1st and 2nd item:
1. Approval of the accounting statement of the R.E.S Branch and of the Draft Agreement concerning the separation (spin-off) of the R.E.S Branch. 2. Approval of the recommendation of the Board of Directors regarding the authorization of an Executive of the Company to sign the notarial deed concerning the spin-off of the R.E.S Branch.
Summary: Spin-off of the fixed assets of the Renewable Energy Sources (R.E.S) Division from PUBLIC POWER COMPANY S.A. (PPC SA) and their allocation to its wholly-owned subsidiary "PPC RENEWABLES S.A." according to Law 2166/1993.
Α. Historical Overview
PPC SA introduced into the Greek market the development of R.E.S in the early 80's. More specifically, the company constructed the first in Europe photovoltaic station in the Kythnos island in 1982 and the first wind generator in Mykonos in 1983, while subsequently commenced the construction of wind parks in several Greek islands.
However, following the opening of the R.E.S market in 1994, pursuant to Law 2244/94, private investors entered into the market and commenced the development of their activities in a pace that PPC SA could not follow due to the fact that its state-owned status obliged the Company to adhere time consuming procedures. In order to compete more efficiently in this market, PPC SA founded its wholly-owned subsidiary "PPC RENEWABLES S.A.", in 1998. In this context, the R.E.S-related projects that are constructed by PPC RENEWABLES S.A. are now entitled for subsidization (by at least 30%) in accordance with the development Law as the same applies to private generators, while the projects constructed by PUBLIC POWER CORPORATION SA are not eligible for subsidy.
One of the top priorities of the PPC SA's senior management since past year, has been the dynamic development of the R.E.S aiming to significantly increase its relevant market share compared with the relatively low 8% current share of the market.
In order to achieve this goal, the Board of Directors of PPC SA decided to:
1. Approve the Business Plan of PPC RENEWABLES S.A. that provides for the development of R. E. S projects of 900 MW installed capacity until 2012 in collaboration with private generators (of which the 450 MW shall be owned by PPC RENEWABLES S.A.)
2. Approve by its resolutions No 272/21.11.06 and No148/26.6.07 the spin-off of the fixed assets of the R.E.S. Division of PPC SA, their allocation to its wholly-owned subsidiary PPC RENEWABLES S.A., the Accounting Statement of the R.E.S Division and the Draft Agreement concerning the separation (spin-off) of the R.E.S Division.
Β. Transaction Overview
1. The PPC SA fixed assets under spin-off and their allocation to PPC RENEWABLES S.A. are the following:
a. 24 Wind parks, out of which 20 are in operation and 4 under construction. Total capacity of 51.7MW.
b. 15 small hydroelectric projects up to 15MW installed capacity, out of which 9 are in operation and 6 under construction. Total capacity of 70.4MW.
c. Photovoltaic parks of total installed capacity of 242.5 KW
d. All the drillings and other Geothermics-related projects of the Company.
e. All generation, installation and operation permits of the RES projects, as well as all the relative rights that have been granted to PPC SA by the State.
2. The total installed capacity of the abovementioned paragraphs a to c of the projects being in operation and under construction, amounts to 122.4 MW.
3. The book value of the abovementioned contributed capital by PPC SA to its wholly-owned subsidiary "PPC RENEWABLES S.A." corresponding to the projects amounts to €24,215,992, while the fair value of the contributed fixed assets amounts to €54,447,702.
4. PPC RENEWABLES S.A. shall proceed to a share capital increase of €24,215,992 equal to the book value of the fixed assets contributed by PPC SA (24,215,992 common shares of 1 € nominal value each), while the difference between this amount and the fair value of the assets in question of €30,231,710, will be recorded in the books of PPC RENEWABLES S.A. as share premium.
5. Subsequent to the abovementioned, the relevant investment of PPC SA in the 100% subsidiary company "PPC RENEWABLES S.A." will be increased by the amount of €54,447,702.
The Accounting Statement of the R.E.S Division , the Draft Agreement concerning the separation (spin-off) of the R.E.S Division and the recommendation of the Board of Directors regarding the authorization of an Executive of the Company to sign the notarial deed concerning the spin-off of the R.E.S Dvision, are submitted for approval to the Extraordinary General Meeting of Shareholders, as approved on June 26, 2007 from the BoD of the Company.
RENEWABLE ENERGY SECTOR OF PPC S.A. - BALANCE SHEET AT JANUARY 1ST 2007 (pdf)
3rd item: Amendment of articles 1 and 32 of the articles of Incorporation and codification of the articles of incorporation.
The modification of article 1 concerns an obviously, spelling error correction in the English discreet Company title from "PC " to "PPC ".
