SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
In accordance with OMFP 1802/2014 amended
Free translation from Romanian, which is the official and binding version
CONTENT: Page
Financial statements for the year ended 31 December 2018
Statement of financial position 1 - 4
Statement of Profit or loss 5 - 7
Statement of Cash flows 8
Statement of Changes in Equity 9 - 10
Notes to the Financial Statements 11 - 39
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF FINANCIAL POSITION FOR YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
1
Element denomination
Row
No.
Note
no.
Balance at the
beginning of the
year
Balance at the
end of the year
A B 1 2
A. FIXED ASSETS
I. INTANGIBLE ASSETS
1. Set-up cost (acc. 201-2801) 01 - -
2. Development expenses (acc. 203-2803-2903) 02 - -
3. Concessions, patents, licenses, trademarks, rights and assimilated and
other intangible assets (acc. 205+208-2805-2808-2905-2908) 03 25.127.238 25.605.373
4. Goodwill (acc. 2071-2807) 04 3.759.283 2.983.964
5. Other intangible assets for exploration and evaluation of mineral
resources (acc. 206 - 2806 - 2906) 05 - -
6. Advances and intangible assets in progress ( acc. 4094) 06 - -
TOTAL: (rows 01 to 06) 07 3 28.886.521 28.589.337
II. TANGIBLE ASSETS
1. Land and buildings (acc. 211+212-2811-2812-2911-2912) 08 1.462.153.150 1.544.045.998
2. Technical installations and machinery (acc. 213+223-2813-2913) 09 791.550.017 905.878.635
3. Other equipment, machinery and furniture (acc. 214+224-2814-2914) 10 3.495.865 3.107.938
4. Property Investments (acc. 215 – 2815 – 2915) 11 - -
5. Tangible assets in progress (acc. 231 - 2931) 12 50.481.295 74.370.496
6. Property investments in progress (acc. 235 - 2935) 13 - -
7. Tangible Assets of exploration and evaluation of mineral resources
(acc. 216 - 2816 - 2916) 14 - -
8. Productive biological assets (acc. 217 + 227 - 2817 - 2917) 15 - -
9. Advances for tangible assets( acc. 4093) 16 - -
TOTAL: (rows 08 to 16) 17 3 2.307.680.327 2.527.403.067
III. FINANCIAL ASSETS
1. Shares held at affiliated entities (acc 261-2961) 18 247 247
2. Loans to affiliated entities (acc. 2671+2672-2964) 19 - -
3. Shares held in affiliated entities and jointly controlled entities (acc.
262 + 263 - 2962) 20 - -
4. Loans to affiliated entities and jointly controlled entities (acc. 2673 +
2674 - 2965) 21 - -
5. Other financial assets (acc. 265 + 266 - 2963) 22 - -
6. Other loans (acc. 2675* + 2676* + 2677 + 2678* + 2679* - 2966* -
2968*) 23 301.784 638.310
TOTAL: (rows. 18 to 23) 24 3 302.031 638.557
FIXED ASSETS - TOTAL (rows 07+17+24) 25 3 2.336.868.879 2.556.630.961
B. CURRENT ASSETS
I. INVENTORIES
1. Raw materials and consumables (acc 301 + 302 + 303 +/- 308 + 321 +
322 + 323 + 328 + 351 + 358 + 381 +/- 388 - 391 - 392 - 3951 - 3958 -
398) 26 4 25.229.850 27.937.093
2. Work in progress (acc 331+332+341+/-348*-393-3941-3952) 27 - -
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF FINANCIAL POSITION FOR YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
2
Element denomination
Row
No.
Note
no.
Balance at the
beginning of the
year
Balance at the
end of the year
A B 1 2
3. Finished goods and merchandise (acc. 327 + 345 + 346 + 347 +/-
348* + 354 + 356 + 357 + 361 + 326 +/- 368 + 371 +/- 378 - 3945 - 3946
- 3947- 3953 - 3954 - 3955 - 3956 - 3957 - 396 - 397 - din acc. 4428) 28 - -
4. Advances for inventories(acc.. 4091) 29 - -
TOTAL: (rows 26 to 29) 30 25.229.850 27.937.093
II. RECEIVABLES
1. Trade receivables (acc.2675*+2676*+2678*+2679*-2966*-
2968*+4092+411+413+418-491) 31 38.814.526 47.460.116
2. Accounts receivable from affiliated entities (acc.451**-495*) 32 86.711.244 81.027.486
3. Accounts receivable from affiliated entities and jointly controlled
entities (acc. 453-495*) 33 - -
4. Other receivables (acc.425+4282+431**+437**+4382+441**+4424+
4428**+444**+445+446**+447**+4482+4582+461+ 473**-496+5187) 34 11.658.923 21.407.129
5. Share capital subscribed, but not paid in (acc. 456-495*) 35 - -
TOTAL: (rows 31 to 35) 36 5 137.184.693 149.894.731
III. SHORT-TERM FINANCIAL INVESTMENTS
1. Shares held at affiliated entities (acc. 501-591) 37 - -
2. Other short-term investments
(acc.505+506+508-595-596-598+5113+5114) 38 - -
TOTAL: (rows 37 + 38) 39 - -
IV.
PETTY CASH AND BANK ACCOUNTS
(acc. 508+5112+512+531+532+541+542) 40 6 96.563.489 125.363.551
CURRENT ASSETS - TOTAL (rows. 30+36+39+40) 41 258.978.032 303.195.375
C. PREPAYMENTS (acc. 471) 42 184.539 460.411
Amounts to be resumed within a period of up to one year (from acc.
471*) 43 184.539 460.411
Amounts to be resumed within a period of more than one year (from acc.
471*) 44 - -
D.
LIABILITIES: AMOUNTS PAYABLE WITHIN A PERIOD UP TO
ONE YEAR
1. Loans from bond issues
(acc. 161+1681-169) 45 - -
2. Amounts owed to credit institutions (acc.1621 + 1622 + 1624 + 1625
+ 1627 + 1682 + 5191 + 5192 + 5198) 46 28.104.806 1.867.622
3. Advance payments from customers (419) 47 - -
4. Trade payables (acc.401 + 404 + 408) 48 117.329.880 132.522.921
5. Bills of exchange payable (403 + 405) 49 - -
6. Amounts owed to group entities (acc.1661 + 1685 + 2691 + 451 ***) 50 19.731.954 33.136.967
7. Amounts owed to associates and jointly controlled entities (1663 +
1686 + 2692 + 453 ***) 51 - -
8. Other payables, including tax and social security liabilities (1623 +
1626 + 167 + 1687 + 2693 + 421 + 423 + 424 + 426 + 427 + 4281 + 431
*** +437 *** + 4381 + 4423 + 4428 + 441 *** *** *** + 446 + 444 +
447 *** *** + 4481 + 455 + 456 *** + 457 + 4581 + 462 + 473 *** +
509 + 5186 + 5193 + 5194 + 5195 + 5196 + 5197) 52 27.000.551 26.929.851
TOTAL: (rows from 45 to 52) 53 7 192.167.191 194.457.361
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF FINANCIAL POSITION FOR YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
3
Element denomination
Row
No.
Note
no.
Balance at the
beginning of the
year
Balance at the
end of the year
A B 1 2
E.
NET CURRENT ASSETS / NET CURRENT LIABILITIES (rws.
41+43-53-70-73-76) 54 39.174.461 85.845.841
F.
TOTAL ASSETS MINUS CURRENT LIABILITIES (rws.
25+44+54) 55 2.376.043.340 2.642.476.802
G.
LIABILITIES: AMOUNTS PAYABLES WITHIN A PERIOD
OVER ONE YEAR
1. Loans from bonds issue, showing separately the loans from the issue
of convertible bonds
(acc. 161+1681-169) 56 - -
2. Amounts owed to credit institutions
(acc.1621+1622+1624+1625+1627+1682+5191+5192+ 5198) 57 81.966.872 80.100.250
3. Advance payments from customers (acc. 419) 58
4. Trade payables (acc. 401+404+408) 59 - -
5. Bills of exchage payable (acc. 403+405) 60 - -
6. Amounts owed to group entities (acc. 1661+1685+2691+451***) 61 94.000.000 366.559.387
7. Amounts owed to associates and jointly controlled entities (acc.
1663+1686+2692+453***) 62 - -
8. Other liabilities, including tax and social security liabilities
(acc.1623+1626+167+1687+2693+421+423+424+426+427+4281+431*
**+437***+4381+441***+4423+4428***+444***+446***+447***+4
481+455+456***+4581+462+473***+509+5186+5193+5194+5195+51
96+5197) 63 - -
TOTAL: (rows from 56 to 63) 64 7 175.966.872 446.659.637
H. PROVISIONS
1. Provisions for Employees Benefits (1515) 65 38.735.625 54.597.578
2. Provisions for taxes (cf. 1516) 66 39.048.705 -
3. Other provisions (1511 + 1512 + 1513 + 1514 + 1518) 67 774.936 1.551.882
TOTAL PROVISIONS: (rows 65+66+67) 68 8 78.559.266 56.149.460
I. DEFERRED INCOMES
1. Investment subsidies (acc.475) (rd. 70 + 71): 69 9.705.516 9.323.775
Amounts resumed within a period of up to one year (from acc. 475) 70 603.353 637.228
Amounts resumed within a period of more than one year (from acc.
475) 71 9.102.163 8.686.547
2. Deferred Income (acc.472) – total (rws. 73+74), of which: 72 962.918 1.214
Amounts resumed within a period up to one year (acc. 472*) 73 962.918 1.214
Amounts resumed within a period over one year (acc. 472*) 74 - -
3. Deferred incomes related to assets received from customers by transfer
(acc. 478) (rw. 76+77) 75 528.221.559 551.475.217
Amounts resumed within a period up to one year (acc. 478*) 76 26.254.648 22.714.142
Amounts resumed within a period over one year (acc. 478*) 77 501.966.911 528.761.075
Negative goodwill (acc. 2075) 78 - -
TOTAL: (rws. 69+72+75+78) 79 9 538.889.993 560.800.206
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF FINANCIAL POSITION FOR YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
4
Element denomination
Row
No.
Note
no.
Balance at the
beginning of the
year
Balance at the
end of the year
A B 1 2
J. CAPITAL AND RESERVES
I. CAPITAL
1. Subscribed and paid-up capital (acc. 1012) 80 354.364.670 354.364.670
2. Subscribed and unpaid capital (acc. 1011) 81 - -
3. State-owned equity plus assets (acc. 1015) 82 - -
4. Heritage of national research and development institutes (acc. 1018) 83 - -
5. Other equity items (acc. 1031) – BALANCE C 84 - -
TOTAL: (rws. 80+81+82+83+84) 85 10 354.364.670 354.364.670
II. SHARE PREMIUMS (acc. 104) 86
III. REVALUATION RESERVES (acc. 105 ) 87 10 573.424.161 540.337.369
IV. RESERVES
1. Legal reserves (acc. 1061) 88 61.361.299 61.361.299
2. Statutory or contractual reserves (acc. 1063) 89 - -
3. Other reserves (acc. 1068) 90 115.240.459 115.240.459
TOTAL: (raws 88 to 90) 91 176.601.758 176.601.758
Equity capital (acc. 109) 92
Gains related to equity capital instruments (acc.141) 93
Losses related to equity capital instruments (acc.149) 94
V. PROFIT AND LOSS CARRIED FORWARD CREDIT 95 467.937.098 536.633.510
(ct 117) DEBIT 96
VI. PROFIT OR LOSS AT END OF THE REPORTING PERIOD
CREDIT 97 40.384.327 -
(acc. 121) DEBIT 98 - 5.717.224
Profit distribution (acc. 129) 99 10 2.263.886 -
EQUITY CAPITAL- TOTAL (rows 85 + 86 + 87 + 91 - 92 + 93 - 94
+95 - 96 + 97 - 98 - 99) 100 1.610.448.128 1.602.220.083
Public (acc. 1016) 101 - -
Private (acc. 1017) 102 - -
TOTAL SHARES CAPITALS (rows 100+101+102) 103 1.610.448.128 1.602.220.083
The attached notes form an integral part of this Statement of Financial Position.
