REG - Public Power Corp - Annual Financial Report <Origin Href="QuoteRef">DEHr.AT</Origin> - Part 10

Public Power SAAnnouncement

07/04/2017 18:40

- Part 10: For the preceding part double click  ID:nRSG9898Bi 

Lignite Levy                  112,730      86,954       112,730      86,954     
 Other                         37,671       38,159       24,464       14,149     
 Total                         1,283,795    1,848,740    1,864,956    1,830,239  
 
 
35.            Short-Term Borrowings 
 
                               Group     Parent   
                               2016      2015       2016      2015    
 Binding overdraft facilities                                         
 - Credit lines available      30,000    127,016    30,000    80,000  
 - Unused portion              -         -          -         -       
 - Used portion                30,000    127,016    30,000    80,000  
 
 
During 2016, the Parent Company proceeded to the amount repayment of Euro 50 mil. which refers to an overdraft facility and
it was refinanced in February 2016. 
 
36.            Accrued And Other Current Liabilities 
 
                                           Group      Company  
                                           2016       2015       2016       2015     
 Accrued interest on loans and borrowings  14,822     18,545     14,822     15,534   
 Natural gas and liquid fuel purchases     39,021     47,797     39,021     47,797   
 Energy purchases                          37         5,935      -          1,001    
 Personnel day off and overtime            73,631     79,971     49,573     49,571   
 RAE fees                                  6,091      6,961      6,091      6,961    
 Deferred interconnection rights           -          55,120     -          -        
 Deferred non-compliance charges           -          24,906     -          -        
 Purchase of Emission Allowances           75,566     76,241     75,566     76,241   
 Discounts on Medium voltage customers     11,000     19,438     11,000     19,438   
 Discounts on Low voltage customers        -          30,000     -          30,000   
 IPTO S.A.                                 -          -          100,433    23,576   
 HEDNO S.A.                                -          -          -          19,742   
 Other                                     43,342     38,555     28,617     4,568    
 Total                                     263,510    403,469    325,123    294,429  
 
 
37.            Commitments, Contingencies AND LITIGATION 
 
Ownership of Property 
 
Major matters relating to the ownership of the Group's assets, are as follows: 
 
1. The Parent Company has completed the registration of its property through a fixed assets registry. These assets (almost
entirely) are registered at the relevant land registries over the country and the cadastral application is monitored. The
update of the existent in the company new integrated information system for fixed assets management is in progress. 
 
2. In a number of cases, expropriated land, as presented in the expropriation statements, differs (in quantitative terms),
with what the Parent Company considers as its property. 
 
3. Agricultural land acquired by the Parent Company through expropriation in order to be used for the construction of
hydroelectric power plants, will be transferred to the State at no charge, following a decision of The Parent Company's
Board of Directors and a related approval by the Ministry of Development, if such land is no longer needed by the Parent
Company for the fulfilment of its purposes. 
 
The property, plant and equipment of the Group are located all over Greece. Currently, the Group  does not carry any form
of insurance coverage on its property, plant and equipment (except for its information technology equipment), resulting to
the fact that if a sizable damage is incurred to its property, it might affect its profitability. Materials, spare parts as
well as liabilities against third parties are not insured. The Group is currently evaluating the possibility - in the newly
formed legal framework, to conduct a tender for the selection of an insurance company to cover for its assets as well as
liabilities against third parties. 
 
Litigation and Claims 
 
The Group from continuing operations is a defendant in several legal proceedings arising from its operations. The total
amount claimed as at December 31, 2016 amounts to Euro 1,438 mil. as further detailed below: 
 
1.   Claims with contractors, suppliers and other claims: 
 
A number of contractors and suppliers have raised claims against the Company. 
 
These claims are either pending before courts or under arbitration and mediation proceedings. The total amount involved is
Euro 455 mil. In most cases the Group has raised counter claims, which are not reflected in the accounting records until
the time of collection. 
 
2.   Fire incidents and floods: 
 
A number of individuals have raised claims against the Company for damages incurred as a result of alleged
electricity-generated fires and floods. The total amount relating to fires is Euro 44 mil. while there are no claims
relating floods. 
 
3.   Claims by employees: 
 
Employees are claiming the amount of Euro 207 mil., for allowances and other benefits that according to the employees
should have been paid by PPC. 
 
4.   Litigation with PPC Personnel Insurance Organization (PPC-PIO): 
 
Until December 31, 2016,PPC Personnel Insurance Organization (former "PPC PIO", TAYTEKO/IKA at 
 
present) had filed, before the courts, seven (7) lawsuits against PPC,  claiming an amount in total of Euro 87.7 
 
mil., out of which three (3) are pending for a total amount of Euro 7 mil. 
 
5.     General Federation of PPC Personnel (GENOP DEI/KHE) and PanHellenic Federation of Retirees' (POS DEI) lawsuit
against PPC 
 
GENOP DEI/KHE and POS DEI have filed a lawsuit against PPC in the Multimember Court of First Instance in Athens. By the
above mentioned lawsuit they pursue that PPC will be obliged to pay to third parties, who are not litigants, in particular
the insurance funds of IKA - ETAM and TAYTEKO the amount of Euro 634.8 mil. plus interest, for the coverage of the
resource, which according to the lawsuit, the State did not pay  to the above mentioned insurance funds for the years 2010
and 2011. The lawsuit is scheduled to be heard in the Multimember Court of First Instance in Athens on September 18th, 2014
but it was postponed and heard on February 23rd, 2017. The decision for the above mentioned lawsuit is pending.In view of
the fact that the above mentioned lawsuit is based on admissions which are in contrast with the provisions of Decision
13/2010 of the Supreme Court (see also  1767/2014, 299 and 805/2015) and Decision 668/2012 of the Athens Court of Appeals,
the Parent Company considers that the possibilities of a positive outcome for the lawsuit in question are minimal and
therefore, has not formed a provision. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
6.   PPC's lawsuit against ETAA (former TSMEDE) 
 
ETAA (former TSMEDE) by its Decision 7/2012 has imposed on PPC the amount of Euro 27.4 mil. in application of article 4 of
L. 3518/2006, as employer contributions due to the Main pension Branch for the period 01.01.2007 - 30.04.2012 and
pertaining to the engineers insured before 01.01.1993 to the above mentioned Insurance Fund, that have been employed by PPC
for the above mentioned period. 
 
