Financial Report (January 1, 2010 - December 31, 2010)

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PUBLIC POWER CORPORATION S.A. AND SUBSIDIARIESNOTES TO THE FINANCIAL STATEMENTSACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDSAS ENDORSED BY THE EUROPEAN UNIONDecember 31, 2010(All amounts in thousands of Euro, unless otherwise stated - except for share and per share data)1. CORPORATE INFORMATIONPublic Power Corporation S.A. (“PPC” or the “Parent Company”) was established in 1950 in Greece for anunlimited duration as a State owned and managed corporation for electricity generation, transmission anddistribution throughout Greece.In 1999, the Hellenic Republic enacted Law 2773/1999 (“the Liberalization Law”), which provided for, among otherprovisions, the transformation of PPC into a société anonyme. PPC’s transformation to a société anonyme waseffected on January 1, 2001, by virtue of Presidential Decree 333/2000 and its duration was set for 100 years.Effective December 2001, PPC’s shares are listed on the Athens and the London Stock Exchanges.The accompanying financial statements include the separate financial statements of PPC and the consolidatedfinancial statements of PPC and its subsidiaries (“the Group”). In addition, based on L. 2773/1999 and L.3426/2005, the unbundled financial statements are presented at appendix I, of the separate and consolidatedfinancial statements.PPC headquarters are located at 30, Chalkokondili Street, Athens, 104 32 Greece.At December 31, 2010, the number of staff employed by the Group was approximately 21,845 (2009: 22,582),excluding employees engaged in Hellenic Electricity Transmission System Operator S,A, (“HTSO”).At December 31, 2010, 169 employees (2009: 199), have been transferred to several State agencies (ministries,organizations, etc.) out of which,145 were compensated by PPC (2009: 156). The total payroll cost of suchemployees, at December 31, 2010, amounted to Euro 6,648(2009: Euro 9,602), and is included in the incomestatement.As a vertically integrated electric utility, PPC generates electricity in its own 63 power generating stations (40additional stations belong to PPC Renewables) facilitates the transmission of electricity through its own powerlines of 12,200 kilometres (high voltage)and distributes electricity to consumers through its own distribution lines of226,456 kilometres (medium and low voltage).Lignite for PPC’s lignite-fired power stations is extracted mainly from its own lignite mines.PPC has also constructed approximately 1,916 kilometres of fibre-optic network along its transmission lines,almost 161 kilometres of urban underground fibre optics network and almost 17 kilometres of underwater fibreoptics network.2. LEGAL FRAMEWORKAmendments to the legislative framework of the Electricity Market in 2010Α. Amendments concerning the Wholesale Electricity MarketWith the Ministerial Decision of the Ministry for the Environment, Energy and Climate Change (MIEECC) of OGΒ’ 1585/29.9.2010, the basic amendments to the provision of the GPEC are:i. The addition of the Average Specific Cost of Carbon Emissions to the variable cost of thermal generationunits. The Average Specific Cost of Carbon Emissions is defined as the average cost for the coverage ofthe deficit of emission allowances of each unit.ii. A procedure is enacted, through which, RAE shall review, the bids submitted by thermal units, to ascertainwhether they reflect at least their variable, as it is stated in the provisions of Law 2773/1999 as amended.iii. The validity of the Variable Cost Recovery Mechanism is extended. According to the Mechanism, each unitwhich is instructed by the TSO and generates energy for the System, is entitled to recover at least itsvariable cost for the generation of energy which corresponds to the instructions, for each Cost CoveragePeriod of the Dispatching Day. RAE has the obligation, through a Decision, to determine the Variable CostRecovery Periods as well as the percentage of surcharge that will be applied.iv. The definition of variable INS Tut is modified. The specific parameter is used in the calculation of thedeviations of the generation units.v. A non-compliance penalty is enacted for the cases that a significant deviation among the submitted values oftechnical characteristics and their realized values, is ascertained by the TSO.vi. The Weekly Declaration for the management of Mandatory Hydro Output, which is submitted by HydroPlants is considered hereinafter as binding.61