Administrator,
General Manager
Branescu Valentin
Director of Support Services Division Dumitriu Raluca Florentina
Director Financial Department
Stegarita Marian
12 April 2019
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts are in RON, unless otherwise stated)
5
Indicator Denomination
Row
no.
Note
no.
Previous financial
year
Ended financial
year
A B 1 2
1 Net turnover (rw. 02+03-04+05+06) 01 11 636.612.471 646.617.212
Sold production (acc.701+702+703+704+705+706+708) 02 11 635.435.419 645.627.230
Revenues from sales of goods (acc.707) 03 11 1.177.052 989.982
Commercial discounts granted (acc.709) 04 - -
Interest incomes recorded by the General register of removed
entities that have ongoing leasing agreements (acc.766*) 05 - -
Income from grants related to net turnover (acc. 7411) 06 - -
2 Income related to work in progress (acc. 711+712)
Credit Balance 07 - -
Debit Balance 08 - -
3 Incomes from the production of tangible and intangible assets
(acc. 721 + 722 ) 09 2.922.536 15.280.041
4. Incomes from the revaluation of tangible assets (acc. 755) 10 2.922.999 -
5. Incomes from property investment production (acc. 725) 11 - -
6. Income from subsidies (acc. 7412 + 7413 + 7414 + 7415 + 7416 +
7417 + 7419) 12 - -
7. Other operating revenues (acc.751+758+7815) 13 12 25.677.384 28.395.448
- of which, incomes from negative goodwill (acc.7815) 14 - -
-of which incomes from investment grants(acc. 7584) 15 9 22.122.686 23.830.854
OPERATING INCOME - TOTAL
(rws. 01 + 07 - 08 + 09 + 10 + 11 + 12 + 13) 16 668.135.390 690.292.701
8. a) Expenses for raw materials and consumables (acc. 601+602) 17 5.731.764 13.160.412
Other material expenses (acc.603+604+606+608) 18 231.173.352 242.778.426
b) Other external charges (for water and energy) (acc. 605) 19 9.563.556 12.413.811
c) Expenses on merchandise (acc. 607) 20 496.294 391.574
Trade discounts received (acc.609) 21 - -
9 Personnel related expenses (rws. 23+24) ,of which 22 13 136.998.230 165.348.581
a) Wages and salaries (acc. 641+642+643+644) 23 110.609.361 158.765.778
b) Social security and other related costs (acc. 645) 24 26.388.869 6.582.803
10.a) Value adjustments on tangible and intangible assets (rws. 26-27) 25 3 120.985.299 127.158.359
a.1) Expenses (acc. 6811+6813+6817) 26 121.864.268 128.301.991
a.2) Incomes (acc. 7813) 27 878.969 1.143.632
10.b) Value adjustments on current assets (rws. 29-30) 28 1.615.687 1.356.699
b.1) Expenses (acc. 654+6814) 29
3.489.918
2.844.419
b.2) Incomes (acc. 754+7814) 30 1.874.231 1.487.720
11 Other operating expenses (rows from 32 to 38) 31 118.021.875 113.206.295
11.1
Expenses on external services
(acc.611+612+613+614+621+622+623+624+625+626+627+628) 32 14
104.413.985
92.494.160
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts are in RON, unless otherwise stated)
6
Indicator Denomination
Row
no.
Note
no.
Previous financial
year
Ended financial
year
A B 1 2
11.2. Other taxes, duties and assimilated payments,
Expenses representing transfers and contributions due under
special regulations (acc. 635 + 6586*)
33
8.629.012
13.726.907
11.3. Expenses on environmental protection (acc. 652) 34 59.374 31.362
11.4. Expenses from the revaluation of tangible assets (acc. 655) 35 1.826.568 -
11.5 Expenses related to calamities and other similar events (acc. 6587) 36 - -
11.6 Other expenses (acc. 651+6581+6582+6583+6588) 37 14
3.092.936
6.953.866
Expenses on refinancing interests recorded by the General register
of removed entities that have ongoing leasing agreements (acc.
666*) 38 - -
Adjustments regarding the provisions (rw. 40-41) 39 8 (1.751.248) 13.199.814
-Expenses (acc. 6812) 40 110.599 16.962.007
-Incomes (acc. 7812) 41 1.861.847 3.762.193
OPERATING EXPENSES – TOTAL
(rows 17 to 20 - 21 + 22 + 25 + 28 + 31 + 39) 42
622.834.809
689.013.971
OPERATING PROFIT OR LOSS:
- Profit (rws. 16-42) 43 45.300.581 1.278.730
- Loss (rws. 42-16) 44 - -
-12 Incomes from participation interests (acc. 7611+7613) 45 - -
- of which, incomes received from affiliated entities 46 - -
13 Interest incomes (acc. 766*) 47 536.736 1.398.199
- of which, incomes received from affiliated entities 48 - -
14 Incomes from subsidies for the interest due (acc.7418) 49 - -
15. Other financial incomes (acc. 762+764+765+767+768+7615) 50 1.616.358 1.074.345
- of which, income from other financial assets (acc. 7615) 51 - -
FINANCIAL INCOME - TOTAL
(rows 45 + 47 + 49 + 50) 52
2.153.094
2.472.544
16 Value adjustments on financial assets and financial investments
held as current assets (rws. 54-55) 53 - -
Expenses (acc. 686) 54 - -
Incomes (acc. 786) 55 - -
17 Expenses on interests (acc. 666*) 56 164.271 7.942.668
- of which, expenses in relation to affiliated entities 57 - -
Other financial expenses (acc. 663+664+665+667+668) 58
2.011.692
259.478
FINANCIAL EXPENSES - TOTAL
(rows 53+56+58) 59 2.175.963 8.202.146
FINANCIAL PROFIT OR LOSS:
- Profit (rws. 52-59) 60 - -
- Pierdere (rd. 59-52) 61 22.869 5.729.602
TOTAL INCOMES (rw. 16+52) 62
670.288.484
692.765.245
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts are in RON, unless otherwise stated)
7
Indicator Denomination
Row
no.
Note
no.
Previous financial
year
Ended financial
year
A B 1 2
TOTAL EXPENSES (rw. 42+59) 63
625.010.772 697.216.117
GROSS PROFIT OR LOSS (A):
- Profit (rws. 62-63) 64 45.277.712 -
- Loss (rws. 63-62) 65 - 4.450.872
18 Proofit TAX (acc. 691) 66 15 4.893.385 1.266.352
19 Other taxes not mentioned for the above items (acc. 698) 67 - -
20
NET PROFIT OR LOSS RELATED TO THE REPORTING
PERIOD - -
- Profit (rws. 64-66-67) 68
40.384.327
-
- Loss (rws. 65+66+67)
(rws. 66+67-64) 69 - 5.717.224
The attached notes form an integral part of this balance sheet.
Administrator,
General Manager
Branescu Valentin
Director of Support Services Division Dumitriu Raluca Florentina
Director Financial Department
Stegarita Marian
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
8
Element denomination 2017 2018
Cash flows from operating activities 45.277.712 (4.450.872)
Result before profit tax
Adjustments for non-monetary items:
Adjustment of tangible and intangible assets, net 120.985.299 127.158.359
Adjustments for current assets, net 1.615.687 1.356.699
Provisions change, net (1.751.248) 13.199.813
(Gain)/ Loss from concession of fixed assets, net 724.865 810.429
Income in advance resumed (22.122.686) (23.830.854)
Impact of revaluation of fixed assets on the profit and loss account, net (1.096.431)
Net financial result (22.870) 5.729.602
Operating result before change in working capital 143.610.327 119.973.177
Changes in net working capital in:
Inventories (18.065.711) (2.707.243)
Trade receivables and other receivables (37.296.556) (67.845.947)
Trade payables and other payables (10.200.418) 54.914.063
Deferred revenue 28.424.792 22.291.954
Changes of working capital (37.137.893) 6.652.826
Interest paid (164.271) (1.484.111)
Profit tax paid (8.453.504) (5.167.998)
Net cash flow from operating activities 97.854.659 119.973.894
Cash flow from investment activity
Payments for acquisitions of tangible and intangible assets (217.335.712) (294.868.379)
Payments for purchases of fixed assets from customer contributions
(connection fee) (28.688.953) (43.984.287)
Receipts from the customer from financial contributions 33.787.676 57.404.983
Increase in deposits with a maturity of more than 3 months - -
Proceeds for deposits with a maturity of more than 3 months 7.939.085 -
Interest received 517.540 1.398.199
Net cash flow used in the investment activity (203.800.364) (280.049.484)
Cash flow from financing activity
Debt repayments to banks related to assigned supplier credits (32.389.399) (18.297.008)
Proceeds from affiliated parties loans 94.000.000 266.426.921
Proceeds from short-term loans 80.000.000 -
Paid dividends (87.894.930) (38.120.441)
Net cash flow (used in) / derived from financing activity 53.715.671 210.009.474
Net increase / (decrease) in cash and cash equivalents (52.230.034) 49.933.884
Cash and cash equivalents at the beginning of the year 127.659.701 75.429.667
Cash and cash equivalents at the end of the year 75.429.667 125.363.551
The attached notes form an integral part of this statement of cash flows.
During 2018 the amount from the connection fee from the client was reclassified. This was presented in operating
activity flows, and now are included in investment activity.
General Manager
Branescu Valentin
Director of Support Services Division Dumitriu Raluca Florentina
Director Financial Department
Stegarita Marian
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
Element of equity Balance at 31
december 2017
Increases Decreases Balance at 31
Total, of which by transfer Total, of
which by transfer december 2018
0 1 2 3 4 5 7
Share capital 354.364.670 - - - - 354.364.670
Revaluation reserve 573.424.161 - - 33.086.792 33.086.792 540.337.369
Legal reserve 61.361.299 - - - - 61.361.299
Reserve from
development fee 42.028.641 - - - - 42.028.641
Other reserves 73.211.818 - - - - 73.211.818
Retained Earnings 467.937.098 106.816.853 71.207.233 38.120.441 - 536.633.510
Result of the year 40.384.327 (5.717.225) - 40.384.327 40.384.327 (5.717.224)
Profit distribution (2.263.886) - - (2.263.886) (2.263.886) -
Total capital and
reserves 1.610.448.128 101.099.628 71.207.233 109.327.675 71.207.233 1.602.220.083
The main changes in equity during the financial year ended December 31, 2018 are as follows:
-Dividends distributed to shareholders in 2018 for the financial year 2017 amounting to 38.120.441 Lei;
-Impact of the revaluation reserve depreciated transfered to retained earnings in amount of 33.086.792 Lei;
-Correction of accounting error with retained earnings, regarding the taxes provision for the revaluation reserve, in
amount of 35.609.620 Lei. The Company considers that recognition criteria for this to be a provision were not meet.
