141
140
Annual Financial Statements
The aforementioned provisions of Law 4001/2011, in conjunction with
the provisions specified in the letter sent by the Ministry of Environ-
ment, Energy and Climate Change’s Petroleum Policy Directorate, as
well as the provisions of both the Subsidiary’s Private Agreement with
LAGIE and the “Supplementary Agreement for Transactions relating
to Electricity from the Dispatchable High-Efficiency CHP Station” be-
tween the two parties, require that the Natural Gas ET is recovered to
the extent that the natural gas was consumed in generating electric-
ity. Therefore, the Subsidiary also recognized the part of the Natural
Gas ET which corresponded to consumptions made in generating
useful heat (steam for the Alumina production process) as a liability
(deducted from ADMIE’s receivables balance), the total value of which
amounted to
€
9.1m.
Regarding the remaining balance of ADMIE’s relevant briefing note,
which amounts to
€
8.3m and relates to the Natural Gas ET which cor-
responded to consumptions for electricity generation (HE- CHP), it is
noted that this does not constitute a liability for the Group. Specifically,
in accordance with IAS 37, “a liability is a present obligation of the
entity arising from past events, the settlement of which is expected to
result in an outflow from the entity of resources embodying economic
benefits”. Based on the above and given that the Subsidiary has not
received a final compensatory price for the Period (by way of the CC,
see above), while, based on the Private Agreement between the Sub-
sidiary and LAGIE, the final settlement will take place following the
issuance of the relevant Ministerial Decision regarding the establish-
ment of the CC (which has not been issued), the Subsidiary believes
that it has no commitment which would legally constitute an obliga-
tion to return the amount of €8.3m. A relevant liability may arise once
the aforementioned Ministerial Decision regarding the establishment
of the CC is issued, in which case the Group estimates that the final
compensation that it will receive for electricity dispatched to the sys-
tem as High-Efficiency CHP will exceed the amount of €8.3m. There-
fore, it is not expected that a loss will result for the Company Group.
Power purchase agreement between ALUMINIUM OF GREECE and
PPC
Following arbitral decision no. Δ1/1/2013, which was issued by RAE’s
Permanent Court of Arbitration on 31.10.2013 and which defined the
fair, reasonable and worthy price for the electricity supplied by PPC
to ALUMINIUM OF GREECE (henceforth the “Subsidiary Company”)
during the period of time between 1-7-2010 and 31-12-2013, the two
parties have not signed a power purchase agreement for the period
between 1/1/2014 and the date on which the financial statements for
the year 2014 were published.
On 7/1/2014, PPC’s Board of Directors requested the convening of an
Extraordinary General Meeting, the main topic of discussion of which
concerned the terms by which the Subsidiary Company would be
charged from 1/1/2014 onwards. PPC’s Extraordinary General Meet-
ing eventually convened on 28/2/2014 and decided the following:
a) The provision of an exceptional discount of 10% on PPC’s approved
tariffs for High Voltage customers, for 1 + 1 year, from 1.1.2014 on-
wards.
b) A further 10% discount on top of the aforementioned discount for
High Voltage customers with an annual consumption over 1000 GWH.
c) A further 25% discount on the A4 tariff
for all High Voltage customers, apart from
those with an annual consumption over
than 1000 GWH, for consumption during
off-peak hours of minimum demand (night-
time and weekends), as an incentive for in-
creasing consumption during these time
periods.
The Subsidiary considers that the content
of the decision taken during PPC’s Extraor-
dinary General Meeting, under a, b and c
above, merely constitutes an offer of pric-
ing terms on behalf of PPC, towards their
large industrial customers. In this respect,
the Subsidiary Company has engaged in
discussions with PPC in good faith, ex-
pressing both its opinions and its reserva-
tions in relation to the terms and content of
the power purchase agreement under ne-
gotiation. In particular, the aforementioned
decision of the Extraordinary General
Meeting of PPC’s shareholders has been
considered taking into account relevant
developments in general. Among other
things, said developments relate to the
rejection of all the judicial and administra-
tive proceedings instituted by PPC against
the Arbitral Award and RAE’s Decision no.