Against the above mentioned 7/2012 decision of the Insurance Fund in question, PPC has filed (legally and timely) the
05.09.2012 appeal to the Athens Administrative Court of First Instance. The discussion of the appeal took place on
03.11.2014 and the issuance of a decision is pending. 
 
Since its employees - who are engineers- are insured mandatorily to PPC's Insurance Fund based on L. 4491/1966, thus
resulting to PPC paying on their behalf to the above mentioned Insurance Fund the corresponding employer contributions
while insurance for the above mentioned engineers in ETAA is optional and is done by choice, with them paying the
corresponding insurance contributions provided for engineers that are independently employed, the Parent Company considers
that the possibilities of a negative outcome of its appeal are minimal and therefore has not established a provision. 
 
7.   Annulment requests against the request for proposal (RFP) by PPC S.A. for the sale of 66% IPTO's shares 
 
Two annulment requests have been filed (one of them includes an application of interim measures) against PPC's RfP in 2014
for the sale of 66% of IPTO's (PPC's subsidiary) shares. The first request has been filed by five (5) trade unions and the
second has been filed by the PanHellenic Federation of Retirees' (POS DEI). The above mentioned requests were discussed in
front of the Supreme Court's Plenary Session (after postponement) on December 5, 2014. The Supreme Court's Plenary Session
with its decisions 1745/2016 and 1746/2016 rejected the two annulment requests. 
 
It is noted that apart from the above mentioned annulment requests, a relevant lawsuit is pending in the civil courts with
an initial court date of Supreme Court's Plenary Session 10.01.2018 (the interim measures hearing took place on October 14,
2014 for which a rejection decision (247/2014) was issued) for the annulment of PPC's BoD's decision concerning the RfP. 
 
8.   Annulment requests against the request for binding offer (RfBO) by PPC S.A. for the sale of 24 % IPTO's shares 
 
An annulment request has been filed in front of the Supreme Court against PPC's RfBO (Request for Binding Offer) in 2016
for the sale of 24% of IPTO's (PPC's subsidiary) shares. The above mentioned request was filed by General Federation of PPC
Personnel (GENOP DEI/KHE). A rapporteur in the case has not yet been appointed and a court date has not been determined. 
 
9.   Lawsuits of IPTO against PPC. 
 
IPTO has filed against PPC, two lawsuits for a total amount of Euro 540 mil. for amounts  due - according to IPTO- to the
Parent Company's participation in the  wholesale electricity market. In particular: 
 
·        By its first lawsuit IPTO is asking for an amount of Euro 242.7 mil. (with interest) for amounts due which the
Parent Company collects from supply bills and conveys to IPTO, that in turn conveys them to EMO. The interest for the above
mentioned sums amounts to Euro 22.5 mil. 
 
·        By its second lawsuit, IPTO is asking for the payment of Euro 232.6 mil. (with interest) for amounts due which the
Parent Company collects from supply bills and conveys to IPTO. The interest for the above mentioned sums amounts to Euro
40.6 mil. 
 
The lawsuits are scheduled to be heard on May 18, 2017 in the Multimember Court of First Instance in Athens. The Parent
Company considers that there is a chance of paying interest on certain sums due and has established a provision of Euro
30.3 mil. It is noted that PPC, if necessary, will file lawsuits against IPTO as well. 
 
On its side, the Parent Company has served an extrajudicial document inviting IPTO to pay a total amount of Euro 14 mil.
The above mentioned amount corresponds to overdue interest of invoices which incorporate debts to PPC from March 2012 until
the 02.02.2015. IPTO, up to this date, has not answered to this extrajudicial document. 
 
In December 2016, IPTO filed against PPC a new lawsuit, by which IPTO asks the Parent Company to be obliged to pay an
amount of Euro 406.4 mil. (with interest) for overdue receivables arising from the Company's participation in the wholesale
electricity market and refer to specific non-competitive charges of IPTO invoices. Moreover, IPTO asks the Parent Company
to be obliged to pay an amount of Euro 52.9 mil. corresponding to interest litigation plus the relevant stamp duty. The
Parent Company considers that it is likely to be asked to pay interest on certain overdue receivables, and has established
an adequate provision. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
10.  Lawsuits of the Municipality of Keratsini against PPC. 
 
The Municipality of Keratsini with its lawsuit on 19.03.2014 which (after various postponements and cancellations)
discussed before the Multimember Court of First Instance in Piraeus on 19.10.2016, claims from PPC a total amount of Euro
62,616. The Municipality of Keratsini claims that PPC failed to comply with its obligations under its BoD's Decision (No.
231/1996), which ratified the Protocol of Collaboration between the Municipality, the Ministry of Development and the
Ministry of Environment. On the one hand, the Protocol provided that PPC should transfer an area of 41,744 sq.m. to the
Municipality and on the other hand stop the operation of its Unit Agios Georgios in Keratsini from July 2006. 
 
It is noted that the above mentioned lawsuit is in the same context with two lawsuits of PPC against Municipality of
Keratsini before the Multimember Court of First Instance in Piraeus, i.e., No.1220/2005 and No.1221/2005, with which PPC
claims from the Municipality the amounts of Euro 479 and Euro 17,770, respectively, as compensation for trespassing on
PPC's property. For the above mentioned lawsuits a preliminary decision was already issued by the Multimember Court of
First Instance in Piraeus (No. 5883/2013), which initially accepted PPC's requests and appointed an expert to draft an
expertise. The expert vowed, after postponement, on 23.09.2016. The Municipality of Keratsini resigned from the application
during the fourth quarter of 2016. 
 
For the above amounts, the Group from continuing operations and the Parent Company have established provisions which as of
December 31, 2016 amounted to Euro 150 mil. and Euro 114 mil., respectively (31.12.2015: Group: Euro 204 mil. and Parent
Company: Euro 124 mil.), which are considered adequate for the expected losses arising from the final judgement. 
 
PPC's relation to its personnel's Social Security Funds 
 
Despite the fact that under the current legislation the Group does not have any obligation to cover in the future any
deficit between income and expenses to PPC's personnel Social Security Funds, there can be no assurance that this regime
will not change in the future. 
 
Litigations Risk 
 
The Group and the Parent Company are involved in several legal proceedings arising from their operations, and any adverse
outcome against PPC or any other of the Group's companies may have a negative impact on their business, financial condition
and reputation. 
 
In addition, as a majority state owned utility, the Group is subject to laws, rules and regulations designed to protect the
public interest, such as of public procurement or environmental protection. Violation of legislation, rules or regulations,
entail, among others, criminal sanctions for the Board of Directors members and executive officers as well as the employees
of the companies and utilities that are subject to those rules. 
 