According with fiscal regulations the revaluation reserve will be taxed with the change in destionation. The decision
of changing the destination of the reserve is of the shareholders.
-Net loss of 2018 is in the amount of 5.717.225 Lei;
General Manager
Branescu Valentin
Director of Support Services Division Dumitriu Raluca Florentina
Director Financial Department
Stegarita Marian
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
10
In 2017, the situation of the equity changes is the following:
Element of equity Balance at 31
december 2016
Increases Reductions Balance at 31
Total, of which by transfer Total, of
which december 2017
0 1 2 3 4 5 7
Subscribed capital 354.364.670 - - - - 354.364.670
Revaluation reserve 541.671.824 76.149.571 - 44.397.234 30.847.615 573.424.161
Legal reserve 59.097.413 2.263.886 2.263.886 - - 61.361.299
Reserve from
development fee 42.028.641 - - - - 42.028.641
Other reserves 63.446.503 9.766.104 9.766.104 789 789 73.211.818
Reported profit 437.088.694 128.509.438 128.509.438 97.661.034 9.766.104 467.937.098
Result of the financial
year - profit 103.686.814 40.384.327 - 103.686.814 103.686.814 40.384.327
Profit distribution (6.025.780) (2.263.886) (2.263.886) (6.025.780) (6.025.780) (2.263.886)
Total capital and
reserves 1.595.358.779 254.809.440 138.275.542 239.720.091 138.275.542 1.610.448.128
The main changes in equity during the financial year ended December 31, 2017 are as follows:
- Profit of the year 2016 after distribution of dividends and legal reserve, transferred to "Other reserves", in amount
of 9.766.104 lei;
- Declared dividends in 2017, in the amount of 87.894.930 Lei;
- Transfer to retained earnings of the depreciation of surplus from revaluation in the amount of 30.848.404 Lei;
- Net profit of 2016 in the amount of 40.384.327 Lei;
-Legal reserve in the amount of 2.263.886 Lei.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
11
1. INFORMATION ABOUT THE COMPANY
i) General information on the Company
„SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE MUNTENIA NORD S.A. (SDEE Muntenia Nord SA
or "The Company") was established on 1 March 2002 on the basis of GD no. 1342/2001, through the reorganization
of Energetic Company Electrica S.A. ("Parent Company" or "Electrica S.A.").
On 31 December 2018, the shareholders of the Company are as follows: 35.436.457 shares, representing 99.99997%,
Societatea Energetica Electrica SA. and 10 shares, representing 0.00003%, Societatea de Distributie a Energiei
Electrice Transilvania Sud SA.
The company has as main activity the distribution of electricity, efficiently operating the transit of electricity through
its own networks, distributing electricity to more than 1.3 mil customers, modernising and re-technology of existing
installations, expanding of automation as well as research-design in its field of activity, according to the Distribution
License no. 455 of 29 April 2002, updated by the Decision of the National Regulatory Authority for Energy no. 549
of 14 April 2017.
SDEE Muntenia Nord has its headquarter in Ploiesti, Marasesti str. 44, Prahova County and it is registered at the
Trade Registry Office of the Prahova Court with the order number J 29/269/2002 and CIF(fiscal identification code)
- RO 14506181.
The company is structured on two levels, with the following competencies and attributions: the central structure and
power distribution branches (SDEE).
Business (activity) transfer agreement
On 31 October 2017, as a result of obtaining the necessary corporate approvals, the activity transfer agreements were
signed between each of the electricity distribution subsidiaries and the Company Filiala de Intretinere si Servicii
Energetice Electrica Serv SA within the Electrica group.
Societatea de Distributie a Energiei Electrice Transilvania Nord SA. carried out the transfer / internalization of some
activities within Electrica Serv S.A. (belonging to the SISE Muntenia Nord branch), transfer approved by the Decision
of the General Meeting of Shareholders no.8 / 27.10.2017.
ii) Regulatory environment
The activity in the energy sector is regulated by the National Authority for Energy Regulation ("ANRE").
Some of ANRE's main attributions are to approve prices and tariffs and to issue calculation methodologies used to
establish regulated prices and tariffs.
Electric energy distribution
Electricity distribution is a monopolistic activity.
Determination of distribution tariffs is regulated by the "ceiling tariff" method. The "Pricing methodology for
electricity distribution service", approved by ANRE Order no.169 / 2018, with the subsequent amendments, regulates
the calculation of the distribution tariffs.
The distribution tariffs are established for the three voltage levels (high, medium and low).
The methodology of the "ceiling tariff" used to establish the distribution tariffs ensures the reduction of income
variation and the avoidance of significant price fluctuations for users.
ANRE determines the target for annual revenues for a regulatory period, using the financial data provided by the
distribution operators. The annual revenue level is established taking into account the controllable operating and
maintenance costs, obtained after applying the annual efficiency factor, imposed by ANRE, non-controllable, with
the purchase of electricity to cover its own technological consumption, the depreciation of the regulated asset base
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
12
(AM), the rate of return of the regulated asset base (RBAR) and the revenues from the application of the reactive
energy regulated tariff. (Article 23, ANRE Order 72/2013).
In the year 2014, a new regulatory period started, governed by the provisions of ANRE Order 72/2013 for the approval
of the Tariff Pricing Methodology for the Electricity Distribution Service (Regulatory Period III: 2014-2018).
In the year 2014, ANRE Order 72/2013 was amended by the Order ANRE 112/2014, and as a result of this
amendment, it was approved the Order 146/2014, by which the regulated rate of BAR's return for the third regulatory
period, 2014-2018, was modified from 8.52% to 7.7% starting with the year 2015.
In the year 2015, ANRE Order 72/2013 was amended through ANRE Order 165/2015, modification following which
the limitation of the various tariffs set at 7% from one year to the next, is applied only in the case of their growth, not
in the sense of the decrease, as was the case for 2016 tariffs.
The regulated electricity distribution tariffs for the Company are the following:
Order 197/14.12.2018 Order 116/12.12.2017 Order 112/14.12.2016
1 January-31 December 2019 1 January-31 December 2018 1 January-31 December 2017
High
voltage
Medium
voltage
Low
voltage
High
voltage
Medium
voltage
Low
voltage
High
voltage
Medium
voltage
Low
voltage
15,21 33,08 114,18 14,79 31,54 109,38 14,79 33,67 109,35
Regulated asset base (BAR)
According to the ANRE Order no. 72/2013, the determination of distribution tariffs is based, among other things, on
the regulated asset base.
The regulated asset base at the beginning of the first regulatory period (January 1, 2005) (Initial BAR) included the
net value of tangible and intangible assets recognized by ANRE and used only for regulated electricity distribution.
The BAR subsequently calculated includes, in addition to initial BAR, as net value, also the net value of tangible and
intangible assets subsequently acquired through investments approved by ANRE. The BAR does not include fixed
assets funded by donations, the development fee received or other non-reimbursable funds, including the connection
fee received from new users of the power distribution network.
Concession of electricity distribution service
The company (as a concessionaire) concluded in the year 2005 concession agreements with the Ministry of Energy
(as concession holder), updated in 2015 by additional acts, a concession agreement having as object the concession
of the electricity distribution service in the determined territory (North Muntenia region), on the risk and
responsibility of the concessionaires and with the observance of the technical regulations applicable to the operation,
modernization, rehabilitation and development of the electricity distribution networks, stipulated in the Energy Law,
of the terms and conditions of the electricity distribution license and of the regulations issued by ANRE. The
concession agreement is concluded for a period of 49 years, with the possibility of extension for a period equal to no
more than half of this period. As a price for the concession, the Company pays an annual fee recognized in the
distribution tariff of 1/1000 of the revenues from the electricity distribution. In order to provide the electricity
distribution service, the company uses the assets representing the electricity distribution network owned by it, situated
in the abovementioned territory. According to the concession agreement, the concessionaire will buy, at the end of
the concession agreement, the ownership of the "relevant goods", respectively the electricity distribution networks,
at a price equal to the regulated asset base as established with the regulatory authority.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
13
2. PRINCIPLES, POLICIES AND ACCOUNTING METHODS
2.1 Basis of drawing up the financial statements
These are the financial statements of the Company for the financial year ended on 31 December 2017, prepared in
accordance with:
• Accounting Law 82/1991 (republished in 008), as amended
• The provisions of the Order of the Minister of Public Finance no. 1802/2014, approving the Accounting Regulations
on the individual annual financial statements and the consolidated annual financial statements, as amended ("OMFP
1802/2014").
The accounting policies adopted for the preparation and presentation of the financial statements are in accordance
with the accounting principles provided by OMFP 1802/2014.
These financial statements include:
- Statement of financial position
- Statement of profit or loss
- Statement of cash flows
- Statement of equity changes
- Notes to the financial statements.
The financial statements refer only to SDEE Muntenia Nord SA. The company does not have subsidiaries to make
consolidation necessary.
The accounting records on the basis of which were prepared these financial statements are in lei ("RON").
These financial statements are not intended to present the financial statement, result of operations, cash flows and a
complete set of notes to the financial statements, in accordance with accounting regulations and principles accepted
by countries and jurisdictions other than Romania. Therefore, the financial statements are not prepared for the use of
persons who are not familiar with the accounting and legal regulations in Romania, including OMFP 1802/2014.
2.2 Significant accounting principles
The financial statements for the financial year ended on 31 December 2018 were prepared in accordance with the
following accounting principles:
Going contern
Preparation of the financial statements under going concern assumption: the company will normally continue its
activity for the forseable future without treat of liquidation or significant reduction of activity.
Consistency principle
The Company consistently applies accounting policies and valuation methods from one financial year to the next.
Principle of prudence
In the preparation of the annual financial statements, the recognition and evaluation has been carried out on a prudent
basis, and especially:
a) the profit and loss account included only the profit realized at the balance sheet date;
b) debts incurred during the current financial year or in a previous financial exercise have been recognized, even if
they become apparent only between the balance sheet date and the date of its drawing up;
c) impairments have been recognized, whether the result of the financial year is loss or profit.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
14
Accrual principle
The effects of transactions and other events have been recognized when transactions and events have occurred (and
not as cash or equivalent has been earned or paid) and have been registered in the accounting and reported in the
financial statements of the related periods.
All income and expenses of the financial exercise have been taken into account, without taking into account the the
date of receipt or payment. Revenues and expenses that resulted directly and simultaneously from the same
transaction were recognized simultaneously in the accounting, by the direct association between expenses and related
income, with a distinct indication of such income and expense.
The principle of intangibility
The opening balance sheet of the financial year corresponds to the closing balance sheet of the previous financial
year.
The principle of separate valuation of assets and liabilities
In order to determine the corresponding value of a balance sheet position, the value of each component of the asset
and liability items was determined separately.
The principle of non-compensation
The values of the items that represent the assets were not compensated by the values of the items that represent the
debts, respectively the revenues with the expenses.
Accountability and presentation of the items in the financial statements, taking into account the economic fund of
the transaction or engagement in question
Accounting record and presentation in financial statements of economic and financial operations reflects their
economic reality, highlighting the rights and obligations, as well as the risks associated with these operations.
