Quarterly Report • Nov 14, 2022
Quarterly Report
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Financial Supervision Authority - General Directorate Supervision - Issuers Division
Communiqué as per the provisions of Law 24/2017, ASF Regulation 5/2018 and the BSE Code Date of the communiqué: November 14, 2022 Name of Issuer Company: NPG Co. TRANSELECTRICA SA, company managed under two-tier system Headquarters: Bucharest, 3, Olteni 2-4 Phone/fax numbers: 021 30 35 611/021 30 35 610 Single registration code: 13328043 Number in the Trade Register: J40/8060/2000 Share capital subscribed and paid: 733.031.420 RON LEI code: 254900OLXCOUQC90M036 Regulated market where the issued securities are transacted: Bucharest Stock Exchange
Total operational revenues for the period January-September 2022 increased by 114% compared to the same period of the previous year (RON 4,884 mn in 9M 2022 compared to RON 2,282 mn in 9M 2021), mainly determined by the transmission and interconnection revenues in the context of the decrease of electricity quantity delivered to consumers, as well as the significant increase in revenues from the balancing market.
Total operational expenses (including depretiation) also registered a significant increase compared to the same period of the previous year, RON 4,388 mn in 9M 2022 compared to RON 182 mn in 9M 2021, mainly determined by the increase in the average price of electricity.
Segment of profit allowed activities: The main area of basic activities registered an increase of ▲83% in revenues which exceeded the increase of ▲44% in operational expenses (including amortisment) determined by the increase in transmission tariff revenue approved by ANRE, the increase in interconnection revenue as well as the recognition of revenue from the capitalisation of one's technological consumption (OTC) according to the new legal provisions. According to GEO no. 119/2022 amending and supplementing GEO no. 27/2022 the additional costs with the procurement of electricity made in 1 January 2022 to 31 August 2023 to cover OTC, compared to the costs included in the regulated tariffs, are capitalised and the assets resulting from capitalisation are amortised over a period of 5 year.
Thus, as of September 30, 2022, the Company registered revenues from OTC capitalization in the amount of RON 279 mn, representing additional OTC calculated as the difference between the net cost of OTC procurement and the cost of OTC included in the regulatory tariff, for January 1 to September 30, 2022.
The expenses with the procurement of energy to cover one's technological consumption (OTC) are in the amount of RON 636 mn in the first 9M of 2022, RON 354 mn higher than in the previous year (+121%), significantly exceeding the values registered in recent years.
Despite a very difficult year and difficulties in the first 9M 2022, when energy prices were considerably higher across the European Union, a situation also exacerbated by the conflict in Ukraine, the company met all its financial liabilities.
Segment of zero profit activities: The basic area of zero-profit activities, registered more than a twofold increase in revenues and expenses in the balancing market in the first 9M of 2022 compared to 9M 2021. According to ANRE's regulations, non-zero monthly balances (revenue surpluses) resulting from such activities will be compensated by ex-post tariff correction (negative correction) applied by ANRE to the tariff in the years following that when such balances were registered.
In January-September 2022, electricity consumption at the SEN level decreased in all nine calendar months. This was influenced on the one hand by the increase in primary fuel prices, which was reflected in the final price of electricity, and on the other hand by the average monthly temperatures, which systematically recorded positive anomalies, being above climatological norms.
| Indicators | M.U. | 9M 2022 | 9M 2021 | ∆ |
|---|---|---|---|---|
| Financial | ||||
| Charged energy volume | [TWh] | 39,50 | 41,93 | ▼ 5,8% |
| PROFIT-ALLOWED ACTIVITIES | ||||
| Average transmission tariff (achieved) | [RON/MWh] | 26,46 | 20,45 | ▲ 29% |
| Total revenue, of which: | [RON mn] | 1.740 | 952 | ▲ 83% |
| Regulated transmission tariff revenues | [RON mn] | 1.045 | 858 | ▲ 22% |
| Interconnection revenue | [RON mn] | 315 | 33 | n/a |
| Revenue from OTC capitalisation | [RON mn] | 279 | 0 | n/a |
| Total expenses, of which: | [RON mn] | 1.081 | 687 | ▲ 57% |
| OTC Expenses | [RON mn] | 636 | 282 | ▲ 125% |
| EBITDA | [RON mn] | 659 | 264 | ▲ 149% |
| Depretiation | [RON mn] | 193 | 196 | ▼ 2% |
| EBIT | [RON mn] | 466 | 68 | n/a |
| ZERO PROFIT ACTIVITIES | ||||
| EBIT | [RON mn] | 30 | 32 | ▼ 4% |
| ALL ACTIVITIES (Profit-Allowed and zero Profit) | ||||
| EBIT | [RON mn] | 496 | 100 | n/a |
| Net profit | [RON mn] | 418 | 81 | n/a |
| Operational | ||||
| Net internal consumption | [TWh] | 40.7 | 43.4 | ▼ 6% |
| Net internal production | [TWh] | 39.4 | 42.5 | ▼ 7% |
| Net import | [TWh] | 1.3 | 1.0 | ▲ 36% |
The Report about the activities of NPG Co. Transelectrica SA in January-September 2021 and the Standalone Interim Financial Statements as of September 30, 2022, are available beginning with November 14, 2022, as follows:
online, on the website www.transelectrica.ro, section Investor Relations Periodical Reports/Reports, namely https://www.transelectrica.ro/rapoarte-2022;
at Company offices: str. Olteni nr. 2-4, Bucharest 3.
