REG - Public Power Corp - Annual Financial Report <Origin Href="QuoteRef">DEHr.AT</Origin> - Part 12

Public Power SAAnnouncement

07/04/2017 18:40

- Part 12: For the preceding part double click  ID:nRSG9898Bk 

customers. These tariffs are applicable for electricity consumption for the
period 01.01.2016 up to 31.12.2017 and customers are entitled to choose between a monthly and a ten day period billing. 
 
40. SIGNIFICANT EVENTS (CONTINUED) 
 
These new tariffs are accompanied by incentives (discounts) to HV customers for high electricity consumption during the
Minimum Load Zone (nights, weekends and holidays). 
 
In addition to the above, the Extraordinary General Meeting of PPC's Shareholders of 07.12.2015 decided on the duration
period for the new tariffs, on the provision of volume discounts for the competitive load and energy charges based on the
total annual HV electricity consumption for individual Companies or Group of companies. 
 
For ALOUMINION, following decision 621/2015 of the Competition Committee, negotiations are in progress and until the
solution of the dispute, this customer will be billed the same way as for the period 2014 - 2015. By 21.04.2016 decision of
the Plenary Session of the Competition Committee, the claim of PPC and ALUMINION for an extension until 31.05.2016 for the
completion of negotiations has been approved. 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, which was completed on 11.07.2016 and
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 its October 5th 2016 Decision, PPC's Extraordinary General Shareholders Meeting, approved the ALOYMUNION's
pricing terms for the period 1.7.2016 - 31.12.2020, as well as the pricing terms for the period 1.1.2014 - 30.6.2016. Based
on the Decision of the EGM, the Supply Agreement between PPC and ALOUMINION was signed on October 20th 2016. 
 
After this, out of nineteen (19) installations of High Voltage customers with a consumption share of over 99% of the total
consumption in High Voltage, fourteen (14) of them have already signed a contract or a supplementary contract, while an
additional supplementary contract will be signed with another customer, since the abovementioned company is under
liquidation and a new administrator has not been appointed currently. The remaining four customers who have not yet signed
supplementary contracts are LARCO, for which reference is made above and 3 more clients who have significant arrears. For
the remaining High Voltage customers, namely 42 renewable energy facilities, supplementary contracts have been signed. 
 
Rewarding Program of PPC's business customers "CONSISTENCY" 
 
On 02.02.2016, the Board of Directors of the Parent Company approved the new Rewarding Program of PPC's business customers.
Specifically, all business customers who will pay full their bills as well as any debt settlement installments, until
payment due date, they will receive a refund (credit) on their next bill, 10% of the value of the electricity consumption
in previous bill which has been paid on time. 
 
The Program began for bills issued on 01.04.2016 and afterwards. Namely, if the bill issued on 01.04.2016 and then, will be
paid on time (until payment due date), as well as any debt settlement installments, then in the immediate next bill, will
be credited automatically (without customer request), the refund 10% of the value of the electricity consumption in
previous bill which has been paid on time. 
 
New Rewarding Program of PPC's residential and business customers "CONSISTENCY" 
 
In June 2016, the Board of Directors of the Parent Company approved the new Rewarding Program of PPC's residential and
business customers. Specifically, all residential and business customers who will pay full their bills as well as any debt
settlement installments, until payment due date, they will receive a refund (credit) on their next bill, 15% of the value
of the electricity consumption in previous bill which has been paid on time. The Program began for bills issued on
01.07.2016 and afterwards. Especially for business tariffs type BΜ and corporate tariff a discount 15% is provided. 
 
Furthermore, PPC's BoD approved a special discount on the current bills paid on time and on any settlement installments, in
the context of negotiations for bilateral contracts with HV customers. 
 
Other arrangements for the settlement of customer debts 
 
On 29.03.2016, the Board of Directors of the Parent Company approved the amended Debt Settlement Regulation and decided the
following arrangements for the payment of the Parent Company's customer debts. 
 
·      From 01.04.2016 until 31.07.2016, all customers can settle their debts in thirty six (36) installments without any
advance payment. 
 
In the above mentioned arrangement will have the opportunity to participate also for the remaining of their debt and those
customers that have already settled their debts under the applicable at present Settlements Regulation. 
 
The payment of the first installment shall be effected with the approval of the Arrangement. 
 