Cost principle
The items presented in the financial statements were valued on the basis of the acquisition cost or production cost,
less tangible assets, that are valued using the revaluation method.
Materiality Principle
The Company may deviate from the requirements included in the applicable accounting regulations, regarding the
information presentations and publication, when the effects of their observance are insignificant.
2.3. Reporting currency
The accounting is realized in Romanian language and in the national currency ("RON"). The bookkeeping of foreign
currency transactions is carried out both in national currency and in foreign currency. The elements included in these
situations are presented in Romanian lei (RON).
2.4. Use of accounting estimates
The preparation of the financial statements prepared in accordance with OMFP 1802/2014 with subsequent
amendments, requires management to make estimates and assumptions that influence the reported amounts of assets
and liabilities and the presentation of contingent assets and liabilities at the date of the financial statements, as well
as the amounts of revenues and expenses of the reporting period. Actual results may differ from the estimated ones.
These estimates are reviewed periodically and, if adjustments are required, they are recorded in the profit and loss
account when they become available.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
15
2.5 Continuity of activity (going concern principle)
These financial statements have been prepared on the basis of the principle of continuity of activity, which implies
that the Company will continue its activity in the foreseeable future. To valuate the applicability of this assumption,
the Companu management analyzes the estimates related to the future cash inflows. Based on these analyzes, the
Company management considers that the Company will be able to continue its business in the foreseeable future, and
therefore the application of the going concern principle in the preparation of the financial statements is justified.
2.6 Currency conversions
Transactions in foreign currency are initially recorded at the exchange rate communicated by the National Bank of
Romania for the transaction date.
At the balance sheet date, monetary items expressed in foreign currency and receivables and debts expressed in lei,
which are settled according to the exchange rate, are evaluated and presented in the annual financial statements at the
exchange rate communicated by the National Bank of Romania, valid on the closing date of the financial year.
The profits and losses from the foreign exchange differences, realized and unrealized, between the exchange rate of
the foreign exchange market communicated by the National Bank of Romania for the date of recording the
receivables or debts in foreign currency and those expressed in lei, the settlement of which is made according to the
the exchange rate, or the rate at which they are recorded in the accounts and the exchange rate at the end of the
financial year, are recorded in the profit and loss account for that financial year.
Non-monetary items purchased with foreign currency payments and recorded at historical cost (fixed assets, stocks)
are presented in the annual financial statements using the exchange rate from the date of the transaction. Non-
monetary items purchased in foreign currency and recorded at fair value (for example, revalued tangible assets) are
presented in the annual financial statements at that amount.
Monetary assets and liabilities expressed in foreign currency are revalued in lei at the exchange rate from the end of
each month and the exchange rate differences are recorded in the profit and loss account.
Exchange rates RON / EUR communicated by the National Bank of Romania on 31 December 2017 and 31
December 2016 were the following:
Currency 31 december 2017 31 december 2018
Leu/USD 3,8915 4,0736
Leu/EUR 4,6597 4,6639
2.7 Significant accounting policies
a) Intangible assets
Intangible assets acquired by the Company are presented at cost less accumulated amortization and impairment loss
(see accounting policy g)). Amortization is recognized in the profit and loss account on a straight-line basis, for the
estimated useful life of the intangible asset. Most of the intangible assets registered by the Company are represented
by dedicated software programs. These are linearly depreciated for a period of 3-6 years.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
16
b) Tangible assets
i. Cost/ Evaluation
Tangible assets are initially recognized at the cost, and after that they are periodically measured at fair value. The
cost of tangible assets (property, plant and equipment) includes the purchase price and other direct expenses related
to the acquisition and commissioning of the tangible assets.
Significant exchange items (electricity meters) and security equipment are considered to be tangible assets when they
are expected to be used for a period longer than one year.
After initial recognition, tangible assets are recorded at cost, less cumulative depreciation and impairment (see
accounting policy g) and are periodically revalued.
Elemen Items in a group of tangible assets (property, plant and equipment) are revalued simultaneously, to avoid
selective revaluation and reporting in the annual financial statements of values that are a combination of costs and
values calculated on different dates. If a non-current asset is revalued, all other assets in the group to which it belongs
must be revalued.
Revaluations are performed with sufficient regularity, so that the accounting value does not differ materially from
that which would have been determined using fair value at the balance sheet date.
In the revaluation of a tangible asset, cumulative depreciation at the revaluation date is eliminated from the gross accounting value of the asset, and the net value determined as a result of the adjustment with the value adjustments is recalculated at the revalued value of the asset.
ii. Subsequent costs
Subsequent expenses incurred related to a tangible asset are expenses of the period in which the asset has been
carried out or increases the value of that asset, depending on the economic benefits related to such expenses,
according to the general recognition criteria.
In the case of replacement of a component of a long-term asset, the Company recognizes the cost of the partial
replacement, the accounting value of the replaced part being removed from the accounting records, with the related
amortization, if the required information is available and if the recognition criteria for tangible assets are met.
The costs of regular inspections or general revisions , performed by the entity for the detection of malfunctions,
are recognized at the moment of each general inspection, as expense or in the accounting value of the item of the
tangible asset as a replacement, if the following conditions are cumulatively met:
- Inspections or general revisions are mandatory for maintaining and operating at normal parameters the
equipment and machinery
- The cost of inspections or general revisions exceeds the materiality threshold established by the entity's
accounting policies.
If the cost of the inspection is recognized as a component of the asset, the component value is amortized over the
period between the two planned inspections. The cost of current revisions and inspections, other than those
recognized, as a component of the asset, represents expenses of the period.
iii. Amortization
Amortization (Depreciation) is calculated to decrease the gross value, less the residual value, using the linear
depreciation method over the lifetime of the tangible assets and of their components, which are separately accounted
for.
The Company calculates the accounting amortization on the basis of the remaining economic lifetimes, established
by the valuer in the valuation report or on the basis of the durations established by the Company's technical
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
17
departments. Fiscal amortization is calculated on the basis of the tax periods from the Catalogue on the classification
of tangible assets under HG 2139/2004.
The economic and fiscal periods of amortization (in years) used for the tangible assets used by the Company are the
following:
Category Economic Periods
(on average) Fiscal periods
Buildings
Administrative and industrial 60 40
Special installations
Lines of electricity distribution
Overhead lines on wood poles 15 9
Overhead lines on concrete poles 40 32
Underground lines 30 12
Other cables 12 9
Transformers 24 16
CMeters 15 8
Measuring and control devices 15 8
Means of transport 8 4
Office supplies 6 4
Others 5 3
Land and current assets are not amortized. Investments in progress are amortized starting from the date of
commissioning.
c) Inventories
Inventories are made up of consumables and other materials. These are recorded as inventory at the time of purchase
and are passed on expenses at the time of consumption. The cost of inventories includes all acquisition costs and
other costs incurred in bringing stocks to and from the current situation.
The cost of inventories is based on the weighted average cost method of evaluation. Where appropriate, depreciation
adjustments for excess or old inventories, or scrap are recorded.
d) Trade receivables and other receivables
Customers accounts and assimilated accounts include mainly invoices issued until 31 December for electricity
distribution, including estimated receivables related to the electricity, distributed by the end of the year, but invoiced
in the period after the end of the year.
Customers accounts and assimilated accounts are recorded at the nominal value, reduced to recoverable amount,
estimated by recording an adjustment for impairment loss. Generally, value adjustments are recorded for old
receivables and payment delays penalties.
e) Short-term investments
Short-term investments include short-term bank deposits, with a maturity of more than 3 months and up to one year.
f) Cash and cash equivalents
Cash holdings consist of cash, bank accounts, term deposits of up to three months, if they are held to cover the short-
term need of cash, checks and commercial effects deposited at the banks. Account overdraft is included in the
balance sheet, within the amounts owed to credit institutions, to be paid within one year.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
18
For the cash flow situation, cash and cash equivalents include cash in the bank, current accounts at the banks, financial
investments for less than three months, net of account overdraft.
g) Impairment losses
The book value of the Company's assets, other than stocks, is analyzed at each balance sheet date, to determine
possible impairment losses. If such a decrease is probable, the recoverable amount of the asset in question is
estimated. If appropriate, an ajustment for impairment is recognized in the profit and loss account or in the equity,
when the book value of the asset is greater than its recoverable value.
The adjustment for impairment may be resumed if there has been a change in the conditions existing at the moment
when the recoverable amount is determined. The resumption of an impairment adjustment may be made only in such
a way that the net value of the asset does not exceed its historical net book value, taking into account the depreciation.
h) Share capital
The Company recognizes the changes of the share capital only after their approval in the General Meeting of
Shareholders and registration with the Trade Registry Office.
i) Dividends
Dividends are recognized as a debt in the period in which their distribution is approved.
j) Revaluation reserve
Revaluations are carried out with sufficient regularity at the balance sheet date, so that the book value does not differ
materially from that that would be determined using fair value.
The difference between the amount resulting from the revaluation and the net book value is presented in the
revaluation reserve, as a separate sub-item in "Capital and reserves".
If the result of a revaluation is an increase compared to the net book value, then it is treated as follows:
- as an increase of the revaluation reserve presented under the item "Capital and reserves", unless there has been a
prior decrease recognized as an expense related to that asset, or
- as an income to compense the expense with the decrease, previously recognized for that asset.
If the result of a revaluation is a decrease of the net book value, it is treated as follows:
- as an expense with the full amount of depreciation, when no amount related to that asset (revaluation surplus) is
recorded in the revaluation reserve; or
- as a decrease of the revaluation reserve, with the minimum between the value of that reserve and the value of the
decrease, and any remaining uncovered difference is recorded as an expense.
The revaluation surplus included in the revaluation reserve is capitalized by the direct transfer to the reported result
(account 1175 "Reported result representing the surplus realised from revaluation reserves "), when that surplus
represents a realised gain. The gain is considered realised as the asset is used by the entity; the value of the transferred
reserve is the difference between the amortization calculated on the basis of the revalued book value and the
amortization value, calculated on the basis of the initial cost of the asset.
According to the tax legislation in force, the revaluation reserve is taxed at the moment of its change of destination.
Starting with 1 May 2009, as a result of changes in tax legislation, revaluation reserves recorded after 1 January 2004
become taxable as amortization of the related tangible assets.
k) Legal reserves
Legal reserves represent 5% of the gross profit from the end of the year until the total legal reserves reach 20% of
the paid up share capital, in accordance with the legal provisions. These reserves are deductible at the calculation of
the profit tax and are not distributable
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
19
l) Income in advance
Income in advance includes the connection fee, the development fee, donations and inventory pluses. They are
resumed at income when recognizing the related costs (depreciation of related tangible assets).
Connection fee
The value of the new connections to the electricity network is invoiced to consumers by a connection tariff (in
accordance with ANRE Order no. 59/2013). New connections to the electricity network are the property of the
Company.
Receipts from the connection fee are recorded as prepaid earnings and are resumed at income as the depreciation of
related tangible assets.
m) Grants (subsidies)
Government grants, including non-monetary grants at fair value, should not be recognized until there is sufficient
certainty that:
1) the entity will comply with the conditions imposed by its award; and
2) grants will be received.
Only receiving a grant does not itself provide conclusive evidence that all the conditions attached to the award of
grant have been or will be met.
