Post on 09-Aug-2018
CONTENTS
01 Company Profile 05 Overview 06 Investment Portfolio 07 Board of Directors – Profiles 08 Steering Committee – Profiles 10 02 Letter from the Chairman of the Board of Directors 15 03 Management Report 19 Results 22 Share Performance 22 Important Facts 23 Upcoming Matters 29 Foreseeable Evolution of the Company 30 Legal Affairs 31 04 Good Governance 33 05 Relationship with Investors 37 06 Development and Wellbeing of Human Talent 41 07 Business Lines 47 Road Concessions 48 Colombia 50 Autopistas del Café 50 Concesión Vial de los Llanos 54 Concesión Santa Marta – Paraguachón 58 Concesión La Pintada 62 Dominican Republic 66 Autopistas del Nordeste 66 Boulevard Turístico del Atlántico 72 Aruba 80 Green Corridor 80 Other road infrastructure business 84 Odinsa Projects and Investments Concession for the collection of INVIAS tolls 86 Constructora Bogotá Fase III S.A., CONFASE 87 Odinsa Services 89 Airport Concessions 90 Colombia 92 El Dorado Airport – OPAIN S.A. 92 Ecuador 98 Mariscal Sucre International Airport – Corporación Quiport S.A. 98 Energy Business 102 Panamá 104 Generadora del Atlántico GENA 104 Chile 108 Generadora del Pacífico GENPAC 108 08 Consolidated Financial Statements 113 09 Separated Financial Statements 127 10 Annex 1 – Contingencies 141
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
01
COMPANY PROFILE
Overview
Company Profile
[Image: Dominican Republic, Aruba, Panama, Colombia, Ecuador, Chile]
Odinsa, an affiliate of Grupo Argos, is one of the strategic businesses engaged mainly in the
structuring, promotion, management and development of infrastructure, road and airport
projects. The human and technical quality of the team, their responsible practices, their high
corporate government standards, and their commitment to sustainability provide a
competitive advantage that has allowed Odinsa to position as one of the most important
companies in the infrastructure sector, in Colombia and Latin America.
In 2016, the Company focused its portfolio of assets on the vial and airport concessions,
maintaining a healthy balance between projects in stages of structuring, building and
operation. Also, the Company strengthened its strategic and financial position for the long
term.
The creation of value for shareholders is based on diversifying their investments and
geographies through a wide portfolio including mature businesses and new projects with
high potential for development, where ethics, transparency, high corporate governance
standards and absolute commitment to sustainability prevail. Odinsa issues local bonds and
its shares are traded on the Colombian Stock Exchange (BVC); this entity awarded our
Company with recognition for adopting good practices on information disclosure and
relationship with investors, for the fourth year in a row.
Odinsa’s headquarters and business address are located in Medellín, Colombia. Odinsa
participates in projects located in six countries.
Odinsa’s commitment to sustainability is evidenced in infrastructure projects that facilitate
connectivity and transform the reality of the communities in its areas of influence. This boosts
development and economic growth in the countries where it is present.
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Investment Portfolio
PROJECTS IN COLOMBIA
GRUPO ARGOS
ODINSA
ODINSA HOLDING
Investment Vehicle
ODINSA SERVICES
Signage service provider to concessions
ODINSA PI
Concesión La Pintada
Vial Concession
Project Stage: Start of work
Location: Antioquia
Concesión Vial de los Llanos
Vial Concession
Project Stage: Start of work
Location: Meta
Autopistas del Café
Vial Concession
Project Stage: Operation and Maintenance
Location: Caldas, Quindío, Risaralda
Santa Marta, Paraguachón
Vial Concession
Project Stage: Operation and Maintenance
Location: Guajira y Magdalena
Constructora Bogotá FASE III S.A. – CONFASE
Public Work Agreement
Project Stage: Maintenance
Location: Bogotá D.C.
El Dorado Airport – OPAIN
El Dorado Airport Bogotá Concession
Project Stage: Building
Location: Bogotá D.C.
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
PROJECTS ABROAD
GRUPO ARGOS
ODINSA
ODINSA PI
ODINSA HOLDING
Investment vehicle
Majoram Riverside Company
Investment vehicle
Quiport Holding
Investment vehicle
Autopistas del Nordeste
Vial Concession
Project Stage: Operation and maintenance
Location: Dominican Republic
Boulevard Turístico del Atlántico
Vial Concession
Project Stage: Operation and maintenance
Location: Dominican Republic
Generadora del Atlántico
Power Generation Plant
Project Stage: Commercial operation
Location: Panama
Generadora del Pacífico
Power Generation Plant in Chile
Project Stage: Commercial operation
Location: Chile
Aruba Green Corridor
Vial Concession
Project Stage: Building
Location: Aruba
Corporación Quiport S.A.
Mariscal Sucre Airport Concession
Project Stage: Operation and maintenance
Location: Ecuador
Road Concessions – Business Unit – Airport Concessions – Business Unit – Divestment Plan – Investment Vehicle
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
BOARD OF DIRECTORS
JORGE MARIO VELÁSQUEZ JARAMILLO
Chairman
(Executive member)
Education
- Civil Engineer from Escuela de Ingeniería de Antioquia
- Specialist in Industrial Operations with emphasis in the Cement Industry from
Confederation of British Industries
- Studies at Kellogg School of Management, Universidad de Los Andes and Stanford
University.
Experience
- General Manager at Cementos del Nare S.A.
- President at Cementos Paz del Río S.A.
- Caribbean Region Vice-president and Logistics Vice-president at Cementos Argos
S.A.
- President at Cementos Argos S.A.
- President at Grupo Argos S.A.
ALEJANDRO PIEDRAHITA BORRERO
Vice-chairman
(Executive member)
Education
- Business Administrator from EAFIT.
- MA in Political Sciences of Economic Development from London School of
Economics
- Corporate Finance Studies at Boston University
- Senior Management Studies (PADE) at Inalde Business School, Universidad de la
Sabana
Experience
- Corporate Finance Senior Analyst and Economic Research Director at Corfinsura
- Structuring and Risk Management Manager at Bancolombia
- Capital Market Structuring Vice-president for Investment Banking at Bancolombia
- Corporate Finance Vice-president at Grupo Argos
RICARDO MEJÍA RAMÍREZ
(Executive member)
Education
- Civil Engineer and Administrator from Facultad Nacional de Minas
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
- Specialist in Hydrology and Hydraulic Resources from Massachusetts Institute of
Technology (MIT)
Experience
- General Manager at Instituto Metropolitano de Valoración de Medellín
- Manager and shareholder at Ingeniería Sanitaria LTDA.
- Manager and shareholder at M y Z S.A.
JORGE ANDRÉS BOTERO SOTO
(Non-executive member)
Education
- Civil Engineer from Escuela de Ingeniería de Antioquia
- Specialist in Finance from EAFIT
- MBA with emphasis on Corporate Finance from Ohio State University
Experience
- Credit Auditing Head at Corfinsura
- Corporate Finance Analyst at Corfinsura
- Project Manager of Corporate Finance at Corfinsura
- Investment Banking Capital Investment Vice-president at Bancolombia S.A.
SERGIO RESTREPO ISAZA
(Non-executive member)
Education
- Business Administrator from EAFIT
- MSc in Management (SLOAN Program) from Stanford University
Experience
- President at Corfinsura
- Executive Vice-president at Grupo Bancolombia
- Capital Market Vice-president at Grupo Bancolombia
LUZ MARÍA CORREA VARGAS
(Executive member)
Education
- Business Administrator from EAFIT
- Specialist in Finance from EAFIT
- Studies at Harvard Business School, Leadership Executive Program 2010
- Yale School of Management Executive Education, Corporate Governance and
Performance Program 2014
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
- Chicago Harris, Public Policy. The University of Chicago, Global Trends for Inclusive
Growth 2015.
- Columbia University School of International and Public Affairs, Social Management
Program 2015.
Experience
- General Manager at Construcciones El Cóndor
- Finance Manager at Construcciones El Cóndor
- Administrative Manager at Construcciones El Cóndor
- President of Grupo Cóndor Inversiones S.A.
- Corporate President at Construcciones El Cóndor
SAMUEL RUEDA GÓMEZ
(Executive member)
Education
- Economist from Universidad Jorge Tadeo Lozano
Experience
- Shareholder at Seguros Confianza Swiss Re Corporation
- Shareholder and Manager at Samuel Rueda & Cía. S. en C.
- Shareholder at Inversiones CGS S.A.
- Shareholder at Grupo Conka S.A.S.
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Steering Committee
MAURICIO OSSA ECHEVERRI
President
Education
- Business Administrator from EAFIT
- Specialist in International Marketing from EAFIT
- Senior Management Program from Universidad de la Sabana
- Management Studies at Kellogg School of Management
- Argos Global Management and Strategic Execution Excellence Program, Harvard
Business School
Experience
- Vice-president of Caribbean Region and Legal Representative of Cementos Argos
- Industrial Business Manager and Marketing Country Manager at Cementos Argos
GUSTAVO ORDÓÑEZ SALAZAR
Road Concessions Vice-president
Education
- Civil Engineer from Universidad Javeriana
- Specialist in Corporate Finance from Colegio de Estudios Superiores en
Administración, CESA
- Argos Global Management and Strategic Execution Excellence Program, Harvard
Business School
Experience
- Concessions and Technical Vice-president at Odinsa
- Business and Project Coordinator at CSS Constructores and Project Manager at Luis
Héctor Solarte Solarte Company
CARLOS MARIO ALZATE TORO
Administrative and Human Management Vice-president
Education
- Public Accountant from EAFIT
- Specialist in the Senior Management Program from Inalde Business School,
Universidad de la Sabana
- Argos Global Management and Strategic Execution Excellence Program, Harvard
Business School
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Experience
- Administrative and Human Management Manager at Sator, Carbon Business of
Grupo Argos
- Administrative Manager at Cementos Argos and Cementos El Cairo
PABLO ARROYAVE FERNÁNDEZ
Finance Vice-president
Education
- Business Engineer from Escuela de Ingeniería de Antioquia
- MBA from New York University, specialized in Corporate Finance and Strategy
- Argos Global Management and Strategic Execution Excellence Program, Harvard
Business School
Experience
- Merger and Acquisition Manager at Grupo Argos
- Merger and Acquisition Director at Cementos Argos
- Presidency Assistant at Cementos Argos
- Market Analyst for Investment Banking Capitals at Corfinsura
EDUARDO BETTIN VALLEJO
Institutional and Legal Affairs Vice-president
Education
- Lawyer from Universidad de la Sabana
- Specialist in the Senior Management Program from Inalde Business School,
Universidad de la Sabana
- Specialist in CEO Management Program from ADEN Business School, New York
University
- Argos Global Management and Strategic Execution Excellence Program, Harvard
Business School
Experience
- President at Sator, Carbon Business of Grupo Argos
- General Secretary at Cementos del Caribe, Colclinker, Tolcemento and Cementos
Paz del Río
- (Acting) President, Executive Vice-president and General Secretary at Acerías Paz
del Río S.A.
01 | COMPANY PROFILE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Caption: Concesión Autopistas del Café
02 | LETTER FROM THE CHAIRMAN OF THE BoD A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
02
LETTER FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS
El Dorado Airport Concession
02 | LETTER FROM THE CHAIRMAN OF THE BoD A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Letter from the Chairman of the Board of Directors
Dear Shareholders,
The year 2016 will be marked as of historical relevance in the evolution of Odinsa as a
business organization, influenced by profound changes and new challenges, as this is the
moment of consolidation of this important company as the concession platform of Grupo
Empresarial Argos, becoming the third strategic pillar of our group, focused on infrastructure.
In a context affected by social, political and economic conjunctures of all kind, Odinsa
achieved positive results in 2016, thus positioning as a lead actor of the sector in the Region.
Throughout the year, Odinsa’s Senior Management succession program was successfully
implemented, upon assumption of the company’s presidency by Mauricio Ossa in February,
accompanied by an experienced and determined human talent team, based on the
principles and values that inspire the corporate actions of the companies of Grupo
Empresarial Argos. Such skills are complemented with those existing in the company, this
strengthening leadership to achieve the challenging strategic objectives set.
The increased share of Grupo Argos to 98.55% on Odinsa’s share capital represented an
important milestone in the confidence of our shareholders, most of which decided to accept
shares issued by Grupo Argos in exchange for their respective shares, maintaining their
holding investments in a wider portfolio, thus conserving the exposure to the infrastructure
sector.
In strategy matters, in 2016, Odinsa concentrated on organizing as a focused and coherent
business platform, ready to deploy its competitive strategy. Deep clearance of the portfolio
was carried out, oriented to consolidate its participation in road and airport concessions. In
careful clearance, the Company went from a structure with 13 projects with minority holding
to controlling investments un road concessions in operation (ADN and BTA), projects in
construction (Pacific II and Malla Vial del Meta) and two large airport assets (Bogotá and
Quito). The most attractive projects were selected to access control over them, with holdings
that allow to develop the business model, thereby strengthening value-generating synergic
operations. Throughout the year, the scheduled divestment of non-related assets began as
well, efficiently transferring the capital invested.
In a complex environment, with uncertainties coming from a challenging worldwide
economy, we perceive in a positive way the future performance of Odinsa, based on the
quality of its assets and underpinned in the strategic focusing of profitable growth in the long
term. We are aware that we are currently building solid foundations that will allow us to
deploy the capability to capture value for all of our shareholders, but with the conviction that
we contribute by delivering large infrastructure works that generate progress and
development.
JORGE MARIO VELÁSQUEZ JARAMILLO
Chairman of the Board of Directors
02 | LETTER FROM THE CHAIRMAN OF THE BoD A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Caption: Concesión La Pintada
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Caption: Concesión Autopistas del Café
03
MANAGEMENT REPORT
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Management Report
Dear Shareholders and Stakeholders,
While the economic environment of 2016 imposed important challenges including
inflationary effects, devaluation, the truck driver strike, “El Niño” phenomenon, and other
natural events such as the earthquake in Ecuador and Mathew hurricane in the Caribbean,
it is really satisfying to disclose our outstanding results and the most relevant facts for Odinsa
during this period, where we transformed to strengthen the strategic focus defined.
In 2016, by means of a Takeover Bid in the public stock market, Grupo Argos reaffirmed its
position within Odinsa by increasing its interest to 98.55%, thus demonstrating confidence
in the Company, the sector and the future of our projects and business. In 2015, this
important infrastructure parent company in process of international growth, leader in
corporate governance and sustainability, had become the controlling shareholder of Odinsa.
In the Ordinary Assembly held on March 18, we bade farewell to Mr. José Alberto Vélez as
the Chairman of the Board of Directors, who resigned from Grupo Argos as set forth in the
Code of Good Governance. Mr. Vélez is a visionary leader, who leaves a fruit-bearing and
significant legacy. On the same day, we pleasantly welcomed Mr. Jorge Mario Velásquez to
replace Mr. Vélez. Mr. Velásquez is the current chairman of the Board of Directors, our main
body of strategic management.
During 2016, the Company’s strategic focus was framed within the consolidation of
investments in roads and airports, as well as the divestment of assets that did not represent
significant contributions to the new vision, in order to be prepared to compete in a dynamic
market and a changing economic environment. The foregoing allowed us to achieve
satisfactory economic results and proper balance in the portfolio, this generating value for
shareholders and the society, due to leadership and quality in our human talent.
To undertake this consolidation, we highlight three of the main actions:
1. Reforming the by-laws and the Code of Good Governance to be adjusted to the
Good Corporate Governance Practice, in order to ensure the protection of investors’
rights and establish mechanisms to ensure transparency in the management of
relations and actions.
2. Renovating our corporate image to communicate new features, such as agility,
seriousness, experience, strength, and sustainability.
3. Positioning as a first-tier actor in the infrastructure sector in Colombia and abroad.
In October, the Colombian Stock Exchange awarded Odinsa with the IR Seal, recognition
granted to companies committed to the highest standards of transparency and corporate
governance.
The ethical vision and commitment to sustainability oriented the management of ambitious
projects throughout the year to face the technical, environmental and social challenges, and
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
thus respond to the confidence of investors and the local and international baking that
provided support to perform them. This represents the momentum necessary to continue
fostering sustainable growth and the development of infrastructure in the countries we are
present.
Caption page 21: Concesión Vial de los Llanos
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Results
Odinsa’s financial statements in 2016 had structural changes that resulted in significant
variations compared to 2015. Such changes are the consolidation of the Autopistas del
Nordeste and the Boulevard Turístico del Atlántico, in the Dominican Republic, since May,
and interest was increased to 78.85% for Concesión La Pintada, in Colombia, in September.
On the other hand, investments in Generadora del Atlántico and Generadora del Pacífico
are no longer consolidated by Odinsa’s decision to alienate these companies, which
involved their classification as assets available for sale.
Consolidated Results
Figures (COP) Variation (vs. 2015)
Income 1,485,594 million 65%
EBITDA 1,065,830 million +> 200%
Net Profits 670,202 million +> 200%
Pro-forma Consolidated Results
Figures (COP) Variation (vs. 2015)
Income 1,038,583 million 15%
EBITDA 460,908 million 49%
Net Profits 134,277 million 1%
The Company’s consolidated financial debt presents an increase of 51%, explained mainly
by the consolidation of long-term financial obligations of the Autopistas del Nordeste and the
Boulevard Turístico del Atlántico. These obligations are under the Project Finance modality.
The total financial debt was COP 2,350,151 million.
COP 1,485,594 million Odinsa’s income in 2016
Odinsa projects new features such as agility, seriousness, experience, strength, and
sustainability.
Share Performance
The main indicators had a positive evolution despite different international and local factors
that influenced the price of shares being negotiation in the Colombian Stock Exchange. A
variation of 17.16% of COLCAP represents a recovery from the fall occurred in 2015.
According to several experts, the factors that most affected the stock market were global
liquidity, aversion to international risk, the price of petroleum, and the global market’s
behavior. This important recovery was registered based on a heterogeneous performance,
both at the sector and issuers levels. The good behavior of the finance sector, its greater
influence in the stock index and lesser participation of the Oil & Gas sector should be
highlighted, which contributed to decrease the dependence on the stock index for this sector.
Odinsa’s share grew 9.65% compared to 2015.
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
In this scenario, Odinsa’s share ended the year at COP 9,320 per share, with a valuation of
9.65% versus the price of COP 8,500 as of December 31, 2015.
Likewise, between January 1 and December 31, 2016, the share price ranged from COP
8,100 to COP 9,500, with an average of COP 8,746. The highest price was determined by
the takeover bid launched by Grupo Argos at the end of 2016, to acquire all of Odinsa’s
shares.
Volume
Millions of shares
Traded in 2016 = 112
Acquired by Argos = 86
Market Capitalization
(based on the price tendered by Grupo Argos at the Takeover Bid)
Trillion pesos
2015 = 1,67
2016 = 1,86
Important Facts
Actions, achievements, novelties and challenges outstand among all activities developed
during year 2016.
Awards
March 16
In the World Airports Awards, the most prestigious awards of the airport industry worldwide,
the British firm Skytrax awarded our two airport concessions as follows:
El Dorado International Airport, Bogotá, operated by Opain, best in South America and best
staff in 2016.
Mariscal Sucre International Airport, Quito, operated by Corporación Quiport, best regional
airport in South America.
Both airports were rated with 4 stars as a result from the audit performed in 2016 on
passenger services. The awarding ceremony took place in Cologne, Germany.
October 10
For the fourth year in a row, Odinsa was awarded with the IR Investors Seal, an award
granted by the Colombian Stock Exchange (BVC) to companies committed to the highest
standards of transparency and corporate governance.
Decisions
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
March 18
The General Shareholders’ Assembly approved reforms to corporate by-laws and changes
to the business name, business purpose, quorum and majorities for the Assembly, as well
as well as the powers of the Board of Directors and Chairman.
April
The Board of Directors updated and aligned the Code of Good Governance with the
corporate by-laws and the regulation of the stock market. Clear rules for action and
improvements in the corporate governance practice are established to strengthen
transparency in relationships.
April 18
The sale of Odinsa’s interest on Vías de Las Américas S.A.S. was completed.
August 8
The Transparency Line (01 8000 124333) came into operation as a confidential mechanism
for any person to anonymously report incorrect acts, complaints and violations to the Code
of Business Conduct.