346/2012 (the decision which determined
a temporary price to be applied until RAE’s
Permanent Court of Arbitration’s final ad-
judication) before both the Administrative
Court of Appeal of Athens and the Euro-
pean Commission’s Directorate-General
for Competition, a fact which confirms and
updates the fairness and reasonableness
of the price at which the Court of Arbitration
concluded.
Consequently, given that as of the date
of approval of MYTILINEOS HOLDINGS
SA’s annual financial statements for the
year 2014, the two parties have not yet
reached an agreement in relation to the ba-
sic terms for charging electricity supplied
by PPC to the Subsidiary , the latter has
announced in the results for the period in
question that the competitive component
of the electricity price amounts to the value
which has most recently been held to be
fair and reasonable (by RAE’s Permanent
Court of Arbitration), plus the Use of Sys-
tem charge, the SGI charge, the Special
RES Duty charge and charges relating to
the relevant Special Consumption Tax, Ex-
ecution of Customs Operations (ΔΕΤΕ) and provisions for non-
recoverable (by way of the compensation mechanism) carbon
dioxide (CO2) emissions costs. The aforementioned price, as
announced by the Subsidiary Company in its results for the year
2014, does not differ substantially from the value deriving from
the decision of PPC’s Extraordinary General Meeting, as this
has been interpreted/applied by the Subsidiary during negotia-
tions between the parties.
However, it is noted that during 2014, PPC, acting arbitrarily
and unilaterally, invoiced the Subsidiary Company based on
the “A5” tariff, whithout incorporating the discount decided in
the General Meeting, noting that the discount would only apply
retrospectively if the Subsidiary Company accepted and signed
PPC’s terms. Finally, on the 12th and 13th of January 2015, with-
out the Subsidiary’s acceptance of the aforementioned terms,
PPC issued credit notes as a result of the re-pricing of electricity
for the year 2014, stating that said re-pricing was in accordance
with the decision of its General Meeting on 28/2/2014.
The Subsidiary contests the way in which PPC’s Management
has interpreted and applied the General Meeting’s decision
of 28/2/2014 in relation to the issuance of the aforementioned
credit tariffs, stressing that in no case have they ever reached
an agreement with PPC either on the basis of the General Meet-
ing resolution, or on any other basis, given that decisions taken
by a Company’s General Assembly are only binding to the com-
pany issuing the General Assembly resolution and do not bind
other contracting parties.
For the year 2014, the difference between the amount an-
nounced in the Subsidiary’s results as the cost for electricity
consumption and the amount that it would have announced
on the basis of the tariffs which PPC unilaterally and arbitrarily
formed, amounts to
€
20.6 million. Similarly, the difference be-
tween the amount announced in the Subsidiary’s results as the
cost for electricity consumption and the amount that it would
have announced in implementation of PPC’s Extraordinary
General Meeting resolution, as this has been interpreted by the
Subsidiary Company during negotiations between the parties,
amounts to
€
4.3 million.
However, it is noted that the two parties have not yet, as of the
date of approval of the Company Group’s Financial Statements,
reached an agreement. Therefore, none of the above differenc-
es constitute contingent liabilities, nor can they be considered
as such, because contingent claims and contingent liabilities
which cannot be accurately estimated at this stage may arise
for the Subsidiary, as a result of the finalization of negotiations
between the two parties, or following new legal or arbitration
procedures, or procedures before another competent authority.
Other Contingent Assets & Liabilities
There is a pending legal claim of the parent company METKA
from a supplier of
€
29,7 million which relates to compensa-
tion for poor performance. The defendant company has filed a
declaratory action claiming that it has no obligation to pay the
Company the above amount. The Company shall acknowledge
in its results the amount that may be as-
signed to it at the time of a positive out-
come and recovery. For the above case,
the defendant company has also request-
ed arbitration against the absorbed com-
pany RODAX S.A., the cases of which are
automatically taken over by METKA.
There are other contingent liabilities against
the Group, amounting to 14,26 m
€
, for
which no provision is formed on the results
since the outcome of these is deemed
uncertain. Moreover there are Groups’
claims against third parties amounting to
106,73 m
€
.
4.37 Post Balance Sheet events
There are no other significant subsequent
events, apart from the above mentioned,
which should be announced for
the purposes of I.F.R.S.