The accounting of the projects financed by the grants is distinct, for every project, every financing source, according
to the concluded contracts, without drawing up separate annual financial statements for each such projeacc.
In order to ensure the correlation of the expenses financed from the grants with the related incomes, proceed as
follows:
1) from the point of view of the profit and loss account:
- during each month the expenses are highlighted by their nature;
- at the end of the month, the grants corresponding to the expenses incurred are highlighted as income.
2) from the point of view of the balance sheet:
- the grant receivable is recognized in correspondence with the grants income, if the expenses incurred from these
grants have been incurred, or the deferred income, if these expenses have not yet been incurred;
- on a regular basis, with the request for reimbursement of the expenses incurred or on the basis of other
documents establishing and approving the appropriate amounts, the amounts registered as receivables from the
grants shall be regularized.
n) Loans
Long-term bank loans are recognized at cost.
o) Debts related to leasing contracts
Leasing contracts in which the Company substantially assumes the risks and benefits associated with the property
are classified as financial leasing. Other contracts are classified as operational leasing. Debt to the Leasing Company
is included in the balance sheet as a debt regarding the leasing contraacc. Financing costs are recorded in profit and
loss account for the leasing period at a constant interest rate.
Payments made under operating leasing contracts are recorded in the profit and loss linear account for the period of
the leasing contraacc. The reductions in the leasing receipts received are recognized in the profit and loss account as
a reduction in expenses.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
20
p) Suppliers and other liabilities
Liabilities to suppliers are highlighted at cost and include bills for deliveries, contracted works and services.
q) The provisions
The provisions are recognised in the balance when the company is born a legal or implied obligation related to a past
event and it is likely that in the future it is necessary to consume some economic resources that left this obligation.
The provisions are revised at each year-end and adjusted to reflect the most appropriate current estimation.
A provision is recognized when:
-an entity has a current obligation generated by a previous event;
-a resource output is likely to be necessary to honour that obligation; and
-a credible estimate of the value of the obligation can be achieved.
Provisions for taxes
The company constitutes provisions for taxes to the extent that for future amounts of payment due to the state budget,
whereas those amounts are not reflected as debt in relation to the state.
Provisions shall be constituted for differences in taxes resulting from uncompleted control operations; Taxes for
which the entity has open court processes; Reserves from tax facilities or other reserves for which in tax legislation
there are provisions relating to their taxation, as well as in other situations that may generate debts in the form of
corporation tax.
Provisions for pensions and other benefits
In accordance with GD no. 1041/2003 and no. 1461/2003, the Company provides benefits in kind in the form of free
energy to employees who have retired from the Company. The Company also provides cash benefits based on
seniority in work and retirement for employees.
The Company records pension provisions and employee benefits based on actuarial calculations performed by
professional actuaries
r) Revenues recognition
Revenues from services are recognized in the period in which they are incurred. Income is mainly the value of the
power distribution service. Revenues are recognized at the fair value of the services rendered or the goods delivered,
net of VAT, excise duties and other taxes related to the sale.
Revenues from electricity distribution to consumers are recognized when electricity is delivered to consumers, based
on meters readings and on the estimates for non-invoiced electricity
s) Financial income and expenses
Financial income includes: income from exchange rate fluctuations, interest income, other financial income.
Financial expenses include: unfavorable exchange rate fluctuations, interest expense, other financial charges. The
principle of the separation of financial exercises is respected for the recognition of these types of expenses and
income.
t) Employees costs
Short-term employee rights include salaries and social contributions. The rights of short-term employees are
recognized as expenses when the service is rendered by them.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
21
Profit (corporate) tax
Short-term employee rights include salaries and social contributions. The rights of short-term employees are
recognized as expenses when the service is rendered by them.
u) Affiliated parties
According to the Order of the Ministry of Public Finance no. 1802/2014 with subsequent modifications, affiliated
(or linked) parties are defined as follows:
(a) A company is linked to an entity that reports whether it meets one of the following conditions:
i) the entity and the reporting entity are parts of the same group (which means that each parent company,
affiliate or member affiliate is linked to the other entities);
ii) the entity is an associate or joint venture of a member entity of a group to which the other entity belongs;
iii) both entities are joint ventures of the same third party;
iv) the entity is a joint venture of a third party and the other entity is an associate of the third party;
v) the entity is a post-employment benefit plan for the benefit of employees of the reporting entity or of an
entity related to the reporting entity. If the entity that reports itself is such a plan, employers who finance the plan are
also linked to the reporting entities;
vi) the entity is controlled or jointly controlled by a person as defined in paragraph (b);
vii) the person identified in paragraph (b) lit. i) has significant influence on the entity or is part of the key
personnel in the entity's management (or in the direction of a parent company of the entity).
(b) A person or a close relative of the person's family is linked to an entity that reports whether the person concerned:
(i) holds control or joint control over the reporting entity;
ii) has a significant influence on the reporting entity; or
(iii) is part of the key management personnel of the entity reporting or managing a parent company of the
reporting entity.
A reporting entity is exempt from reporting requirements, in accordance with the Order of the Minister of Public
Finance no. 1802/2014 with subsequent amendments at transactions with linked parties and open balances, including
commitments, with:
a) Government, which has control, joint control or has significant influence on the reporting entity;
b) Another entity that is a linked entity for which the same government has control, joint control or
significant influence, both on the reporting entity and on the other entity.
A reporting entity shall present the following aspects related to transactions and outstanding balances, with the
entities referred to in the preceding paragraph, as follows:
- type and value of each significant transaction individually; and
- for other transactions, that are collectively significant, but not individually, a qualitative or quantitative
indication of their importance.
v) Contingent liabilities
A contingent liability is :
a) a potential obligation, arising as a result of past events, prior to the balance sheet date and whose existence
will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events,that can
not be wholly under the control of the entity; or
b) a current liability arising from past events prior to the balance sheet date, but that is not recognized, because:
- is not sure that there will be necessary resources outflows to extinguish this debt; or
- the amount of the debt can not be valuated sufficiently reliably.
Contingent liabilities are not recognized in the balance sheet, they are presented only in the explanatory notes of the
financial statements.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
22
Contingent liabilities are continually evaluated to determine whether an outflow of resources that incorporates
economic benefits has become probable. If it is considered that the outflow of resources generated by an item
previously considered contingent liability is necessary, a liability or a provision shall be recognized, as appropriate,
in the financial statements related to the period in which the change in the event's classification occurred.
w) Events after the balance sheet date
These financial statements reflect events after the end of the year, events that provide additional information about
the Company's position at the balance sheet date or those that indicate a possible breach of the business continuity
(going concern) principle (events that determine adjustments). Subsequent events that are not events that determine
adjustments are presented in notes, when they are considered significant.
3. FIXED ASSETS
Between 1 January and 31 December 2018, fixed assets have evolved as follows:
Gross value
Item
description
Balance at
31 December
2017
Direct inputs
Transfers
Discounts
Balance at
31 December
2018
Intangible assets
Goodwill 3.823.000 -13.000 - - 3.810.000
Concessions and other
intangible assets 73.915.893 1.561.710 5.686.878 - 81.164.481
Total Intangible
assets 77.738.893 1.548.710 5.686.878 - 84.974.481
Tangible assets
Land 43.963.342 - -
- 43.963.342
Buildings 1.420.969.781 164.266 139.719.915
129.364 1.560.724.598 Technical installations
and machines 792.620.981 276.318 175.308.850 75.589 968.130.560
Other installations,
machinery and
furniture 7.220.859 - 114.604 20.151 7.315.312
Advances and tangible
assets in progress 51.015.425 344.719.448 (320.830.247) - 74.904.626
Total tangible assets 2.315.790.388 345.160.032 (5.686.878) 225.104 2.655.038.438
Equity securities 247 - - - 247
Other receivables 301.784 524.462
-
187.936 638.310
Total financial assets 302.031 524.462 - 187.936 638.557
Total fixed assets 2.393.831.312 345.233.204 - 413.040 2.740.651.476
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
23
Adjustments for depreciation of f fixed assets
Item description Balance at
31 December 2017 Increases Reductions
Balance at 31
December 2018
Adjustments for building
depreciation 2.779.972 2.112.250 920.645 3.971.577
Adjustments for installations
depreciation 1.070.965 482.015 221.870 1.331.110
Adjustments for depreciation
of other fixed assets 1.117 32.974 1.117 32.974
Adjustments for depreciation
of current fixed assets 534.130 - - 534.130
Total fixed assets 4.386.184 2.627.239 1.143.632 5.869.791
Accumulated amortization
Item description Balance at
31 December 2017 Increases Reductions
Balance at 31
December 2018
Intangible assets
Goodwill 63.717 792.319 - 826.036
Concessions and other
intangible assets 48.788.655 6.770.453 - 55.559.108
Total intangible assets 48.852.372 7.532.772 - 56.385.144
Tangible assets
Buildings - 56.674.902 4.537 56.670.365
Technical installations and
machines
- 60.996.403
75.589 60.920.814
Other installations,
machinery and furniture 3.723.877 470.675 20.151 4.174.401
Total tangible assets 3.723.877 118.141.980 100.277 121.765.580
Total depreciation of fixed
assets
52.576.249 125.674.752 100.277 178.150.724
Net value
Item description Balance at
31 December 2017 Balance at 31 December 2018
16 17 18
Intangible assets
Goodwill 3.759.283 2.983.964
Concessions and other intangible assets 25.127.283 25.605.373
Total intangible assets 28.886.521 28.589.337
Tangible assets
Land and land improvements 43.963.342 43.963.342
Buildings 1.418.189.808 1.500.082.656
Technical installations and machines 791.550.017 905.878.636
Other installations,machinery and furniture 3.495.865 3.107.937
Advances and tangible assets in progress 50.481.295 74.370.496
Total tangible assets 2.307.680.327 2.527.403.067
Financial assets
Equity securities 247 247
Other receivables 301.784 638.310
Total financial assets 302.031 638.557
Total fixed assets 2.336.868.879 2.556.630.961
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
24
In the year 2017, following the internalization of the maintenance activity taken from FISE Electrica Serv, a goodwill
was set up in the amount of 3.823.000 lei (see Note 1). In February 2018, following the completion of the contract,
it was corrected by 13.000 lei. Thus, at the end of 2018 the gross value of the goodwill is 3.810.000 lei.
Tangible assets include mainly low, medium and high-voltage power distribution lines. The Company records the
tangible assets based on the revaluation method.
Within the "Constructions" are included administrative buildings, with a net accounting value of 32.479.887 Lei at
31 december 2018 (32.479.887 Lei la 31 december 2017), the rest representing the electrical networks and special
constructions related to the electrical networks.
"Technical equipment and machines" are mainly equipment and apparatus for electrical stations and transformation
stations, with a net accounting value of 755.109.096 Lei at 31 december 2018 (669.763.628 Lei at 31 december
2017) and measuring devices and installations , control and adjustment with a net value of 152.052.031 Lei at 31
december 2018 (122.793.725 Lei at 31 december 2017).
At 31 December 2017 The Company carried out the revaluation of tangible fixed assets (land, buildings, technical
installations and machinery) existing, at fair value at the balance sheet date. The revaluation was carried out by Darian
DRS SA.