September 27
Fitch Ratings maintained the rating “AA-(col) with Negative Perspective” for 2008 Odinsa’s
ordinary bonds for COP 100 billion.
Road Concessions
January 25
The companies Sociedad Vial del Nus S.A. and ANI entered into a concession agreement
within the APP Framework of the private initiative (Bello - Alto de Dolores, Hatillo - Don Matías),
where Odinsa owned an interest of 22.21%. This percentage would be alienated later.
March 8
Addendum No. 15 to the Concession agreement 113-97 was executed by Autopistas del Café S.A.
in order to perform the works for rehabilitation of the road La Española – Calarcá with surplus
resources equivalent to COP 1.8 billion.
Caption: El Dorado Airport Concession
May 10
Acquisition of 25% additional to achieve 67.5% of majority shareholding on the road concessions
Autopistas del Nordeste (AND) and Boulevard Turístico del Atlántico (BTA) in the Dominican
Republic. This acquisition allows to consolidate results. Such roads suffered no significant damages
by hurricane Mathew.
March 18
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Odinsa Proyectos e Inversiones S.A. executed with INVIAS an addendum to the 2011 Concession
Agreement No. 250 for COP 32.351 billion.
Beginning of the construction of La Paz Detour under the agreement entered into by Autopistas del
Café S.A. and Fondo Adaptación for COP 31.542 billion.
April
Yucao and Casetabla tolls were granted in concession, which are located in Puerto López – Puerto
Gaitán road, in the Concesión Malla Vial del Meta.
Detailed drawings of functional units 1 and 7 were submitted, and ANLA issued a favorable opinion
to consider the second road Séptima Brigada – Ocoa – Apiay as an enhancement.
May 17
The Agencia Nacional de Infraestructura (ANI) submitted to the Chamber of Commerce of Bogotá an arbitration lawsuit against Autopistas del Café S.A. with allegations for COP 278 billion. Hernando Yepes Arcila, María Cristina Morales de Barrios and William Barrera Muñoz were appointed as arbitrators by mutual agreement. The arbitration court took over on October 5 and accepted the lawsuit on October 18. July 6 Addendum No. 3 to the Los Llanos Roads concession agreement was executed to extend the term for financial closure from 365 to 540 days, from the commencement date. July 13
The record of settlement between Avianca and Opain was executed, thus terminating the leasing agreement for Terminal Puente Aéreo entered into by the Aerocivil and Avianca. Opain received common areas, business premises, and the parking. August 11
In compliance with resolution No. 1130, the ANI ordered to increase the toll fees for the Malla Vial del Meta project under the responsibility of the company Concesión Vías de Los Llanos S.A.S. This situation created inconformity and strikes between neighboring community and the road users. September 6
Credit agreements that are part to the financial closure of Pacific II Connection Highway project were executed, with the participation of the national and international bank amounting to COP 1.2 trillion. The interest was increased from 25% to 78.85% through the acquisition of Mincivil, Mota Engil, Termotñecnica Coindustrial S.A., and Icein. This project includes the rehabilitation of a 24-kilometer single carriageway (Primavera – La Pintada) corresponding to UF5, the construction of a 41-kilometer dual carriageway (Bolombolo – La Pintada), a 2.5-kilometer double-tube tunnel, and a 120-meter bridge over Cauca River. September 12 Opain executed Addenda No. 20 and 21 to extend the termination date of the modernization and expansion date of the El Dorado International Airport until November 30, 2018. October 13
Grupo Argos, that held 54.75% of interest, requested authorization before the Finance Superintendence of Colombia to carry on a takeover bid for Odinsa’s remaining ordinary shares. Consequently, on December 26, Grupo Argos consolidated 98.55% of interest. November 4
Concesión Vial de los Llanos and the ANI executed Addendum No. 5 to suspend for 30 days the accreditation of the financial closure and the commencement of the building stage, with a view to find alternatives to make the project feasible under the most adequate conditions for the region. December 21
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Addendum No. 6 to Concesión Vial de los Llanos was entered into, thus suspending the financial closure, commencement of the building stage, and funding of the property subaccount for one year or until enforceable judgment from an arbitration court is issued. Alienations A 22.21% interest was alienated on Concesión Vías del Nus S.A.S., which was the company responsible for the Concession Agreement under the APP scheme corresponding to Vías del Nus private initiative. This initiative required an approximate investment of COP 1.2 trillion, with the agreement being executed on January 25, 2016. A 22% interest was alienated on Hatovial; 2.25% interest on Concesión Autopistas del Café, going from 61.92% to 59.67% interest; the whole interest on Vías de las Américas S.A.S.; and finally, a 12.18% interest on Sociedad Portuaria de Santa Marta.
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Airport Concessions El Dorado International Airport – Bogotá Operated by: OPAIN S.A. Investment: COP 281.9 billion for second expansion Novelties: New boarding bridges, increase of contact points
for aircraft parking. In September, the business premises and Parking
of Terminal Puente Aéreo previously managed by Avianca were received.
Passengers served: 31.4 million Variation vs. 2015: 3.5% Cargo moved: 644,050 tons Variation vs. 2015: 1.13% Mariscal Sucre International Airport – Quito Operated by: Corporación Quiport S.A. Investment: USD 10.77 million Novelties: The earthquake occurred in Ecuador did not affect
the facilities. It provided important support in humanitarian aid
works to the earthquake victims. Passengers served: 4,873,760 Variation vs. 2015: -9.3% Cargo moved: 170,656 tons Variation vs. 2015: -1.8%
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Other Business Upon maturity of the contractual term, the agreement entered into with Fonvivienda was settled, including the family housing project named Macroproyecto de Tulúa, as the environmental authority–CVC–made some decisions that are the responsibility of Tulúa municipality. However, this entity has not received the funds necessary to finance the corresponding civil works in order to make the project viable. Fonvivienda was reimbursed COP 7,556 billion plus COP 738 million as financial return. Odinsa Servicios S.A.S. ended activities on November 30, 2016. One hundred percent of assets were sold to the Concesión Autopistas del Café, which will continue to perform directly the vertical and horizontal signaling activities. The operational staff appointed for the project was hired directly by this concession. Constructora Bogotá Fase III S.A. – Confase ended architectonic and urbanization works of Bicentenario Park, while the procedural steps of the arbitration lawsuit No. 2 filed by Confase against IDU were in course, claiming allegations for COP 21 billion. Meanwhile, maintenance shall be performed for three years in the road and public space of some sections of Carrera 10ª and Calle 26. We moved forward in searching parties interested in the thermal generation assets of Generadora del Atlántico (GENA), in Panamá, where Odinsa holds a 60% interest, as well as in the thermal generation assets and the photovoltaic plant (14 MW) of Generadora del Pacífico (GENPAC), in Chile, where Odinsa holds a 51% interest. The building works of the solar park at GENPAC were completed in December 2016.
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Caption: Concesión Vial de los Llanos Upcoming Matters Fitch Ratings improved the rating of bonds to fund the Autopistas del Nordeste project. January 2017 January 18 The Sixth Cross-sectional Delegate Controllership decided to close the tax liability procedure under number PRF 01917-2011 against Opain S.A., Otca S.A.S. (the cargo terminal operator), Aerocivil and Fiduciaria Bancolombia, derived from the administration of the public recourses under the agreement entered into with Otca S.A.S., amounting to COP 4,761,954,949. Upon analyzing the seven facts that constituted support to initiate the procedure, and upon review of the evidentiary basis submitted, the Controllership considered applicable to reaffirm the writ dated December 16, 2016, and thus ordered to close the procedure. January 24 Fitch Ratings improved the rating for bonds issued for funding the Autopistas del Nordeste project, in the Dominican Republic, from B+ to BB-. The rating perspective remains stable. Bonds are payable as of 2026 and the pending balance is USD 152,2 million. January 27 In the conciliation hearing within the arbitration procedure initiated by the Santa Marta – Paraguachón Concession against the Agencia Nacional de Infraestructura (ANI), the court approved the conciliation agreement achieved between the concessionaire and the ANI. According to this agreement, the ANI undertook to pay liquid amounts of COP 3,473,895,928 not later than on the last business day of 2018. Also, several administrative acts were revoked, whereby payment of COP 8,688,386,793 by the concession was being claimed. January 31 The arbitration award in favor of Corporación Quiport was read regarding the controversy aroused from claiming the payment of rent installments corresponding to the use of business premises. The court accepted in full the allegations of Corporación Quiport, which amounted to USD 90,000. The arbitration award ordered that the defendant shall pay invoices claimed, plus legal interest, as well as the payment of litigation costs. The arbitration award was uttered in favor of Constructora Bogotá Fase III S.A. Confase S.A., against Instituto de Desarrollo Urbano (IDU) and Transmilenio. The arbitration court resolved the controversies aroused between the parties upon execution of agreement ISU 136/2007, and sentenced the IDU and Transmilenio to pay COP 11,545,984 to Confase S.A. February February 8 The seating hearing of the arbitration court convened took place on December 1, 2016, for Concesión Vial de Los Llanos S.A.S. against the Agencia Nacional de Infraestructura (ANI) before the Chamber of Commerce of Bogotá, in order to resolve the controversies aroused from the performance of the Concession Agreement No. 004/2015.
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
On February 18, as instructed by the Agencia Nacional de Infraestructura, the fees of the Malla Vial del Meta toll stations were decreased, under the responsibility of Concesión Vial de Los Llanos S.A., until commencement of the agreement building stage. For this, we are awaiting the resolution of the contractual controversy under consideration of the arbitration court. March Mariscal Sucre Airport from Quito (operated by Corporation Quiport) and El Dorado Airport from Bogotá (operated by Opain) were awarded with the World Airport Awards by Skytrax in 2017: Mariscal Sucre Airport
Best Regional Airport in South America. Best Airport Staff in South America. 4 Star Rating, as a result of the audit performed in 2016 on passenger services.
El Dorado Airport
Best Airport in South America. 4 Star Rating, as a result of the audit performed in 2016 on passenger services.
Foreseeable Evolution of the Company The perspective is optimistic, as there is a profitable growing strategy in place with sustainability criteria and ethical principles, transparency and corporate culture. In addition, there are opportunities in the road and airport infrastructure sector, not only in Colombia but also in other countries of the American continent, a balanced portfolio between mature businesses and projects with high potential for development, and incursion in new businesses. The foregoing is complemented with adequate risk management and corporate and financial support from Grupo Argos.
03 | MANAGEMENT REPORT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Legal Affairs Contingencies Legal procedures and, in general, the legal situation of the Company has developed as usual. It should be noted that, with the takeover bid of Grupo Argos S.A., it holds 98.55% of Odinsa’s shares. This gives place to the event set out in numeral 3, Article 457 of the Code of Commerce. It should be highlighted that, as provided for in Article 24 of Act 1429/2010, associates have 18 months to adopt the modifications required in order to set aside the grounds for dissolution. The contingencies are related to Annex 1 hereto. Rules on Intellectual Property In 2016, Odinsa complied with the rules on intellectual property, copyright, and software licenses as provided for in Act 607/2000. Operations under numeral 3, Article 446 of the Code of Commerce
ODINSA S.A.
CONCEPT 2016
Expressed in thousand COP
RPC 10,228,929
Entertainment expenses 314,999
Fees 4,473,870
Counseling 11,999,284
Tax Auditing 670,197
Advertisement, propaganda and promotion 1,398,753
Donations 15,597
TOTAL 29,101,628 Caption: Concesión Autopistas del Café
04 | GOOD GOVERNANCE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
04 GOOD GOVERNANCE
04 | GOOD GOVERNANCE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Good Governance Taking account of the recommendations of the Country Code, on March 18, 2016, the ordinary shareholders meeting was held, where the company’s by-laws were amended to modify some of the duties of the Board of Directors and the President of the Company, among others. Also, a new Board of Directors was appointed to be formed by seven members (5 executive and 2 non-executive), with no alternate members. Mr. Jorge Mario Velásquez Jaramillo replaced Mr. José Alberto Vélez. All other by-laws remain unchanged. Likewise, Odinsa changed its shareholder structure, as a result of the takeover bid on ordinary shares, performed in November by Grupos Argos S.A., whereby it increased its interest from 54.75% to 98.55%. As part of Grupo Argos and under its direction, the Company has been working in the implementation of the corporate guidelines and practices. From March 18, 2016, the Board of Directors of the Company was formed as follows:
Name Capacity
Jorge Mario Velásquez Jaramillo Executive Member
Alejandro Piedrahita Borrero Executive Member
Luz María Correa Vargas Executive Member
Samuel Rueda Gómez Executive Member
Ricardo Mejía Ramírez Executive Member
Jorge Andrés Botero Soto Non-Executive Member
Sergio Restrepo Isaza Non-Executive Member
The Board of Directors, in meeting held on May 31, by recommendation from the Sustainability and Corporate Governance Committee, approved and implemented the Relationship Policy among related companies. Likewise, in meeting held by the Board of Directors on October 24, by recommendation from the Auditing, Finance, and Risks Committee, the Policy on Fraud, Bribery, and Corruption Management was amended to include the duty to submit the Income and Goods Statement. In the same session, the Transparency Policy was approved. The Board of Directors held 14 meetings in 2016, and the Committees held 9 meetings.
04 | GOOD GOVERNANCE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Board of Directors and Committees The Board of Directors held 14 meetings in 2016. This body analyzes operational and financial results of Odinsa and opens a special space dedicated to study and assess new businesses. Likewise, the Board of Directors has followed and ratified the deliberations and approvals of the following committees:
Auditing, Finance and Risks Sustainability and Corporate Governance Appointments and Compensations
The composition of the committees was modified in meeting held on April 25, 2016, by the Board of Directors. Auditing, Finance and Risks Committee Composed by: Jorge Andrés Botero, Sergio Restrepo, and Alejandro Piedrahita. This Committee held 5 meetings throughout the year, in February, April, July, October, and December. Appointments and Compensations Committee Composed by: Jorge Mario Velásquez, Luz María Correa, and Jorge Andrés Botero. This Committee held 2 meetings throughout the year, in June and December. Sustainability and Corporate Governance Committee
Composed by:
Alejandro Piedrahita, Samuel Rueda, and Ricardo Mejía.
This Committee held 2 meetings throughout the year, in May and November.
Financial Reports Control Disclosure System
The financial informational disclosure and control systems have been working in a manner
consistent with the provisions of Article 47, Act 964/2005. The information analysis and
results are satisfactory.
Certification Act 1676/2013
According to Title IX “related to the factoring activity”, Article 87 of Law 1676 dated August
20, 2013, administrators state that free circulation of invoices issued by the commercial area
and vendors was not hindered.
04 | GOOD GOVERNANCE A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Apart from the information in this report, the Company has not have certain and final
information on important facts occurred between the accounts closure date and the
preparation date of this report that may compromise its evolution or the shareholders’ equity.
Board of Directors
Jorge Mario Velásquez (Chairman)
Alejandro Piedrahita Borrero
Luz María Correa Vargas
Ricardo Mejía Ramírez
Samuel Rueda Gómez
Jorge Andrés Botero Soto
Sergio Restrepo Isaza
President of the Company
Mauricio Ossa Echeverri
05 | RELATIONSHIP WITH INVESTORS A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
05
RELATIONSHIP WITH INVESTORS
Caption: Concesión La Pintada
05 | RELATIONSHIP WITH INVESTORS A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Relationship with Investors
Odinsa, through the Relationship with Investors area, complies with its commitment to
maintain a timely, direct and transparent communication with its shareholders and investors,
to facilitate the decision-making process.
In 2016, strengthening of direct channels with this stakeholder was continued, including one-
to-one meetings with investors and with other equity provider groups, such as financiers and
insurers, interested in Odinsa. Results for each quarter were presented through telephone
conferences, which allowed the attendance of a significant number of investors and other
equity providers.
In November 2016, and for the fourth consecutive year, the Colombian Stock Exchange,
BVC, renewed the Issuers Recognition (IR) for fully complying with best practices regarding
information disclosure and relationship.
05 | RELATIONSHIP WITH INVESTORS A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Caption: El Dorado Airport Concession
06 | DEVELOPMENT AND WELLBEING OF HUMAN TALENT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
06
DEVELOPMENT AND WELLBEING OF HUMAN TALENT
06 | DEVELOPMENT AND WELLBEING OF HUMAN TALENT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Development and Wellbeing of Human Talent
Relations with employees are governed by principles of respect, integrity, teamwork, social
responsibility and leadership.
Applying the best practices in processes involving talent allows Odinsa to consolidate an
innovative, high-performance team with great human quality and professionalism. The
Company provides the necessary tools to develop and strengthen in people the skills and
competences that enable them to contribute to the achievement of organizational results.
In the work of development and retention of qualified talent, Odinsa is based on a policy of
respect, integrity, teamwork, social responsibility and leadership. Accordingly, training and
wellbeing activities are focused on the employees and their families.
The area responsible for the development and wellbeing of human talent is strategic for the
business, in managing programs that promote learning, development, life-work balance and
healthy recreation.
Employees
Gender
87 Men
185 Women
Type of agreement
4 fixed term
268 indefinite term
Recruitment in 2016
Gender
20 Men
31 Women
Age
29 -30 years
15 30-40 years
6 40-50 years
1 50-60 years
Training in 2016
Training hours per topic
3,343 Training on technical skills
4,743 Environment, health and safety
06 | DEVELOPMENT AND WELLBEING OF HUMAN TALENT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Annual average training hours per level
Executive 49
High management 44
Middle management 22
Specialists 33
Operational 28
Skills evaluation coverage per level
Executive 5
High management 14
Middle management 27
Specialists 45
Operational 181
100% of Odinsa employees took part in the evaluation of skills development.
Key Leadership Programs
Competency assessment program
With the support of Korn Ferry
46 leaders of the organization participated
Objectives: identification of talents, joint construction of individual development plans
and definition of the successors for the Vice-presidencies.
Program on global management and excellence in strategic execution
Delivered by the Harvard Business School
First level managers participated.
Strategic alignment activities
Detection and linking of internal and external talents. With their knowledge and skills
they will face the great challenges of the organization.
Redesign of the induction process. Its scope was expanded, Odinsa employees
participate as hosts and the satisfaction of the program was evaluated for continuous
improvement. In addition, the initiative "My first 60 kilometers" was implemented, which
aims to validate the incorporation and integration process of an employee to the
Company.
Evaluation for skills development. With a coverage of 100% of Odinsa’s population.
Seventy-five percent the employees received feedback from their leaders.
Twenty people were promoted, including the operational positions of the Autopistas del
Café project, as part of the process of recognition and promotion of internal talent.
06 | DEVELOPMENT AND WELLBEING OF HUMAN TALENT A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Twenty-eight people were sponsored for higher education studies, with the aim of
strengthening the employees’ professional profile.
Adaptation to change was a central axis of management to achieve alignment with the
transformations of the organization. The workshop "Successful Attitude to Change" was
addressed to all employees; and the workshop "Managing Change" was addressed to
the leaders so that they become agents of transformation within their areas.
Recognition and wellbeing, balance between personal and work life were strengthened
through activities such as Odinsa Olympics (with competitions in five sports),
distinctions to the Best Collaborator and Leader of the Year, creation of the rest room
and structuring of primary groups, among others.
Assessment of the work environment. This task was entrusted to Great Place to Work;
the results were socialized and action plans were implemented to close the gap against
the expected results.
Ninety-five percent of the population participated in quality of life and family activities.
Odinsa is Enchanted, Odinsa babies, flexible schedule, and healthy circuit give the
family greater institutional knowledge and sense of belonging.
Internal Communications
In the consolidation of the organizational culture and climate, communications are the key
in the relationship of the company with its employees.
In 2016:
The 30th edition of the bimonthly newsletter was issued
New communication channels were developed: Conversations with the President and
videos.
Meetings were held between managers and employees.
Odinsa Employees Fund - FEGO
Savings, credit and social welfare services were provided by the employees fund to its 607
associates from 15 companies.
In 2016, Concesión La Pintada S.A.S. was linked to FEGO to extend the benefits to its
employees. There are already 16 related employers' linked, whose employees have access
to social programs, credit lines and quality of life agreements.
FEGO awarded COP 11 million in prizes for social welfare activities.
