.2023
31.12.2022
31.12.2023
31.12.2022
Liabilities
171
293
195
228
Receivables
77
72
10
11
45 RISK MANAGEMENT POLICIES AND PROCEDURES
The Group is exposed to multiple financial risks such as market risk (volatility in exchange rates, interest rates, market prices etc.), credit risk, and liquidity risk. The risk management plan aims to eliminate the negative effect of these risks on financial results of the Group as these effects arise from uncertainty in financial markets and the changes in costs and sales. The risk management policy is applied by the financial services of the Group.
The procedure followed is as follows:
➢ Evaluation of risks related to Group’s activities and operations,
➢ Planning the methodology and selecting the necessary financial products for decreeing the risk and
➢ Execution/application, in accordance with the approved procedure by the management, of the risk management plan.
The financial instruments of the Group are mainly deposits in banks, short-term financial products of high liquidity traded in the money market, trade debtors, and creditors, loans to and from associates, shares, dividends payable, liabilities arising from leasing and derivatives.
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
378
45.1 Foreign Exchange Risk
Euro is the functional currency of the parent company and the reporting currency of the Group.
Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument will be subject to fluctuations due to changes in exchange rates. This type of risk may arise, for the Group, from foreign exchange differences at the valuation and conversion into the Group’s currency (Euro) of financial assets, mainly financial receivables, and financial liabilities, related to transactions that are carried out in a currency other than the functional currency of the Group’s entities. The transactions mainly concern purchases of fixed assets and inventories, commercial sales, investments in financial assets, loans, as well as net investments in foreign operations.
The Group operates through branches and companies in Greece, the Balkans, and in Poland and thus it may be exposed to foreign exchange risk. The Group’s current foreign operations concern construction projects, real estate development and development of production of electricity from renewable energy resources.
Regarding the construction projects in the Balkans: the contractual receivables, liabilities to basic suppliers (cement, iron products, asphalt, cobble, skids etc.) and sub-contractors are realized in euro and thus the exposure to foreign exchange risk is limited. Moreover, the Bulgarian lev (BGN) has a fixed exchange rate against euro. Development of real estate in the Balkans is mainly realized by the Group’s construction companies and thus it is exposed to the same foreign exchange risk as the aforementioned construction companies. Sales (and receivables), are performed in euro, and thus the exposure to foreign exchange risk is limited.
Electricity production from renewable energy sources activity is performed in Poland, Serbia and North Macedonia, where the local currency fluctuates in relation to euro and may lead to foreign exchange translation differences and exposure to foreign exchange risk from the fluctuations of the exchange rate of Polish zloty (PLN), the Serbian dinar (RSD), the dinar of North Macedonia (MKD) and the Albanian lek (ALL) against Euro.
The following table presents the financial assets and liabilities in foreign currency:
2023
(amounts in euro)
RON
ALL
MKD
AED
QAR
BHD
IQD
SAR
USD
LYD
PLN
RSD
Financial assets
136
218
39,623
206
105
7,084
0
1,839
11,308
632
23,763
46,774
Financial liabilities
(217)
(481)
(43,102)
(76)
(1,025)
(314)
(29)
(691)
(1,674)
(2)
(6,997)
(42,202)
Total current assets
(81)
(263)
(3,479)
130
(920)
6,770
(29)
1,148
9,634
630
16,766
4,572
Financial assets
4
0
0
27
9
0
9
0
63
0
154
77
Financial liabilities
0
0
0
0
0
0
0
0
(429)
0
(11,482)
(4)
Total non-current assets
4
0
0
27
9
0
9
0
(366)
0
(11,328)
73
GEK TERNA GROUP
Annual Financial Statements of the fiscal year 1 January 2023 - 31 December 2023
(Amounts in thousands Euro, unless otherwise stated)
379
2022
(amounts in euro)
RON
ALL
MKD
AED
QAR
BHD
IQD
SAR
USD
LYD
PLN
RSD
Financial assets
827
265
29,772
602
1,968
9,250
1
1,653
12,434
645
14,018
30,105
Financial liabilities
(193)
(3,546)
(35,433)
(1,169)
(1,941)
(777)
(18)
(711)
(2,067)
(2)
(14,492)
(33,994)
Total current assets
634
(3,281)
(5,661)
(567)
27
8,473
(17)
942
10,367
643
(474)
(3,889)
Financial assets
4
0
0
32
10
3
9
0
18
0
139
5,592
Financial liabilities
0
0
0
0
0
0
0
0
0
0
(16,302)
(13)
Total non-current assets
4
0
0
32
10
3
9
0
18
0
(16,163)
5,579
The following table presents the sensitivity of Net Earnings as well as other comprehensive income to fluctuations of exchange rates through their effect on financial assets and liabilities. For BGN currency we did not examine the sensitivity as it maintains a stable exchange rate against euro. For all other currencies, we examined the sensitivity at a change of +/- 10%.
The table presents the effects of the +10% change. The effects of the -10% change are represented by the opposite amount.
2023
RON
ALL
MKD
AED
QAR
BHD
IQD
SAR
USD
LΥD
PLN
RSD
Effect on Net earnings
0
0
0
4
0
0
0
(0)
(114)
0
(325)
0
Effect on other comprehensive income
8
26
(1)
(7)
123
(628)
91
(170)
(909)
(63)
(172)
(166)
2022
RON
ALL
MKD