PUBLIC POWER CORPORATION S.A. AND SUBSIDIARIESNOTES TO THE FINANCIAL STATEMENTSACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDSAS ENDORSED BY THE EUROPEAN UNIONDecember 31, 2010(All amounts in thousands of Euro, unless otherwise stated - except for share and per share data)2. LEGAL FRAMEWORK (CONTINUED)vii. The validity of the Transitory Capacity Assurance Mechanism is extended. The provisions concerning thecalculation of the Capacity Assurance Coefficient, are amended. This coefficient is hereinafter calculated onan hourly basis.viii. It is specified that the calculation of the non-compliance charges is performed indicatively until 31.01.2011.The TSO until January 15 th , 2011. will review the whole issue and submit a report to RAE, with the purposeof revaluing the calculation coefficients of the respective amounts.The Decision of the MIEECC published in OG Β’ 1557/22.09.2010 specifies the 30 th of September 2010 as 5 thReference Day.In the Decision of the MIEECC published in OG΄1700/29.10.2010) titled Determination of the CapacityPayment Unit Price according to the provisions of article 333 of the Grid and Power Exchange Code (OG655/Β’/17.05.2005) the numerical value of the Capacity Payment Unit Price was set to forty five thousand Eurosper MW per year (45.000€/MW/year). The aforementioned decision is implemented from 1.11.2010.After the implementation of the 5 th Reference Day it became necessary that the time periods of electricity marketsettlement payments should be redefined. Following a public consultation organized by RAE among Participantsof the Electricity Market the ministerial decision of the MIEECC published in OG Β’ 1874/30-11-2010 wasissued, which modifies the provisions of the Greek Grid & Exchange Code concerning the aforementionedpayment schedules.In order to achieve the integration of the settings needed for the operation of the wholesale market, RAE issueddecision 2312/2010 (OG Β’ 2046/30-12-2010) by which it determined the value of parameter TOL, which is usedin the calculations of the deviations of the generation units. Its value was set to 2%.In the same framework RAE issued decision 2258/2010 (OG Β’ 2046/30-12-2010) by which the percentage ofsurcharge calculated in the Variable Cost Recovery Mechanism of the generation units is set to 10%. In the samedecision all 24 hours of a day are specified as variable cost Coverage Periods.Β. New LawsNew legislative initiatives took place, aiming at either incorporating existing EU Directives, or supplementing theexisting legislative framework.1. In OG Α΄ 85/4.06.2010, Law 3851/2010 was published titled Acceleration of the development of theRenewable Resources of Energy to address climate change and other provisions in issuesconcerning the authorities of the Ministry for the Environment, Energy and Climate Change.The specific Law amends Law 3468/2006 which regulated issues concerning energy generation from plantsthat use Renewable Resources of Energy.2. In OG Α’ 95/23.06.2010 Law 3855/2010 was published titled Measures for the end-use efficiency, energyservices and other provisions.By the specific Law the Greek legislation complies with Directive 2006/32/EC of the 5 th of April 2006, whichaims at the financially effective amelioration of energy efficiency and the development of an energy servicesmarket.3. In the OG Α’ 204 2/12/2010 Law 3894/2010 was published titled Acceleration and Transparency ofStrategic Investments. It concerns the Law with the alternative name ‘Fast Track’, by which theorganization ‘ Invest in Greece’ is created, through which the evaluation, promotion and implementation ofstrategic investments will be achieved. The law enacts specific criteria by which an investment ischaracterized as strategic and enacts measures through which the necessary procedures for theirimplementation are accelerated.C. Measures which amend the institutional texts of electricity market.1. In OG Β’ 646/14.05.2010 the ministerial Decision of the MIEECC was published with subject theorganization and Application of System providing Guarantees of Origin of electricity generation byRES and Cogeneration plants as well as its Assurance Mechanism.2. In order to comply with this measure the Ministry of Finance and the MIEECC issued common Ministerialdecision OG Β’ 989/30.06.2010 specifying the details for data transfer, concerning the collection of theSpecific TAX by the departments of the MIEECC, RAE, HTSO, DSO as well as the suppliers of electricity, tothe Controlling Customs Department of the Ministry of Finance.62
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A. STATEMENT OF MEMBERS OF THE BOAR
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STATEMENT OF MEMBERS OF THE BOARD O
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B. EXECUTIVE SUMMARY OF THE BOARD O
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In December 2010 decided:- To initi
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Financial Report (January 1, 2010 - December 31, 2010)

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