Gabriel ANDRONACHE Executive Director General Florin-Cristian TĂTARU Directorate Member
January – September 2022
| Date of the report: | 14 November 2022 |
|---|---|
| Name of trading company: | NPG TRANSELECTRICA SA, company managed under two-tier system |
| Headquarters: | Bucharest, Str. Olteni nr. 2 - 4, sector 3, postal code 030786 |
| Phone/fax number: | 021 303 5611/ 021 303 5610 |
| Code with the ONRC: | 13328043 |
| Number with the RC: | J40/ 8060/ 2000 |
| LEI code (Legal Entity Identifier) | 254900OLXOUQC90M036 |
| Date of Company establishment: | 31.07.2000/ ORG 627 |
| Share capital: | 733,031,420 lei, subscribed and paid |
| Regulated market where the issued securities are transacted: |
Bucharest Stock Exchange, Premium category |
| Main characteristics of the issued securities: |
73,303,142 shares of RON 10/share nominal value each, in dematerialised nominative ordinary indivisible freely marketable form as of 29.08.2006, TEL symbol |
| Market value: | 1,242,488,257 lei (16.95 lei/share on 30.09.2022) |
| Accounting standard applied: | International Financial Reporting Standards |
| Audit: | The quarterly financial statements elaborated on 30.09.2022 have not been audited. The amounts corresponding to 31 December 2021 are audited by the external financial auditor. |
To the best of our knowledge, the stand-alone interim simplified financial statements as of and for the 9 months' period ended on 30 September 2022 have been elaborated in accordance with the International Accounting Standard 34 "Interim Financial Reporting" and they provide accurate image in compliance with the real situation of assets, obligations, financial position, profit and loss account of NPG Co. Transelectrica SA..
This report comprises fair complete information about the economic-financial situation and the activities of NPG Co. Transelectrica SA.
| FINANCIAL HIGHLIGHTS | OPERATIONAL | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RON | 4.884 | mn | ▲ | 114% y/y |
Revenues | 2,20% | * | ▼ | -0,28 y/y |
pp | OTC |
| RON | 690 | mn | ▲ | 133% y/y |
EBITDA | 32,17 TWh |
▼ | -1% y/y |
Transported energy*** |
||
| RON | 418 | mn | ▲ | 418% y/y |
Net profit | ||||||
| TWh | 39,50 | ▼ | -6% y/y |
Charged energy volume** |
| energy*** | |||
|---|---|---|---|
OTC - one's own Technological Consumption (grid losses)
* Share of one's own technological consumption in the electricity taken over by the electricity transmission grid (transmitted energy)
** The charged quantity is defined by the electricity amount extracted from public interest networks (transmission and distribution networks), less the electricity exports
*** The transmitted quantity is defined by the power amount physically carried in the transmission network
Note: For reading facility and result understanding, certain figures provided in graphs and/or tables use mn RON as measuring unit and are rounded up to it. This presentation convention might determine in certain circumstances minor differences between totaling figures and totals obtained by summing up the components.
