EDF / 2020 Universal Registration Document

6 FINANCIAL STATEMENTS

Notes to the consolidated financial statements

Related parties Note 22

Accounting principles and methods Related parties include the French State, companies in which the State holds majority ownership and certain of their subsidiaries, and companies in which the EDF group exercises joint control or significant influence. They also include members of the Group’s management and governance bodies.

Details of transactions with related parties are as follows:

Associates and joint ventures

French State or State-owned entities*

Joint operations

Group Total

31/12/2020

31/12/2020

31/12/2020

31/12/2020

31/12/2019

31/12/2019

31/12/2019

31/12/2019

(in millions of euros)

Sales

355

455

-

-

2,082 2,114

1,889 2,104

2,437 6,000

2,344 6,171

Energy purchases External purchases

3,885

4,063

1 7

4 3

13

18

348

253

368 179

274 150

Financial assets

179 495

150 633

- - -

- - -

-

-

Other assets

593

532

1,088

1,165

Financial liabilities Other liabilities

-

-

-

-

-

-

1,114

1,228

1

1

600

624

1,715

1,853

Excluding tax and social liabilities and the CSPE receivable. *

22.1

Transactions with entities

The support functions for Real Estate, Vehicles and Machines, Litigation and Insurance, Training and Recruitment, and Office purchases, which were previously combined, are now handled separately by each of the two companies. In July 2020, Enedis and GRDF decided to initiate a shared project for transformation of their common activities ( transformation des activités communes or TAC), with the aim of ending co-employability in the activities that remain mixed: equipment procurement and logistics, employment contracts, medical/social matters, housing management, IT and telecommunication for offices, and accounting. Concerning the common service of LPG distribution and supply in the cities of Ajaccio and Bastia in Corsica, ENGIE informed EDF in October 2020 that it was considering terminating its LPG activities in Corsica on 31 March 2021 (its concession agreements ended in the 1990s). The same month, the city of Ajaccio launched a call for tenders for the LPG distribution concession and ENGIE submitted a bid. The city of Bastia also announced that it would launch a call for tenders. The 1951 agreement stipulates the terms for exchanges of information between EDF and ENGIE regarding the reciprocal impacts of their decisions. Relations with public sector entities 22.2.3 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). Front-end of the cycle Several important agreements were negotiated between EDF and Orano: for supplies of natural uranium: Orano Mining contracts; ● for fluoration, enrichment of natural uranium into uranium 235: an Orano ● Conversion-Enrichissement contract (formerly Orano cycle contract). In connection with the plan to construct two EPRs in the UK at the Hinkley Point site, on 29 September 2016 EDF and Orano signed a uranium contract with Orano Mining, and a conversion contract and an enrichment contract with Orano Conversion-Enrichissement. Back-end of the cycle Relations between EDF and Orano Recyclage concerning transportation, processing and recycling of spent fuels are described in note 15.1.1.1.

included in the scope of consolidation

Transactions with the principal associates (CTE (the company that owns RTE), CENG and Taishan) are presented in note 12. Transactions with other associates, joint ventures, and partner entities in joint arrangements with the Group mainly consist of sales and purchases of energy.

22.2

Relations with the French State

and State-owned entities

22.2.1

Relation with French State

The French State holds 83.68% of the capital of EDF at 31 December 2020, 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. Relations with GRDF 22.2.2 Enedis and GRDF have an agreement that defines their relations for provision of certain common services and the resulting division of costs, under Article L. 111-71 of the French Energy Code. In the gas and electricity distribution sector, this agreement covers work related to plant construction, site project management, and network operation and maintenance. It is updated regularly. In 2018, Enedis and GRDF reorganised some of their joint operations by creating two mixed entities: one handles employment contracts, studies and medical/social matters and the other is the IT and telecoms operator for all telephone and office technology activities. These two entities took effect from 1 January 2019.

417

EDF - UNIVERSAL REGISTRATION DOCUMENT 2020