Simultaneously, the Group is one of the largest industrial groups in Greece, with complex activities and operations across
the country. In the ordinary course of its  business, from time to time, competitors, suppliers, customers, owners of
property adjacent to the Group's  properties, media outlets, activists, and ordinary citizens, raise complaints (even to
public prosecutors) about the Group's  operations and activities, to the extent they feel that such  activities and
operations cause or are likely to cause economic damage to their views and/or interests, businesses or properties. In the
context of advancing those complaints, they often file criminal complaints against the Group  with the public prosecutor on
a variety of grounds and allegations or make public allegations in the press, which the public prosecutor is obligated to
investigate further before they decide further actions, including the closing of the case for lack of any conclusive
evidence. 
 
These practices have intensified during the recent economic crisis, as public prosecutors and the general public have
generally become more sensitive to similar allegations, especially against companies in which the Hellenic Republic is a
major shareholder and are viewed as operating in the public interest. 
 
As a result, the Group and the Parent Company, their Board of Directors members and directors, are presently and from time
to time, and could be in the future, subject to various criminal or other investigations at various stages of procedural
advancement on a variety of grounds arising in connection with their activities in the ordinary course of business. These
investigations and legal proceedings may be disruptive to the Group's and the Parent Company's daily operations to the
extent that the officers and directors involved need to spend time and resources in connection therewith. They may also
adversely affect the Group's and the Parent Company's reputation. To date, none of the proceedings initiated against the
Group and the Group's officers or directors has resulted in any criminal convictions.

37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
Litigation with "Αlouminion of Greece" (ALOUMINION) 
 
1.   On 31.10.2013 with a majority of two to one (2/1) Decision No. D1/1/2013, the Permanent Arbitration Court of RAE
decided the price for the supply of electricity to ALOUMINION S.A. at Euro 40.7/MWh for the period 01.07.2010 until
31.12.2013. At this price both the fixed and variable energy costs were included, as well as System Use Charges, Ancillary
Services Charges, Public Service Obligations, and state fees on behalf of RAE and HTSO/EMO, although Renewable
Energy/Gaseous Pollutants special fees/ETMEAR, Special Electricity Tax, DETE and other taxes imposed were not included. The
burden on the financial results of the third quarter of 2013 imposed by the above mentioned Decision, as far as the supply
of electricity to ALOUMINION is concerned, for the period 01.07.2010 until 30.9.2013 amounted to Euro 105.5 mil. 
 
As the abovementioned Decision compelled PPC to sell at a loss, PPC filed a lawsuit for invalidity against it, which was
scheduled to be heard on 04.12.2014, and was postponed for 01.10.2015 and, in addition, submitted a complaint for state aid
before the European Commission (December 2013). 
 
Regarding PPC's appeal for the annulment of RAE's Arbitration Decision, the Athens Court of Appeals issued on 18.02.2016 a
decision (634/2016), not accepting PPC's lawsuit for the annulment of RAE's arbitration decision No 1/2013 and against
ALOUMINION. PPC may appeal on the Supreme Court against this decision. 
 
The European Commission by a letter in June 12th, 2014, had notified PPC that it does not intend to further examine the
complaint. PPC has challenged the Commission's decision in front of the General Court of the European Union by its appeal
dated 22/08/2014 (case T-639/2014). 
 
On 17.04.2015 PPC was notified of a subsequent decision (dated 25.03.2015) of the European Commission, through which, the
latter concluded, as the decision dated 12.06.2014 had, that PPC's complaint, concerning illegal state aid towards
ALOUMINION, does not require further investigation concerning state aid but using a different rationale. Specifically, the
new decision is based mostly on the fact that the decision to resort to arbitration met the criteria of a private investor
and therefore that it could not lead to an illegal state aid. 
 
On 20.05.2015 the General Court of the European Union forwarded to PPC an application by the European Commission, by which
the latter requests the dismissal of the above mentioned trial, which is pending following the T-639/14 complaint by PPC,
reasoning that, a decision is no longer necessary, since the Commission has issued a subsequent decision dated 25.03.2015,
replacing its previous decision dated 12.06.2015. PPC filed a relevant memo in front of the General Court. Moreover, PPC
filed (on June 29th 2015) an action for annulment according to art. 263 of the Treaty for the Operation of the European
Union, against the abovementioned decision of the Commission, dated 25.03.2015 [Case SA 38101 (2015/NN) (former 2013/CP)].
The hearing's date is still pending. 
 
2.   State Aid of Euro 17.4 mil. 
 
Furthermore regarding case C-590/14 P, relating to PPC's petition for the annulment of the General Court's decision dated
8.10.2014 in case T-542/11 "ALOUMINION against Commission", which annulled the Commission's decision dated 13.07.2011,
which awarded to PPC an amount of E17.4 mil., payable by ALOUMINION, for an illegal state aid, as a result of the
implementation of a favorable tariff for the period January 2007 - March 2008, a decision was issued on October 26th 2016
by the European Union's Court of Justice. 
 