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
07
BUSINESS LINES
Caption: Mariscal Sucre International Airport Concession – Quito
Road Concessions
COLOMBIA
Autopistas del Café
Vehicles mobilized
Average daily traffic 34,366
Average daily traffic variation 3.37%
Total collection (billions) COP 173
Collection variation 9.82%
Financial results
2016 2015
Operating revenue COP 201.415 billion COP 172.529 billion
2015-2016 Variation 16.74%
EBITDA COP 46.788 billion
2015-2016 Variation 33.56%
Net profits COP 36.848 billion
Caption: Concesión Autopistas del Café
[Image: Manizales, Chinchiná, Santa Rosa de Cabal, El Pollo, Pereira, Intersection,
Armenia, Calarcá, La Española, La Palla]
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Operational results
Autopistas del Café maintained its normal operation throughout the year. The number of
vehicles that crossed the highway tolls reached a daily average of 34,366 vehicles, of which
category No. 1 represents 63%. The increase of traffic with respect to the previous year is
3.37%. The total collection reaches a total of COP 173 billion.
In terms of works, the completion of the rehabilitation of the Calarcá - La Española section
in the department of Quindío is highlighted, with a length of 10.9 kilometers. This section is
part of the country's main logistics corridor with an average daily traffic (ADT) that, together
with regional traffic and freight transport, exceeds 10,000 vehicles.
The works of the Adaptation Fund are in the final stage with the construction of La Paz
detour. Works are expected to be completed by October 2017. The activities carried out
there represent an important volume of ground movement with an estimated total of 386,000
cubic meters and an expected final investment of COP 31.5 billion.
The construction of La Paz detour constitutes a solution of high regional and national
importance because, once completed, it will be possible to overcome the threat of landslides
that compromise the stability of the road at the municipality of Chinchiná in the department
of Caldas.
Main maintenance: At the end of 2016, a total of 5,509 cubic meters of asphalt were
installed, emphasizing on the intervention of sections La Paila – Calarcá and Armenia –
Pereira, and the works performed in the section Pereira – Manizales, in addition to the works
throughout the highway corridor. These are in total 270 kilometers long.
Routine maintenance: the linear demarcation of 704,727 linear meters of paint was made,
while the horizontal demarcation required the quantity of 44,104 square meters of paint. This
program was complemented with the installation of 31,958 reflective studs. For vertical
signaling, 215 information items were placed, which, along with the horizontal signaling
activities, provide the highway a rating above 4.5 out of 5, in terms of road signs and
prevention at the service of the concession road users.
COP 62.491 billion was Ebitda, 34% more than in 2015.
Financial Results
The Company's operating revenue increased from COP 172.529 billion in 2015 to COP
201.415 billion. This increase is mainly due to the higher levels of construction works that
allowed to record COP 52 billion this year, versus COP 30 billion in 2015. Revenues from
the concession's long-term operating activity grew 5%.
The Company's EBITDA reached COP 62.491 billion, increasing 34% with respect to 2015.
The net profit contributed is COP 41.8 billion and distributed dividends were COP 36.847
billion.
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Autopistas del Café remains free of financial indebtedness and is a stable source of benefits
to its shareholders.
Featured Facts
At the end of the term, the system ayudame.com.co registered 83,816 logins. The
complementary system of Road Event Register (Registro de Eventos en la Vía – REV), for
operations and maintenance, obtained 16,070 records. Also, 16 activations of the Crisis
Room were carried out to deal with novelties that, due to their magnitude and potential
incidence, required the participation of different areas of the concession.
During 2016 the Management Information System (MIS) project was developed, whereby
the company orderly collects and organizes critical information on all activities and results,
which is transformed into management indicators that can be consulted by the Management,
under the structure of a balanced scorecard.
Caption: Concesión Autopistas del Café
Finally, regarding attention to users, a total of 67,413 requests were attended, including
1,470 ambulance services, 1,670 calls to # 850, 2,587 road safety campaigns, 4,995 crane
requests. Besides, logins to the system ayudam.com.co should be highlighted, with a total
of 46,514 queries.
Addendum No. 15 dated April 7, 2016, was signed to contract additional 0.84 kilometers of
the rehabilitation of the Calarcá - La Española section in the department of Quindío.
On May 17, 2016, the Agencia Nacional de Infraestructura (ANI) filed an arbitration lawsuit
against Autopistas del Café. The lawsuit claims are: i) Correct the difference between the
value of the CAPEX and the OPEX in Clause 8 of the Addendum dated June 15, 2005, with
respect to that in the financial model; ii) Update the financial model on an annual basis using
the real CPI, and thereby recalculate the concession term.
The ANI therefore intends the concession to be declared completed, although clause 7 of
Addendum dated June 15, 2005, states that the term of the contract is until February 1,
2027. The lawsuit was responded promptly, explaining, among others, that: (i) in the first
generation concession agreements, such as the agreement of Autopistas del Café S.A., the
value set out is estimated, with the one included in the financial model being the final value;
therefore, both values are usually different; ii) the Internal Rate of Return was agreed in
Agreement 00113/1997 in real terms, and therefore, it is not possible to update it with the
CPI; iii) the agreement has a clause indicating that the deadline is February 1, 2027, and
that term is the only one that compensates the contracted investments with the IRR agreed
upon.
Finally, Addendum No. 17 dated December 29, 2016, was signed to contract the
construction of the pedestrian bridge Bosques de la Acuarela in the municipality of
Dosquebradas, in the department of Risaralda, as well as the operation and routine
maintenance of the Troncal de Occidente detour and Studies and Designs Phase III of
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Campoalegre one way double and the dual carriageway between the Tarapacá II toll and
the La Paz detour in the municipality of Chinchiná.
Concesión Vial de los Llanos
Vehicles mobilized
Average daily traffic 18,089
Total collected (billions) COP 48.54
Financial results
2016
Operating revenue COP 43.358 billion
EBITDA COP 1.665 billion
Net profits COP 1.907 billion
Caption: Concesión Vial de Los Llanos
[Image: Puente Arimena, Puerto Gaitán, Puerto López, Villavicencio, Acacias, Granada]
This concession executes the Malla Vial del Meta IP project, one of the first Public-Private
Partnerships (PPPs), of private initiative approved by the National Government.
Length: 354 kilometers of roads
46 kilometers of double carriageways
Estimated investment: COP 1.27 trillion
Revenues from Concesión Vial de los Llanos come from its five toll stations: Ocoa, Iraca,
La Libertad, Yucao and Casetabla.
Two events affected revenues: the fall in international oil prices, which led to a rebound in
traffic and a decrease in the number of trucks transiting through the department of Meta, the
country's largest crude oil producer; and the impossibility of applying the tariff structure for
the toll stations of Casetabla and Yucao for 428 days from the execution of the initiation
minutes.
Financial Results
Year 2016 was the first full year of operation of the concession. In 2015, it operated during
the second semester.
The operating revenue of the concession amounted to COP 43.358 billion, while last year it
was COP 56.386 billion. The main reason is the lower level of construction activity in 2016.
Only works for COP 24.691 billion were recorded; in 2015,it amounted to a value of COP
41.886 billion. Revenue allocated to the operation amounted to COP 18.667 billion for the
12 months, while in 2015 it was only COP 11.237 billion for six months of operation.
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
The Ebitda of the company was COP 1.665 billion, which is normal in the stage of
construction of this type of projects. The net profit was COP 1.907 billion.
In the Public-Private Partnership of the Malla Vial del Meta IP project, an investment of COP
1.27 trillion is estimated.
At the end of November 2016, shareholders made the second contribution of Equity for COP
62.176 billion. These contributions were recorded in the liabilities of the Company as
subordinated debt with shareholders whose value is COP 173.259 billion. The remaining
liabilities correspond to the collections of the concession that must be destined to
investments in the same project. The company does not record financial indebtedness yet.
The company holds COP 158.589 billion in trust funds and COP 78.911 billion available that
support the risk capital placed by the shareholders and the collections obtained from the
operation of tolls that must be destined for the execution of Functional Units of the
construction stage.
Featured Facts
Because of the project's imbalance of income, the concession convened an arbitration court
to resolve the parties' difficulty in sustaining the project's viability under such adverse and
unpredictable circumstances in the fall of traffic. This lawsuit was filed by the concession on
December 1, 2016, before the Chamber of Commerce of Bogotá. This resulted in the
execution of Addendum No. 6 to the agreement, where the suspension of the obligation to
perform the financial closure of the project is extended, and the beginning of the construction
stage is suspended.
Although the concession has not initiated the construction stage, it has been making
interventions to the pavement of the existing roads in order to comply with the Contractual
Service Levels for the pre-operative stage.
On April 18, 2016, Invías granted to the ANI, and ANI, in turn, granted to the concessionaire,
both toll stations of Yucao and Casetabla that were being operated by Invías. The toll rates
for the two previous stations corresponded to Invías Resolution 052, and as of August 11,
2016, prior to the ANI's socialization, contractual rates were implemented according to
Resolution 1130.
By the execution of Addendum No. 6, the obligation to certify the financial closure, and
consequently, the beginning of the construction stage were suspended, for the period
between the subscription of the Addendum and the Award of the Arbitration Court or until a
conciliatory agreement is achieved or for one year.
During this year, the parties agreed to carry out the works required to ensure the trafficability
of the concession corridor, as described in Clause 4 of the Addendum and other contractual
commitments.
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Throughout the year, the Property Acquisition Plan was approved according to the existing
property list for January 4, 2016. Subsequently, and in line with the project's dynamics, it
was agreed with the ANI to adjust the property areas that will be affected by the Concession
project. This agreement was materialized by the execution of Addendum No. 4 dated
October 6, 2016, where the areas to be acquired were specified in accordance with Act
1228/2008 and regulatory decree 2976/2010.
Simultaneously, work groups were held with the Office of the Mayor of Villavicencio, in order
to certify the land use of the properties adjacent to the Ring Road of the City. By the end of
the year, the parties subscribed Addendum No. 6 to the Concession Agreement, whereby
the start of the construction stage, among others, was suspended, and it was agreed to
execute the project’s property items, but without making formal purchase offers to owners.
Throughout the project, the Ministry of Internal Affairs has certified the presence of an
indigenous community located between Functional Units 9 and 10, Puerto Gaitán - Puente
Arimena corridor. The concessionaire has carried out the corresponding approaches and
working groups with the Ministry of Internal Affairs, in order to apply the provisions of the
infrastructure law in relation to improvement interventions.
Caption: Concesión Vial de los Llanos
Concesión Santa Marta – Paraguachón
Vehicles mobilized
Average daily traffic 9,137
Traffic variation 0.92%
Total collected (billions) COP 37.21
Collection variation 12.20%
Financial Results
2016 2015
Operating revenue COP 38.469 billion COP 34.5 billion
2015-2016 Variation 11.48%
EBITDA COP 13.794 billion
2015-2016 Variation 45.30%
Net profits COP 400 million
Caption: Concesión Santa Marta – Paraguachón
[Image: Santa Marta, Buritaca, Palomino, Riohacha, Maicao, Carralpía, Paraguachón]
Comentado [DJRA1]: El término en español es “tira predial”, que no encontré así que no estoy muy segura de que “property list” sea el término correcto
07 | BUSINESS LINES A company of Grupo Argos
Odinsa | Annual Report | 2016 www.odinsa.com
Operating Results
The traffic behavior showed an increase of 0.92% with respect to 2015, as did the collection,
which increased by 12.20% compared to the figures collected in the same period.
Financial Results
Operating revenue reached COP 38.469 billion, representing an improvement in the
collection compared to the previous year due to the partial reopening of the border in
Paraguachón.
Additionally, EBIT of COP 6.284 billion and EBITDA of COP 13.794 billion is presented, due
to the reduction of maintenance costs of the project. Working capital of COP 5.775 billion,
with a distortion due to loans for paying the income tax and financial obligations, which must
be reclassified in the long term. By eliminating the distortion, the working capital is COP 8.9
billion. A current ratio of 151% with a distortion due to loans to pay the income tax and
financial obligations, which should be reclassified in the long term. By eliminating the
distortion, the current ratio is 258%. The level of indebtedness of 62.26% remains stable,
due to the normal payment of financial obligations. A net income of COP 400 million, which
is explained by the decrease in the amount payable for maintenance, ordered by court order
for COP 998 million. The level of indebtedness remains stable, due to the normal payment
of financial obligations, which amounts to COP 33 billion.
Featured Facts
In financial terms, the year 2016 presented a significant increase in traffic of 0.92% and
in the collection of 12.2% that, although it represents an improvement, remains below the
optimum levels for the finances of the Company due to the fact that 2015 was very critical,
especially due to the decrease in traffic in the stations of Paraguachón and Alto Pino, as
a result of the closure of the Colombian - Venezuelan border at Paraguachón township.
During 2016, Concesión Santa Marta - Paraguachón S.A. signed with the ANI the
following documents:
a) Certificate of cancellation of interest dated May 13, 2016, for extemporaneous payment
of the tariff differential for the first half of 2015.
b) Certificate of payment dated June 20, 2016 for compensation for tariff differential in
the terms and conditions of Resolution No. 0003326 dated September 15, 2015 –
Concession Agreement No. 445/1994.
c) Certificate of payment dated October 31, 2016, for the settlement of the premium value
of the all-risk policy No. 706081605, for material damages to the infrastructure of the Alto
Pino electric transmission line for the period between September 11, 2015, and
September 10, 2016 – Concession Agreement No. 445/1994.
d) Conciliatory agreement dated December 13, 2016, on disputes arising from the
Concession Agreement No. 445/1994.
Caption: Concesión Santa Marta – Paraguachón
On January 27, 2017, a conciliation hearing was held within the arbitration process
initiated by Concesión Santa Marta – Paraguachón against Agencia Nacional de
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Infraestructura (ANI), in which the court approved the conciliation agreement reached
between the concessionaire and the entity convened. Under this agreement, the ANI
undertook to pay liquid sums of money in the amount of COP 3,473,895,928 not later
than the last business day of 2018. Likewise, the entity undertook to revoke different
administrative acts whereby it alleged a payment by the Concession for a sum of COP
8,688,386,793.
In accordance with the mandate received by all the shareholders of Concesión Santa
Marta – Paraguachón S.A., Bancapital S.A. has performed the valuation and search of
clients for the company since September, with the accompaniment of the law firm Castro
Leiva Rendón Criales, in order to sell 100% of shares.
Concesión Santa Marta – Paraguachón S.A. and BBVA Asset Management S.A., a
fiduciary company, executed Addendum No.10 to the Commercial Trust Agreement,
whose purpose is that the fiduciary will assume the costs of the payroll of employees who
keep the trust accounts.
By Resolution 0506 dated May 12, 2016, ANLA authorized the total assignment of the
environmental license granted to the Odinsa-Valorcon Consortium, thus binding
Concesión Santa Marta – Paraguachón as obligated party and beneficiary.
Based on the analysis carried out by Auditing, the ANI informed the concessionaire that
it should reimburse the sum of COP 359,612,110 of June 1994, since increases in toll
rates during the period from May 2011 to January 2014, exceeded the provisions of
clause 5 of the concession agreement No. 445/1994. In view of the fact that these
resources were received from the road corridor users, the Concession responded to the
ANI that these sums must be reimbursed to the road corridor users in strict law. The
Concession is awaiting the decision of the ANI.
Concesión La Pintada
Vehicles mobilized
Average daily traffic 6,218
Traffic variation 2.11%
Total collected (billions) COP 22.118
Collection variation 8.93%
Financial Results
2016 2015
Operating revenue COP 67.525 billion COP 50 billion
2015-2016 Variation 34.79%
EBITDA COP 6.6 billion
2015-2016 Variation 2073%
Net profits COP 1.255 billion
Concesión La Pintada
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[Image: Medellín, Bolombolo, La Pintada, Santa Bárbara, Primavera]
Featured Facts
The management of Concesión La Pintada S.A.S. stood out in the performance of the
rehabilitation, construction and maintenance works of the roads belonging to the Conexión
Pacífico II project.
Odinsa consolidated its shareholding by reaching 78.85% of the share capital of this
concession, and 21.25% belong to Construcciones El Cóndor.
The formalization of the financial closure was a definite step for the project, since it granted
the capacity for the performance of the corresponding works and the contractual obligations.
In addition, it allowed to focus efforts on studies, designs, and social, property and
environmental management.
Odinsa went from 25% to 78.85% of the share capital.
Digging and earthworks were initiated in the works of La Pintada – Puente Iglesias
(functional unit 1) and Puente Iglesias – Mulatos Tunnel (functional unit 2). There will be 37
kilometers of construction of new roads.
Fifty-four kilometers of the rehabilitated La Pintada – Primavera road were delivered, with
activities of surface milling and asphalt binder, as well as containment at critical points.
The section La Pintada – Primavera was highlighted by the ANI as the first functional unit of
the fourth generation projects to be completed.
Road safety was strengthened as a priority, so it was ensured that the concession roads
had optimal and permanent signage, and interventions were made in the search for
community awareness, through a system of road culture generation.
Operational Results
Number of direct employees 184
Number of indirect employees 467
Progress in Works
FU1 0.40%
FU2 0.80%
FU3 0%
FU4 0%
FU5 100%
Total 13.31%
Value of works performed
Figures in billion COP
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2016 96.762
2017 310.355
2018 531.216
Financial Results
Revenue
2016 IFRS
2016 133.761
2015 50.099
Ebitda
Consolidated under Odinsa
2016 $6.666
2015 $307
Net profits
Consolidated under Odinsa
2016 $1.255
2015 $238
Balance of debts with financial entities
2016 Bridge loan disbursed by financial leasing agreement and subordinate debt interest
2016 197.934
2015 43.804
Capitalizations received
$40.145 billion capitalized in total as of December 2016
2016 39.945.621
2015
Featured Facts
Odinsa announced the increase in its shareholding, from 25% to consolidate 78.85% of
the share capital.
A positive response was obtained for 100% of the environmental procedures.
The financial closure was formalized with the participation of national and international
banks with credit agreements for more than COP 1.2 trillion.
Works began on the Functional Units 1 and 2.
Rehabilitation works of the route La Pintada – Spring (FU 5) were completed.
85.44% of the properties necessary for the performance of the project were released.
Contingencies and/or Risks
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Lawsuits received None
Inspection processes open None
Requirements from any authority regarding taxes, administration of public resources, contractual compliance
None
Sanctions imposed None
DOMINICAN REPUBLIC
Autopistas del Nordeste
Vehicles mobilized
Average daily traffic 10,284
Traffic variation 6.80%
Total collected (millions) USD 12,401
Collection variation 4.69%
Financial Results
2016 2015
Operating revenue USD 17.5 million USD 18.9 million
2015-2016 Variation -7.29%
EBITDA USD 24.7 million
2015-2016 Variation -9.2%
Net profits -USD 5.59 million
Concesión Autopistas del Nordeste – Dominican Republic
[Image: Santo Domingo, Rincón de Molinillo Junction, Majagual, Naranjal, Marbella,
Samaná, Hato Mayor, Higuey]
It is an entity incorporated under the laws of the Dominican Republic since June 19, 2001.
The main purpose of the Company is the construction of the Santo Domingo – Rincón de
Molinillos Highway, for subsequent management through the concession system. This entity
signed a concession agreement with the Dominican State on July 18, 2001, for a 30-year
period. The entity began its operational activities in the month of June 2008, when putting
into service the highway and the stations for toll collection. The company is a subsidiary of
Autopistas del Nordeste (Cayman), LTD. (parent company), a trading company incorporated
and organized in accordance with the laws of the Cayman Islands.
Autopistas del Nordeste or Juan Pablo II Highway provides direct access from Santo
Domingo to the northeastern region of the Samaná Province, starting at kilometer 20 of Las
Américas Highway and ending at the site known as Rincón de Molinillos.
Construction works were completed on June 30, 2008, 28 months after the financial closure
of February 28, 2006. The project completion certificate was issued by the authorities on
June 29, 2009.
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Characteristics of the road:
Length: 106,59 km
Rails: 1 in each direction, with vehicle overpass rails
Design speed: 100 km/hour (50 km/hour in the "Los Haitises" area)
12 bridges and 4 intersections
Toll Stations: 3
• Marbella, at kilometer 0 + 500
• Naranjal, at kilometer 14 + 500
• Guaraguao located at kilometer 84 + 500.
Operational results
Traffic and collection:
Due to the increase in the number of vehicles paid for the improvement in the economy
(domestic tourism, tariffs) this indicator had a record performance in 2016. The collection in
Dominican pesos in 2016 grew by 6.97% compared to 2015, for a net increase in the
collection of 4.69%, in dollars.
