31 March 2008(pdf)

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PUBLIC POWER CORPORATION S.A.NOTES TO THE INTERIM CONDENSED CONSOLIDATED AND SEPARATE FINANCIALSTATEMENTSIN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ASADOPTED BY THE EUROPEAN UNIONMARCH 31, 2008(All amounts in thousands of Euro, unless otherwise stated)1. CORPORATE INFORMATIONPublic Power Corporation S.A. (“PPC” or the “Parent Company”) was established in 1950 in Greecefor an unlimited duration as a State owned and managed corporation for electricity generation,transmission and distribution throughout Greece. In 1999, the Hellenic Republic enacted Law2773/1999 (“the Liberalization Law”), which provided for, among other provisions, the transformationof PPC into a société anonyme. PPC’s transformation to a société anonyme was effected on January 1,2001, by virtue of Presidential Decree 333/2000 and its duration was set for 100 years. EffectiveDecember 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 theconsolidated financial statements of PPC and its subsidiaries (“the Group”).PPC headquarters are located at 30, Chalkokondili Street, Athens, 104 32 Greece. At March 31, 2008and 2007, the number of staff employed by the Group was approximately 24,332 and 25,955,respectively, excluding employees engaged in Hellenic Electricity Transmission System Operator(“HTSO”).At March 31, 2008 and 2007, 236 and 262 employees, respectively have been transferred to severalState agencies (ministries, organizations, etc.) out of which, 186 and 225 were compensated by PPC.The total payroll cost of such employees amounted to Euro 1,754 and Euro 2,069 for the three monthperiod ended March 31, 2008 and 2007, respectively.As a vertically integrated electric utility, PPC generates electricity in its own 67 power generatingstations (32 additional stations were transferred to PPC Renewables, through the spin off procedure in2007), facilitates the transmission of electricity through approximately 11,700 kilometres of highvoltage power lines and distributes electricity to consumers through approximately 214,000 kilometresof distribution network.Lignite for PPC’s lignite-fired power stations is extracted mainly from its own lignite mines. PPC hasalso constructed approximately 1,600 kilometres of fibre-optic network along its transmission linesand almost 200 kilometres of urban underground fibre optics network.2. CHANGES IN LEGAL FRAMEWORKThere were no changes in legal framework for the period 01.01.2008 – 31.03.20083. BASIS OF PRESENTATION FOR THE INTERIM CONDENSED FINANCIAL STATEMENTS3.1. BASIS OF PREPARATION(a) Basis of preparation of financial statements: The accompanying interim condensed consolidatedand separate financial statements (“financial statements”) for the three month period ended March31, 2008 have been prepared in accordance with IAS 34 “Interim Financial Reporting” whichdefines the form and the content of the interim financial statements. The accompanying financialstatements do not include all the information and disclosures required in the annual financialstatements and should be read in conjunction with the latest annual financial statements as atDecember 31, 2007 made publicly available.8
PUBLIC POWER CORPORATION S.A.NOTES TO THE INTERIM CONDENSED CONSOLIDATED AND SEPARATE FINANCIALSTATEMENTSIN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ASADOPTED BY THE EUROPEAN UNIONMARCH 31, 2008(All amounts in thousands of Euro, unless otherwise stated)3.1. BASIS OF PREPARATION (Continued)The accompanying financial statements have been prepared under the historical cost conventionexcept for certain assets that have been measured at fair value, assuming that PPC and itssubsidiaries will continue as a going concern.The financial statements are presented in thousands of Euro and all amounts are rounded to thenearest thousand, except when otherwise indicated.(b) Approval of Financial Statements: The Board of Directors approved the accompanying financialstatements for the three month period ended March 31, 2008, on May 27 th , 2008.3.2. ACCOUNTING POLICIESThe accounting policies applied to the financial statements are the same as those applied to the annualseparate and consolidated financial statements for the year ended December 31, 2007.3.3. NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVEUp to the date of approval of the financial statements, certain new standards, interpretations andamendments to existing standards have been published but are not yet effective for the current reportingperiod and which PPC has not early adopted, as follows:Standards and interpretations issued by the IASB and adopted by the EUIFRS 8 ‘Operating Segments’ (effective for annual periods beginning on or after 1 January 2009). IFRS8 replaces IAS 14 ‘Segment Reporting’ and adopts a management-based approach to segment reporting.The information reported would be that which management uses internally for evaluating the performanceof operating segments and allocating resources to those segments. This information may be different fromthat reported in the balance sheet and income statement and entities will need to provide explanations andreconciliations of the differences. PPC is in the process of assessing the impact of this standard on itsfinancial statements.IFRIC 11, IFRS 2 ‘Group and Treasury Share Transactions’ (effective for annual periods beginning onor after 1 March 2007). IFRIC 11 requires arrangements whereby an employee is granted options to buyequity shares, to be accounted for as equity-settled schemes by an entity even if the entity chooses or isrequired to buy those equity shares from another party, or the shareholders of the entity provide the equityinstruments granted. The interpretation also extends to the way in which subsidiaries, in their separatefinancial statements, account for such schemes when their employees receive rights to equity instrumentsof the parent. This interpretation is not relevant to PPC.Standards and interpretations issued by the IASB but not yet adopted by the EUAmendment to IAS 23 ‘Borrowing costs’ (effective for annual periods beginning on or after 1 January2009). The benchmark treatment in the existing standard of expensing all borrowing costs to the incomestatement is eliminated in the case of qualifying assets. All borrowing costs that are directly attributable tothe acquisition or construction of a qualifying asset must be capitalised. A qualifying asset is an asset thatnecessarily takes a substantial period of time to get ready for its intended use or sale. In accordance withthe transitional requirements of the Standard, PPC will adopt this as a prospective change. Accordingly,borrowing costs will be capitalised on qualifying assets with a commencement date after 1 January 2009.No changes will be made for borrowing costs incurred to this date that have been expensed.9
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