The fair value was determined as follows:- market value for all goods (real estate and mobile), for which it exist a
market on which they can be traded: land, apartments and service or intervention dwellings, administrative buildings,
dynamics market equipment;
- the net replacement cost for specialized goods for which there is no market on which these can be capitalized (by
sale or rent): buildings, special operational buildings and equipment;
Revaluation reserve
2017 2018
Revaluation reserve at the beginning of the financial year 541.671.824 541.671.824
Surplus from revaluation during the financial year 76.149.571 -
Decrease from revaluation during the financial year 13.548.830 -
Resume of revaluation reserve to retained earnings as a result of
depreciation and disposal of tangible assets 30.848.404 33.086.791
Revaluation reserve at the end of the financial year 573.424.161 540.337.370
As described in note 1 ii), according to ANRE Order no. 72/2013 and no. 172/2015, the determination of the
distribution tariffs is based, among other things, on the regulated asset base (BAR). Based on the estimates made by
the Company as at 31 December 2018, the carrying amount of property, plant and equipment is recoverable.
A Value adjustments for the impairment of property, plant and equipment are attributable to depreciated fixed assets,
unused for normal operating or preserving capacity. The Company has as at 31 December 2018 adjusted for
impairment of tangible assets of 5.869.792 Lei (31 december 2017: 4.386.184 Lei).
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
25
4. INVENTORIES
On 31 December 2018 and 31 December 2017 inventories are as follows:
Item name 31 december 2017 31 december 2018
Auxiliary materials 5.679.394 7.523.558
Spare parts 8.469.416 18.087.485
Materials and materials at third parties 8.487.233 22.630
Inventory materials and supplies for work protection 1.252.419 819.068
Other stocks 1.341.388 1.484.352
Total stocks 25.229.850 27.937.093
Inventories held by the company as at 31 December 2018 include mainly cables, breakers and fuses necessary for the
proper functioning of the distribution network.
As at 31 December 2018, the Company constituted provisions for inventories amounting to 1.313.111 Lei.
5. RECEIVABLES On 31 December 2018, the Company's receivables are as follows:
Receivables Balance at 31
december 2017
Balance at 31
december 2018
Liquidity deadline
Less than 1 an Over 1 an
1 2 3 4
Advances to suppliers 8.445.010 9.056.075 9.056.075 -
Clients, gross book value 45.735.190 53.680.385 53.680.385 -
Adjustment for uncertain customers (15.365.674) (15.276.344) (15.276.344) -
Total third parties trade receivables 38.814.526 47.460.116 47.460.116
Trade receivables to be collected from
affiliated parties 86.757.994 81.073.372 81.073.372 -
Other receivables to be collected from
affiliated parties 99.488 102.975 102.975 -
Adjustment for receivables to be collected
from affiliated parties (146.238) (148.861) (148.861)
Total receivables affiliated parties 86.711.244 81.027.486 81.027.486 -
Various debtors, gross book value 6.817.324 7.365.761 7.365.761 -
Other receivables 8.351.579 17.592.896 17.592.896 -
Adjustment for various uncertain debtors (3.509.980) (3.551.528) (3.551.528) -
Total other receivables 11.658.923 21.407.129 21.407.129 -
Total receivables 137.184.693 149.894.731 149.894.731 -
Commercial receivables from third parties mainly include receivables from the distribution of electricity. Advances
to suppliers mainly include the amount of electricity contracted and paid until 31 December 2018 and delivered in
2019.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
26
Claims receivable from affiliated entities are mainly distribution services and other services provided to Electrica
Supply (see Note 16.2).
Other claims include mainly:
- VAT to be recovered of 12.183.897 lei (2017: 7.084.523 lei);
- Profit tax to be recovered of 5.035.236 Lei (2017: 1.133.590 Lei).
6. CASH ACCOUNT AND BANK ACCOUNTS
At 31 December 2017 and 31 December 2018, cash assets and assimilated items are as follows::
Intem name 31 december 2017 31 december 2018
Bank liquid assets 96.495.618 125.284.804
Cash account assets 67.678 78.642
Other assets 193 105
Total cash and bank accounts 96.563.489 125.363.551
Credit Line (presented in short-term Balance Sheet) (21.133.822) -
Total liquid assets ans assimilated items according to
the cash flow situation 75.429.667 125.363.551
7. LIABILITIES
Liabilities
Balance
at 31
december
2017
Balance at
31 december
2018
Liquidity term
Less than 1
an Over 1 an Over 5 ani
0 1 2 3 4 5
Amounts owed to credit institutions 110.071.678 81.967.872 1.867.622 80.100.250 -
Suppliers 24.352.156 22.192.015 22.192.015 - -
Assets suppliers 92.977.724 112.297.778 112.197.528 - -
Total trade debts payables to third
parties 117.329.880 132.522.921 132.522.921 -
Loans due to affiliated parties 94.000.000 372.792.101 6.232.714 - 366.559.387
Suppliers - affiliated parties 14.205.504 24.346.330 24.325.351 - -
Assets suppliers – affiliated parties 4.976.058 2.048.776 2.048.776 - -
Other debts to affiliated companies 550.392 509.147 509.147 - -
Total debts to affiliated parties 113.731.954 399.696.354 33.136.967 - 366.559.387
Anticipations and guarantees 2.835.437 3.904.071 3.904.071 - -
Salaries and other salary rights 8.731.972 7.664.184 7.664.184 - -
Social security and other wage related
taxes 7.185.878 6.730.897 6.730.897 - -
Other debts to the state budget and to
local budgets 7.630.177 5.496.383 5.496.383 - -
Other debts
617.087 3.134.316 3.134.316 - -
Total other debts 27.000.551 26.929.851 26.929.851 - -
Total debts 368.134.063 641.116.998 194.457.361 80.100.250 366.559.387
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
27
For debts to affiliated parties see Note 16. As of December 31, 2018 the amounts owed to credit institutions are
represented by the loan of BRD GSG of 80.000.000 Lei, which was fully drawn;
The situation of the liabilities related to these contracts is presented as follows:
Supplier’s name Balance at
31.12.2018 Short-term Long-term
Assigned to
the bank
AEM_2014 SD_TG R2565 /
26.06.2014
501.250
401.000
100.250 BCR
EXIMPROD GRUP SD BR
SAD RURAL R2231 / 04.06.2014
415.321
415.321 0
Banca
Transilvania
EXIMPROD GRUP SD FCS
SAD RURAL R2231 /
04.06.2014
391.714
391.714 0
Banca
Transilvania
EXIMPROD GRUP SD GL
SAD RURAL R2231 / 04.06.2014
658.587
658.587 0
Banca
Transilvania
TOTAL SUPPLIER CREDITS 1.966.872
1.866.622 100.250
On 17 October 2016, the Company concluded with BRD Groupe Societe Generale S.A. the loan agreement
196/8130/2016, through which the Bank makes available to the Company until 16 October 2021 a credit in the form
of a ceiling, with a limit of 80.000.000 lei, with a fixed interest rate of 0.02% per annum, for the financing of the
general needs of the Company . The guarantor is Societatea Energetica Electrica SA, which constituted a guarantee
in favor of the bank in the form of a chattel mortgage on amounts of money blocked in its account, which will cover
100% of the amounts used in the loan.
On 31 December 2018 the credit was drawn in full.
On 29.05.2018, the Company concluded with BRD GSG the credit contract no. 76/8130/29.05.2018,
(R1877/29.05.2018), through which the Bank makes available to the Company up to 25 May 2019 an overdraft credit,
with a limit of 95.000.000 lei, with a ROBOR1M-0,60% p.a. interest, for financing the general needs of the Company.
On 31 December 2018, other debts to the state budget and to local budgets refer, mainly, to the following:
VAT not applicable at 31.12.2018 of 3.528.129 Lei (2017: 5.921.501 Lei);
tax on profit to pay of 910.492 Lei (626.650 Lei la 31 december 2017).
On 31 December 2018, social security and other taxes related to the salaries refer mainly to the following:
tax on salaries : 1.028.618 Lei (1.867.588 Lei at 31 decembrie 2017);
social security contributions: 5.702.280 Lei (5.180.503 Lei at 31 decembrie 2017).
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
28
8. PROVISIONS
On 31 December 2018 and 31 December 2017, the statement of provisions is the following:
Balance at
Constitutions
Return
Return
provisions
Sold la
31
december
2017
based on
retained
earnings
31 decembrie
2018
Provisions for Employee
Benefits 38.735.625 15.861.953
- 54.597.578
Provisions for taxes 39.048.705 - 35.609.620 3.439.085 -
Provisions for litigation 774.936 103.145 323.108 554.973
Other Provisions - 996.909 - 996.909
Total 78.559.266 16.962.007 35.609.620 3.762.193 56.149.460
8.1. Provisions for pensions and similar obligations
In accordance with GD no. 1041/2003 and no. 1461/2003, the Company provides benefits in kind in the form of
free energy to employees who have retired from the Company. The Company also provides cash benefits based on
length of service and retirement for employees. Given the complexity of the calculation, the Company contracted
an independent actuary - Mazars Romania S.R.L.
Based on the actuarial valuation report, the Company has registered in 2017 the resumption of a provision for
employees pensions and benefits, as follows:
Initial balance 1 January
2017 2018
39.969.778 38.735.625
Cost of current seniority 1.076.368 1.295.650
Cost of interest 1.430.091 1.714.682
Paid benefits (2.223.029) (2.558.813)
(Gain)/Actuarial loss (1.517.583) 15.410.435
Final balance 31 december 38.735.625 54.597.578
The assumptions which were the basis of the actuarial calculation were the following:
- the inflation rate used is 4,92 %.
- it is estimated that wages will increase: in 2019 by 5%, and in 2020 and 2021 by 2.5%. Starting in
2022, it is estimated that wages will increase annually by 2.5%;
- the price of electricity is expected to increase in 2019 by 2.8%, in 2020 by 2.5%, in 2021 by 2.3%,
and by 2022 by 2.2%;
- rotation rate of estimated staff: 6.55% in the years 2019 and 2020 and 2.31% in the years 2021 and
the following.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
29
The long-term benefits granted to employees under the Collective Bargaining Agreement are mainly the
following:
Jubilee premiums granted for seniority in work within Electrica:
Seniority Value of the benefit in relation to the gross salary
at 31 december 2017 at 31 december 2018
20 years 80% 100%
30 years 160% 200%
35 years 240% 300%
40 years 320% 400%
45 years 400% 500%
Premiums at retirement based on the seniority within Electrica:
Seniority Value of the benefit in relation to the gross salary
at 31 december 2017 at 31 december 2018
Between 8 and 10 years 100% 100%
Between 10 and 25 years 200% 200%
Over 25 years 300% 300%
The company also offers a benefit of 1.200 kWh of free energy annually to employees who have retired from the
Company and have met certain seniority conditions.
8.2. Provisions for taxes
The Company considered it necessary to reversal the provision for taxes related to the revaluation reserves realized,
amounting to 35.609.620 lei, on the account of the retained earnings arising from the correction of the accounting
errors, since it was no longer justified to maintain it, being transformed into current debt only at the moment of
changing the destination of this reserve.
In 2018 the non-deductible provision for accessories (SPFL Ploiesti) was resumed in the amount of 3.439.085 Lei
as a result of Decision no. 3693 / 01.11.2018 of the High Court of Cassation and Justice of Romania, which dismissed
the appeal filed by SDEE MN as plaintiff against the Sentinete nr.32 from 10.02.2016 of the Ploiesti Court of Appeal
- Civil Section II , administrative and fiscal litigation, as unfounded.