The behavior of traffic in 2016 followed the pattern of the previous year, with peaks during
the Easter holiday period, the school holidays (June – July) and during the Christmas holiday
season. However, tourism in the Samaná area was affected by unusual rains, and in
October, a section of the road had to be closed for 48 hours due to flooding. The toll stations
Naranjal and Guaraguao were the most affected by the rains.
Regarding the management of the Minimum Guaranteed Income (IMG), 2016 was a
success, since the Dominican state made a greater budgetary allocation for the payment of
bills of this item for the year.
Caption: Concesión Autopistas del Nordeste – Dominican Republic
Financial Results
2016 (USD) 2015 (USD)
Operating revenue 18,894,092 17,526,531
Financial revenue 23,345,560 23,206,306
Ebitda 27,234,781 24,738,373
Net profits 824,418 (5,593,628)
Subordinate debt payments to shareholders 5,000,000 6,000,000
Balance of debt with financial entities 152,248,984 141,792,209
Balance of subordinate debt with shareholders 56,836,532 61,441,906
Total assets 305,088,458 305,770,022
Total liabilities 263,332,191 265,257,258
During 2016, total revenue was below USD 1,377,313 (-7.29%), as the financial model set
at the beginning of the concession contemplated a higher amount of income for this period.
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On the other hand, both EBIDTA (-9.17%) and net profit (-778%) are below the previous
year's levels, since the company had to accrue and record under expenses almost the entire
amount of the first major maintenance scheduled for the 10th year of the concession.
Under the concession agreement, the Company is committed to carry out periodic paving of
the highway, to be completed in 2017. The provision for future paving arises as a result of
the use of the highway during the operation phase.
The study provided by the consulting firm Tecno América on the condition of the asphalt,
estimated USD 6 million above the USD 24 million contemplated in the financial model on
which the expense was recorded. Therefore, the corresponding increase had to be made.
In order to be prepared, in 2016 the company contracted the consulting firm Tecno América,
which carried out the necessary studies on the condition of the asphalt, and estimated the
cost of the project at approximately USD 24 million, USD 6 million above what was agreed
upon in the company’s original financial model, which was the basis to accrue this expense.
Consequently, this expense was increased by USD 9 million or 167%, in order to adjust the
provision to that estimated in the study by Tecno América.
The company had to accrue and record under expenses almost the entire amount of the first
major maintenance scheduled for the 10th year.
Movements in the major maintenance provision account at the end of 2015 and 2016 are as
follows:
2016 2015
Balance at the beginning of the year 15,001,920 9,346,559
Financial cost 2,709,541 817,823
Increase in provision 6,496,857 3,837,538
Balance at the end of the year 23,208,318 14,001,920
The remaining operating, maintenance and administrative expenses are maintained at the
same levels agreed upon in the financial model of the concession.
The financial debt was paid promptly, and according to the levels established in the loan
agreements.
On the other hand, two payments of accrued interest on subordinated debt to shareholders
were made, given the improvement in IMG's charges to the State during 2016 and the
improvement in the collection of tolls. Likewise, this allowed the concession to fully comply
with the agreed levels of reserve accounts and debt ratios, as in 2015.
Relevant Facts
Year 2016 was a very important period for the preventive and corrective maintenance of the
Juan Pablo II Highway. In the last 12 months, the road was subject to different processes
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with the aim of rehabilitating and/or maintaining the different sections of the road and its
pavement structure, thus maintaining the service levels required by users.
Activities carried out include the following:
Rehabilitation of Asphalt Surface (patching): 26,485 m2
Construction of longitudinal drainage (covered ditches): 1,640 meters of ditches covered
with rock and cement
Transversal drainage in promenades and berms
Road signaling (Horizontal and Vertical)
Rehabilitation of metallic defenses: 1,276 meters of metal defenses.
Maintenance of Toll Stations:
In compliance with the Infrastructure Maintenance Schedule of Collection Stations,
general maintenance was carried out at toll stations, administrative booths and the
operations control center.
Road safety:
Road assistance is a service offered to users free of charge throughout the year through
specialized units to provide the necessary support in a timely and agile way. It includes:
• Basic mechanical assistance.
• Fuel supply.
• Transfer of vehicles (crane).
• Help in replacing tires.
• Military Security.
• Provision of information.
• Pre-hospital medical services (ambulances).
Contingencies and risks
During the years 2012, 2013, 2014 and 2015, the Company made the formal request for the
asset tax exemption to the authorities in accordance with the procedure established for such
a purpose. The General Directorate of Tax Policy and Legislation of the Ministry of Finance
approved the request by the Company on the tax exemption on this tax for the years above-
mentioned. However, the General Directorate of Internal Taxes, attached to the Ministry of
Finance, rejected this request; thus, the Company submitted appeals for reconsideration
according to the procedure and the deadlines stipulated by the laws. The formal request for
exemption to the Ministry of Finance for 2016 will be made in May 2017, upon submission
of the income tax affidavit to the authorities by the Company. The Company also expects to
obtain approval of the exemption of the assets tax of 2016 from the Ministry of Finance, as
in previous years.
As of the date of preparation of this report, the Contentious Administrative Court of the
General Directorate of Internal Taxes has not ruled yet judgments on appeals submitted for
the years indicated above.
Boulevard Turístico del Atlántico
Vehicles mobilized
Average daily traffic 3,759
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Traffic variation 1.24%
Total collected (millions) USD 2.65
Collection variation 7.38%
Financial Results
2016 2015
Operating revenue USD 20.0 million USD 19.7 million
2015-2016 Variation 1.70%
EBITDA USD 23.8 million
2015-2016 Variation -18.57%
Net profits -USD 44.2 million
Caption: Concesión Boulevard Turístico del Atlántico – Dominican Republic
[Image: Nagua, Sánchez, El Limón, Samana, Hato Mayor]
Boulevard Turístico del Atlántico, S.A. was established on May 18, 2007. The main purpose
of the company is the development, construction and rehabilitation of the Nagua - Sánchez
- Samaná - El Limón - Las Terrenas road, through the concession system. The Company
started operations in November 2011 when both the road and the toll station came into
operation.
Characteristics:
Length: 123.8 km
• 1 lane in each direction.
• Design Speed: 80 km/h and in the urban area 45 km/h.
• A toll station, "El Catey", located at the entrance of the province of Samaná. According
to a provision of the Ministry of Public Works, the formal operation and collection of the
toll began on November 1, 2011. Only traffic that accesses the northern coast of the
Peninsula by the section of the new construction is charged, which links the Section of El
Catey with the municipality of Las Terrenas in a temporary toll station.
For the purposes of administration and control, the project was divided into five sections, as
follows:
Section Location Length (km) Condition
A Nagua – Sánchez 34,900 Rehabilitation
B Sánchez – Samaná 30,000 Rehabilitation
C El Limón junction – El Limón – Abra Grande
27,800 Rehabilitation
D Abra Grande – Balata 15,850 Construction / Rehabilitation
E Balata – El Catey 15,023 Construction Operational Results
a) Traffic and collection
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The toll station and its collection scheme were designed and located such that it would
function as a kind of portal at the beginning of the Province of Samaná. In this way, the
taxpayer would be the user who enters or leaves the provincial territory, so that local users
are free of charges for the use of rehabilitated and/or constructed new roads in their entirety.
The toll is charged only to users who access the north coast of the Peninsula by the new
section of the road built. In view of the above, the Government formally committed to the
concessionaire to pay in full the minimum guaranteed income resulting from the variation of
the financial model, which has been carried out since the beginning of the project operation.
During 2016, despite the climatic conditions that affected the country, there was a slight
increase in the total traffic of vehicles, due to the continuous economic recovery, the
increase in the traffic of vehicles paid and the increase of the rates according to the
agreement. Because the secondary road was restored by the Ministry of Tourism and is free
for all users, there is a direct impact on the traffic of the BTA road project. However, the
deterioration of the alternative route has led to certain types of vehicles (Category 3 and 4)
choosing to transit through the BTA road project (the alternate section is not part of the
concession roads; therefore, it is not subject to maintenance).
b) Management of Collection of Minimum Guaranteed Income (IMG)
Year 2016 was a success for the management of collection of guaranteed minimum income.
Consequently, only the quota allocation with a current invoice dated November 10 remained
pending.
In this way, during 2016, quotas were allocated in the budget for the recovery of 4.5 invoices
issued instead of the 4 that had been allocated in previous years, even though the average
days of accounts receivable for 2016 were 170 days compared to 127 days in 2015. Given
the irregularity in payments by the State, the historical average of accounts receivable for
the IMG invoices is 129 days.
Financial Results
2016 (USD) 2015 (USD)
Operating revenue 19,706,703 20,041,228
Financial revenue 13,051,958 12,494,223
Ebitda 29,186,568 23,766,450
Net profits 9,507,832 44,218,334
Balance of debt with financial entities 128,027,030 117,978,880
Balance of subordinate debt with shareholders 67,278,347 73,393,898
Total assets 200,372,311 244,673,691
Total liabilities 203,566,483 203,595,730
Total liabilities 203,566,483 203,595,730
The debt with financial institutions was paid promptly, according to the levels established in
the loan agreements.
Caption: Concesión Boulevard Turístico del Atlántico – Dominican Republic
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Featured Facts
Road maintenance
• Replacement of guardrails and/or metallic defenses in the different sections of the project,
to be replaced due to collisions in traffic accidents.
• Rehabilitation of faults in INAPA - Las Terrenas - Cosón.
• Repair of pavement and asphalt structure for sections A, B and D.
• Repair and construction of longitudinal drains and/or ditches for sections B, C and D.
• Construction of sidewalks and curbs for section D.
• Repair and maintenance of bridge rails for sections A and B.
• Maintenance to toll station and checkpoint and improvement of the archive area.
• Maintenance of speed reducers in sections B, C and D.
• Repair and replacement of vertical signs both at monitored accident points (black spots)
and in all sections of the project.
• Replacement of bi-directional road signs or raised reflective pavement marks that are worn
and/or missing due to the constant flow of heavy vehicles.
• Seeding of trees in slopes in section E as replanting and control of slope erosion at km
5+300 and km 7+000.
• Structural evaluation and proposed designs for final solution to deterioration of Nagua I,
Nagua II and Matancitas bridges.
• Inspection of Bridges section A and section B of road project by Ammann-Whitney/Louis
Berger, for the Annual Maintenance Plan thereof.
• Inspection of pavement structure by Louis Berger, for the annual maintenance plan.
• Clearance of landslides in section E, due to rainy months in October and November in a
length of approximately 40 meters.
In October 2016 the rehabilitation of the asphalt layer was carried out and the rehabilitation
of the longitudinal drainage began in the section:
• Section D: Abra Grande - Coson.
The scope of these works consists of the milling and placement of the asphalt layer. These
repaired points had problems in the layer for the following reasons:
• INAPA piping faults.
• Cracking of the asphalt layer.
• Settlement of the asphalt layer.
Intervention in Section B: Sánchez - El Limón junction (Samaná)
Intervention in Section D: Abra Grande - Cosón
Boulevard Turístico del Atlántico has maintained a road maintenance scheme using
microentrepreneurs from the area of influence of the highway, in order to promote
employment in the area. Each of these microentrepreneurs was held responsible for a
project sector to keep road sides, the rolling surface, culverts, and ditches clean, and
maintain the vegetation at levels suitable for visibility and safety in general terms. They are
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the first option in hiring for road repair works, in addition to a routine maintenance
agreement.
Road Safety
Boulevard Turístico del Atlántico has a three-vehicle road assistance team with two
uniformed agents, equipped with first aid, safety and mechanical tools, with adequate
training, as well as a monitoring vehicle, which patrol the road circuit 24 hours a day. In
periods where the flow of visitors to the province increases (Easter and Christmas holidays),
one vehicle equipped for 24-hour patrol is added, in order to improve efficiency in customer
service.
If required, the user is provided in BTA with road and/or mechanical assistance, service of
crane and transfer to a safe point of their vehicle completely free of charge, and finally first
aid care in case of any difficulties in the vicinity of the road corridor. For the latter, BTA has
provided three strategically located aid stations for the rapid assistance required in these
cases.
In 2016, one of the main causes of accident was the imprudence of the users for driving
under the influence of alcohol, excess speed and excess number of passengers.
Likewise, the tendency of vehicles with tires in poor condition and motorcycles without lights
was observed. The project has a major challenge in terms of education in road safety.
I Road Safety: Traffic Monitoring System: It allows to evaluate the safety conditions of
the project. The analysis of the data collected allows to identify critical points.
II Technical Aspects: Quality Management System
Throughout 2016, the administrative team continued the process of reviewing and updating
all instructional manuals and procedures of the operation phase of the collection stations.
The staff was trained and internal audits were carried out in preparation for the recertification
of the Quality Management System based on ISO 9001:2008 standard granted to the
company in 2014.
During 2016, this system has been continued, with enhancement or creation of processes
and promotion of the quality and active participation of those who are part of the system.
Other Events
Acquisition of shares on Grupo Empresarial Grodco by Odinsa S.A.
On May 10, the purchase operation was executed to increase the interest of Odinsa S.A. on
the road concessions projects Autopistas del Nordeste and Boulevard Turístico del
Atlántico, located in the Dominican Republic. Negotiations had begun in late 2015. With the
purchase of Grodco shares, Odinsa became the majority shareholder of the Dominican
concessionaires, increasing its share from 42.5% to 67.5%.
Fault of slopes at kilometer 28-29
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During November 2016, and after the cyclonic season, accumulated rainfall in the country
rose to 809.8 mm (3.24 times the historical average for this month). On November 11, 174.2
mm of rain fell, which is 70% of the monthly historical average. Consequently, faults occurred
in slopes on the embankments located at km 28+900 and 29+600 of section A Nagua –
Sánchez of the Boulevard Turístico del Atlántico road circuit, on the next day. As the rain
continued to fall steadily throughout the month, damage to the road segment from kilometers
28+700 to 28+900 was intensified. This resulted in the loss of the right side lane at the
mentioned points, as well as considerable cracks and settlements in the pavement structure
of the section, on Thursday, November 24, 2016.
The work crews of the Concessionaire immediately secured the entire perimeter and
reinforced road safety to protect users, permanently placing an assistance unit for that spot.
Similarly, during that weekend, beginning on Friday, November 25, an attempt was made to
restore the lane provisionally until the relevant evaluations were carried out to find a final
solution. These attempts did not produce any results, since the fault and/or crack that gave
rise to the situation reappeared, despite the removal of the saturated material, the lime
stabilization of the filler and the placement of a triaxial reinforcement mesh.
07 Business Lines
Atlantic Touristic Boulevard Concession - Dominican Republic
Contingencies and Risks:
In accordance with the provisions of the concession agreement signed with the Dominican
government, it has been established that the Company must comply with the tax laws of the Dominican
Republic, except for the exemptions granted under said agreement. This agreement indicates that any
changes to the tax laws that imply the rupture of the economic balance of the agreement will force the
Dominican government to reestablish said balance at their expense.
Agreement Min. No. 6 signed on August 25th, 2005 between the Minister of Public Works and
Communications, the Department of Finance -- now the Minister of Finance -- and the Company as part
of the concession agreement, establishes that because ITBIS regulations were not in force, the
Concessionaire undertakes to bear the difference as an additional contribution. This is due to the fact
that said regulations constitute a rupture of the economic balance of the agreement, thus ratifying the
provisions of the concession agreement related to maintaining an economic balance. Based on the
above, the Company's management understands that it is not subject to the payment of 1% on the
basis of the assets, which would be the basis for taxation given the fact that said tax was not in force
when the agreement was signed and, therefore, it would also qualify as a rupture of the economic
balance. Also, the Company's assets correspond mainly to the concession granted by the Dominican
government. Additionally, the Tax Code grants exemptions to companies whose majority of assets come
from capital-intensive investments.
During the years 2012, 2013, 2014 and 2015, the Company made a formal tax exemption request
for the assets in accordance with the procedure established for such purposes for the fiscal years of
2011, 2012, 2013 and 2014. The General Directorate of Tax Policies and Legislation of the Ministry
of Finance has not objected to the Company requesting a tax exemption for the aforementioned years.
A Grupo Argos company
79 www.odinsa.com
However, the General Directorate of Internal Taxes, which is attached to the Ministry of Finance, has rejected these
requests. Therefore, the Company has been submitting appeals for reconsideration in accordance with the
procedure and deadlines stipulated by law.
Since 2015, it has been negotiating amendments to loan agreements with creditors so that they may adapt to the
reality of the project. Consequently, as of December 31, 2016 the Company is in default of certain covenants of
its financing agreements.
According to Section7.11.2 of the Common Terms Agreement (CTA), it will constitute a default event if the project
does not reach the project completion milestone before July 15, 2016 for reasons not attributable to the borrower,
given that the conditions of the project changed since its inception. Specifically, the company is in default of:
Traffic: The project has not reached the levels of traffic estimated in the initial projections.
Including the original toll plaza (a month prior to starting operations, the government ordered the toll to be moved
to a temporary station, which has still not changed).
Financial Ratios: The project has not been able to consistently meet the financial ratios required in the
loan agreements because of its dependence on the payment of minimum incomes guaranteed by the
government.
Others: The Dominican government still has not finished paying the rights of way to those affected by
the construction of the project.
According to the stipulations of the loan agreements, these situations can, at the discretion of the creditors,
result in the immediate collection of the loans. International financial reporting standards provide that, in such
situations, long-term debts can be reclassified as short-term debts. In such an event, current liabilities would
exceed the current assets by approximately USD 102 million. Despite the fact that this situation can affect the
company's capacity to continue with the ongoing business, the Company's management understands that, in the
short term, the multilateral bank that is the project's creditor will not claim the debt in the long term based on the
following:
The company has been immersed in the process of renegotiating the aforementioned agreements since
June 2015, and it has been a known fact for some time that the Company would not be able to comply
with the aforementioned covenants. The contractual amendments under renegotiation will reflect the
current reality of the project.
The company has been paying its debt on time.
To date, the only substantial obstacle in the negotiations with the creditors is the Dominican
government's failure to pay for the rights of way to those affected by the construction of the project. The
remaining amount to be paid is USD 3.2 million. Despite the fact that under Dominican law and the
stipulations of the concession agreement the responsibility for said payment falls to the government
and not the Company, creditors understand that this subject constitutes an event of non-compliance
under the credit agreements. Despite it is not its responsibility, the company has approached
government officials and has offered the government different alternatives to remedy the situation,
including paying beneficiaries itself.
Creditors issued several waivers, the last of which expired in July 2016 and has not been
renewed. However, to date, the banks have not taken any actions nor have they expressed any
interest in accelerating the payment of the debt, needing the balance and terminating the
agreements, or in increasing the loan's interest rates. For the time being, and until such time an
agreement is reached, the Company continues to comply with its obligations under the CTA and
the rest of the financing agreements while seeking a solution to the impasse caused by the non-
payment of the rights of way to the beneficiaries.
On July 3, 2016 shareholders extended the corporate guarantee until March 31, 2017 in order to give their
creditors greater guarantees during the renegotiation process.
As of the date of this report, the Dispute Tribunal of the General Directorate of Internal Taxes had not issued
a ruling regarding the appeals for the years indicated previously.
ARUBA
Green
Corridor
Financial Results
2016 2015
Operating income:
Variation:
Ebitda:
Variation from 2015:
Net profits:
USD 29,3 million
79.26%
- USD 0,93 million
- 412.42%
USD (17)
USD 16,4 million
80 Odinsa I Annual Report I 2016
A Grupo Argos company
Green Corridor Concession -
Aruba
Queen Beatrix Airport
Barcadera Spanish Lagoon
San Nicolas Savaneta
81 www.odinsa.com
07 Business Lines
82 Odinsa I Annual Report I 2016
The Aruba Green Corridor project is being developed by the concessionaire company, Caribbean Infrastructure
Company (CIC) NV, in which Odinsa holds a 100% stake. Similarly, the project has a contractor under the EPC
modality, Chamba Blou NV, which is controlled by Odinsa S.A. through its subsidiary, Odinsa Holding Inc.
On July 22, 2015, the financial closure for the project was achieved and the DBFM Green Corridor contract was signed.