With this Decision the aforementioned judgment of the General Court was annulled. Therefore, and given that the
Commission's Decision of July 13th, 2011 remains in force, following the annulment of the General Court's judgment, in
accordance with Article 266 TFEU and the case law, PPC should recover (once again) the illegal state aid with interest. For
the purpose of this recovery, the Commission sent a letter to the Central State Aid Unit (LTC-IC) informing that the
amount, plus statutory interest for the period from January 1st, 2015 until the date of payment, will be reimbursed by
Aluminion of Greece to PPC and requested information on this matter. LTC-IC subsequently informed PPC, which also informed
the Aluminion of Greece and the parts (PPC and ALOUMINION) are in communication in order for the aid to be recovered. It is
noted that ALOUMINION appealed against the above mentioned Decision of the Court (Case T-542/11 RENV ALOUMINION OF GREECE
S.A., former ALOUMINION S.A. against European Commission, PUBLIC POWER CORPORATION S.A. (PPC) , intervener]. In this Case
the Court may examine the other grounds of ALOUMINION's appeal for the annulment of the decision of July 13th, 2011.
ALOUMINION has applied in writing to be conducted oral procedure before the General Court. Subsequently, ALOUMINION in its
letter, requested from PPC not to proceed with the aid recovery until the issuance of the General Court's Decision in the
aforementioned Case T-542/11 RENV. PPC sent ALOUMINION's letter to the Central State Aid Unit (LTC-IC) which sent it
further to the Commission. Commission, by its letter dated 17.02.2017, replied to the ALOUMINION's request, reiterating the
obligation of the Greek Authorities to execute the decision immediately and effectively. It also notes that the amount of
aid and its interest can be deposited in a blocked account, in order to cease the payment of interest on the amount of
illegal aid. Moreover, the Commission by its letter, asks from the Greek Authorities information concerning the recently
signed "Electricity Supply Agreement between PPC S.A. and ALOUMINION OF GREECE S.A.", in order to determine whether it
could be considered that the 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
content of the abovementioned agreement covers the obligation to reimburse the illegal aid and compounding interest.
Additionally, the Commission requested and the updated calculation of the recovery amount of the illegal aid and its
interest. PPC replied to the above mentioned letter, with a letter to the Central State Aid Unit (LTC-IC) on 10.03.2017,
and expressed the opinion that in this case, the deposit by the ALOUMINION of the aid amount in a blocked account should
not be considered as an immediate and effective fulfillment of the obligation of the above mentioned Decision's execution
in accordance with the State Aid rules. Consequently, for the fulfillment of this obligation, the full amount (plus
interest) must be reimbursed to PPC. The views of PPC, following the relevant attachments and information which the
Commission had requested, were sent to the Greek Permanent Representation of the Hellenic Republic by the LTC-IC on
22.03.2017 in order to be sent to the Commission. The Commission's answer is pending. 
 
3.   ALOUMINION does not accept tariffs for the High Voltage Customers, which were decided on PPC's 28.02.2014 General
Shareholders' Meeting and proceeds with a partial payment of the amounts due to PPC for the consumptions of its industrial
installations, calculating, by its statement, the supply tariff of the energy consumed for the year 2014, on the base of
the above mentioned 1/31.10.2013 Arbitration Decision. 
 
In addition, ALOUMINION, in months of negotiations has denied all proposed tariffs by PPC, since 2013, including the tariff
decided by PPC's General Shareholders Meeting on 28.02.2014. 
 
PPC through its General Shareholders' Meeting on 22.12.2014 has decided concerning High Voltage Customers that do not
accept its 28.02.2014 Decision that : "The Management should have been committed to take measures against companies that do
not sign an electricity supply contract for 2014". Following that, PPC proceeded on 02.01.2015 to an order for the
deactivation of ALOUMINION's load meters and invited IPTO to proceed to all necessary actions. 
 
Following that, ALOUMINION has filed the RAE I-191545/09.01.2015 complaint -application of interim measures- application of
special regulatory measures against PPC, which was notified to IPTO. RAE, by its letter to PPC and IPTO -notified to
ALOUMINON- recommended to all parties not to execute the above mentioned order of deactivation. Afterwards, on 28.04.2015
RAE, notified by a letter an extract of its 11.03.2015 plenary session, by which the discussion and decision on
ALOUMINION's complaint was suspended until the resolving of some issues relating to the quorum set by law in order to take
a decision on the above mentioned complaint. 
 
On 20.03.2015 a document of the Competition Committee (CC) was notified to PPC, by which CC asked the submission of PPC's
views on a memo submitted by ALOUMINION, with which the latter asked from the CC, on 25.02.2015, to apply interim measures
(among others the suspension of PPC's complaint regarding its supply relationship dated 07.11.2013, as well as its January
2015 declaration of discontinuation of representation of ALOUMINION's meters). PPC has submitted the relevant data in time.
The CC set 29.07.2015 as the hearing date. Finally the hearing was held on 25.09.2015 and on 14.10.2015 and the CC granted
to PPC a deadline for submitting a commitment proposal under the provision of par. 6 of article 25 of Law 3959/2011. 
 
Following an oral hearing of the case on 15.10.2015, PPC submitted the final set of commitments undertaking that : a)
within ten (10) days of the notification of the CC's decision, will proceed in recalling the order for the deactivation of
ALOUMINION's load meters which has been sent by PPC to ALOUMINION and IPTO SA by its extrajudicial statements on 02.01.2015
and 19.01.2015 and b) that it will continue to supply electricity to ALOUMINION under the current terms and conditions,
while the issue of ALOUMINION's electricity tariffs, will be resolved through either direct negotiation between the parties
or by any other means. Negotiations should have been completed within three (3) months from the date of CC's acceptance of
the commitments. The latter date has been extended until 31.05.2016. Meanwhile PPC would refrain from adopting, and
generally taking any measures against ALOUMINION. The above mentioned PPC's commitments were accepted by the CC, which
issued the relevant decision (621 / 2015). Abiding by its commitments, PPC recalled the order for the deactivation of
ALOUMINION's load meters. Subsequently, negotiations were held between the parties, while an extension of the quarter in
which the parties must conclude their negotiations was granted twice by successive decisions of the Competition Committee
(CC), initially until 31.05.2016 and then until 08.07.2016. The theme of "Electricity Supply Agreement between PPC S.A. and
ALUMINION OF GREECE S.A" was introduced at the 14th Annual General Meeting of PPC's Shareholders dated 11.07.2016, which
decided to postpone its decision on the matter for the next General Meeting. On 13.09.2016 PPC's BoD decided to convene an
Extraordinary General Meeting of PPC's Shareholders on 05.10.2016. On the latter's agenda the above mentioned matter was
included. By the October 5th, 2016 Decision of the EGM of PPC's Shareholders the customer's (ALOUMINION) pricing terms for
the period 1.7.2016 - 31.12.2020 were approved, as well as pricing for the period 1.1.2014 - 30.6.2016. Based on the
Decision of the EGM, a Supply Agreement was signed on October 20th 2016 between ALOUMINION and PPC. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
Old Bank of Crete 
 
The dispute with the old "Bank of Crete" is dating back to 1989, when the bank was under liquidation. More precisely, by a
mandatory action of the then trustee of the Bank, PPC's deposits were mandatorily converted to stake-holding in the share
capital of the Bank and to obligatory credit to the Bank. PPC by its July 22, 1991 lawsuit against the bank asked to be
compensated for GRD 2.2 billion approximately, (Euro 6.5 mil.) for the reason that the above mentioned Act of the trustee
of the Bank was held invalid. 
 