40. SIGNIFICANT EVENTS (CONTINUED) 
 
·      From 01.08.2016 onwards for all residential and business customers (except seasonal and agricultural customers) the
following will apply : 
 
•       Monthly installments : An amount equal (at first) to 30% of the average monthly bill (on an annual basis) but with
a minimum number of eighteen (18) installments and a maximum of thirty six (36) 
 
•       Advances : 
 
a) Customers without unconventional behavior: 5% 
 
b) Customers with unconventional behavior: 15% 
 
On 12.08.2016 the Board of Directors of the Parent Company approved the extension of the above mentioned Program until
30.09.2016. Furthermore, it approved from 03.08.2016 and afterwards, for the customers who were disconnected due
non-payment and require debt settlement and reconnection, in order to be reconnected, among others and the following: 
 
·      For customers, who were not included in the above Rewarding Program of thirty six (36) installments and they did not
have any active settlement at 01.04.2016 with programs before that date, their debt to be settled with immediate payment of
30% of the amount due and eight (8) monthly installments. 
 
·      For customers with an active settlement at 01.04.2016, which was approved before 01.04.2016, who within ten (10)
days from the disconnection they do not require their inclusion in the above mentioned Rewarding Program of thirty six (36)
installments effective until 30.09.2016, or they do not settle their debts on the basis of the Settlement Plan in which
they have been included, their debt to be settled with immediate payment of 30% of the amount due and eight (8) monthly
installments. 
 
·      For the customers who have been included in the above Rewarding Program of thirty six (36) installments, who within
ten (10) days from the disconnection they do not settle their debts on the basis of the Settlement Plan, their debt to be
settled with immediate payment of 30% of the amount due and eight (8) monthly installments. 
 
On September 28th 2016, the Parent Company's Board of Directors approved the extension of the Settlements Programme of 36
installments, up to October 31st 2016. Moreover, it decided that from 01/10/2016 - 31/10/2016 for disconnected due to debts
customers, which violate the metering device, their debt will be settled by the direct payment of the 15% of the debt and
12 monthly installments for the remaining amount. 
 
On October 31th 2016, the Parent Company's Board of Directors approved the extension of the Settlements Programme of 36
installments, up to December 31st 2016, with a minimum installment of ten Euro. Moreover, it decided that from 01/10/2016 -
31/12/2016 for disconnected due to debts customers, which violate the metering device, their debt will be settled by the
direct payment of the 15% of the debt and 12 monthly installments for the remaining amount. 
 
41.       SUBSEQUENT EVENTS 
 
Repayment of loans and new loans 
 
Within the period 01.01.2017 - 07.04.2017, the Group proceeded to debt repayments of loan installments amounting to Euro
147.1 mil. (Parent Company Euro 147.1 mil.). 
 
In April 2017, the basic terms ("term sheet") of the syndicated bond loan of Euro 200 mil. between the Parent Company and
Greek Banks were signed. The above mentioned loan has a two-year duration and bears securing through pledge of existing and
future PPC's receivables from corporate customers' contracts, with the value of annual consumption based on the average of
two previous years, totaling 125% on each loan outstanding balance. It is noted that there is no obligation to create
"escrow account", namely the creation of an account, the movement of which is subject in the approval of Banks and provided
that an event of default has not been occurred, the Parent Company has the right to move all its accounts and use the
amounts paid to them by those corporate customers. 
 
In March 2017, the subsidiary company IPTO S.A. proceeded in refinancing existing loan obligations totaling Euro 337.1 mil.
approximately, through the issuance of the syndicated bond loan of an equal amount. The Joint Venture consists of existing
Greek Banks which lent us. The loan, maturing in 2021, is of floating rate with gradual repayments. 
 
41. SUBSEQUENT EVENTS (CONTINUED) 
 
Advance payments in PPC against debts of General Government Entities 
 
In March 2017, according to Article 58 of Law 4075/2012, the State General Accounting Office granted an advance payment in
cash in the Parent Company amounting Euro 50 mil. against debts of General Government Entities, from overdue electricity
bills. The above mentioned advance payment will be refunded by the Parent Company in installments, after the debt
repayments by the General Government Entities, and in each case the remaining balance should be refunded until 29.12.2017. 
 
Furthermore, in March 2017, the Parent Company received from the State General Accounting Office Euro 80 mil. as an advance
payment on electricity consumed by the General Government Entities, for the year 2017. 
 
Tariff Policy 
 
In January 2017, PPC's BoD decided to provide new incentives to consistent customers who pay their bills. In particular, it
rewards with a discount 6% those customers who will prepay the total value of one year electricity bills and any arrears.
The implementation of the "Prepaid Account" Program was launched for large companies while in the near future it will also
be applied for households, business customers and small businesses. 
 
APPENDIX I 
 
UNBUNDLED FINANCIAL STATEMENTS 
 
Under the provisions of L.4001/2011 
 
and the approved methodology of 
 
the Regulatory Authority for Energy. 
 