Its scope includes the design, funding and maintenance of the corridor made up of the roads from the airport to San
Nicolas, and the Savaneta - San Nicolas North and South roads. The term of the contract is 25 months, ending on
August 17, 2017, on which date the availability of the project begins, and the 18 year term ends on August 17, 2035.
The project consists on the construction of 7 kilometers of double traffic lanes, the restoration of 27 kilometers, and
the construction of a 6-kilometer bicycle path.
Operating Results: Construction continued throughout 2016 in order to comply with the availability date of August 2017. Progress on the
works reached 53%, with the new second lane and the main structure of the bridge over Spaans Lagoen having been
completed.
• Number of direct employees: 2
• Number of indirect employees: 275
With the goal of positioning Odinsa as one the main companies in the road infrastructure sector and of focusing the
company's investments in projects in which it can hold a majority share, the company announced the divestiture of its
stake in Caribbean Infrastructure Company (CIC), Chamba Blou NV (Chamba), and the Green Corridor project. In
relation with this decision, we are negotiating the sale of the assets with Mota - Engil, which the hiring company
authorized. We are awaiting the authorization of the lending bank.
Financial Results
According to the financial model, no income was generated during the construction period.
The investment in the project was been supported by loan disbursements, as established in the financial model.
Salient Facts In October of 2016, the metallic arch of the bridge over Spaans Lagoen was closed, thus achieving one of the milestones
of the project. Likewise, paving of the second lane was completed in June 2016.
In December 2016, the extension of the ISO 9001:2008 certification was granted, thus meeting one of the contractual
requirements.
The Independent Certifier carried out audits of the manufacturing and assembly of the Spaans Lagoen bridge in June
and September.
Contingencies and/or Risks There have been no events during this period that caused the report of contingencies and/or changes to the risk
profile of the companies and the project.
07 Business Lines
84 Odinsa I Annual Report I 2016
La Pintada Concession
Other Road Infrastructure Business
R
07 Business Lines
Odinsa Concession Projects and Investments for the Collection of INVÍAS Tolls
Financial Results
2016 2015
Operating income:
2015 - 2016 Variation:
EBITDA:
2015 - 2016 Variation:
Net profits:
COP 46.854 million COP 62.626 million
-25.18%
COP 15.658 million
15.48%
COP 12,021 million
Contract No. 250 of 2011
Odinsa PI - Invías
Contract No. 250 of 2011, signed between The
National Institute of Roads (Instituto Nacional de
Vías) and Odinsa Proyectos e Inversiones S.A.
achieved the expected income on April 16, 2016
when the first 25 toll plazas located on the different
road corridors that were awarded to the
concessionaires of the 4G roads were reversed.
Extensions were signed for the main contract,
No. 250-2011, which permitted additions to the
contract value in the amount of COP 33,677 million
for the purpose of continuing the collection
operations of the remaining 18 tolls under the
responsibility of Odinsa Proyectos e Inversiones. The
contract additions included the operation of toll
plazas and weighing of the Bogotá - Girardot road,
which is considered one of the most important in the
country.
Collection operations ended on November 30,
2016. The contract is currently suspended for a
period of 6 months.
Additionally, 100% of the operational staff provided
by the temporary services company were relocated.
Unification process with the new concessionaires:
• First delivery - April 17, 2016 (4G
concessions);
25 toll plazas and 2 weighing stations.
Second delivery - September 16, 2016
(Successful Bidder); 18 toll plazas and 3
weighing stations.
Third delivery - November 30, 2016 (Bogotá
- Girardot Concession); 2 toll plazas and 2
weighing stations.
•
•
All 11 regional administrative offices at the
national level were closed down.
Salient Facts
With the reversal of the toll plazas and weighing
stations to Invías, a total of 874 of the Company's
direct employees were terminated; 48% of them were
relocated. *Note: values in millions
86 Odinsa I Annual Report I 2016
Invías Contract No. 250-2011
Description Contract Data
Total Collection
(May 2011- Nov 2016)
COP 2,102,623
Total Contract Income COP 397,713
Toll Plazas 51
Lanes 142
No. of Weighing Stations 10
Direct Employees 910
Indirect Employees 300
A Grupo Argos company
Constructora Bogotá Fase III S.A., Confase
Concession
Constructora
Bogotá Fase III
S.A., CONFASE
Financial Results
2016 2015
Operating income:
2015 - 2016 Variation:
EBITDA:
2015 - 2016 Variation:
Net profits:
COP 11.096 million COP 7.053 million
57.33%
COP 878 million
74.32%
COP 1.823 million
the architectural works of Bicentennial Park, in
accordance with Appendix 7 of the contract.
The finished park has an area of 8,363 square
meters, out of which 3,529 square meters are large
green areas and an additional 554 square meters are
nature trails. There are also 4,280 square meters of
hard areas, including a central square, squares at
each strip, ramps, stairs and public areas on the
south side, which joins the east and west side, as well
as 390 square meters of green walls. It also has
nearly 900 linear meters worth of railings, 400 meters
of handrails for disabled persons and almost 220
linear meters of single and double benches.
Operating Results
Constructora Bogotá Fase III S.A., CONFASE S.A.
is a company that was created in 2007 and whose
corporate purpose is the construction and
maintenance of projects corresponding to
TransMilenio Group 3, Phase III. Odinsa controls this
company with a 51% stake in it.
At the end of the year, Constructora Bogotá Fase
III was executing the maintenance tasks in
accordance with the obligations acquired under
contract IDU 136-2007. They were also settling the
finalized offers for the construction of
87 www.odinsa.com
07 Business Lines
On September 7, 2016 CONFASE S.A. finished
construction on the works of Bicentennial Park.
Before the delivery, technical supervisors and IDU
officials took a tour of the park on September 9th.
Finally, the project was delivered on September
20th.
The costs and expenses of Bicentennial Park, as
of December 31, 2016, amounted to COP 9,627
million and the revenues to COP 11,096 million. The
fiscal year results as of December 31, 2013 were
COP 1,823 million.
IDU Minutes No. 32 is pending invoicing for an
amount of COP 643 million, and it has associated
costs of COP 64 million. It is estimated that this may
be invoiced in February 2017 once the review of unit
prices endorsed by the Technical Supervision Agency
is completed.
By the end of the year, there was a general
progress of 99.55% on the projects. The remaining
0.45% represents projects that were not possible to
execute during the construction stage or during the
maintenance stage for reasons out of the control of
CONFASE related to the completion of the
intersection between 23rd Street and Carrera 10,
and the works related to networks, public spaces
and roads in the area around Circunvalar Avenue
between 26th Street and Carrera 3.
Net profits in 2016 reached COP 1,823 million.
At the end of the 2016 fiscal year, total assets
represented COP 14,912 million. There is a decrease
of 38.88% in relation to the previous year as a
consequence of the reconciliations between the
parties, as follows: VALORCON S.A. in the amount of
COP 1,268 million and VALORCON - ODIVAL in the
amount of COP 3,388 million.
At the end of 2016, liabilities amounted to COP
55,514 million, which represented a decrease of
13.68% compared to the previous year as a
consequence of the reconciliations between the
parties VALORCON S.A., in the amount of COP 4,799
million, and VALORCON - ODIVAL, in the amount of
COP 3,268 million, and the acquisition of new
liabilities in the amount of COP 464 million.
Salient Facts
The company received funding from its
shareholders in the amount of COP 2,300 million,
which was used to ensure the operation of the
company and correct investment in the IDU project.
2016 marked the fourth anniversary of the
maintenance of the roads and public spaces of
segment 4 of Carrera 10 and segment 5 of 26th
Street, and the third anniversary of segment 5 of
Carrera 10 and segment 6 of 26th Street. These
activities are carried out under the highest quality
standards.
We are still making progress on preparing the
documents (information on the digital platform
defined by the entities, deeds of settlement,
certificates of delivery, and management of
certificates of good standing) for the settlement of
IDU Contract 136 of 2007 in accordance with
contractual requirements, which must be submitted
by November 2018.
Financial Results
During 2016, CONFASE S.A. billed projects for an
amount of COP 14,219 million. Close to COP 3,122
million correspond to maintenance work executed
during the second half of 2015 on Bicentennial Park
and billed during the second half of 2016 for
budgetary reasons of the contracting company. It
should be noted that in the company's accounting
records, this amount was provisioned in 2015;
therefore, in the financial statements the revenue
recorded for 2016 is COP 11,096 million.
The decrease in non-operating revenue is due to
the fact that, during the year, we recovered revenues
from deferred taxes in the amount of COP 952
million, and in 2015 we obtained other revenues
through the arbitration court convened to resolve the
contractual disputes between IDU and
TRANSMILENIO, which occurred on February 19,
2013. Once all procedural actions had been taken,
the court issued a conclusive ruling on February 10,
2015 in which the Institute of Urban Development
(Instituto de Desarrollo Urbano - IDU) paid in favor of
CONFASE S.A. the amount of COP 16,227 million on
March 9, 2015.
Supervening Events
On January 31, 2017 the arbitration court
convened before the Chamber of Commerce of
Bogotá in 2014 against IDU and TRANSMILENIO,
claiming COP 20,000 million as payment for work and
longer time spent caused by the execution of IDU
Contract No. 136 of 2007.
The court issued a ruling awarding the payment of
COP 11,500 million to CONFASE S.A.
88 Odinsa I Annual Report I 2016
A Grupo Argos company
Odinsa Services
During 2016, vertical signs were supplied and
installed and horizontal demarcation activities were
carried out for the Autopistas del Café Concession,
the Autopistas del Café Construction Group, El
Dorado Airport, CCND and the Santa Marta -
Paraguachón Concession.
The total value of the revenues received in 2016
amounted to COP 4,500 million.
On November 30, 2016 Odinsa Servicios S.A.S
finalized its operations and proceeded to settle the
contracts related to services of demarcation and
supply and installation of signs.
One hundred per cent of its assets were sold to
the Autopistas del Café Concession, which will
continue to perform the activities of vertical and
horizontal signage directly.
The operational staff assigned to the project
were hired directly by the Autopistas del Café
Concession.
Constructora Bogotá Fase III S.A., Confase
Concession 89 www.odinsa.com
COLOMBIA
El
Dorado International
Airport
OPAIN Operated by
31.4 Millions of passengers served
3.5% Variation from 2015
674,201 Tons of mobilized cargo
0.59% Variation from 2015
92 Odinsa I Annual Report I 2016
A Grupo Argos company
El Dorado Airport Concession- Bogotá
Financial Results
2016 2015
Operating revenue from
the operation and
exploitation of the airport:
2015 - 2016 Variation:
EBITDA:
2015 - 2016 Variation:
Net profits:
COP 820.079 million COP 724.537 million
13.2%
COP 281.396 million
18.7%
COP 63.983 million
Operating Results
Global passenger traffic registered a growth of
5.1% during the period comprised between
November 2015 and October 2016 (last period
available), driven by lower prices and a strong
international traffic. The Latin American and
Caribbean (LAC) region underwent a growth of
1.2%. (ACI figures as of October
2016). During this same period, global air cargo has
a slightly positive performance in terms of the
previous year, with an accumulated growth of 2.4%.
In Colombia, in accordance with figures
published by Aerocivil, passenger traffic between
January
2016 and October 2016 registered a growth of 5.6%
and a total of 55.1 million passengers. Bogotá's El
Dorado International Airport handles 46.6% of the
total traffic, with 25.9 million passengers served
during said period. Regarding the cargo mobilized by air, national
performance fluctuated quite a bit. However, during
the period between November 2015 and October
2016, the accumulated growth was 2.04%. The total
volume of cargo mobilized during this period was
735,212 metric tons.
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07 Business Lines
Although Aerocivil has not yet issued the passenger
figures, it is estimated that total passenger traffic in
2016 for passenger terminals in El Dorado was 31.4
million passengers. The airport in the country's capital
continues to be the third busiest airport in Latin
America in terms of passenger traffic, with a
passenger traffic growth of 3.5%, behind the airports
of Guarulhos (Sao Paulo) and Mexico City. Over the past year, Turkish Airlines (Turkey), Air
Europa (Spain), Wingo (subsidiary of Copa Holdings)
and Ocean Air (Brazil) started operating out of El
Dorado Airport, which now works with 29 commercial
passenger airlines. There are currently 44 direct
international destinations, now that routes to Istanbul
(Turkey), Cuzco (Peru) and Belo Horizonte (Brazil)
have been opened. Additionally, weekly flights to
Madrid (Air Europa), Buenos Aires (LATAM and
Avianca) and Miami (Viva Colombia) were increased.
12.6 million passengers
(79.83%) pay the airport tax.
Regarding the air cargo, during 2016
674,201 metric tons were mobilized in the
cargo terminal, which represents a growth of
0.59% compared to 2015.
Finally, regarding flight operations,
domestic flights decreased by 3.0%, cargo
flights decreased by 6.4%, and international
flights grew by 2.8%. This confirms the trend
regarding the increased size of aircraft
operating out of the airport, which enables an
increased number of passengers compared to
a decrease in regular commercial aviation
operations.
Investments COP 281,933 million were invested in the
execution of projects. The most relevant are:
Clearway for the north runway, anti-erosion jet-turbine protective surfaces at the head of the north runway, and the expansion of holding points in the north runway - F2
3 Demolition of old airport
Inner platform and passenger boarding bridges million passengers
took connecting flights or were in
transit and were therefore exempt.
Investments Voluntary work to expand the commercial
exploitation areas:
By the end of 2016, Opain S.A. had 559
direct employees, which represented a
variation of 6.68% from the previous year.
Increases were mainly related to the
resumed operation of the Puente Aéreo
Terminal (TPA for its acronym in Spanish),
as the result of the amendments to the
lease agreement made with Avianca S.A. Expansion of the south side building for national
operation. Progress of 73%.
94 Odinsa I Annual Report I 2016
A Grupo Argos company
El Dorado Airport Concession
Additionally, it has generated 2,213 indirect jobs
related mainly to activities of construction,
security, cleaning and maintenance at the airport.
Out of the total revenues, the main items
correspond to (i) international airport taxes in the
amount COP 401,159 million and a share of 47% of the total revenues, followed by (ii)
commercial revenues in the amount of COP 259,356
million and a share of 30%.
Financial Results
Revenues from the operation and commercial
exploitation of the airport in 2016 amounted to COP
820,079 million, which represents a growth of
13.2% compared to the COP 724,537 from the
previous year.
281,396 million COP, this was the
Ebitda, which is 18.7%
more than in 2015.
The Company's consolidated profits amounted to
COP 63,983 million, which represents a growth of 4%
caused mainly by the increase of financial expenses
in 2016, which increased by 86%.
30.7% Non-aeronautical
Salient Facts
During 2016, several amendments were made to
the main concession agreement. These include:
69.7% Aeronautical
• Addendum 18, Addendum 19 and
Addendum 22: for the reversal of areas
concessioned to Opain S.A, equivalent to
42,845.52 square meters in order expand
Mike 2 taxiway.
95 www.odinsa.com
Income
96 Odinsa I Annual Report I 2016
07 Business Lines
On December 23, 2016, Opain S.A. signed a loan
agreement in pesos with Financiera de Desarrollo
Nacional S.A. (FDN) in the amount of COP 190,000
million, intended to fund voluntary projects. From
this amount, COP 100,000 million were disbursed
according to the progress of the voluntary projects of
the month of October 2016. In 2013, Opain S.A. filed an arbitration claim with
the Arbitration and Conciliation Center of the
Chamber of Commerce of Bogotá against UAEAC
(now subrogated to ANI) for issues related to the
interpretation of the lease agreement signed
between said company and Avianca, which was
transferred to Opain S.A. under the concession
agreement. On August 24, 2015 a ruling was issued
in favor of Opain S.A. As a result of this, 23 of the 24
fines that were to be imposed on Opain S.A. were
dismissed. Once this ruling was final, ANI and the
State Legal Defense Agency filed an appeal for
annulment, which Opain S.A. objected to. Regarding
this, the Council of State ruled on these appeals on
September 14, 2016 which it considered to be
unfounded and ordered ANI to pay the costs.
• Addendum 20: to define the execution of the
Phase I Supplementary Works, for the design,
construction and operation of the following
main works: expansion of the building and
platform with their respective boarding
bridges in the north and south concourses in
the passenger terminal, the Aerocivil hangar,
the collection center and others. The value to
be reimbursed to Opain for detail designs
and studies was agreed on COP 2,117
million, CAPEX for COP 104,269 million and
OPEX for COP 6,339 million. The method of
payment was also agreed upon and an
exclusive sub-account was created for such a
purpose.
• Addendum 21: to extend the modernization
and expansion stage until November 30,
2018. This circumstance resulted from the
lack of restitution of the maintenance
hangars by Avianca, as well as the lack of the
necessary operational windows to finish
work on the airport's north runway.
www.odinsa.com 97
A Grupo Argos company
On September 2, 2016 a conciliatory agreement was
signed between Opain and ANI, which was approved
by the Public Prosecutor and the arbitration court,
thus putting an end to the dispute between Opain
and ANI related to the lease agreement signed by
Opain with OTCA.
Avianca summoned Opain to a conciliation hearing
at the Corporate Conciliation and Arbitration
Center of the Superintendency of Corporations
(Conarbitraje) in order to settle the dispute
between the parties in relation to the termination
of Contract BO-AR-011-04, whose purpose was
Avianca's holding of the Puente Aéreo Terminal.
On July 25, 2016 a Conciliation Agreement was
signed between Avianca and Opain at the
Superintendency of Corporations. Among other
aspects of this procedure, Avianca restituted the
common areas to Opain as of October 6, 2016 and
transferred the commercial agreements it had in
place with over 70 space holders. It currently has
new agreements in place regarding the areas it
occupies for the operation of the airline. For its part, Opain S.A. started the direct operation
of the Puente Aéreo Terminal and directly undertakes
the activities related to security, cleaning and the
operational management of the terminal; it has
improved its image and standardized procedures with
Terminal 1 of El Dorado Airport.
Opain took over the
direct operation of
the Puente Aéreo
Terminal and
executes directly
the operational
management
activities.
El Dorado Airport Concession
ECUADOR
Mariscal Sucre
International
Airport Quiport S.A. Operated by
4,873,760 Millions of passengers served
-9.3% Variation from 2015
170.656 Tons of mobilized cargo
-1.8% Variation from 2015
98 Odinsa I Annual Report I 2016
A Grupo Argos company
Mariscal Sucre International Airport Concession - Quito
Financial Results
2016 2015
Operating revenue from
the operation and
exploitation of the airport:
2015 - 2016 Variation:
EBITDA:
2015 - 2016 Variation:
Net profits:
USD 146.6 million USD 155.10 million
-5.48%
USD 106.5 million
-7.83%
USD 45.3 million
Domestic passengers: 2,738,414 (9.3% less
than in 2015).
As for the number of operations, 5,136
cargo aircraft movements were recorded as
well as 55,122 passenger flights, which
represents a decrease of 8.2% compared to
2015. Out of these, 19,557 corresponded to
international aircraft. This represents a
variation of -8.4% compared to 2015. Another
30,409 movements corresponded to domestic
aircraft, which represents a variation of -8.1%
compared to 2015.
By the end of 2016, Mariscal Sucre Airport
connected Quito with 27 domestic and
international destinations.
Operating Results
The year 2016 was marked by economic impacts
on Ecuador, including the devastating earthquake
that affected the coastal area in April. These external
factors had a negative impact on Mariscal Sucre
Airport, as the number of both domestic and
international passengers was decreased.
The number of domestic and international
passengers reached 4,873,760.
International passengers: 2,135,346 (which is
9.4% less than in 2015).
99 www.odinsa.com
07 Business Lines
Financial Results
During 2016, the operating income of Quiport
amounted to USD 146.6 million, which represents a
decrease of 5.48% compared to 2015. This variation
is associated with a decrease in the flow of
passengers due mainly to the economic recession
that affected Ecuador during 2016 that resulted in
the decrease of flights and the closure of certain
routes by some airlines.
The Company's Ebitda reached USD 106.5 million,
which represents a decrease of 7.83% and is directly
related to the decrease in traffic.
Net utilities were USD 45.3 million, which
represents a decrease of more than 20% compared
to the previous year. During 2016, Quiport paid USD
13 million in dividends to shareholders.
Debts with financial entities or the capital market
by year end 2016 and compared to 2015. Financial
indebtedness was reduced by USD 63.5 million. The
balance of the debt ended at USD 163 million.
and social responsibility of the airport operations.