Moreover, PPC had outstanding loan balances, received under six (6) loan agreements for which it was agreed upon to be
repaid gradually throught installments. On June 10, 1991, although PPC has paid the overdue installments, the Bank has
terminated all of the above mentioned loan agreements and thus on that date the claim against PPC became overdue for the
whole amount of the loans. For that reason, against PPC's above mentioned lawsuit, the Bank has proposed an offset of its
claim resulting by the above mentioned loans, amounting to GRD 4 bil. approximately, and furthermore has asked the payment
of this amount by PPC by its lawsuit dated 28.12.1995. The Court of First Instance has postponed the hearing of the Bank's
lawsuit against PPC until the final outcome of the hearing, which started with PPC's lawsuit against the Bank. 
 
PPC's lawsuit against the Bank was rejected by the Multimember Court of Athens and PPC appealed against the said Decision
of the Court which was also rejected by the Athens Appeal Court.The above mentioned decision was brought to review by PPC
before the Supreme Court, which accepted it and in consequence the case was again brought to trial before the Court of
Appeals, which held that an expert report should take place. After the said expert report the Court's decision was held
partially in PPC's favor (Court of Appeals decision 2005).However, a petition for review before the Supreme Court was filed
against the aforementioned Decision which was then accepted by the Supreme Court and then was resubmitted to the Court of
Appeals which by its inconclusive decision (Nr 4093/2009) ordered the completion of the expert report.The official expert
report was completed at the end of May 2012. Following that, the hearing of the case would have taken place on October 25,
2012, but it was postponed for September 26, 2013, due to the strike of both judges and lawyers. The case was heard on the
abovementioned date. 
 
Decision 3680/2014 of the Court of Appeals was issued, which only partially accepts PPC's lawsuit while essentially
accepting the results of the ordered by the Court above mentioned official expert report, as following : a) the amount due
by the Bank of Crete to PPC at the time of the filing of the lawsuit by PPC on 22.07.1991 amounted to GRD 1,268,027,987 and
b) The amount due by PPC to the Bank of Crete on 01.07.1991 due to the loan amounts becoming overdue by the Bank and after
the suggested by the Bank set off of its counterclaim against the above-mentioned PPC's claim, amounted to GRD 
2,532,936,698. 
 
PPC intends to appeal against the above mentioned decision. It is noted that until the final judgment on the appeal, the
discussion of the aforementioned (28 December 1995) lawsuit of the Bank of Crete against PPC is pending. 
 
In case that the Supreme Court accepts PPC's annulment, then it will judge the case anew and the decision which it will
issue will be irrevocable. In case of a positive outcome for PPC, for which there are increased probabilities, then the
case of the Bank against PPC might be rejected. 
 
Complaint against the European Commission's Decision regarding lignite extraction rights 
 
On May 13th, 2008, PPC filed before the General Court of the European Union (General Court), an application for the
annulment of the Commission's decision of March 5, 2008 regarding the granting by the Hellenic Republic of lignite
extraction rights to PPC. The Greek State has intervened before the aforementioned Court in favor of PPC, while two
competitors of PPC have intervened in favor of the European Commission. Furthermore, on August 4, 2009, the European
Commission issued a decision (which was notified to PPC on August 7, 2009), in which the measures for the compliance with
the decision of March 5, 2008 were defined as obligatory for the Hellenic Republic. 
 
The Commission's Decision made obligatory for the Hellenic Republic the launching of public tender procedures for the
concession of lignite rights for the mines of Drama, Εllassona, Vevi and Vegora to third parties excluding PPC, with the
exception of those cases where there were no other valid and binding offers. 
 
The Hellenic Republic was also obliged, to ensure that the third parties that would be awarded the relevant extraction
rights, would not sell to PPC the extracted lignite from the specific mines, with the exception of those cases where there
would be no other valid and binding offers. PPC submitted an application for the annulment of the said decisions of the
Commission before the CFI of the European Communities. Furthermore, the Hellenic Republic has intervened before the CFI in
the said proceedings, in favor of PPC. The hearing of the cases took place before the General Court on February 2, 2012.
The General Court of the European Union on 20.9.2012 issued two (2) decisions for both cases (Case T-169/08 and T-421/09)
in favor of PPC. 
 
The Commission appealed for the revision of the relevant decisions before the General Court of the European Union (Cases
C-553/12 and C-554/12). The abovementioned appeals have been notified to PPC on December 19, 2012. 
 
On March 25, 2013 the companies "MYTILINEOS S.A - GROUP OF COMPANIES", "PROTERGIA S.A." and "ALOUMINION S.A." filed before
the European Union Court, an intervention petition in favor of the European Union and against PPC, for the annulment of the
above mentioned Decision of the General Court of September 20th, 2012. The hearing of the case took place on October 3,
2013. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
On July 17, 2014, the Court of the European Union has issued a decision on the annulment requests for the 
 
Commission, by accepting them. In particular the Court of the European Union, by citing cases, has accepted that for the
application of the directives in question of the union law it is required (but also enough) the adoption of a measure, by
which a member state exclusively grants rights to a public company, creates an inequality of opportunities between
companies and thus drives the company to an abuse of its dominant position. The European Union's Court has not accepted the
Commission's request to judge the case in its substance following the injunction of the decision in the first degree but
referred the case again to the General Court of the European Union, in order for it to deliver a decision on the remaining
annulment reasons, which, although PPC had invoked in front of the Court, the General Court had not examined. In Case
T-169/08 RENV, PPC put forward four reasons for the annulment of Decision C (2008) 824: a) an error in law and a manifest
error of assessment b) breach of the duty to state reasons c) violation of the principles of legal certainty, of the
protection of legitimate expectations and of protection of private property as well as abuse of power and d) violation of
the principle of proportionality. 
 
In Case T-421/09 RENV, PPC put forward four reasons for the annulment of Decision C (2009) 6244: a) an error in law and a
manifest error in the definition of the relevant markets, b) a manifest error of assessment of the facts and error in law
concerning the necessity of the imposed measures, c) breach of the duty to state reasons and, d) violation of the principle
of contractual freedom and of the principle of proportionality. 
 
Before the hearing of the case, the General Court of the European Union requested that the parties reply to inquiries sent
to them on February 2016 and the parties submitted to the Court their written replies. On 08.03.2016 both Case T-169/08
RENV, in which parties are PPC as an applicant and the Greek Republic as intervener in support of PPC and on the other hand
the European Commission and the "Thessaloniki Energy A .E. " Greek Energy & Development SA " as interveners in support of
the Commission and" MYTILINEOS SA."," PROTERGIA SA " and "ALOUMINIUM SA" as interveners in the appeal, as well as Case
T-421/09 RENV between the same parties (but without interveners) were discussed before the General Court. By its Decision
of December 15th 2016 the General Court of the European Union rejected the reasons for annulment put forward by PPC. An
appeal against the judgment of the General Court was feasible, limited to legal matters, within two months after the
notification of the Decision. Eventually, PPC did not proceed to an appeal. 
 