8.3 Provisions for litigation
On December 31, 2018, the Company has provisions for litigation amounting to 554.973 Lei (774.936 Lei as at 31
December 2017), mainly for the restitution of a building in kind or by equivalent, based on the Law no. 10/2001, the
applicant Niculescu Vladimir, amounting to 510.000 Lei.
8.4 Other provisions
Other provisions refer to the variable part of the bonus granted to directors with a Company's mandate contract and
directors with an employment contract with MKP functions, for which a provision of 996.909 lei was created and
resumed on the basis of the payment of the remuneration, during the year 2019 (on 31 December 2017, the Company
had no payment to directors with a mandate contract).
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
30
9. INCOME IN ADVANCE
31 decembrie 2017 31 decembrie 2018
Contributions from customers, development fee,
inventory overs and connection fee 537.927.075 560.798.992
Other income in advance 962.918 1.214
Total 538.889.993 560.800.206
In the year 2018, the Company has collected the connection fee in the amount of 42.441.703 lei (26.359.583 lei in
2017) and resumed in the income the amount of 23.830.854 Lei (22.122.686 Lei in 2017), representing the
amortization of the fixed assets acquired from the tax connection.
10. CAPITAL AND RESERVES
On 31 December 2018, the share capital is of 354.364.670 lei, divided into 35.436.467 shares, with a nominal value
of 10 lei, being held as follows:
99,99997%, respectively 354.364.570 Lei, by Societatea Energetica Electrica SA;
0,00003%, respectiv 100 Lei, by Societatea de Distributie a Energiei Electrice Transilvania Sud S.A.
During the year 2018, the amount of the share capital of the Company has not changed.
The members of the Board of Directors of the Company at 31.12.2018 are the following:
- Ms. Georgeta-Corina Popescu was appointed provisional member of the Board of Directors of SDEE
Muntenia Nord SA, for a period of one (1) year by CA Resolution no.34 of 20.11.2018, from the date of the
present decision or until the meeting of the General Assembly Ordinary Shareholders of SDEE Muntenia
Nord SA.
- Ms. Livioara Sujdea - appointed member by GMS Decision no.3 of 14.04.2017, starting with 14.04.2017 until
14.04.2021;
- Ms. Ana Maria Nistor - appointed member by AGA Decision no.3 of 14.04.2017, starting with 14.04.2017 until
14.04.2021;
Distribution of profit
During the year 2018, the Company registered a loss in the amount of 5.717.224 Lei.
The net profit in the amount of 40.384.327 Lei, distributed as follows:
• the amount of 2.263.886 Lei (5% of the gross profit) to the legal reserve;
• the amount of 38.120.441 Lei it was distributed in 2018.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
31
11. TURNOVER
For 2017 and 2018 net turnover is composed of the following:
Indicator 2017 2018
0 1 2
Revenues from power distribution 567.119.519 567.392.560
Income from selling reactive power 25.527.180 30.263.622
Rental income 33.846.058 40.610.277
Other income from various works rendered to third parties 8.942.662 7.360.771
Income from sales of merchandise 1.177.052 989.982
Net turnover 636.612.471 646.617.212
The average distribution tariff in the year 2018 was 93.81 Lei / MWh (86.64 Lei / MWh in 2017).
In the year 2018, the average purchase price of electricity to cover CPT (own technological use) was 245.41 Lei /
MWh (236.56 Lei / MWh in 2017).
The revenues from the provision of the energy distribution service amounted to 554.768.220 lei (558.498.843 lei in
2017) and were made mainly to Electrica Furnizare, which amounted to 378.277.884 Lei in 2018 (394.548.395 Lei
in 2017).
In the year 2018, the revenues from energy sales on the Balancing Market amounted to 12.624.340 lei (8.620.675 lei
in 2017) to Societatea Energetica Electrica SA.
12. OTHER OPERATING REVENUE
Other operating income includes the following:
Indicator 2017 2018
0 1 2
Income from indemnities and penalties 2.152.628 2.441.770
Resumption of prepaid income as depreciation
of related tangible assets 22.122.686 23.830.853
Other operating income 1.402.070 2.122.825
Total other operating income 25.677.384 28.395.448
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
32
13. EXPENSES RELATING TO PERSONNEL AND INFORMATION ON EMPLOYEES,
MEMBERS OF THE ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES
The total personnel (staff) costs for the years 2018 and 2017 were as follows:
2017 2018
Salaries related to the financial exercise 106.533.642 151.840.863
Meal tickets 4.075.719 6.924.915
Social security costs 26.388.869 6.582.803
Total 136.998.230 165.348.581
The social insurances expenses also included the amount of 3.501.431 lei related to the insurance contribution for the
work, a contribution that did not exist in 2017, this contribution being introduced as of 01.01.2018, according to GEO
no. 79/2017 amending the Fiscal Code .
The expenses for the remuneration of directors with a mandate contract in 2018 amounted to 2.086.753 lei, plus
related contributions in the amount of 46.952 lei. The amount of 2.086.753 lei represents the fixed remuneration for
the year 2018.
The expenditures with the remuneration of directors with a mandate contract in 2017 amounted to 636.852 lei (fixed
remuneration + the corresponding fixed remuneration granted upon revocation of the mandate contract), plus related
contributions in the amount of 143.474 lei.
The expenses with the remuneration of the members of the Board of Directors in the year 2018 were 0 lei.
The expenses with the remuneration of the members of the General Meeting of Shareholders were 0 Lei in 2018 (0
Lei in 2017) and the related contributions were 0 lei (0 lei in 2017).
No loans were given to directors or managers in 2018 and 2017.
The average number of employees for the financial year ended at 31 December 2018 and 2017 was as follows:
2017 % 2018 %
Workers 1.065 58% 1.305 60%
Other categories 771 42% 866 40%
Total 1.836 100% 2.171 100%
The evolution of the average number of employees in 2018 compared to the year 2017 is significantly influenced by
the transfer of the activity of maintaining and taking over the personnel contained therein on 01.11.2017 (580
employees), in the sense of growth, and the personnel outflows due to termination of the contract individual work
with the agreement of the parties and a compensatory package in the sense of decrease (196 employees in 2017 and
80 employees in 2018).
In July 2018, an Agreement on CIM Termination Conditions with the agreement of the parties and a compensatory
package was signed between the Company and the Trade Union, which provides compensatory payments for
voluntary departures of employees.
Based on this, in 2018, 80 (2017: 196) individual labor contracts were terminated with the agreement of the parties
and compensatory packages. The total cost of compensatory packages was 6.394.013 Lei (2017: 11.981.094 Lei)
representing the gross amount of the 80 employees. The cost of the contributions paid by the employer (corresponding
to the fund consumed with the compensatory packages) was 143.865 Lei (2017: 2.734.565 Lei).
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
33
14. OTHER OPERATING EXPENSES
Indicator 2017 2018
Expenses related to external services 104.413.985 92.494.161
Expenses with other taxes, fees and similar charges 8.629.012 13.726.907
Expenses with penalties, damages compensation, donations
and transferred assets 3.152.310 6.985.228
Adjustments for risk and expense provisions, net (1.751.248) 13.199.814
Other operating expenses 114.444.059 126.406.110
Expenses on external services mainly includes the following:
Indicator 2017 2018
Expenses with maintenance and repairs 34.481.326 7.242.559
Expenses with other services Electrica Serv (auto, design,
maintenance and repairs)
24.409.590 420.007
Expenses with other services Electrica 65.456 4.611.918
Expenses with rents 12.225.006 15.598.798
Expenses with energy reading 12.667.894 12.651.774
Expenses with IT services 4.073.575 3.791.126
Expenses with work travels 1.154.806 1.405.123
Transportansions costs 1.440 26.938.418
Guard and protection expenses 6.602.297 9.931.392
Expenses with other services 8.732.595 9.903.045
Total expenses related to external services 104.413.985 92.494.160
15. TAX ON PROFIT
Item name 2017 2018
Profit before tax 45.277.712 (4.450.872)
Legal reserve (2.263.886) -
Non-deductible expenses 9.787.555 46.491.993
Other items of income nature 55.372.064 46.371.999
Non-taxable incomes (7.522.466) (6.278.452)
Expenses with additional tax depreciation (70.067.320) (74.080.607)
Taxable profit 30.583.659 7.914.698
Tax on profit (16%) 4.893.385 1.266.352
The main non-deductible expenses are as follows:
- overtaking of the own technological consumption (CPT) of 14.832.212 Lei (650.698 Lei in 2017);
- expenses with value adjustments and provisions of 22.253.698 Lei (6.094.725 Lei in 2017);
- accessory expenses due to the local budget SPFL Ploiesti according to civilian order No. 3693/2018 = 3.439.085
Lei
- non-deductible VAT expenses related to the excess CPT and excise = 3.924.232 Lei;
- amortization of goodwill = 826.036 Lei;
- other material aid granted under CCM of 202.905 Lei
- other non-deductible expenses of RON 1.013.826 of which indemnities, protocol, fines (BRML and ANRE)
Other revenue influences mainly refer to the following:
- amortization of the revaluation reserve not fiscally recognized, in accordance with OMF 34/2009 of 28.631.128
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
34
lei (55.372.064 lei in 2017);
Additional tax depreciation refers to:
- the difference between the tax depreciation and the accounting depreciation of fixed assets put into operation by the
connection fee of RON 74.219.970 (70.067.320 Lei in 2017).
Non-taxable income mainly refers to the following:
- cancellation of value adjustments and provisions of 6.278.452 lei (2017: 4.599.467 lei);
16. INFORMATION ABOUT RELATIONS WITH RELATED PARTIES
16.1 Type of transactions with affiliated parties
Affiliated parties, as well as a brief description of their activities and their relationship with the Company, are as
follows:
Affiliated part Activity Main business relationship with the
Company
Societatea Energetica Electrica SA,
Parent Company
Electricity distribution and
commercialization, consultancy and
management. Major shareholder of the
company.
Balancing market, other services to the
Company.
Electrica Serv,
Company from the group
Maintenance and repair services in the
field of electricity distribution
Providing maintenance and repair
services, car services and other
services to the Company
Electrica Furnizare SA,
Company from the group
Electricity commercialization Invoicing of the electricity distribution
service for consumers who have
electricity supply contracts with
Electrica Furnizare SA
SDEE Transilvania Sud - Company
from the group
Electricity distribution in the
Transylvania South geographical area
There were no significant transactions.
SDEE Transilvania Nord - Company
from the group
Electricity distribution in the
Transylvania North geographical area
There were no significant transactions..
Servicii Energetice „Muntenia” S.A. -
Company from the group
Maintenance and repair services in the
field of electricity distribution.
In insolvency for reorganization
Servicii Energetice „Oltenia” S.A. –
Company from the group
Maintenance and repair services in the
field of electricity distribution.