NOTES TO THE UNBUNDLED FINANCIAL STATEMENTS 
 
1. GENERAL INFORMATION 
 
According to the provisions of European Directive 2009/72/EC, as well as the provisions of Law 4001/2011, which integrates
the aforementioned European Directive into the national legislation, unbundling is the separation of financial statements
(balance sheet and income statement) of an integrated electric utility into different financial statements for each one of
its activities. 
 
The unbundled financial statements will reflect each activity's financial position, assets and liabilities, as if such
activities prepared financial statements had they been separate (independent) legal entities. 
 
PPC, as a vertically organized integrated electric utility, keeps in its internal accounting, separate accounts for its
activities and prepares separate balance sheets and statements of income for each one of its activities (balance sheet and
statement of income before tax - hereinafter referred to as "unbundled financial statements"), as if these activities were
carried out by different entities, in order to avoid discriminations, cross subsidization and distortion of competition. 
 
Further to the above, PPC should keep separate accounts for its activities carried out in the non-interconnected islands. 
 
The accounting principles applied for the preparation of the unbundled financial statements are those applied for the
preparation of the Company's separate and consolidated financial statements. 
 
The unbundling methodology applied by the Company for the preparation of the accompanied unbundled financial statements was
 approved by the 266/2014 Decision of the Regulatory Authority for Energy. Additionaly, in the Non - Interconnected System
the transactions of energy between PPC's Generation and  Supply and HEDNO, are carried out according to RAE's Decision
641/2013. 
 
2. ACCOUNTING UNBUNDLING METHODOLOGY 
 
The methodology applied for the preparation of the unbundled financial statements consists of the following phases: 
 
·      Determination of activities into which the integrated electric utility should be unbundled 
 
·      Preparation of unbundled trial balances 
 
·      Preparation of unbundled balance sheets 
 
·      Preparation of the unbundled statements of income 
 
·      Quantification of inter-segment revenues and expenses among activities through the application of an internal
pricing system 
 
Determination of activities into which the integrated electric utility should be unbundled 
 
The activities for unbundled financial statements are prepared, on a first level, are Mines, Generation, Distribution
Network, Supply, and Corporate. 
 
On a second level, these activities are presented as follows: 
 
·      Interconnected System 
 
o  Mines 
 
o  Generation 
 
o  Distribution network 
 
o  Supply 
 
·      System of Crete 
 
o  Generation 
 
o  Distribution network 
 
o  Supply 
 
·      System of other Non Interconnected Islands 
 
o  Generation 
 
o  Distribution network 
 
o  Supply 
 
·      Corporate 
 
Mines 
 
Mines include the lignite extraction activity carried out in the Lignite Centers of West Macedonia and Megalopolis. 
 
Generation 
 
Generation includes the electricity generation activities in the Interconnected System, the System of Crete and the System
of Non Interconnected Islands. 
 
Distribution 
 
Distribution Network includes the rental of assets to HEDNO SA in the Interconnected System, the System of Crete and the
System of Non Interconnected Islands. 
 
Supply 
 
Supply reflects the Company's activity which monitors relationships with final customers in the Interconnected System, the
System of Crete and the System of Non Interconnected Islands. 
 
Corporate 
 
The Corporate is the adninistrative departments of the Parent Company, which provide support to PPC's activities. 
 
The Balance Sheet and Statement of Income of the Corporate is further allocated based on certain allocation rules, which
are described in detail in the following pages. 
 
Related parties are reflected as a separate activity in the group unbundled financial statements . 
 
Preparation of unbundled trial balances 
 
In the Company's accounting system, each the cost centre and the profit centre represents an organizational entity, in
which the assets and liabilities are recorded. In order for these trial balances to be generated, the following tasks are
performed, which are applied per account and cost / profit centre for the minimum account degree in General Accounting: 
 
·      Cost / profit  centers are recorded in order to identify the boundaries of activities and then all cost / profit
centers to be assigned to activities with which they are related to. 
 
·      The sum totals of the cost / profit  centers and accounts are reconciled with the comprehensive trial balance of the
Company. 
 
·      The trial balance accounts are codified and grouped into sections of the balance sheet and of the income statement
based on Company's consolidated Financial Statements. 
 
Preparation of unbundled balance sheets 
 
At the and of each financial year, balance sheets are prepared for each of the four activities (Mines, Generation,
Distribution Network, Supply) in the Interconnected System, in the Crete System and in the Non - Interconnected Islands
System. 
 
The balance sheet for each activity is prepared under the principle of independent accounting. 
 