Alleged claims of EMO (LAGIE), against PPC S.A. 
 
·     Implementation of methodology for the payments allocation due to deficits of the Day Ahead Schedule ( DAS ) 
 
It is noted that following the issuance of RAE's Decision 285/2013, EMO sent a letter to PPC, according to which an amount
of Euro 96.6 million is seemingly allocated to PPC, based on the finalization of the methodology by RAE for "the fair
allocation of payments to cover deficits in the Day Ahead Schedule (DAS)" created by third party suppliers during 2011 and
2012. 
 
In continuation to this letter, EMO allocating the total amount of Euro 96.6 mil.in seven monthly installments starting
from August 2013, sent to PPC the related briefing notes amounting to Euro 13.8 mil., each. PPC considered that EMO's
alleged claim violates fundamental principles of law, while simultaneously neither the amount nor the reasons for this
claim are substantiated. In addition, the relevant RAE Decision was contested in court. In particular, PPC had already
filed an application for annulment of RAE's Decision 285/2013, before the Council of State, as well as, an action for
suspension of such Decision, until a final judgment is issued by the Council of State. The hearing for the application for
the annulment took place on March 18, 2014. In the meantime, the Council of State had issued an interim Decision (n.
62/2014), which suspended the payment of 50% of the amount of Euro 96.6 mil., which is attributable to PPC. 
 
At the same time, EMO had filed a lawsuit in the Multimember Court of First Instance for an amount of Euro 55 mil. which is
the equivalent of 4 equal installments out of the total amount of Euro 96.6 mil. The hearing of this lawsuit has been
scheduled after postponement for 07.06.2017. The above mentioned case depends on the State Council's decision for the
validity of RAE's Decision 285/2013, which constitutes the legal basis of the dispute in the Court of First Instance. 
 
PPC, following the State Council's interim decision, has recognized in its books since 2014 a provision of 50% of the
amount of Euro 96.6 mil. due to the uncertainty of the recoverability of this amount in the future. In September 2016,
PPC's application for annulment was rejected by the State Council (Section D', decision 1761/2016). As a consequence, PPC
recognized the remaining 50% of the above amount in the results for the six month period ended 30.06.2016. 
 
Following the above decision of the State Council, EMO in November 2016 sent an "Information Note on the allocation of the
monthly deficits of the Day Ahead Schedule ( DAS )", which informed PPC regarding the final settlement of these deficits
according to Article 61 of the Power Exchange Code for Electricity at the expense of load representatives (suppliers of
Electricity) and the allocation methodology. According to the final statement the amount allocated to PPC amounts to Euro
126.3 million. As a result, PPC recognized, without prejudice to its legal rights, the residual amount of Euro 29.7 mil. in
the results of the Third quarter 2016. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
It is noted that EMO on 23.12.2016 filed a lawsuit against PPC and asks approximately the amount of Euro 78 mil., plus
interest, which according to EMO is the residual amount that PPC owes as a registered Load Representative from the DAS
settlement and the State Council's decision 1761/2016, including and the amounts of Euro 746 and Euro 16,7 that PPC owes to
EMO as Last Resort Supplier and as Universal Service Supplier.  The above mentioned lawsuit was filed in accordance with
the new provisions of the Code of Civil Procedure, therefore, it has not a court date with a last deadline of proposals'
submission on April 7, 2017. The hearing is determined by the President of the Court after that date. 
 
PPC filed an opposite lawsuit against EMO and the above mentioned lawsuit, with EMO's application on 20.02.2017,  which
will be heard together with the above mentioned EMO's lawsuit. 
 
In addition, the company "ELPEDISON" by two lawsuits requests EMO to be ordered to pay to "ELPEDISON" an amount of Euro
89.4 mil. (with interest), stemming from its participation to DAS. The lawsuits are founded to RAE's Decision 285/2013,
according to its second part, which forbids the practice of offsetting claims from the participating in DAS with claims
from other causes. Specifically, it claims that EMO's negligence to demand from PPC to stop the practice of offsetting
amounts not pertaining to the DAS market leaded to EMO's inability to timely pay ELPEDISON which is why it claims the above
mentioned amounts from EMO. The lawsuits were scheduled to be heard in the Multimember Court of Piraeus on 25.05.2016. 
 
EMO asked PPC to participate in the above mentioned trial (where the two lawsuits will be heard) as a procedural guarantor
asking with an incidental request that PPC is reprobated to pay the above mentioned sums (according to PPC's share of the
electricity supply market energy) in case of an adverse decision. The notice of EMO against PPC for the latter's
participation in the trial of Elpedison against EMO was going to be heard together with the main trial at the hearing of
25.5.2016. The additional independent intervention which PPC brought into trial hearing on 30.03.2016 was postponed, but it
was likely to be heard for relevant reasons together with the above mentioned main trial and notice of the EMO on
25.5.2016. The above mentioned cases were postponed, and more specifically, on the initiative of Elpedison, which is the
first applicant, and upon consent of EMO and PPC. 
 
The companies "HERON II THERMAL POWER PLANT VIOTIAS S.A." and "PROTERGIA THERMAL POWER PLANT AGIOY NIKOLAOY S.A.", by
similar lawsuits request EMO to be ordered to pay to them the amounts of Euro 14.3 and Euro 3.8 respectively stemming from
their participation to DAS. EMO asks PPC to participate in the trials as a procedural guarantor asking with an incidental
request that PPC is reprobated to pay the above mentioned sums (according to PPC's share of the electricity supply market
energy) in case of an adverse decision. The notices of EMO against PPC for the latter's participation in the trials of
"HERON II THERMAL POWER PLANT VIOTIAS S.A." and PROTERGIA THERMAL POWER PLANT AGIOY NIKOLAOY S.A." against EMO were going
to be heard together with the main trial (after postponements) at the hearing of 3.5.2017 and 28.4.2017 respectively. 
 
The main applicant PROTERGIA resigned from its main lawsuit in December 2016, and EMO with e-mail on 20.03.2017, informed
us that its notice against PPC will be postponed and will not be discussed at the court date 28.04.2017 since it is
pointless after the dismissal of the main trial. 
 