The proposed modification of article 32 (par. 2, 3, 4, 5, 6 and 9) for harmonisation with the legislation (article 20 N.3426/2005) regarding the Accounting separated financial statements and the application of International Financial Reporting Standards, has as follows:
Article 32
The Financial Year of the Company- Annual accounts
[§ 1 no amendment]
2. At the end of each financial year, the Board of Directors shall balance the accounts, draw up a thorough inventory of the assets and liabilities of the company and prepare the annual financial statements and a report thereon, in accordance with articles 42(a), 42(b), 42(c), 42(d), 42(e), 43, 43(b), 134, 135, 136 and 139 of Codified Law 2190/1920, as same is in force, as well as annual Consolidated Financial Statements in accordance with articles 90 up to 109 and 134 up to 136 of the same Law.
3.The annual financial statements shall include:
a. The balance sheet,
b. The profit and loss account,
c. The Statement of alterations of equity capital,
d. The cash flow Statement,
e. The profit and loss appropriation list, and
f. The appendix.
The statements referred to above shall constitute a unified whole, shall be audited in accordance with the stipulations of articles 36, 36a, 37 and 137 of Codified Law 2190/1920, as same is currently in force, and shall present a faithful and clear picture of the assets and liabilities of the company. In preparing its annual financial statements, the company shall, in parallel the above, apply the rules for the keeping of accounts provided for by article 30 of Law 2773/1999 (Official Gazette, volume A, issue no. 286) concerning ''Liberalization of the Electricity Market - Regulating Energy Policy Matters and Other Provisions'', as applied modified.
4. In order that a valid resolution be taken by the General Assembly on the financial statements approved by the Board of Directors, the said statements must have been specifically certified by:
a) The Chairman of the Board of Directors or its Deputy Chairman,
b) The Chief Executive Officer and, in case the posts of the Chairman and of the Chief Executive Officer are combined in the same person, by Vice Chairman of the Board of Directors,
c) The General Manager of the Financial Division (Chief Financial Officer)
d) The person in charge of the Accounting Department.
The above, in case of disagreement about the legacy of the manner of preparing the financial statements, shall notify the General Assembly of their objections in writing.
5.The management report of the Board of Directors to the regular meeting of the General Assembly must present a faithful and clear picture of the progress of the business and of the financial position of the company, as well as furnish information concerning the anticipated development of the company in accordance with articles 43(a) and 136 of Codified Law 2190/1920, as same is currently in force, as well as any other important event which has occurred in the time period extending from the end of the financial year to the day of submittal of the report.
6.The Board of Directors of the company shall publish the Annual Financial statements and the Annual Consolidated Statements, the Report of the Board of Directors and the Auditing Report of the Chartered Auditors, at least twenty (20) days prior to the meeting of the General Assembly:
a) Registration in the Societes Anonymes Register with an announcement of their registration published in the Official Gazette, volume concerning Societes Anonymes and Limited Liability Companies.
b) Insertion into the web site, which shall be accessible to the public, for at least two years from their publication.
c) Submission to the Capital Market Committee.
Likewise, the annual financial statements (except for the appendix), original and amended by the General Assembly and the Auditing report of the company, are published, in their total, in the Official Gazette, volume concerning Societes Anonymes and Limited Liability Companies, twenty (20) days prior to the meeting of the General Assembly, and in case of their modification, within twenty days following the meeting of the General Assembly. The balance sheet shall contain the personal data of those who have certified it in accordance with article 7(a), paragraph 1, subpar. g of Codified Law 2190/1920.
[§ 7 no amendment]
[§ 8 no amendment]
9. In addition to the financial statements referred to above, the company shall prepare, at the end of each financial year, the Unbundled Financial Statements as provided for by article 30 of Law 2773/1999, as applied amended, in accordance with the international accounting standards.
The said statements shall be audited by the auditors of the company as stipulated by article 31, hereof and together with the relevant Auditing Report shall be submitted for approval by the General Assembly.
[§ 10 no amendment]
[§ 11 no amendment]
The amendment of articles 1 and 32 of the articles of Incorporation and the codification of the articles of incorporation, are submitted for approval to the Extraordinary General Meeting of Shareholders.
4th item: Approval Directors and Officers liability insurance.
The Board of Directors of PPC S.A. at its meeting held on June 5, 2007, decided to approve the call for tender of the Inquiry No 819/25.1.2007 and award "the third party liability insurance of the Members of the Board of Directors, the Members of the Management Council, the Members of the Projects and Purchasing Council and the Managers of PPC S.A. (collectively PPC S.A. Directors and Officers Liability Insurance)", to the company ''ETHNIKI ASFALISTIKI'' In accordance with the terms and conditions of the above-mentioned call for tender, the "PPC S.A. Directors and Officers Liability Insurance" contract, will have one-year duration upon signing by the contracting parties and will grant to PPC S.A. the right of renewal for one year with terms and conditions that will be reconsidered and agreed upon by the contracting parties and with retroactive effect as of March 3, 2005. The contract in question bears a cost of €118,272 and provides for a maximum insurance limit up to €30 million.
Following the above, the General Meeting of the Shareholders shall approve the call for tender results award with regards to PPC S.A.'s Directors and Officers Liability Insurance.
5th item: Announcements and other issues.