The accounts of each balance sheet are as follows: 
 
-       Direct, which include the direct charges and credits of the accounts of the relevant profit centers of the
corresponding level of activity, 
 
-       Indirect of the administration departments, which derive from the administration departments of each activity and
include its allocated balance sheet accounts. 
 
-       Indirect of the Corporate, which include the allocated balance sheet accounts, which are presented in a separate
line on each activity's balance sheet. 
 
Additionaly, the Balance Sheets of PPC's subsidiaries are depicted separately. 
 
Preparation of the unbundled statements of income 
 
For each accounting period income statements are prepared for each of the four activities (Mines, Generation, Distribution
Network, Supply) in the Interconnected System, in the Crete System and in the Non - Interconnected Islands System.
Additionaly, the Income Statements of PPC's subsidiaries are depicted separately. 
 
Income statement accounts of financial nature are allocated to activities based on the loans of each activity. 
 
Then, income statement account balances that have remained in Corporate are allocated in the activities. 
 
For the allocation of revenues  and expenses to Activities the criterion is based on direct expenses of every Activity,
with the exception of expenses that relate to the system of customers' monitoring and billing that are assigned only to
Supply. Upon completion of the above allocations, the Statements of income for each Activity are prepared. 
 
The Corporate expenses and revenues allocated to the activities are presented separately in a line item in each activity. 
 
Quantification of inter-segment revenues and expenses among activities through the application of an internal pricing
system 
 
Within the framework of an integrated utility products and services are exchanged among its activities, which would be
recorded if these activities would operate as independent entities. 
 
In order for these products and services to be quantified and recorded, an internal pricing system is applied if necessary
(where there is no external determination of internal exchanges). The most important services and products internally
exchanged in PPC among its Activities, that are presented in the Unbundled Financial Statements are the following: 
 
                                                                                                                                           Activity which                                 
 Product/ Service                                                                                                                          Renders                                          Receives                                           
 Interconnected system                                                                                                                   
 Lignite                                                                                                                                   Mines                                            Generation                                         
 Other Services Self-consumption energy                                                                                                    MinesSupply                                      Generation           Mines, Generation             
 System of Crete                                                                                                                         
 Self-consumption Energy                                                          Supply                                     Generation  
 Return of receivable Public Service Obligations                      Interconnected Supply           Supply of Crete                    
                                                                                                                                         
 System of other non-interconnected islands                                                                                              
 Self-consumption Energy                                                                                                                   Supply                                           Generation                                         
 Return of receivable Public Service Obligations                                                                                           Interconnected                         Supply    Supply of non-             interconnected islands  
                                                                                                                                                                                                                                                 
 
 
Each activity's revenues from product sales or services to another activity are quantified, through the internal pricing
system. Also, the activity that receives the product/ service records the related cost. 
 
The internal revenues - expenses for each activity are defined as follows: 
 
In the interconnected system: 
 
The internal energy sales for self-consumption are calculated based on each Activity's metered consumption of energy with
the average marginal price including the Return of receivable Public Service Obligations, Transmission System Tariffs and
IPTO uplift charge. 
 
The Mines internal revenue is calculated in accordance of the agreement for the lignite supply between Mines and 
Generation. The lignite supply contract determines the internal lignite market, i.e the lignite sales of the activity of
the  Lignite General Division to the activity of the Generation General Division. The contract covers the consumption of
the lignite stations on a continuous basis, as well as with the necessary stock for the specific period. The calculation of
the relative amounts takes place on the monthly basis, taking into account the monthly consumption and the calorific value
of the lignite delivered. 
 
In the Non-Interconnected system: 
 
The internal energy sales are calculated based on each activity's metered consumption of energy priced by the average
revenue of PPC's tariffs for the sale of electricity to Medium Voltage for Industrial Use customers. 
 
The Public Service Obligations (PSOs)  that are invoiced by Supply to its customers, third party PSOs as well as self
consumption PSOs are allocated as an internal revenue of Crete and the Non Interconected Islands'  Supply. 
 
Additionaly Supply receives as revenue electricity sales (self consumptions) to Generation  (internal expense). 
 
ANALYSIS OF REVENUES - EXPENSES FROM GENERATION AND SUPPLY 
 
 1  TAIPED or HRADF is a Societé Anonyme under the name "HELLENIC REPUBLIC ASSET DEVELOPMENT FUND S.A." which was
established by Law 3986/2011 (O.G. A' 152/2011) as amended and in effect. 
 
 2  article 43bb was added to CL 2190/1920 by article 2 of L. 4403/2016 (Official Gazette volume A issue 125/ 7.7.2016) 
 
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