Some of the most important awards include:
• March 2016 - Best Regional Airport in
South America.
Skytrax World Airport Awards.
March 2016 - 4 Star Service Rating
Skytrax World Airport Ratings.
July 2016 - Leading Airport in South America
World Travel Awards.
•
•
•
•
•
When a devastating earthquake hit the coastal
areas of Ecuador on April 16, 2016, Quiport
contributed in different ways: it provided logistical
support for humanitarian flights, direct help for
affected employees, collection and distribution of
donations from airport companies, and the
rehabilitation of the airport in Manta in 3 days.
Since 2008, a key focus of Corporación Quiport
has been the development of routes. This is why it
has been participating actively in different events
and meetings with airlines, with the aim of promoting
new destinations and flight connections. During
2016, several achievements were accomplished in
this field. Relevant Facts
Corporación Quiport reached a significant
milestone in terms of its relationship with its lenders
by obtaining the Technical Completion, Financial
Completion and Project Completion certifications,
which demonstrate the airport has met the
infrastructure and technological equipment
requirements demanded by the banks through
international consultants such as Mott MacDonald
and Golder, and it has also exhibited solid financial
management.
In 2016, Mariscal Sucre International Airport
obtained awards from the main players in the global
airport management arena. Without a doubt, the
most relevant aspects considered by international
associations were excellent service, focus on safety
• February 25 - JetBlue started operations out of
Quito.
September 12 - LATAM Airlines Ecuador made
its inaugural flight to Buenos Aires. This route
operates 7 weekly flights.
December 3 - Wingo began its operations.
December 14 - Qatar Cargo landed at the
airport for the first time.
•
•
•
The focus remained on improving the passenger
experience by offering new stores and
restaurants, expanding the infrastructure, and
adding more art and landscaping to the airport.
100 Odinsa I Annual Report I 2016
A Grupo Argos company
www.odinsa.com 101 Mariscal Sucre International Airport Concession - Quito
PANAMA
Generadora
del Atlántico
GENA 78 Gwh Generated Energy
-34% Variation
567 GWh Energy sold through contracts
57% Variation
104 Odinsa I Annual Report I 2016
A Grupo Argos company
Generadora del Atlántico GENA - Panama
Financial Results
2016 2015
Operating revenue:
2015 - 2016 Variation:
EBITDA:
2015 - 2016 Variation:
Net profits:
USD 92.8 million USD 97 million
-4.32%
USD 42.7 million
37.30%
USD 15.8 million
Operating Results
In 2016, GENA generated 78 GWh. This
represents a decrease of 34% in comparison to
2015. The highest levels of generation occurred in
January and in May, when 31 GWh and 30 GWh were
produced, respectively. The plant was affected by the
influx of new generating units at the end of 2015,
and by a very humid summer in the Caribbean basin
where two of the most important lakes in Panama
are located (Fortuna and Changuinola), as well as by
a very good level of wind in the central area of the
country, where Panama's wind farm with 280 MW of
installed capacity is located. Additionally, there was
a very low growth of the maximum demand on the
system, which was
only 6 MW this year, when an additional 80 MW were
expected.
In 2016, the energy sold though contracts with
distributors was 567 GWh, 57% more than in 2015,
due to the fact that the average volume of contracted
power went from 58 MW to 94 MW.
The low generation and the increased
commitments of energy contracts reduced the
availability of energy for sale on the occasional
market, in comparison with 2015. In 2016, the energy
sold on the occasional market amounted to 23 GWh,
compared to 71 GWh in 2015.
105 www.odinsa.com
07 Business Lines
The above also caused the purchase of energy
on the occasional market to rise, in order to be
able to honor the contracts with distributors. In
2016, said purchases totaled 513 GWh, which
is 72 GWh more than the 441 GWh of 2015.
Commercialized firm energy totaled 130 MW,
same as 2015.
Financial Results
Over the course of the year, operating income
amounted to USD 92.8 million, which is USD 4.2
million less than in 2015, while direct costs
decreased by USD 16.7 million, which enabled an
increase of the contribution margin of USD 12.5
million more than the previous year.
The company's Ebitda was USD 42.7 million,
which is USD 11.6 million more than in 2015.
Operational and maintenance costs increased
by USD 1.9 million compared to 2015. This was
mainly due to the following reasons: Increased
transmission costs (USD 0.4 million), execution of
preventive and corrective maintenance (0.7
million) and an accumulated rate for rural
electrification of USD 0.5 million (half of this
amount corresponds to the 2016 period whose
implementation was approved in December of that
year through an amendment to the law).
Net profits in 2016 amounted to USD 15.8 million.
This is USD 0.6 less than the previous year. This
result was affected by the disposal of assets in the
amount of USD 5.6 million, and USD 6.4 million from
the amortization of the Gas Conversion Project.
By the end of 2016, the Company's financial position
had improved significantly in comparison to the
previous year. The balance on the credit line was paid
off over the course of the year. Additionally, USD 18
million were paid towards the related party debt and
USD 2 million were paid towards the shareholder
debt. The debt with La Concepción was reduced to
USD 17 million down from 32 million.
Positive net profits for the third year in a row and a plant availability of 92.7% make 2016 the best year in GENA's history.
Relevant Facts
With positive net profits for the third year in a
row and a plant availability of 92.7%, 2016 was the
best year in GENA's history. The drop in fuel prices,
the new plants - especially wind farms - and the
weather conditions all helped to provide the energy
for the contracts with distributors at a lower cost.
The price of energy on the occasional market
reached
Financial expenses remained at USD 6.0 million,
made up of USD 2.7 million from La Concepción
loan, USD 2.8 million in shareholder loans and
USD 0.5 million in financial expenses with
Banistmo.
106 Odinsa I Annual Report I 2016
A Grupo Argos company
Generadora del Atlántico GENA - Panama
an annual percentage of USD 60/MWh. During the
summer, the average price was USD 68/MWh The
contribution margin for the year was USD 52.7
million. At the beginning of the year, an average award of
64 MW of power was obtained in contracts with
distributors for the 2017-2019 period through LPI
ETESA Bid No. 03-15, which was originally mistaken
and had not been awarded to us. These contracts
represent over USD 21.7 million.
GENA obtained a backup power contract that
represents revenues of USD 6.46 million for the
Company for the 2017-2018 period.
For GENA, one of the main goals this period was
to keep the plant's main equipment preserved and
ready to be operated. In order to do this, several
projects were carried out:
Modification to the 200 gas turbine
filter house in order to install bag
filters to address the coal ash
emissions problem.
Industrial paint on all eight diesel fuel
tanks and the plant's water tank.
Combustion inspection of the 200
gas turbine.
Repair and paint job on the upper
transition parts of the HRSG 200.
Repair and maintenance of all the
pad-mounted transformers.
Biannual inspection of the two
HRSGs.
Graduation of three new control
room operators.
Execution of the Plant's Tree
Planting Plan.
• Correction of gas leaks in the housing of gas
turbine No. 200.
Major inspection of the generator of gas
turbine No. 200.
Replacement of the coolers (radiators) of the
115kV power transformers corresponding to
units 200 and 300.
It should be noted that the maintenance work
was completed within the scheduled time and
estimated cost. •
• The accident rate target for 2016 was 6.75%,
which was not only met but exceeded, with a rate
of 1.79%.
107 www.odinsa.com
CHILE
Generadora del
Pacífico GENPAC
1.49 Gwh Generated Energy
16% Variation
108 Odinsa I Annual Report I 2016
%
A Grupo Argos company
Generadora del Pacífico GENPAC - Chile
Financial Results
2016 2015
Operating income:
Variation:
Ebitda:
Variation:
Net profits:
USD 7.6 million
2.2%
USD 4.8 million
3.5%
USD 2.5 million
USD 7.4 million
Operating Results
GENPAC has two generation plants located in the
same area in Copiapó. The first one is a thermal power
plant made up of 60 Perkins-FG Wilson diesel engines
with a maximum unit power of 1,600 KW prime and a
working power of
1,280 KW within a regime of continuous operations,
and a firm energy of 85.98 MW, as declared to the
Central Interconnected System (SIC, for its acronym in
Spanish). The energy sufficiency level compensated
by the system was 65.88 MW by the end of 2016. The
plant has an availability of 4 stations with 16
generating units each, which are
governed by a central control system (SCADA ) that
allows the independent operation of each engine. Also, as of the first quarter of 2017 the new
photovoltaic generation plant will start operations.
This plant consists of 42,200 solar panels with a
maximum capacity of 13.8 MW. The building
occupies an area of 15.38 hectares in two lots
adjacent to the existing diesel plant.
In 2016, the CDEC-SIC requested to operate as
a backup plant on 14 occasions, for a total of 28.45
hours and
109 www.odinsa.com
07 Business Lines
1.5 GWh generated during the year. The above
took place despite having a marginal cost of
148.98 USD/KWh, a much higher price than the
average spot market price, whose 2016 average
closed at USD 37/MWh at the Cardones node,
where said energy is injected. Both generation plants supply energy to the
national SIC system though their own 220 kV
interconnection line between the Medellín
Substation (23/220 kV) and the Cardones
Substation. The Cardones Substation is the
reference point for the injection of energy from the
plant to the system (instant node price).
Relevant Facts
This year, construction on the photovoltaic project
reached 99%, with 42,200 solar panels and 13.8
MW-peak. Connection tests and commissioning as
well as some minor repairs are still pending.
During the year, GENPAC obtained a loan from
Banco de Chile, which enabled the financial closure
necessary to begin construction on the photovoltaic
plant. The loan covered 100% of the project's CAPEX
and refinanced the existing loans with the same bank.
The construction of the plant took 14 months and
was completed in mid-November. The only things
pending are the provisional acceptance and final
connection tests, which will take place in February
2017 after the permit for change of soil use and the
definitive construction permit are granted by the
municipality of Copiapó.
As a result of the strategic analysis of Odinsa's
objectives, the decision was made to completely
divest the Company's assets. Consequently,
GENPAC's administrative and operational teams
actively participated in several sue diligence
processes within the framework of the sale process.
All the administrative, legal and technical documents
were prepared to be entered into the virtual data
room made available to buyers and a presentation
document was prepared for potential buyers.
Additionally, between the months of June and
December, several presentations and tests were
carried out for interested companies and we
participated in the definitive process of confirmatory
due diligence with the best bidder selected during the
last quarter of the year.
Regarding the operating results, it is worth noting
there was an increase in the value of the energy
sufficiency recognized by the CDEC SIC as a
consequence of the improved firm capacity of the
plant (sufficiency energy) resulting from the training
received by the plant's maintenance and operation
teams.
Financial Results
The EBITDA improved in comparison to 2015; it
reached USD 4.8 million, which was the result of
higher revenues from power in accordance with the
change in calculation methodology issued by the
Department of Energy and published in early 2016,
and in accordance with the savings in direct fuel
costs due to a lower generation.
The debt balance increased as a result of the
loan from Banco de Chile to fund the new
photovoltaic generation project. In 2016, a loan
was received from Banco de Chile to fund the
execution of the project and 100% of the previous
debt was refinanced as well.
The following were offered as collateral for this
purpose: a pledge on the equipment and land of the
Termopacifico project and a pledge on the
photovoltaic equipment, which will be executed
once the declaration of provisional operation is
granted. Additionally, Odinsa Holding provided a
parent company guarantee in the amount of USD
12.5 million in favor of Banco de Chile as backing
for the fulfillment of GENPAC's obligations.
In 2016, three installments of the loans were
amortized in the months of June, September and
December, which corresponded to principal and
interest for segment 1 (total value of USD 14
million), interest for segment 2 (total value of USD
12 million) and interest for segment 3 for USD 5.7
million corresponding to a one year bullet loan
extendable to 8 years.
110 Odinsa I Annual Report I 2016
A Grupo Argos company
www.odinsa.com 111 Generadora del Pacífico GENPAC - Chile
Consolidated Financial Statements 08
Medellin, February 20th, 2017
To the Shareholders of Odinsa S.A.
and the General Public
In my capacity as Legal Representative, I hereby certify that the consolidated financial statements that
have been made public with a cutoff date of December 31, 2016 do not contain any defects, inaccuracies
or material error that may obscure the true financial position or operations carried out by Odinsa S.A. during
the corresponding period.
Mauricio Ossa Echeverri
Legal Representative
114 Odinsa I Annual Report I 2016
A Grupo Argos company
Medellin, February 20th, 2017
To the Shareholders of Odinsa S.A.
The undersigned Legal Representative and Accounting Manager of Odinsa S.A. (hereinafter "the Company"),
hereby certify that the Company's consolidated financial statements up to December 31, 2016 and 2015
have been taken faithfully from the books and that, prior to being made available to you and to third
parties, we have verified the following statements contained therein:
a) All the assets and liabilities included in the Company's consolidated financial statements up to
December 31, 2016 and 2015 and all the transactions included in these statements have been
carried out during the years ended on the aforementioned dates.
b) All the economic events carried out by the Company and its subordinates during the years ended on
December 31, 2016 and 2015 have been recognized in the financial statements.
c) The assets represent probable economic benefits in the future (rights) and the liabilities represent
probable economic commitments in the future (obligations) obtained by or under the responsibility of
the Company as of December 31, 2016 and 2015.
d) The income and expenses accrued match the reality of the Company and they have been classified
based on current legal stipulations.
e) All the elements have been recognized based in their appropriate values in accordance with the
financial reporting standards applicable in Colombia.
f) All the economic events that affect the Company have been classified, described and disclosed
correctly in the financial statements.
Mauricio Ossa Echeverri
Legal Representative
Mario Alonso García
Romero
Accounting Manager
T.P. 69852 -T
115 www.odinsa.com
Consolidated Financial Statements 08
Tax Auditor Report
To the Shareholders of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
1. I have audited the attached consolidated financial statements of Odinsa S.A. (previously Grupo Odinsa S.A.),
which include the financial position statement as of December 31, 2016 and the income statement, the
statement of changes to the shareholders' equity and the cash flow statement for the year ended on said date,
as well as the summary of the main accounting policies indicated in Note 2 and other explanatory notes.
Responsibility of Management for the Financial Statements
2. Management is responsible for the adequate preparation and presentation of these consolidated financial
statements in accordance with the accounting and financial reporting standards accepted in Colombia. They
are also responsible for whatever internal controls Management considers relevant to the preparation of these
financial statements so that they are free of significant mistakes caused by fraud or errors.
Responsibility of the Auditor
3. My responsibility is to offer an opinion on said consolidated financial statements based on my audit. I
conducted said audit in accordance with the financial reporting audit standards accepted in Colombia. These
standards demand that the audit meets certain ethical requirements, and that the audit is planned and
carried out in order to obtain reasonable assurance that the financial statements are free of significant errors.
4. An audit consists of developing procedures to obtain audit evidence regarding the amounts and disclosures
found in the financial statements. Procedures are chosen based on the auditor's judgment, including assessing
the risk of there being significant errors in the financial statements caused by fraud or mistakes. In evaluating
the risk, the auditor considers the Company’s relevant internal control measures used to prepare the financial
statements in order to design audit procedures that are appropriate to the circumstances. An audit also
includes an assessment of the suitability of the accounting policies that were used and the accounting
estimates made by Management, as well as an evaluation of the complete presentation of the consolidated
financial statements.
5. I believe the audit evidence I obtained is sufficient and appropriate to provide a basis for my opinion, with
certain caveats which are expressed in paragraph 7 below.
To the Shareholders Meeting of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017 Basis for the Opinion with Caveats
6. The consolidated financial statements of Odinsa S.A. include, up to December 31, 2016, assets from the
subsidiary Boulevard Turístico del Atlántico S.A. in the amount of $495,472 million and net revenues of
$86,182 million, which were recorded based on the preliminary financial statements and represent 9.5% and
6.3% of the Company's total assets and revenues, respectively. By the end of the year, the audited financial
statements of said subsidiary had not been provided to me, therefore, it was not possible to obtain sufficient
and adequate evidence of the book value of the assets and the revenues recorded up to December 31, 2016.
116 Odinsa I Annual Report I 2016
A Grupo Argos company
Opinion with Caveats
7. In my opinion, except for the possible effect of the issue described in paragraph 6 above, the attached
consolidated financial statements are a reasonable reflection, in all significant aspects, of the financial
situation of Odinsa S.A. as of December 31, 2016 and of the results of its operations and cash flows for the
year ended on said date, pursuant to the accounting and financial reporting standards accepted in Colombia.
Emphasis Paragraph
8. Without qualifying my opinion, I would like to call attention to the facts described in the following notes to
the consolidated financial statements:
a) Note 37 indicates that the consolidated financial statements up to December 31, 2016 were prepared
using the provisional fair value for the combination of businesses made directly and indirectly by Odinsa
S.A. with the subordinate companies Autopistas del Nordeste S.A., Boulevard Turística del Atlántico S.A.
and their corresponding joint operations, “JVADN” and “JVBTA”, respectively. Therefore, until such time as
the measuring period established by IFRS 3 "Business Combinations" (which may not exceed a year from
the date of acquisition) is over, there is the probability that these financial statements may be adjusted to
reflect the impact of new information obtained regarding facts and circumstances that existed on the date
of acquisition and which would have affected the values recognized as of that date.
b) Note 35 describes the current status of the arbitration claim filed by the National Infrastructure Agency
(ANI, for its acronym in Spanish) and of the fiscal liability process being handled by the Comptroller
General's Office against the subordinate Autopistas del Café S.A. This is expected to be resolved within
the respective terms of the law.
To the Shareholders Meeting of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
Other Issues
9. The Company's consolidated financial statements for the year ended on December 31, 2015 were audited
by me using audit standards generally accepted in Colombia, and which were in force at that date. On a report
dated February 25, 2016 I issued an opinion with no caveats regarding said statements. My opinion for the
year 2016 is not qualified regarding that matter.
Jorge Eliécer Moreno Urrea
Auditor
Professional Card No. 42619-T
Member of PricewaterhouseCoopers Ltda.
