On 14 August 2003, EDF signed an agreement to sell its 36.3% shareholding in the Swedish group Graninge AB to Sydcraft, a subsidiary of German group Eon.
After acquiring the 12% stake held by energy and raw materials broker Louis Dreyfus, EDF now owns 100% of its trading subsidiary’s shares.
EDF announced that it would be selling its 22.2% stake in CNR to Electrabel, a Suez subsidiary. This sale is awaiting approval from the European Commission.
EDF and EnBW have acquired an additional 35% stake in the Polish electricity company Rybnik.
42/43
23 Changes in the scope of consolidation
23.1 Changes in the scope of consolidation in the first half of 2003
Major changes in the scope of consolidation in the first half of 2003 consist of the inclusion of the following wholly owned subsidiaries of EDF International with effect from 1 January 2003:
HISPAELEC,
EDF ENERGIA ITALIA.
Both companies are involved in the sale of energy.
EDF ENERGY GROUP
London Electricity Group was renamed EDF Energy Group as of 30 June 2003.
Padco and Metronet, both acquired following the consolidation of Seeboard accounts by London Electricity Group in 2002, were proportionally consolidated as of 1 January 2003. Both entities were equity consolidations in 2002. London Electricity Group owns 50% of Padco and 20% of Metronet.
EnBW
Changes consist of:
acquisition of 77% in KWL (ED Group), fully consolidated in EnBW’s financial statements as of 1 January 2003. The company is involved in hydraulic generation and distribution and the purchase and resale of energy in Switzerland;
acquisition of the remaining NWS shares;
acquisition of the remaining Salamander shares;
acquisition of the remaining TAE shares.
TIRU
TIRU acquired two waste processing (incineration) companies, CIDEM and CYDEL, wholly owned and fully consolidated as of 1January 2003.
23.2 Changes in the scope of consolidation during the 2002 financial year EUROPE
London Electricity
London Electricity’s financial statements include the following companies:
EPN and all of 24 seven, as of January 2002;
Seeboard, as of July 2002.
43/43 EnBW
The Group’s consolidated holding has risen from 35.38% to 45.75%.
EnBW’s financial statements also include the following companies:
- EnAlpin, fully consolidated since 1 January 2002;
- Hidroelectrica del Cantabrico, proportionally consolidated since 1July 2002;
- ZEAG, fully consolidated since 1 July 2002;
- GVS, fully consolidated since 31 December 2002;
- Stadtwerke Düsseldorf, accounted for under the equity method since 1 January 2002.
The interest percentage in NWS increased from 32% to 99%. Tesion was sold on 31 August 2002.
AMERICAS
LIGHT
EDF increased its stake in Light to 88% to take sole control and in return disposed of its interests in Light-Gas, Metropolitana and Light Telecom. EDF has since increased its capital, taking its stake to almost 95%.
24 Foreign exchange rates
The exchange rates used at 31 December 2002 and 30 June 2003 were as follows (currency/euro):
Currency Closing rate
REVIEW REPORT OF THE STATUTORY AUDITORS ON THE
INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS PERIOD ENDED JUNE 30, 2003
Electricité de France
22-30, avenue de Wagram 75008 Paris
Deloitte Touche Tohmatsu Ernst & Young Audit Mazars & Guérard
Deloitte Touche Tohmatsu Ernst & Young Audit Mazars & Guérard
Membres de la Compagnie Régionale de Paris et de Versailles
Electricité de France
22-30, avenue de Wagram 75008 Paris
Review Report of the Statutory Auditors on the
Interim Consolidated Financial Statements for the six months period ended June 30, 2003
As statutory auditors of Electricité de France, we have reviewed the accompanying interim consolidated financial statements of Electricité de France for the six-month period ended June 30, 2003.
These interim consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to issue a report on these financial statements based on our review.
We conducted our review in accordance with professional standards applicable in France. These standards require that we plan and perform the review to obtain moderate assurance, lesser than that which would result from an audit, as to whether the interim consolidated financial statements are free of material misstatement. The review excluded certain audit procedures and was limited primarily to analytical procedures and to inquiries of Group management and knowledgeable personnel on information that we deemed necessary.
We wish to draw your attention to the following uncertainties:
The estimated value of provisions related to nuclear electricity production, as described in notes 1.22, 16 and 17, is sensitive to the assumptions used concerning costs, inflation rates, long-term discount rates, forecast cash outflows and the results of current negotiations with Cogema. Any change in these parameters could lead to a significant revision of the amounts of provisions.
As mentioned in note 12, EDF began a physical inventory of fixed assets owned by the parent company during 2002, which is due to be completed during the second half-year of 2003. The impact of this inventory is currently being estimated and will be recorded in the financial statements as of December 31, 2003.
The uncertainty relating to the evaluation of the investment in Italenergia Bis (IEB) / Edison and related financial commitments, which was mentioned in our report on the consolidated financial statements as of December 31, 2002, has not been maintained given the provisions accounted for as of June 30, 2003.
In addition, we qualify our conclusions on the following matters:
Interim consolidated financial statements are published for the first time as of June 30, 2003. They do not include comparative financial information, on an historical or proforma basis, as of June 30, 2002.
EDF's current and retired employees in France benefit from a special pension plan for Electricity and Gas Industries personnel and other employee benefits. EDF's corresponding obligation is not covered by a provision, and no actual figure is disclosed in the notes to the financial statements. Under the current scheme, this obligation represents an unrecognized amount well above the Group's equity. As explained in note 19 to the consolidated financial statements as of December 31, 2002, the value of this obligation is likely to undergo major changes due to the planned funding reform for the special Electricity and Gas Industries pension plan.
Based on our review, and except for the matters described in the paragraphs above, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements, prepared in accordance with French accounting principles, do not give a true and fair view of the financial position of the Group as at June 30, 2003 and of the results of its operations for the period then ended.
In addition, without affecting the conclusions expressed above, we draw your attention to :
! note 1.3, which describes the changes in accounting policies, in particular those resulting from the anticipated application as of January 1st 2003 of the French regulation CRC n° 2002-10 relating to the amortization and depreciation of assets, and the change in accounting estimate relating to the extension of the nuclear installations useful life.
! notes 1.13, 11 and 19, which describe the update process for the valuations of goodwills, other fixed assets and investments-related financial commitments, and their sensitivity to underlying assumptions.
October 2nd, 2003
The Statutory Auditors
Deloitte Touche Tohmatsu
Philippe VASSOR Amadou RAIMI
Ernst & Young Audit
Patrick GOUNELLE Claire NOURRY
Mazars & Guerard
Jean-Louis LEBRUN Guy ISIMAT-MIRIN
This is a free translation of the original French text for informational purposes only