EDF / 2018 Reference document

FINANCIAL STATEMENTS Cash flows and other information

RELATED PARTIES NOTE 48

Details of transactions with related parties are as follows:

Associates and joint ventures

French State or State-owned entities (1)

Joint operations

Group Total

31/12/2018

31/12/2017

31/12/2018

31/12/2017

31/12/2018

31/12/2017

31/12/2018

31/12/2017

(in millions of euros)

Sales

560

580

-

-

1,708 2,031

1,549 2,313 1,163

2,268 6,107

2,129 6,134 1,176

Energy purchases External purchases

4,071

3,817

5 3

4 4

4

9

251

258 294

Financial assets

294 730

238 729

- - -

- - -

-

-

238

Other assets

486

596

1,216

1,325

Financial liabilities Other liabilities

-

-

-

-

-

-

1,162

1,282

1

1

631

552

1,794

1,835

Excluding tax and social liabilities and the CSPE receivable. (1)

48.1

TRANSACTIONS

Relations with Engie 48.2.2 The common service function shared by Enedis and GRDF is defined by Article L. 111-71 of the French Energy Code. Its missions in the electricity and gas distribution sector are building structures, site project management, network operation and maintenance, and metering operations. This service is not a legal entity in its own right. Enedis and GRDF’s relations in this common service are governed by an agreement that defines the scope of the service and the resulting division of costs. The agreement has an unlimited term and can be terminated at any time subject to 18 months notice: in such a case, the parties undertake to renegotiate the agreement during the notice period. It is updated regularly. In July 2014, Enedis and GRDF issued a joint announcement that their joint activities of meter reading and work on meter panels would be discontinued in the future. Currently, Enedis prioritises a structure consisting of regional Divisions covering all its operational missions at local level. A network of smaller units is used for very local activities. In March 2018, Enedis and GRDF decided to set up two mixed entities: UONRH-MS for employment contracts, studies and medical/social matters and OIT, the IT and telecoms operator, for all telephone and office technology activities. These two mixed entities take effect from 1 January 2019. For Enedis, other support functions (Vehicles and Machines, Litigation and Insurance, Training and Recruitment, and Office purchases) are grouped into a Support Services Division. 48.2.3 The EDF group’s relations with public sector entities mainly concern the two entities belonging to the former AREVA group (Orano and AREVA SA). Transactions with Orano concern: the front-end of the nuclear fuel cycle (uranium supplies, conversion and ■ enrichment services); the back-end of the nuclear fuel cycle (transportation, storage, processing and ■ recycling services for spent fuel). Relations with public sector entities

WITH ENTITIES INCLUDED IN THE SCOPE OF CONSOLIDATION

6.

Transactions with the principal associates (CTE, (the company that owns RTE), CENG, Taishan and Alpiq) are presented in note 23. Transactions with other associates, joint ventures, and partner entities in joint arrangements with the Group mainly consist of sales and purchases of energy.

48.2

RELATIONS

WITH THE FRENCH STATE AND STATE-OWNED ENTITIES Relations with the French State 48.2.1 The French State holds 83.67% of the capital of EDF at 31 December 2018, and is thus entitled in the same way as any majority shareholder to control decisions that require approval by the shareholders. In accordance with the legislation applicable to all companies having the French State as their majority shareholder, the EDF group is subject to certain inspection procedures, in particular economic and financial inspections by the State, audits by the French Court of Auditors (Cour des Comptes) or Parliament, and verifications by the French General Finance Inspectorate (Inspection générale des finances). The public service contract between the French State and EDF was signed on 24 October 2005. This contract is intended to form the framework for public service missions assigned to EDF by the lawmaker for an unlimited period. The Law of 9 August 2004 does not stipulate the duration of the contract. EDF, like other electricity producers, also participates in implementation of the multi-year energy programme established by the Decree of 27 October 2016, which defines objectives for generation and load shedding. Finally, the French State intervenes through the regulation of electricity and gas markets, particularly for authorisation to build and operate generation facilities, establishment of sales tariffs for customers that have stayed on the regulated tariffs, transmission and distribution tariffs, and also determination of the ARENH price in accordance with France’s Energy Code, and the system for compensation of public service charges.

423

EDF I Reference Document 2018