Similarly, HERON II with e-mail on 20.03.2017 informed the other litigants (EMO and PPC) that does not intend to discuss on
03.05.2017 its main lawsuit as well as to submit proposals, thus both the main lawsuit and the related notice of EMO will
be postponed upon a relevant consensus of all litigants. Therefore, all the aforementioned related trials will be
dismissed. 
 
·     Offsets of Photovoltaic Systems Producers in buildings 
 
Moreover, the above mentioned Decision 285/2013 of RAE which does not permit the netting of amounts that PPC owes to EMO
based on DAS settlement, including energy generated by PVs on rooftops, with the amounts that PPC is contractually required
to pay directly to the generators in question, based on the feed - in tariff, leads to delays in recovering the latter
amounts from EMO. Non implementation of an offset does not impact financial results but will have a negative effect on cash
flows, due to the increased working capital needs, since PPC is obliged to await payments in cash from EMO through the
relevant special RES account. The issue in question concerns monthly amounts of Euro 16.5 mil. on average and the total
amount to be recovered could reach approximately Euro 80 mil. based on an estimated five-month waiting period. EMO has
already filed both a claim and an application for interim measures before the Court of First Instance of Athens against
PPC. On the application for interim measures Decision 6022/2014 of the Multimember First Instance Court of Athens was
issued, ordering a temporary injunction on offsetting amounts due from DAS with amounts claimed from other causes at a rate
of 50% of the amounts claimed. Following the issuance of  the decision 1761/2016 (State Council Section D') and hence the
confirmation of the legality of RAE 285/2013, PPC can no longer offset amounts raised from its status as a Producer and
Supplier simultaneously, in relation to the energy produced by Photovoltaic Systems in buildings. In view of this, the
lawsuit filed by EMO and was pending for the hearing date 12.01.2017, with a request to recognize the non-existence PPC's
right to proceed in offsettings, was postponed on EMO's initiative. Respectively, with the same lawsuit, an additional
intervention of SPEF in favor of EMO was postponed, which was set to be discussed at the same hearing date. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
Corrective settlements of IPTO, concerning the Special Account of art. 143, of Law 4001/2011 
 
According to L.4152/2013, RES energy purchases in the Interconnected System are disbursed though the market operation, on
the higher amount of either their income from DAS and Imbalances settlements or the value of energy they inject to the
system multiplied by the weighted average variable cost of the conventional thermal power plants. This amendment started
being applied from 14.08.2013, when RAE's Decision 366/2013 was published in OG, amending the relevant articles of the
Power Exchange Code and specifying the methodology of calculations, with which the provision of law was implemented. In
October 2013, IPTO has sent to PPC S.A. corrective clearing statements for May, June, July and part of August of 2013,
totaling to an amount of Euro 48.2 mil., which derived from the retrospective application of the relevant methodology.The
PPC's lawsuit against IPTO for the invoices in question was accepted by the Multimember Court of First Instance in Athens 
(Decision  2260/2016) and is considered that PPC does not have to repay the total amount 54,4 of invoices issued which
incorporate claim for the weighted average variable cost of the conventional thermal power plants for months May to August
2013. 
 
Environmental Obligations 
 
Key uncertainties that may influence the final level of environmental investment which the Group will be required to
undertake, over the forthcoming decade, include: 
 
1.      HPP Messochora (161.6 MW) 
 
According to Law 3481/2006, the environmental terms for the construction and operation of the projects of the Acheloos
River Diversion Scheme to Thessaly, in which Messochora HPP is included, were approved and their fulfilment was a
prerequisite for the implementation of the projects and for which responsibility lies with the administrator, responsible
for construction and operation of the respective projects. Following the publication of the Law for Public Projects, as
well as PPC's projects that have been auctioned and constructed or were underconstruction and were related to projects of
the Acheloos River Diversion Scheme to Thessaly as well as energy projects were allowed to operate or be completed,
according to the approved Administration Plan and the above-mentioned environmental terms. 
 
Based on the above-mentioned terms the continuation of the project was allowed for the completion and operation of
Messochora HPP as well as the completion of the construction project of the tunnel, which have already been completed and
finally delivered by 17.06.2010. After the publication of Law 3734/2009, matters concerning the Messochora Hydroelectric
Project were arranged. These matters concerned expropriation of areas in the Messochora HEP Reservoir, expropriation of the
Messochora Village and of the areas where it will be relocated, as well as arranging compensations for the affected
inhabitants. All the above mentioned expropriations are declared of great importance in the public's interest and their
settlement will allow the completion of the Project and the operation of the Messochora Power Plant. 
 
Following ruling No 141/2010 by the competent Suspension Committee of the Council of State, the immediate cease of all
works has been ordered at all relevant projects, as well as the cease of operation of all completed projects. Further
developments, namely the final judgment, will be issued by the Plenary of the Council of State after taking into
consideration the (11.09.2012) Decision of the European Court of Justice, to which relevant preliminary questions had been
addressed referring to the compatibility of the provisions of Law 3481/2006 with the European legal framework. The Council
of State by its recent Decision 26/2014 has decided to annul the 567/14.09.2006 letter by EYDE/OSYE, by which and according
to the Court's Decision 3053/2009, it has been allowed, under the provisions of L. 3481/2006, and the approved
environmental terms, the continuation of the diversion scheme in total. The above mentioned decision by the Council of
State resulted to the inability to continue, complete and operate HPP Messochora. 
 
37. COMMITMENTS, CONTINGENCIES AND LITIGATION (CONTINUED) 
 
The Parent Company (PPC S.A.), considering that the Hydroelectric Plant of Messochora is independent from the Acheloos
River Diversion to Thessaly Scheme and therefore it should not be affected from the abovementioned issues and examining the
possibility to disengage Messochora Power Plant from the overall Acheloos River Diversion Scheme, so that the Project can
be dealt with as an independent unit and have its own environmental terms, independently from the other Projects of the
Diversion Scheme, proceeded to the review and the updating of the Environmental Impact Assessment (EIA) for HPP
Messochora. 
 
After the completion of the approval process and the publication, by the relevant OG (9.2014), of the Decisions for the
approval of Management Plans for River basins of the Western Sterea Hellas Water District and the Thessaly Water District
the EIA is completed and submitted to the Directory of Environmental Permits (DEP) of the Ministry of Environment, Energy
and Climate Change (now Ministry of Environment and Energy), which has proceeded to the procedures for the issuance of the
Joint Ministerial Decision regarding the Environmental Terms for the Project. 
 
