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)3.4 PRINCIPAL ACCOUNTING POLICIES (CONTINUED)considered as possible that enough taxable profits will be presented against which, a part or the total of assets can beutilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the yearwhen the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted orsubstantively enacted at the balance sheet date. Income tax relating to items recognized directly in equity isrecognized in equity and not in the statement of income.Defined contribution plansPPC recognizes as an expense the contribution for the employees’ services payable to PPC Personnel InsuranceOrganization and as a liability the amount that has not been paid yet.Revenue recognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and therevenue can be reliably measured. Revenue from all types of electricity sales is accounted for on an accrual basis.At each balance sheet date, unbilled revenue is recorded to account for electricity delivered and consumed bycustomers but not yet billed. Deductions from reduced consumption of electricity as defined by specific returnpolicies of the Company are accounted when they can reliably be estimated (based on historical data, if availableor on prior year’s data. Revenue from rendering of services is recognized based on the stage of completion of theservice rendered and to the extent that the related receivable will be collected. Revenue from interest is recognizedwithin the period incurred and revenue from dividends is recognized when the Group’s right on such dividends isapproved by the respective bodies of the companies’ that declare them.ElectricityElectricity costs are expensed as purchased and separately reflected in the accompanying statements of income.LeasesThe determination of whether an arrangement is, or contains a lease is based on the substance of thearrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific assetor assets or the arrangement conveys a right or use the asset.Group as a lesseeLeases, which do not transfer to the Group substantially all the risks and benefits of ownership of the asset areclassified as operating leases. Operating lease payments are recognized as an expense in the statement ofincome on a straight line basis over the lease term.Group as a lessorLeases where the Group does not transfer substantially all the risks and benefits of ownership of the asset areclassified as operating leases. Operating lease payments are recognized as revenue in the statement of incomeon a straight line basis over the lease term.Earnings/ (Losses) per shareThe basic and diluted earnings per share, are computed by dividing net income by the weighted average numberof shares outstanding during the relevant year. The weighted average number of shares is derived by adding theexisting shares, that the share capital is divided, with the rights that the Company owns and potentially couldexercise.Subsequent eventsPost period-end events that provide additional information about the Group’s position at the balance sheet date(adjusting events), are reflected in the financial statements. Post-period-end events that are not adjusting eventsare disclosed in the notes.Operating SegmentAccording to L. 2773/1999 and L. 3426/2005, the Company is obliged to prepare and integrate in its financialstatements, accounting unbundled financial statements for each sector. These include PPC’s activities in theSectors of Generation, Transmission, Distribution, Supply to Eligible Customers, Supply to non – eligiblecustomers and Management of the Non-Interconnected Islands. As a result, information disclosures byoperational sector as well as the principles of segment as presented in IFRS 8 “Operating Segment” are stated inthe Appendix 1.77
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)3.5. NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVEThe new standards, amendments / improvements of standards or Interpretations listed below, were issued buthave not been adopted in the accounting period, beginning in January 1, 2010:• IFRIC 19 Extinguishing Financial Liabilities with Equity InstrumentsThe interpretation is effective for annual periods beginning on or after 1 July 2010. This interpretationaddresses the accounting treatment when there is a renegotiation between the entity and the creditorregarding the terms of a financial liability and the creditor agrees to accept the entity’s equity instruments tosettle the financial liability fully or partially. IFRIC 19 clarifies such equity instruments are “consideration paid”in accordance with paragraph 41 of IAS 39. As a result, the financial liability is de-recognized and the equityinstruments issued are treated as consideration paid to extinguish that financial liability.The implementation ofthis Interpretation, is not expected to have impact in PPC’s financial statements.• IFRIC 14 Prepayments of a Minimum Funding Requirement (Amended)The amendment is effective for annual periods beginning on or after 1 January 2011. The purpose of thisamendment was to permit entities to recognize as an asset some voluntary prepayments for minimum fundingcontributions. This Earlier application permitted and must be applied retrospectively. This Interpretation doesnot have any impact on the PPC’s financial statements.• IFRS 9 Financial Instruments – Phase 1 financial assets, classification and measurementThe new standard is effective for annual periods beginning on or after 1 January 2013. Phase 1 of this newIFRS introduces new requirements for classifying and measuring financial assets. Early adoption is permitted.This standard has not yet been endorsed by the EU. PPC is in the process of assessing the impact of thenew standard in the financial Statements.• IAS 32 Classification on Rights Issues (Amended)The amendment is effective for annual periods beginning on or after 1 February 2010. This amendmentrelates to the rights issues offered for a fixed amount of foreign currency which were treated as derivativeliabilities by the existing standard. The amendment states that if certain criteria are met, these should beclassified as equity regardless of the currency in which the exercise price is denominated. The amendment isto be applied retrospectively PPC does not expect that this amendment will have an impact in the financialStatements.• IAS 24 Related Party Disclosures (Revised)The revision is effective for annual periods beginning on or after 1 January 2011.This revision relates to thejudgment which is required so as to assess whether a government and entities known to the reporting entityto be under the control of that government are considered a single customer. In assessing this, the reportingentity shall consider the extent of economic integration between those entities. Early application is permittedand adoption shall be applied retrospectively. PPC is in the process of assessing the impact of thisamendment will have an impact in the financial Statements.• IFRS 7 Financial Instruments: Disclosures as part of its comprehensive review of off balance sheetactivities (Amended)The amendment is effective for annual periods beginning on or after 1 July 2011. The purpose of thisamendment is to allow users of financial statements to improve their understanding of transfer transactions offinancial assets (e.g. securitisations), including understanding the possible effects of any risks that may remainwith the entity which transferred the assets. The amendment also requires additional disclosures if adisproportionate amount of transfer transactions are undertaken around the end of a reporting period. Theamendments broadly align the relevant disclosure requirements of IFRSs and US GAAP. This amendmenthas not yet been endorsed by the EU. The Group does not expect that this amendment will have an impact inthe financial statements.• IAS 12 Deferred tax: Recovery of Underlying Assets (Amended)The amendment is effective for annual periods beginning on or after 1 January 2012. This amendmentconcerns the determination of deferred tax on investment property measured at fair value and alsoincorporates SIC-21 Income Taxes — Recovery of Revalued Non-Depreciable Assets into IAS 12 for nondepreciableassets measured using the revaluation model in IAS 16. The aim of this amendment is to includea) a rebuttable presumption that deferred tax on investment property measured using the fair value model inIAS 40 should be determined on the basis that its carrying amount will be recovered through sale and b) arequirement that deferred tax on non-depreciable assets, measured using the revaluation model in IAS 16,should always be measured on a sale basis. This amendment has not yet been endorsed by the EU. TheGroup does not expect that this amendment will have an impact in the financial statements.78
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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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• € 18 m. have been expended in
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After this outcome basic technical
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With the actions mentioned above, D
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S&P reports that the current PPCs
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3 rd Quarter of 2011Fully implement
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Compensation to members of the Boar
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NOTES TO THE UNBUNDLED FINANCIAL ST
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• The account balances which rela
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interconnected islandsRental of dis
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E. ADDITIONAL INFORMATION142
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F. DISCLOSURES UNDER ARTICLE 10 L.3
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Financial Report (January 1, 2010 - December 31, 2010)

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