117 www.odinsa.com
Consolidated Financial Statements 08
ODINSA S.A. (previously Grupo Odinsa S.A.) Consolidated Financial Position Statements As of December 31, 2016 and 2015 (Figures in millions of Colombian Pesos)
118 Odinsa I Annual Report I 2016
Note
2016 2015
Assets
Current Assets
Cash and Cash Equivalents 9 311,590,615 261,848,398
Trade receivables and other accounts receivable
10
398,378,258
330,408,607
Inventories 11 247,653 7,652,887
Other non-financial assets 12 13,338,480 26,449,994
Other financial assets 14 2,257 40,379,418
Current tax assets 19 28,054,602 36,462,548
Discontinued operations 20 342,358,651 -
Restricted cash 9 523,647,103 120,194,470
Total Current Assets 1,617,617,619 823,396,322
Non-Current Assets
Investments in subsidiaries, joint ventures and
associates
13
990,742,935
1,091,154,406
Property, plant and equipment 17 40,417,435 651,770,022
Investment properties 18 39,117,421 35,761,109
Deferred tax assets 19 49,684,944 34,719,874
Other financial assets 14 422,079 56,892,801
Other intangible assets 16 137,410,325 103,175,017
Trade receivables and other accounts
receivable
10
2,325,691,501
165,593,284
Other non-financial assets 12 7,334,458 10,341,021
Restricted cash 9 - 10,018,713
Total Non-Current Assets 3,590,821,098 2,159,426,247
Total Assets 5,208,438,717 2,982,822,569
Equity and Liabilities
Share capital 29 19,604,682 19,604,682
Issue premium 354,528,587 354,528,587
Year results 670,201,765 133,190,039
Other comprehensive income 121,023,458 113,705,042
Accumulated earnings (229,121,173) (274,446,164)
Reserves 29 499,067,792 369,977,525
Other components of equity (6,541,592) (2,245,480)
A Grupo Argos company
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
119 www.odinsa.com
Note
2016 2015
Non-controlling interest 382,476,273 259,716,978
Total Equity 1,811,239,792 974,031,209
Current Liabilities
Loans and obligations 21 501,667,201 515,744,791
Other provisions 23 2,552,524 -
Other non-financial liabilities 24 71,108,882 122,143,420
Employee benefits 25 7,239,304 10,878,011
Trade payables and other accounts payable 26 149,209,692 96,643,175
Current tax liabilities 19 22,858,916 16,797,548
Securities issued 28 40,885,749 340,011
Discontinued operations 20 190,874,829 -
Total Current Liabilities 986,397,097 762,546,956
Non-Current Liabilities
Loans and obligations 21 1,303,120,406 964,531,026
Other provisions 23 112,321,091 12,808,544
Other non-financial liabilities 24 203,823,225 82,420,347
Employee benefits 25 4,935,525 409,282
Trade payables and other accounts payable 26 231,362,367 56,447,611
Deferred tax liabilities 19 50,761,915 50,627,594
Securities issued 28 504,477,299 79,000,000
Total Non-Current Liabilities 2,410,801,828 1,246,244,404
Total Liabilities 3,397,198,925 2,008,791,360
Total Liabilities and Equity 5,208,438,717 2,982,822,569
Consolidated Financial Statements 08
ODINSA S.A. (previously Grupo Odinsa S.A.) Consolidated Income Statement For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
120 Odinsa I Annual Report I 2016
Note 2016 2015
Gains (losses)
Revenue from regular business activities 30 1,360,747,519 553,968,469
Share in gains (losses) of associates and
joint
13
124,846,930
37,129,328
ventures posted using the equity method
Cost of sales (244,759,300) (326,071,662)
Gross profit 1,240,835,149 265,026,135
Other revenues 32 20,238,361 1,594,861
Administrative expenses 31 (163,164,466) (103,705,591)
Other expenses, net 32 (67,607,579) 15,063,302
Gains (losses) on operating activities 1,030,301,465 177,978,707
Financial income and expenses, net 33 (140,511,981) (17,276,155)
Gains (losses) before taxes 889,789,484 160,702,552
Tax revenue (expenses) 19 (50,112,580) (38,421,791)
Gains (losses) of the Group before discontinued operations 839,676,904 122,280,761
Discontinued operations 20 (329,797,731) 70,371,801
Gains (losses) of the Group after discontinued operations
509,879,173
192,652,562
Earnings per share (in pesos) 2,601 1,061
From continuous operations 4,283 637
From discontinued operations (1,682) 366
Gains (losses) attributable to non-controlling interests (160,322,592) 59,462,523
Gains (losses) attributable to the owners of the parent 670,201,765 133,190,039
A Grupo Argos company
ODINSA S.A. (previously Grupo Odinsa S.A.) Consolidated Statement of Other Comprehensive Income For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
121 www.odinsa.com
Note 2016 2015
Gains attributable to the owners of the parent 670,201,765 133,190,039
Equity method 13 863,621 (44,536,019)
Difference from exchange rates 13 7,571,426 153,937,131
Difference from exchange rates - discontinued operations 20 (1,116,631) 4,303,930
Reclassification to other equity components
Items reclassified after the income 7,318,416 113,705,042
Comprehensive income attributable to non-controlling interests (2,862,269) 46,156,992
Comprehensive income attributable to owners of the Company 674,657,912 293,052,073
Consolidated Financial Statements 08
ODINSA S.A. (previously Grupo Odinsa S.A.) Consolidated Cash Flow Statements For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
122 Odinsa I Annual Report I 2016
Cash flows from operating activities
2016 2015
Year Results $ 670,201,765 133,190,039
Adjustments to reconcile the net profits with the (used) cash provided by
operating activities:
Non-controlling interest (160,322,592) 59,462,521
Income tax expense recognized in gains or losses
18,761,170
53,347,652
Share in the income of subsidiaries, associates and joint ventures
(124,846,931)
(37,129,328)
Profits/losses from the sale and write-off of properties, plant and equipment 811,697 (143,226)
Profits/losses from the sale of investments (64,506,306) (578,307)
Loss from impairment recognized in income from investments - 5,032,687
Depreciation and amortization of non-current assets 37,202,706 8,912,023
Amortization of intangibles other than capital gain - 11,637,395
Other adjustments to reconcile the gains (losses) (15,785,799) 18,717,932
Profit from advantageous purchases (665,093,736) -
Adjustment of investments at fair value (10,893,067) -
Long-term provisions 46,856,596 -
Long-term asset impairment 383,403,807 -
115,796,713 252,449,388
Changes in assets and liabilities:
Trade receivables and other accounts receivable 89,550,294 (185,442,998)
Inventories 7,283,873 1,449,437
Other assets - taxes, expenses paid in advance (21,281,193) (43,799,541)
Other financial assets 3,041,098 -
Current tax assets 382,982 -
Taxes paid (23,412,353) (17,570,804)
Investments in subsidiaries, joint ventures and associates 151,725,448 -
Trade payables and other accounts payable 16,171,411 (44,148,066)
Provisions 2,265,681 9,745,773
Deferred revenues 140,402,403 37,344,966
Employee benefits (8,430,855)
Securities issued 40,545,738
Other liabilities (127,610,860) 104,731,787
A Grupo Argos company
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
123 www.odinsa.com
Cash Generated by Operating Activities
2016 2015
409,835,330 132,330,746
Interests received 1,330,849 8,737,555
Tax paid on wealth - (5,976,592)
Dividends paid - (39,876,400)
Dividends received 3,936,180 1,594,861
Net Cash Generated by Investment Activities 415,102,359 96,810,170
Cash flows from investment activities
Acquisition of properties, plant and equipment (56,695,289) (171,188,400)
Product of the sale of properties, plant and equipment 1,033,567 1,434,187
Acquisition of investment properties - (2,650,544)
Acquisition of intangible assets 40,595,207 (104,796,071)
Acquisition of interests in associates and joint ventures - (785,483,817)
Product of the sale of interests in associates and joint ventures 37,336,063
120,006,804
Acquisition of dependents, net cash 292,217,547 -
Increase/decrease of other assets (111,868,379) -
Net Cash Used for Investment Activities 202,618,717 (942,677,841)
Cash Flows from Financing Activities
Increase/decrease of other financing instruments - banks -
bonds
(56,737,058)
1,026,307,958
Interests paid (89,888,825) (44,212,090)
Non-controlling interest 283,081,887 77,514,345
Increase/decrease of other liabilities (300,982,231) -
Net Cash Provided in Financing Activities
(164,526,227) 1,059,610,213
Net increase (net decrease) of cash and cash equivalents 453,194,849 213,742,542
Cash and cash equivalents at the beginning of the period 382,042,869 168,300,327
Cash and cash equivalents as of December 31
$
835,237,718
382,042,869
ODINSA S.A. (previously Grupo Odinsa S.A.) Consolidated Statement of Changes in Equity For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
components interest
Mauricio Ossa Echeverri Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
Co
nso
lida
ted
Fin
an
cia
l S
tate
me
nts
0
8
12
4
Od
insa
I An
nu
al R
ep
ort I 2
01
6
Subscribed
and paid share
capital
Share issue
premium
Legal reserve
Reserve for investments
and donations
Year Results
Accumulated
income
Other
comprehensive income
Other equity components
Non-controlling
Total
Balance as of December 31, 2014 18,316,631 264,236,219 78,498,174 285,502,759 85,461,922 (257,776,516) 70,974,174 14,199 182,202,633 727,430,195
Changes in equity:
Appropriations 1,288,051 90,292,368 10,616,872 (85,461,922) (16,669,648) 65,721
Period results 133,190,039 133,190,039
Non-controlling interest 77,514,345 77,514,345
Other comprehensive income 42,730,868 42,730,868
Tax on wealth (4,640,280) (4,640,280)
Other movements (2,259,679) (2,259,679)
Balance as of December 31, 2015 $ 19,604,682 354,528,587 78,498,174 291,479,351 133,190,039 (274,446,164) 113,705,042 (2,245,480) 259,716,978 974,031,209
Changes in equity:
Appropriations 133,190,039 (133,190,039)
Non-controlling interest 285,944,156 285,944,156
Other comprehensive income 7,318,416 (2,862,269) 4,456,147
Year Results 670,201,765 (160,322,592) 509,879,173
Tax on wealth (4,099,772) (4,099,772)
Other movements 45,324,991 (4,296,112) 41,028,879
Balance as of December 31, 2016 $ 19,604,682 354,528,587 78,498,174 420,569,618 670,201,765 (229,121,173) 121,023,458 (6,541,592) 382,476,273 1,811,239,792
Separate Financial Statements 09
Medellin, February 20th, 2017
To the Shareholders of Odinsa S.A.
and the General Public
In my capacity as Legal Representative, I hereby certify that the separate financial statements that have been
made public with a cutoff date of December 31, 2016 do not contain any defects, inaccuracies or material error
that may obscure the true financial position or operations carried out by Odinsa S.A. during the corresponding
period.
Mauricio Ossa Echeverri
Legal Representative
128 Odinsa I Annual Report I 2016
A Grupo Argos company
Medellin, February 20th, 2017
To the Shareholders of Odinsa S.A.
The undersigned Legal Representative and Accounting Manager of Odinsa S.A. (hereinafter "the Company"),
hereby certify that the Company's separate financial statements up to December 31, 2016 and 2015 have
been taken faithfully from the books and that, prior to being made available to you and to third parties, we
have verified the following statements contained therein:
a) All the assets and liabilities included in the Company's consolidated financial statements up to
December 31, 2016 and 2015 and all the transactions included in these statements have been carried
out during the years ended on the aforementioned dates.
b) All the economic events carried out by the Company and its subordinates during the years ended on
December 31, 2016 and 2015 have been recognized in the financial statements.
c) The assets represent probable economic benefits in the future (rights) and the liabilities represent
probable economic commitments in the future (obligations) obtained by or under the responsibility of the
Company as of December 31, 2016 and 2015.
d) The income and expenses accrued match the reality of the Company and they have been classified
based on current legal stipulations.
e) All the elements have been recognized based in their appropriate values in accordance with the
financial reporting standards applicable in Colombia.
f) All the economic events that affect the Company have been classified, described and disclosed
correctly in the financial statements.
Mauricio Ossa Echeverri
Legal Representative
Mario Alonso García
Romero
Accounting Manager
T.P. 69852 -T
129 www.odinsa.com
Separate Financial Statements 09
Tax Auditor Report
To the Shareholders of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
I have audited the attached separate financial statements of Odinsa S.A. (previously Grupo Odinsa S.A.), which
include the financial position statement as of December 31, 2016 and the income statement, the statement of
changes to the shareholders' equity and the cash flow statement for the year ended on said date, as well as the
summary of the main accounting policies indicated in Note 2 and other explanatory notes.
Responsibility of Management for the Financial Statements
Management is responsible for the adequate preparation and presentation of these consolidated financial
statements in accordance with the accounting and financial reporting standards accepted in Colombia. They are
also responsible for whatever internal controls Management considers relevant to the preparation of these
financial statements so that they are free of significant mistakes caused by fraud or errors.
Responsibility of the Auditor
My responsibility is to offer an opinion on said separate financial statements based on my audit. I conducted
said audit in accordance with the financial reporting audit standards accepted in Colombia. These standards
demand that the audit meets certain ethical requirements, and that the audit is planned and carried out in order
to obtain reasonable assurance that the financial statements are free of significant errors.
An audit consists of developing procedures to obtain audit evidence regarding the amounts and disclosures
found in the financial statements. Procedures are chosen based on the auditor's judgment, including assessing
the risk of there being significant errors in the financial statements caused by fraud or mistakes. In evaluating
the risk, the auditor considers the Company’s relevant internal control measures used to prepare the financial
statements in order to design audit procedures that are appropriate to the circumstances. An audit also includes
an assessment of the suitability of the accounting policies that were used and the accounting estimates made
by Management, as well as an evaluation of the complete presentation of the separate financial statements.
I believe the audit evidence I obtained is sufficient and appropriate to provide a basis for my opinion, with
certain caveats which are expressed in the paragraph below.
To the Shareholders Meeting of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
Basis for the Opinion with Caveats
The financial statements of Odinsa S.A. include, as of December 31, 2016, direct and indirect investments in
the subsidiary Boulevard Turístico del Atlántico S.A. in an amount of $79,266 million and equity method
revenues of $86,182 million, which were recorded based on the preliminary financial statements and represent
4.2% and 9.4% of the Company's total assets and revenues, respectively. By the end of the year, the audited
financial statements of said subsidiary had not been provided to me, therefore, it was not possible to obtain
sufficient and adequate evidence of the book value of the investment and the equity method revenues recorded
up to December 31, 2016.
130 Odinsa I Annual Report I 2016
A Grupo Argos company
Opinion with Caveats
In my opinion, except for the possible effect of the issue described in the paragraph above, the attached financial
statements are a reasonable reflection, in all significant aspects, of the financial situation of Odinsa S.A. as of
December 31, 2016 and of the results of its operations and cash flows for the year ended on said date, pursuant
to the accounting and financial reporting standards accepted in Colombia.
Emphasis Paragraph
Without qualifying my opinion, I would like to call attention to the facts described in the following notes to the
financial statements:
a) Note 12 indicates that the financial statements up to December 31, 2016 were prepared using the
provisional fair value for the combination of businesses made directly and indirectly by Odinsa S.A. with the
subordinate companies Autopistas del Nordeste S.A., Boulevard Turística del Atlántico S.A. and their
corresponding joint operations, “JVADN” and “JVBTA”, respectively. Therefore, until such time as the
measuring period established by IFRS 3 "Business Combinations" (which may not exceed a year from the
date of acquisition) is over, there is the probability that these financial statements may be adjusted to reflect
the impact of new information obtained regarding facts and circumstances that existed on the date of
acquisition and which would have affected the values recognized as of that date.
b) Note 32 describes the current status of the arbitration claim filed by the National Infrastructure Agency
(ANI, for its acronym in Spanish) and of the fiscal liability process being handled by the Comptroller General's
Office against the subordinate Autopistas del Café S.A. This is expected to be resolved within the respective
terms of the law.
To the Shareholders Meeting of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
Report on other Legal and Regulatory Requirements
Management is also responsible for ensuring compliance with regulatory aspects in Colombia related to the
management of accounting documents, the definition of internal control measures, the conservation and
custody of assets in the Company's power, the preparation of management reports, and the proper handling of
contributions to the Social Security system.
As required by law and Colombian regulations, I have carried out procedures related to compliance with
regulations, and based on said procedures, it is my opinion that:
a) The Company's accounting records conform to legal regulations and accounting techniques.
b) The transactions recorded in the books and the administrative acts conform to the bylaws and decisions
of the Shareholders' Meeting.
c) Correspondence, account vouchers, the minutes book, and shareholders ledger have all been duly kept.
d) There are adequate internal control measures in place, as well as measures for the conservation and
custody of the Company's and third parties' assets in the Company's power.
131 www.odinsa.com
Separate Financial Statements 09
e) There is concordance between the financial statements and the management report prepared by the
administrators. The administrators left a record in the management report stating that they did not hinder
the free circulation of invoices issued by vendors or suppliers.
f) The information contained in the Social Security payment statements, in particular the information
concerning affiliates and their base contribution income, has been taken from accounting records and
accounts. The Company is not in default of contributions to the Social Security system.
To the Shareholders Meeting of Odinsa S.A. (previously Grupo Odinsa S.A.) February 22, 2017
Other Issues
The Company's financial statements for the year ended on December 31, 2015 were audited by me using audit
standards generally accepted in Colombia, and which were in force at that date. On a report dated February
25, 2016 I issued an opinion with caveats concerning some internal control deficiencies related to the
settlement, record and payment of labor obligations. My opinion for the year 2016 is not qualified regarding
that matter.
Jorge Eliécer Moreno Urrea
Auditor
Professional Card No. 42619-T
Member of PricewaterhouseCoopers Ltda.