DEP sent the EIA to competent bodies for consultation. The Thessaly Region and the Western Greece Water Directorate of
Decentralized Administration of Peloponnese, Western Greece and the Ionian Sea have delivered positive opinions on the
subject. 
 
It is estimated that the procedure issuance of the Joint Ministerial Decision regarding the Environmental Terms for the
Project will be completed in the 1st half of 2017. 
 
After the issuance of the Joint Ministerial Decision regarding the Environmental Terms for the Project, the construction of
the remaining works and the procedure for expropriation of the remaining land will proceed, in order to make it possible to
start the operation of the Project, which is estimated in the 1st half of 2020. 
 
On December 31, 2016 the aggregate expenditure amount for HPP Messochora amounted to Euro 281 mil., while an additional
amount of Euro 121 mil. is estimated to be required in order to complete the project. 
 
2.   Under IPPC (Integrated Pollution Prevention and Control) Directive, the Reference Document on Best Available
Techniques for Large Combustion Plants - BREF LCP (with a thermal capacity greater than 50 MW) was issued in July 2006. In
accordance with the European Directive 2001/80/EC, a pollutants emissions reduction plan for existing Large Combustion
Plants has been approved by the Parent Company's Board of Directors, was submitted to the authorities and has been
incorporated in the National Emissions Reduction Plan of Greece for the period 2008-2015, according to the provisions of
the aforementioned Directive. 
 
In December 2010, the new Directive (2010/75/ EU) was issued for industrial emissions (Industrial Emissions Directive -
IED), revising Directives IPPC and 2001/80/ EC, which is effective from 06.01.2011. Following the provisions of Article 32
of Directive 2010/75/EU, a Transitional National Emissions Reduction Plan (TNERP) for the period 2016-2020 was elaborated
and officially submitted by Greece to the EU at the end of 2012. The TNERP was approved by the EU on November 26, 2013. On
December 2013, PPC submitted to the Ministry of Environment and Energy an application for limited changes to the TNERP,
along with its declaration to use the limited life-time derogation (Article 33) for certain Power Plants. After the
approval from the Ministry of Environment and Energy the revised TNERP was resubmitted on March 18, 2014 by the Greek
authorities and was approved by the EU on July 07, 2014. The Joint Ministerial Decision for TNERP was issued in August 2015
(Nr. 34062/957/Ε1032017/2015). Finally, according to the above, SES Agios Dimitrios, Meliti and Megalopolis A' and B' are
included in the TNERP, while SES Amyntaion and Kardia will use the limited life-time derogation. 
 
In 2011 began the process of revising the Reference Document on Best Available Techniques Manual for Large Combustion
Plants, which is underway, within the framework of Directive 2010/75/EU and is coordinated by the EIPPCB (European IPPC
Bureau). Following the adoption, of the legally binding, conclusions of the revised Manual expected in the first half of
2017, additional investments in PPC's major thermal stations may be required. 
 
3.     On November 28, 2015 Directive 2015/2193 of the European Parliament and the Council's of November 25th 2015 was
published in the Official Journal of the European Union, on the limitation of emissions of certain pollutants into the air
from Medium Combustion Units, regardless of the type of fuel used. As Medium Combustion Units, are defined units with a
rated thermal input equal to or greater than 1 MWth and less than 50 MWth. Pollutants in question are sulfur dioxide (SO2),
Nitrogen oxides (NOx) and dust, while rules for the monitoring of emissions of carbon monoxide (CO) are defined. Production
units of such a size, operate mainly in the islands (engines and turbines). Also, in many of PPC's SES, there are many G/S
and auxiliary boilers, but with limited operating time. The provisions of the new Directive should be thoroughly examined
by the competent services of PPC, so as together with the competent Greek authorities to timely promote the appropriate
strategies for the electrification of the islands with technically and economically viable solutions which should also be
promptly implemented, and in any case before the expiry of the deadline laid down by the Directive. Indicatively, major
projects such as the islands' interconnection, should be planned and implemented in such a way as to fully cover the needs
of all islands in electricity, while any remaining production units will be used as a backup solution and will be operating
only in an emergency, not exceeding  500 hours of operation per year. 
 
4.     The extent of land contamination has to be assessed for many of PPC's installations, following the provisions of
art. 22 of Directive 2010/75/EU. At present, there appears to be no requirement for large-scale remediation projects at
PPC's sites, and it is unlikely that this will be required at the mining areas or at the lignite-fired power stations for
the foreseeable future. Remediation, however, may be required, at some of the company's oil-fired power stations in the
future. In the context of decommissioning of the Unit Agios Georgios in Keratsini, a remediation study for the land and the
undrgroung water in the Unit was submitted in November 2016 for approval from the Competent Authorities. The remediation
cost is estimated at Euro 213. 
 
5.     PPC has performed limited studies on the presence of asbestos-containing materials, at its premises. Upon submission
by PPC of a full environmental impact assessment study, the Ministry of Environment issued in May 2004 the environmental
permit for the construction and operation by PPC, in its premises in Ptolemaida area of an environmentally - controlled
Industrial Waste Management Area for the management and final disposal of asbestos containing construction materials, from
the plants of the Northern System. With the real estate transfer contract no. 37244 / 05.06.2015, which is legally
transcribed, PPC transferred full ownership of the Industrial Waste Management Area, located at the Kardia Mine of the
Western Macedonia Lignite Center, in DIADYMA S.A. From the date of signing the contract, DIADYMA S.A. is responsible for
the Area's management. 
 
6.     During the operation of the Transmission Lines, Substations and Hyperhigh Voltage Centers, there is no
electromagnetic radiation, but two separate fields, the magnetic and the electric field. At places where the public or the
Company's personnel might find themselves close to the above mentioned lines and substations, the values for those fields
are substantially less than the limits. Those limits were established by the International Commission on Non Ionizing
Radiation Protection (ICNIRP) in collaboration with the World Health Organization (WHO). The above mentioned limits have
also been adopted by the European Union as well as the Greek State. 
 
It must be noted though, that the limits stated in the above regulations for both fields do not constitute dangerous
values, but rather contain large safety factors, in order to cover for some vagueness due to the limited knowledge about
both the magnetic and electric fields' influence in order to fulfil the requirement for the prevention of any adverse
impacts. 
 
7.     The Environmental Permit for Klidi Mine is expected to be issued. 
 
8.     Furthermore the Parent Company's Mine Environmental Department has carried out all required procedures, for the
renewal of 

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