In insolvency for reorganization
16.2 Amounts due and receivable from affiliated parties
Receivables balance at
31 decembrie 2018
(net value)
Debts balance at
31 decembrie 2018
Electrica SA - 374.151.110
Electrica Furnizare SA 80.996.166 12.970.801
Electrica Serv 31.320 12.464.497
SE Muntenia - 109.946
Total 81.027.486 399.696.354
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
35
Receivables balance at
31 decembrie 2018
(net value)
Debts balance at
31 decembrie 2017
Electrica SA 2.030.523 94.714.653
Electrica Furnizare SA 84.644.779 1.922.781
Electrica Serv 35.942 17.051.548
SE Muntenia - 42.972
Total 86.711.244 113.731.954
The receivables from Electrica Furnizare mainly refer to the amounts collected from the electricity distribution
service.
At 31 December 2018, debts to affiliated companies come mainly from:
• The amounts drawn from a loan received from Societatea Energetica Electrica SA, amounting to 366.559.387 lei,
were used to finance the investment plan for 2018. We mention that the value of the loan agreement concluded by
SDEE Muntenia Nord with Societatea Energetica Electrica SA is 380.000.000 lei.
• Electricity related to the balancing market invoiced by Electrica Furnizare SA amounting to RON 11.175.664
• Maintenance and other services provided by F.I.S.E. Electrica Serv S.A., in the amount of 12.464.497 lei
(17.051.548 lei at 31 December 2017).
16.3 Information on transactions with affiliated parties
Sales 2018 Purchases 2018
Electrica SA 3.134.014 285.866.879
Electrica Furnizare SA 404.712.633 38.164.830
SDEE Transilvania Nord - 76.650
SDEE Transilvania Sud - -
Electrica Serv 6.479 47.290.699
SE Muntenia - 872.917
407.853.126 372.271.975
Sales 2017 Purchases 2017
Electrica SA 6.969.294 124.558.725
Electrica Furnizare SA 414.018.383 11.725.248
SDEE Transilvania Nord 47.342 12.000
SDEE Transilvania Sud 44.292 -
Electrica Serv 155.454 110.955.110
SE Muntenia - 791.128
421.234.764 248.042.211
The main transactions with affiliated parties are represented by the following:
i. services of maintenance and repair of electrical networks and car transport services, provided by Electrica Serv;
ii. the purchase of energy for the balancing market with Electrica SA;
iii. the purchase of energy for the balancing market with Electrica Furnizare SA;
iv. the sale of electricity distribution services to Electrica Furnizare SA;
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
36
v. amounts drawn from a loan received from Energetica Electrica SA in the amount of Lei 272.559.387 and related
interests in the amount of 7.716.825 Lei.
The main sales transactions re-invoiced with affiliated parties, not presented in the above transactions, are
represented by the following types of transactions:
- re-invoicing of utilities, telephony, maintenance, in the amount of 380.161 lei (2017: 405.343 lei) with Electrica
Furnizare SA;
- re-invoicing of utilities, security, elevator maintenance, in the amount of 209.599 lei (2017: 387.816 lei) with
Electrica Serv.
The main re-invoiced purchase transactions with the affiliated parties, not presented in the above transactions, are
represented by the following types of transactions:
- re-invoicing of telephone services, fees and work travel, in the amount of 841.405 lei (2017: 1.280.872 lei) with
Electrica SA;
- re-invoicing of utilities, security, in the amount of 3.620.378 lei (2017: 1.449.158 lei) with Electrica Serv.
Dividends distributed to affiliated parties in the result of the financial year 2017 amounting to RON 38.120.441 are
not disclosed in the transactions with affiliated parties.
16.4. Balances and transactions with other companies in which the State holds significant control or
influence
In 2018 and 2017, the Company had significant purchase and sale transactions with the following companies in which
the State holds significant control or influence:
Receivables
balance at 31
december 2017
(net value)
Receivables
balance at 31
december 2018
(net value)
Debt balance
31 december
2017
Debt balance
31 december 2018
Transelectrica 1.147 355.500 6.519.566 4.409.259
Hidroelectrica 36.496 429.027 50.499 58.013
OPCOM - - 13.040 8.729
SNGN Romgaz 25.575 24.114 - -
Electrificare CFR 526.519 384.742 - -
Municipiul Ramnicu
Sarat 2.080 779.496
TOTAL 591.817 1.972.879 6.583.105 4.476.001
Sales 2017 Sales 2018
Purchases 2017 Purchases 2018
Transelectrica 6.126 303.572 26.092.071 25.465.655
Hidroelectrica 253.099 4.392.037 15.083.382 55.102.941
Electrocentrale Bucuresti - - 6.311.597 -
OPCOM - 1.810.642 59.639.680 51.495.637
Nuclearelectrica - - 43.365.272 18.592.532
CE Oltenia - - 22.857.703 26.814.337
SNGN Romgaz 3.161.176 2.961.616 - -
Electrificare CFR 4.896.085 4.305.206 - -
Municipiul Ramnicu Sarat 2.080 676.820
TOTAL 8.318.566 14.449.893
173.349.705 177.471.102
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
37
17. Contractual commitments
On December 31, 2018, the Company has the following contractual commitments:
Amount
Purchase of electricity
107.286.816
Purchases of tangible and intangible assets
215.083.805
Total contractual commitments 322.370.621
18. Guarantees and mortgages
On 31 December 2018, the Company has 9 issued bank guarantee letters (SGB) for a total amount of 24.682.814,80
lei, of which 2 SGBs of 4.486.320 lei, valid until 25 January 2019, a SGB of 5.500.000 lei, valid until 05.02.2019, a
SGB of 3.587.940 lei, valid until 25 February 2019, 3 SGBs of 7.589.248,80 lei, valid until 25.04.2018 and 2 SGBs
of 3.519.306 lei, valid until 25 January 2020.
With the exception of the SGB, issued in favor of OPCOM for participation at auctions on the PZU market, all the
others are issued for the purchase of electricity from the PCCB-NC or PCCB-LE market, in favor of electricity
suppliers: Ezpada(Cehia), GEN.I (Slovenia), Veolia Energie Iasi, Energy Distribution Services, Next EnergyPartners,
Axpo Energy Romania, Tinmar Energy and EFT Furnizare.
19. Contingents 19.1 Fiscal risks
The legislative-fiscal framework in Romania and its implementation in practice is changing frequently and is the
subject of different interpretations by various Government Ministries. The Romanian Government has a number of
agencies that are authorized to carry out controls on Romanian companies, as well as on foreign companies operating
in Romania. These controls are similar, in their nature, to tax audits carried out by fiscal authorities from many
countries, but they can focus not only on fiscal issues, but also on other legal or regulatory elements, of interest to
that agency. In addition, the agencies carrying out these controls appear to be much less regulated, and the company
subject to control seems to have fewer practical ways of protecting than in many other countries.
Fiscal controls are frequent in Romania, consisting of detailed verifications of taxpayers' accounting registers. Such
controls occur sometimes after months or even years after the payment obligations have been established.
Consequently, companies may owe taxes and penalties. In addition, fiscal legislation is subject to frequent changes,
and authorities often interpret legislation inconsistently. However, the Company's management considers that
adequate reserves have been created for all significant fiscal obligations.
Corporate tax declarations are subjected to the revision and correction by the fiscal authorities, generally for a period
of five years after the date of their completion.
Management considers that it has appropriately recorded the fiscal obligations in the attached financial statements;
however, there is a risk that the fiscal authorities will take different positions on the interpretation of these issues (see
Note 8 -Tax Provisions).
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
38
19.2 Transfer price
According to the fiscal legislation, the fiscal evaluation of a transaction realized with affiliated parties is based on
the market price concept orelated to that transaction. Based on this concept, transfer prices needs to be adjusted, to
reflect market prices that would have been set between entities that do not have an affiliate relationship and that act
independently, based on "normal market conditions".
It is likely that transfer prices checks will be carried out in the future by fiscal authorities, to determine whether those
prices comply with the "normal market conditions" principle and that the Romanian taxpayer's taxable base is not
distorted.
19.3 Land used by the Company
According to the Company's policy, the financial statements include only the value of the land for which the property
title was obtained at the date of preparation of the financial statements.
In accordance with the provisions of Chapter V ^ 1, Article 32 ^ 2, paragraph (3) of the Law no. 99 of 26 May 1999,
regarding certain measures for accelerating the economic reform, with subsequent amendments and completions, if
the Company obtains the attestation certificate of land ownership right, after the privatization, the share capital is
increased by the value of the land, which will be considered as a contribution in kind of the state or of the
administrative-territorial unit, as the case may be.
In accordance with the provisions of art. 2 of the Law no 169/2004, the increase of the share capital of the electricity
distribution affiliates is preceded by the corresponding increase of the share capital with the value of the land for
which the certificate of attestation of ownership right is issued.
Law no. 123/2012 on electricity and natural gas stipulates in art. 44, paragraph (4), that the land on which the existing
electricity distribution networks are located upon the entry into force of this law are and remain in the public property
of the state.
At the same time, according to art. 12 of the Law 123/2012, holders of authorizations for the establishment of energy
capacities and license holders, benefit from the exercise of some rights of use and easement of free passage over land
and goods, public or private property of natural or legal persons, rights necessary for the establishment and operation
of energy capacities.
The rights of use and easement of free passage shall be exercised without registration in the Land Book, for the whole
duration of the existence of the energetic capacity or, temporarily, on the occasion of the re-technologization of a
functioning capacity, of the repair, of the revision, of the intervention works in case of damage.
The exercise of the rights of use and easement on the properties of the state and of the administrative-territorial units
affected by the energetic capacities is performed free of charge, during their whole existence.
The company is involved in a number of property-related disputes over land on which energy capacities are located,
but the outcome of these legal actions is not significant for the financial statements.
SOCIETATEA DE DISTRIBUTIE A ENERGIEI ELECTRICE
MUNTENIA NORD S.A.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2018
(all amounts in RON, unless otherwise stated)
39
19.4 Compensation payments
a) Benefits following individual layoffs at the Company's initiative
According to the collective labor agreement, concluded between the Company and the Unions, at the termination of
the individual labor contract of the employees at the initiative of the Group, this will pay to the employees benefits
at the termination of the labor contract, according to their length of service, as follows:
Seniority (length of service)
Number of
basic monthly gross salaries
1 - 2 years 2
2 – 5 years 3
5 - 10 years 4
10 - 20 years 5
More than 20 years 8
b) Benefits following collective redundancies at the Company's initiative
In the case of collective redundancies, according to the collective labor agreement, the Company will pay to the
employees benefits at the termination of the labor agreement, according to their length of service, as follows:
Seniority (length of service)
Number of
basic monthly gross salaries
1- 3 years 3
3 – 5 years 6
5 - 10 years 7
10 - 20 years 11
More than 20 years 16
The above provisions do not apply to employees with an individual labor contract concluded for a specified period
of time. The above provisions do not apply to employees who benefit from other cumulative compensating salary
rights, established by legal regulations regarding the reorganization or restructuring of the Company. Employees
reassigned to the Group after redundancy do not benefit from the rights set out above.
c) Benefits following voluntary departures
According to the Additional Act to the Collective Labor Agreement, signed by the Company and the trade union, if
the individual labor contract is concluded by the voluntary departure of the employee, the Company will pay
compensatory salaries according to the remaining period until retirement, seniority in the Society and seniority in
work. The number of monthly gross salaries paid as compensatory salaries ranges from 6 to 20
.
The financial statements do not include any provision for debts related to compensation payments, because there is
no present obligation related to this aspeacc.
General Manager
Branescu Valentin
Director of Support Services Division Dumitriu Raluca Florentina
Director Financial Department
Stegarita Marian