132 Odinsa I Annual Report I 2016
A Grupo Argos company
ODINSA S.A. (previously Grupo Odinsa S.A.) Separate Financial Position Statement For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
Current Assets
133 www.odinsa.com
Cash and Cash Equivalents 7 47,421,427 18,290,116
Trade receivables and other accounts receivable 8 269,980,598 113,879,400
Tax assets 9 9,204,364 7,457,615
Other non-financial assets 10 236,996 166,676
Assets classified as held for sale 11 11,947,474 -
Total Current Assets 338,790,859 139,793,807
Non-Current Assets
Investments in subsidiaries, associates and joint
ventures
12
1,460,262,900
965,597,535
Property, plant and equipment 13 18,369,659 20,954,612
Investment properties 14 33,159,080 30,848,591
Intangible assets other than capital gain 15 850,633 1,793,272
Deferred tax assets 9 36,203,351 26,581,603
Other financial assets 16 418,049 482,367
Other non-financial assets 10 7,264,682 7,359,953
Total Non-Current Assets 1,556,528,354 1,053,617,933
Total Assets 1,895,319,213 1,193,411,740
EQUITY AND LIABILITIES
EQUITY
Subscribed and paid share capital 24 19,604,682 19,604,682
Issue premium 24 354,528,587 354,528,587
Year results 24 670,201,765 133,190,039
Accumulated earnings 24 (229,121,173) (274,446,164)
Reserves 24 499,067,792 369,977,525
Other comprehensive income 121,023,458 113,705,042
Other components of equity (6,541,592) (2,245,480)
Total Equity 1,428,763,519 714,314,231
ASSETS Note Dec-31-16 Dec-31-15
Separate Financial Statements 09
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
134 Odinsa I Annual Report I 2016
ASSETS Note Dec-31-16 Dec-31-15
LIABILITIES
Current Liabilities
Financial liabilities 17 146,461,118 132,724,661
Trade payables and other accounts payable 18 68,052,632 54,822,116
Employee benefits 19 5,019,282 3,888,937
Tax liabilities 9 282,018 1,131,102
Other non-financial liabilities 20 4,511,308 8,915,479
Securities issued 21 332,449 340,011
Liabilities classified as held for sale 22 6,758,784 -
Total Current Liabilities 231,417,591 201,822,306
Non-Current Liabilities
Financial obligations 17 131,328,474 171,564,121
Trade payables and other accounts payable 18 456,970 2,499,850
Employee benefits 19 4,593,818 -
Deferred tax liabilities 9 19,648,978 12,499,224
Securities issued 21 79,000,000 79,000,000
Other non-financial liabilities 20 109,863 10,129,029
Other provisions 23 - 1,582,979
Total Non-Current Liabilities 235,138,104 277,275,203
Total Liabilities 466,555,694 479,097,509
Total Equity and Liabilities 1,895,319,213 1,193,411,740
A Grupo Argos company
ODINSA S.A. (previously Grupo Odinsa S.A.) Separate Statement of Comprehensive Income For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
135 www.odinsa.com
ASSETS Note Dec-31-16 Dec-31-15
Continuous operations
Revenue from regular business activities 25 117,367,757 69,411,896
Share in the gains (losses) of associates and joint ventures posted
using the equity method
651,045,609
164,747,066
Cost of sales (4,348,854) (50,539,283)
Gross profit 764,064,512 183,619,679
Other revenues 26 10,297,390 29,990,320
Administrative expenses 27 (49,641,576) (36,365,421)
Other expenses 28 (10,255,445) (2,531,926)
Gains (losses) on operating activities 714,464,880 174,712,652
Financial income 29 13,255,110 8,325,860
Financial costs 29 (43,188,971) (41,609,066)
Financial costs, net (29,933,862) (33,283,206)
Gains (losses) before taxes 684,531,018 141,429,446
Income tax expense 9 (5,628,070) (10,159,089)
Gains (losses) for the Year from Continuous Operations 678,902,948 131,270,357
Discontinued Operations
Net (losses) from discontinued operations 30 (8,701,184) 1,919,682
Net gains (losses) for the year 670,201,765 133,190,039
Gains (losses) per share of continuous operations 3.46 0.68
Gains (losses) per share of discontinued operations (0.04) 3,961.55
Separate Financial Statements 09
ODINSA S.A. (previously Grupo Odinsa S.A.) Separate Statement of Other Comprehensive Income For the years ended on December 31, 2016 and 2015
(Figures in thousands of Colombian Pesos)
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
136 Odinsa I Annual Report I 2016
Dec-31-16 Dec-31-15
Net profits 670,201,765 133,190,039
Other comprehensive income
Difference from exchange rates 7,571,426 158,241,060
Equity method 863,621 (44,536,019)
Difference from exchange rates - Discontinued operations (1,116,630) -
Other Comprehensive Income Total 7,318,416 113,705,042
Total Comprehensive Income 677,520,181 246,895,081
ODINSA S.A. (previously Grupo Odinsa S.A.) Separate Statement of Changes in Equity As of December 31, 2016
(Figures in millions of Colombian Pesos)
Mario Alonso García Romero
Accountant T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor T.P. No. 42619 - T
Member of PricewaterhouseCoopers Ltda. (See attached report)
Mauricio Ossa Echeverri Legal Representative
(See attached certification)
A G
rupo A
rgos c
om
pany
13
7
ww
w.o
din
sa
.co
m
Opening Balance as of January 1, 2015
Subscribed
and paid share
capital
Share issue
premium
Legal
reserve
Reserve for investments
and donations
Year Results
Accumulated income
Other
comprehensive income
Other equity components
Total
equity
18,316,631 264,236,219 78,498,174 285,502,759 85,461,922 (257,776,516) 70,974,174 14,199 545,241,761
Comprehensive income:
Appropriations 1,288,051 90,292,368 0 10,616,872 (85,461,922) (16,669,648) 0 0 65,721
Non-controlling interest 0 0 0 0 0 0 0 0 0
Other comprehensive income 0 0 0 0 0 0 42,730,868 0 40,471,189
Year Results 0 0 0 0 133,190,039 0 0 0 133,190,039
Tax on wealth 0 0 0 (4,640,280) 0 0 0 0 (4,640,280)
Other movements 0 0 0 0 0 0 0 (2,259,679) (2,259,679)
Final Balance as of December 31, 2015 19,604,682 354,528,587 78,498,174 291,479,351 133,190,039 (274,446,164) 113,705,042 (2,245,480) 714,314,231
Comprehensive income:
Appropriations 0 0 0 133,190,039 (133,190,039) 0 0 0 0
Other comprehensive income 0 0 0 0 0 0 0 0 0
Year Results 0 0 0 0 670,201,765 0 0 0 670,201,765
Tax on wealth 0 0 0 (4,099,772) 0 0 0 0 (4,099,772)
Other movements 0 0 0 0 0 45,324,991 7,318,416 (4,296,112) 48,347,295
Final Balance as of December 31, 2016 19,604,682 354,528,587 78,498,174 420,569,618 670,201,765 (229,121,173) 121,023,458 (6,541,592) 1,428,763,519
See the notes to the financial statements
Separate Financial Statements 09
ODINSA S.A. (previously Grupo Odinsa S.A.) Separate Cash Flow Statements As of December 31, 2016 and December 31, 2015
(Figures in thousands of Colombian Pesos)
138 Odinsa I Annual Report I 2016
Dec-31-16 Dec-31-15
Cash Flows from Operating Activities
Net Profits (Losses) 67,020,175 133,190,039
Adjustments for:
Income tax expense recognized in profits or losses 5,628,069 10,159,089
Share in the income of subsidiaries, associates and joint ventures (651,045,609) (166,666,747)
Expenses recognized related to employee benefits 4,593,818 -
Profits/losses from the sale of properties, plant and equipment and other assets 1,143,345 (124,034)
Profits/losses from the sale of investments (117,041,714) (578,307)
Net profits/losses from the fair value of financial assets held for trading
(2,290,311)
(2,714,341)
Loss from impairment recognized in income 11,704,188 2,257,983
Depreciation and amortization of non-current assets 1,496,387 1,595,470
Amortization of intangibles other than capital gain 1,701,735 5,450,039
Exchange difference recognized in income (1,260,340) (2,170,678)
Other adjustments to reconcile the gains (losses) (6,531,612) 31,053,126
Changes in the Work Capital of:
Trade receivables and other accounts receivable (159,285,309) (94,177,069)
Current tax assets (1,746,749) -
Other non-financial assets (48,197) 5,775,636
Investments posted using the equity method 280,158,428 (11,192,506)
Trade payables and other accounts payable 46,330,679 (5,127,507)
Provisions - 1,582,979
Deferred revenues - (5,808,343)
Employee benefits 1,130,345 -
Other non-financial liabilities (7,126,062) (3,845,275)
Securities issued (7,562) -
Interests received 1,217,569 617,988
Tax paid on wealth (4,099,772) (4,640,281)
Net Cash Flow Provided by (Used in) Operating Activities 74,823,092 (105,362,739)
Cash flows from investment activities
Dividends received from associates and joint ventures 30,700,454 85,660,980
Other dividends received
Acquisition of properties, plant and equipment (493,839) (477,414)
Product of the sale of properties, plant and equipment 768,488 1,416,711
A Grupo Argos company
See the notes to the financial statements
Mauricio Ossa Echeverri
Legal Representative
(See attached certification)
Mario Alonso García Romero
Accountant
T.P. No 69852-T
(See attached certification)
Jorge Eliecer Moreno Urrea
Auditor
T.P. No. 42619 - T
Member of PricewaterhouseCoopers
Ltda. (See attached report)
139 www.odinsa.com
Dec-31-16 Dec-31-15
Acquisition of investment properties - (2,592,141)
Acquisition of intangible assets - (109,686)
Product of the sale of intangible assets (759,096) -
Acquisition of other non-current assets (229,309) (56,031)
Product of the sale of other non-current assets 64,316 -
Net cash flow provided by (used in) operating activities 30,051,013 83,842,419
Cash Flows from Financing Activities
Increase/decrease of other financing instruments - banks - bonds (38,101,332) 71,235,043
Interests paid (35,598,582) (34,976,169)
Return of retainage and other liabilities (2,042,880) (11,987,721)
Net Cash Flows Used in Financing Activities (75,742,794) 24,271,153
Net Increase in Cash and Cash Equivalents 29,131,311 2,750,833
Cash and cash equivalents at the beginning of the period 18,290,116 15,539,283
Cash and Cash Equivalents at the End of the Period 47,421,427 18,290,116
10 APPENDIX 1
CONCERNING TAX MATTERS
To date, Odinsa S.A. has no contingencies
concerning tax matters.
AGAINST ODINSA S.A.
2. CARLOS GAVIRIA Y ASOCIADOS S.A. IN
REORGANIZATION vs. ODINSA S.A.
a. NAME OF PLAINTIFF:
CARLOS GAVIRIA Y ASOCIADOS S.A. IN
REORGANIZATION 1. CORPORATE REORGANIZATION OF CARLOS
GAVIRIA Y ASOCIADOS S.A.
b. NAME OF DEFENDANT: ODINSA S.A.
a. TYPE OF PROCEEDINGS:
Liquidation c. TYPE OF PROCEEDINGS: Executive
process b. HANDLED BY:
Superintendence of Corporations. Delegate
Superintendence for Insolvency Proceedings.
d. HANDLED BY:
First Civil Court of the Backlog Circuit Currently
being handled by the 5th Civil Circuit Court
c. CURRENT STATUS OF THE PROCEEDINGS:
• September 24, 2015: Odinsa notified the
Superintendence about a payment of COP
61,885,049.76 made before the First Civil
Court of the Backlog Circuit and about a
payment of COP 197,596,462 made at the
Fifth Civil Court of the Circuit of Bogotá.
October 8, 2015: The Superintendence
ordered the issue of an official notification to
the Fifth Civil Court of the Circuit of Bogotá so
that said court would make the sum of COP
197,596,462 available to them. January 13,
2017: The adjudication report submitted by
the liquidator of the company Carlos Gaviria
y Asociados was approved. This was
appealed by filing a claim on January 18,
2017 as it is considered that the report
should not have been approved due to its
inconsistencies.
e. CURRENT STATUS OF THE PROCEEDINGS:
• October 26, 2015: The Court amended the
settlement of the loan and approved it in the
amount of COP 2,881,584,114. November 20, 2015: The Court denied the
payment order requested against Seguros
Confianza.
July 15, 2016: Notice of order through which
the loan settlement was approved for the
sum of COP 2,881,584,114, with a cutoff
date of September 30, 2015.
November 2, 2016: Notice of order through
which the Court order the payment of COP
305,419,364 for additional updated
settlement.
•
•
•
•
•
f. APPROXIMATE AMOUNT: According to the
estimate of the amount indicated in the claim,
this currently adds up to a value of TWO BILLION
EIGHT HUNDRED EIGHTY ONE MILLION FIVE
HUNDRED EIGHTY FOUR THOUSAND ONE
HUNDRED FOURTEEN PESOS (2,881,584,114).
d. CLAIM FILING NUMBER: No. 43704
e. APPROXIMATE AMOUNT:
ODINSA S.A. was recognized as creditor of the
company in liquidation for the amount of ONE BILLION
SEVEN HUNDRED AND THIRTEEN MILLION NINE
HUNDRED AND TEN THOUSAND TWO HUNDRED
SIXTY ONE PESOS (COP 1,713,910,261) and its loan
was rated as among the Fourth Class of the "supplier"
type. Similarly, ODINSA S.A. was named debtor of
Carlos Gaviria y Asociados in the amount of ONE
BILLION TWO HUNDRED EIGHTY EIGHT MILLION TWO
HUNDRED FIFTEEN THOUSAND SIX HUNDRED THIRTY
SIX PESOS (COP 1,288,215,636).
g. CLAIM FILING NUMBER:
11001310300320110074701
h. JUDICIAL CONTINGENCY: Proceedings
completed
3. DIRECT REPARATION OF JHON JAIME
GONZALEZ JARAMILLO - NOHRA DEL SOCORRO
GONZALEZ JARAMILLO - LUZ ESTHELA GONZÁLEZ
JARAMILLO - GLORIA PATRICIA GONZÁLEZ
JARAMILLO - MARLENY GONZALEZ JARAMILLO -
PAOLA YOVANA GONZÁLEZ JARAMILLO- MARIA
ELENA GONZÁLEZ JARAMILLO f. JUDICIAL CONTINGENCY: Remote
142 Odinsa I Annual Report I 2016
A Grupo Argos company
and JORGE ELIECER GONZÁLEZ JARAMILLO vs. THE
NATIONAL INSTITUTE OF ROADS - Invías -
AUTOPISTAS DEL CAFÉ S.A. - NATIONAL
INFRASTRUCTURE AGENCY- ANI - ODINSA S.A. AND
COOPERATIVA DE TRABAJO ASOCIADO EL MITRE
LTDA. IN LIQUIDATION a. NAME OF PLAINTIFF:
JHON JAIME GONZALEZ JARAMILLO - NOHRA DEL
SOCORRO GONZALEZ JARAMILLO - LUZ ESTHELA
GONZÁLEZ JARAMILLO - GLORIA PATRICIA GONZÁLEZ
JARAMILLO - MARLENY GONZALEZ JARAMILLO -
PAOLA YOVANA GONZÁLEZ JARAMILLO- MARIA ELENA
GONZÁLEZ JARAMILLO AND JORGE ELIECER
GONZÁLEZ JARAMILLO
4. ADMINISTRATIVE PROCEEDINGS FOR THE
DIRECT REPARATION OF FIDUCIARIA CAFETERA
FIDUCAFE AND TRILLADORA DE MANIZALES
AGAINST ORGANIZACIÓN DE INGENIERÍA
INTERNACIONAL S.A. ,ODINSA S.A. ET. AL.
a. NAME OF PLAINTIFF:
FIDUCIARIA CAFETERA FIDUCAFE ET. AL.
b. NAME OF DEFENDANT:
ODINSA S.A. ET. AL.
c. TYPE OF PROCEEDINGS: Direct
reparations b. NAME OF DEFENDANT:
NATIONAL INSTITUTE OF ROADS - Invías –
AUTOPISTAS DEL CAFÉ S.A. - NATIONAL
INFRASTRUCTURE AGENCY - ANI - ODINSA S.A. AND
COOPERATIVA DE TRABAJO ASOCIADO EL MITRE
LTDA. IN LIQUIDATION
d. HANDLED BY: Third Section of the State Council
e. CURRENT STATUS OF THE PROCEEDINGS:
• The Dispute Tribunal of Caldas granted the
appeal filed by the plaintiff against the first
instance ruling, which favored the interests
of Odinsa S.A.
Within the framework of the second ruling
proceedings, closing arguments were filed on
April 14, 2015.
On June 3, 2015 the proceedings moved to
the second ruling stage.
c. TYPE OF PROCEEDINGS: Direct reparations
d. HANDLED BY: Second Administrative Court of
Backlogs of the Armenia Circuit
•
e. CURRENT STATUS OF THE PROCEEDINGS:
• December 15, 2014: The defendants were
notified of the lawsuit.
March 26, 2015: Odinsa filed a countersuit.
August 20, 2015: impleader proposed by
Odinsa S.A. against Equidad Seguros is
accepted.
As of the date of this report, the procedure to
notify EQUIDAD SEGUROS - SEGUROS
GENERALES is underway.
To date, an order to be obeyed and complied
with has been issued to break down and open
the books and the procedure to notify the
impleaders will begin.
•
•
• f. APPROXIMATE AMOUNT: According to the
estimate of the amount indicated in the claim,
this currently adds up THREE BILLION SEVEN
HUNDRED NINETY THREE MILLION EIGHT
HUNDRED TWENTY FOUR THOUSAND FIVE
HUNDRED PESOS (COP 3,793,824,500),
estimated in the year 2006.
•
•
g. CLAIM FILING NUMBER: 2006-00711
h. JUDICIAL CONTINGENCY: Remote
f. APPROXIMATE AMOUNT: According to the
estimate of the amount indicated in the claim,
this currently adds up to a value of TWO BILLION
NINE HUNDRED MILLION PESOS (COP
2,900,000,000).
5. ADMINISTRATIVE PROCEEDINGS FOR THE
DIRECT REPARATION OF ANTONIO NARIÑO
UNIVERSITY AGAINST ODINSA S.A. ET. AL.
a. NAME OF PLAINTIFF:
ANTONIO NARIÑO UNIVERSITY
g. CLAIM FILING NUMBER:
63001333375220140007600 b. NAME OF DEFENDANT:
ODINSA S.A. ET. AL.
h. JUDICIAL CONTINGENCY: Eventual
c. TYPE OF PROCEEDINGS: Direct
reparations
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10 APPENDIX 1
d. HANDLED BY: Dispute Tribunal of Caldas g. CLAIM FILING NUMBER: 2011-00275
e. CURRENT STATUS OF THE PROCEEDINGS:
• Within the framework of the second ruling
proceedings, closing arguments were filed on
November 4, 2015.
• On December 3, 2015 the proceedings moved
to the second ruling stage.
h. JUDICIAL CONTINGENCY: Remote
7. DIRECT REPARATION OF RODRIGO
VARÓN BARRAGÁN VS. ODINSA S.A. ET. AL.
a. NAME OF PLAINTIFF:
RODRIGO VARÓN BARRAGÁN
f. APPROXIMATE AMOUNT: The claim was filed
for an amount of FIVE BILLION TWO HUNDRED
FORTY FOUR MILLION SEVENTY FIVE THOUSAND
PESOS (COP 5,244,075,000) in 2006.
b. NAME OF DEFENDANT:
ODINSA S.A. ET. AL.
c. TYPE OF PROCEEDINGS: Direct
reparations
g. CLAIM FILING NUMBER: 2006-00711 d. HANDLED BY: Administrative Court of Quindío
h. JUDICIAL CONTINGENCY: Remote e. CURRENT STATUS OF THE PROCEEDINGS:
•
•
March 20, 2015: the claim was accepted.
A clerk's certificate was issued to serve
notice and request and answer within 3 days
regarding the appeals filed by Autopistas del
Café S.A. and the National Infrastructure
Agency.
Second instance - to issue a second ruling.
6. TORT LIABILITY PROCESS OF LUIS FERNANDO
MEJÍA SERNA VS. ODINSA S.A. ET. AL.
a. NAME OF PLAINTIFF:
LUIS FERNANDO MEJÍA SERNA •
b. NAME OF DEFENDANT:
ODINSA S.A. ET. AL.
f. APPROXIMATE AMOUNT: The claim was filed for
an amount of SEVEN HUNDRED FORTY THREE
MILLION ONE HUNDRED EIGHTY EIGHT
THOUSAND FIVE HUNDRED NINETY PESOS (COP
743,188,590) estimated in 2014. c. TYPE OF PROCEEDINGS: Tort liability
g. CLAIM FILING NUMBER: 2014-262
d. HANDLED BY: Second Civil Court of the Circuit
of Manizales
h. JUDICIAL CONTINGENCY: Remote
e. CURRENT STATUS OF THE PROCEEDINGS:
PROMOTED BY
ODINSA S.A.
1. ODINSA S.A. vs. CARLOS GAVIRIA Y
ASOCIADOS S.A. IN REORGANIZATION ET. AL.
• The second instance is currently underway in
the High Court of Manizales - Family Civil
Chamber.
On November 12, 2015 an order was issued
admitting the appeal filed by the plaintiffs
against the first ruling.
It is currently in the second instance. Under
appeal of the order settling the costs.
•
• a. NAME OF PLAINTIFF:
ODINSA S.A.
f. APPROXIMATE AMOUNT: The claim was filed
for an amount of ONE HUNDRED THIRTY FOUR
MILLION NINETY TWO THOUSAND ONE HUNDRED
EIGHTY SEVEN PESOS (COP 134,092,187) in
2011.
b. NAME OF DEFENDANT:
CARLOS GAVIRIA Y ASOCIADOS S.A. IN
REORGANIZATION, CARLOS JOSE GAVIRIA
VALENZUELA ET. AL.
144 Odinsa I Annual Report I 2016
A Grupo Argos company
c. TYPE OF PROCEEDINGS:
Ordinary
3. Direct reparation action initiated by ODINSA
S.A. et. al.
d. HANDLED BY: Fortieth Civil Court of the Bogotá
Circuit, reassigned to Eight Civil Court of the
Backlog Circuit, due to suppression it was moved
to the Fifth Civil Court of the Circuit of Execution.
a. Plaintiff: Odinsa S.A. et. al. (GRUPO EJECUTOR
HATOVIAL Consortium)
b. TYPE OF PROCEEDINGS:
Direct reparation action filed against Financial
Superintendency of Colombia for the damages
suffered by the plaintiffs as a consequence of the
omissions incurred by the defendant in regards to
their compliance with their inspection, supervision
and control duties over the companies of Interbolsa
S.A., Interbolsa S.A. Sociedad Comisionista de Bolsa,
and Interbolsa S.A. Sociedad Administradora de
Inversión.
e. CURRENT STATUS OF THE PROCEEDINGS:
• November 17, 2015: The High Court of
Bogotá confirmed the order denying the
attachment of court bond JU003320 issued
by Compañía Aseguradora de Fianzas-
Confianza. December 2, 2015: Claim
changed to a different Court. As of the date of this report, a reply to the
notice received from the Fifth Civil Court of
Execution is being processed in order to
register the attachment on the ruling against
Odinsa.
Sent for resolution to the appeal against the
order of October 4, 2016.
•
•
c. HANDLED BY: Third Section, Subsection B of
the Administrative Court of Cundinamarca.
•
d. CURRENT STATUS OF THE PROCEEDINGS:
The proceedings initiated by the companies that
make up the Grupo Ejecutor Hatovial Consortium is in
the stage of initial hearings. The first part of the
hearing took place on December 15, 2015 and the
second in March 2016.
f. APPROXIMATE AMOUNT: According to the
estimate of the amount indicated in the claim, this
currently adds up to ONE BILLION SEVEN
HUNDRED THIRTEEN MILLION NINE HUNDRED
TEN THOUSAND TWO HUNDRED SIXTY ONE PESOS
(COP 1,713,910,261). The process is currently in the stage of
preliminary inquest and collection of evidence.
g. CLAIM FILING NUMBER: 2014-0037000
h. JUDICIAL CONTINGENCY: Likely
At present, the investigation is ongoing.
The district attorney in charge reported that Gilberto
Montoya has been located and they have his
information in order to conduct a video interview.
Additionally, the relevant steps were taken with the
department of International Affairs of the District
Attorney's Office in order to organize the logistics of
said task.
2. Criminal complaint initiated by ODINSA S.A. et. al.
a. Plaintiff: Odinsa S.A. et. al. (GRUPO EJECUTOR
HATOVIAL and CONSTRUCTOR ABURRÁ NORTE
Consortiums)
b. TYPE OF PROCEEDINGS:
Criminal complaint filed as a result of the
operations performed by Interbolsa stock brokers,
charged to the accounts of GEHATOVIAL and COCAN
consortiums without authorizations.
c. HANDLED BY: Attorney General of Colombia
d. CURRENT STATUS OF THE PROCEEDINGS:
The complaint is currently in the stage of
preliminary inquest and collection of evidence.
f. JUDICIAL CONTINGENCY: Remote
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