The financial results at 9M 2022 have not been audited. A summary of the financial results as of 30 September 2022 in the extended variant of the same period is shown in the Annexes to this Report.
| Stand-alone profit or loss statement – unaudited results | ||||||
|---|---|---|---|---|---|---|
| [RON mn] | 9M 2022 | 9M 2021 | Δ | Δ (%) | ||
| 1 | 2 | 3=1-2 | 4=1/2 | |||
| Charged energy volume [TWh] | 39.50 | 41.93 | (2.4) | (5.8%) | ||
| ALLOWED PROFIT ACTIVITIES | ||||||
| Operating revenues | 1,740 | 952 | 789 | 83% | ||
| Transmission and other revenues on the electricity market, of wich: |
1,426 | 922 | 503 | 55% | ||
| Regulated tariff | 1,045 | 858 | 187 | 22% | ||
| Other revenues on the electricity market | 66 | 32 | 34 | 107% | ||
| Interconnection | 315 | 33 | 282 | n/a | ||
| Other revenues | 35 | 29 | 6 | 20% | ||
| Revenues from OTC capitalisation | 279 | 0 | 279 | n/a | ||
| Operating expenses | 1,081 | 687 | 394 | 57% | ||
| System operating expenses | 681 | 325 | 356 | 109% | ||
| Repairs and maintenance expenses | 78 | 65 | 13 | 20% | ||
| Personnel expenses | 204 | 178 | 26 | 14% | ||
| Other expenses | 117 | 118 | (1) | (1%) | ||
| EBITDA | 659 | 264 | 395 | 149% | ||
| Depreciation | 193 | 196 | (3) | (2%) | ||
| EBIT | 466 | 68 | 398 | n/a | ||
| ZERO PROFIT ACTIVITIES | ||||||
| Operating revenues | 3,144 | 1,330 | 1,814 | 136% | ||
| Technological system services revenues | 369 | 467 | (98) | (21%) | ||
| Balancing market revenues | 2,774 | 863 | 1,911 | 221% | ||
| Operating expenses | 3,114 | 1,299 | 1,815 | 140% | ||
| Technological system services expenses | 339 | 448 | (109) | (24%) | ||
| Balancing market expenses | 2,775 | 851 | 1,924 | 226% | ||
| EBIT | 30 | 32 | (1) | (4%) | ||
| ALL ACTIVITIES (WITH PROFIT ALLOWED AND ZERO PROFIT) |
||||||
| Operating revenues | 4,884 | 2,282 | 2,602 | 114% | ||
| Operating expenses | 4,195 | 1,986 | 2,209 | 111% | ||
| EBITDA | 690 | 296 | 394 | 133% | ||
| Depreciation | 193 | 196 | (3) | (2%) | ||
| EBIT | 496 | 100 | 397 | n/a | ||
| Net finance result | (1) | (3) | 2 | 61% | ||
| EBT - Profit before income tax | 495 | 97 | 398 | n/a | ||
| Income tax | 77 | 16 | 61 | n/a | ||
| Net profit | 418 | 81 | 337 | n/a |
| Stand-alone statement of financial position | ||||||
|---|---|---|---|---|---|---|
| [RON mn] | 9M 2022 | 2021 | ||||
| - unaudited | -audited- | Δ | Δ (%) | |||
| 1 | 2 | 3=1-2 | 4=1/2 | |||
| Non-current assets | ||||||
| Tangible assets | 3,890 | 3,815 | 75 | 2% | ||
| Assets of the usage rights for leased assets - buildings | 24 | 30 | (6) | (20%) | ||
| Intangible assets | 9 | 7 | 2 | 28% | ||
| Intangible assets-Supplementary OTC | 279 | - | 279 | n/a | ||
| Financial assets | 86 | 82 | 4 | 5% | ||
| Total assets | 4,288 | 3,933 | 355 | 9% | ||
| Current assets | ||||||
| Inventories | 41 | 40 | 1 | 2% | ||
| Receivables | 3,650 | 2,996 | 655 | 22% | ||
| Profit tax recoverable | - | 21 | (21) | n/a | ||
| Cash and cash equivalents | 382 | 252 | 130 | 51% | ||
| Total current assets | 4,073 | 3,309 | 764 | 23% | ||
| Total assets | 8,361 | 7,242 | 1,118 | 15% | ||
| Shareholders' Equity | 3,781 | 3,355 | 426 | 13% | ||
| Non-current liabilities | ||||||
| Long term deferred revenues | 440 | 443 | (3) | (1%) | ||
| Long-term borrowings | 62 | 79 | (18) | (22%) | ||
| Other borrowings and similar liabilities - Leasing of building | 17 | 23 | (6) | (26%) | ||
| Other non-current liabilities | 171 | 177 | (6) | (3%) | ||
| Total non-current liabilities | 690 | 723 | (33) | (5%) | ||
| Current liabilities | ||||||
| Trade and other liabilities | 3,639 | 3,034 | 606 | 20% | ||
| Short-term borrowings | 101 | 25 | 76 | n/a | ||
| Other borrowings and similar liabilities - Building leasing | 8 | 8 | 0 | 2% | ||
| Other short-term liabilities | 141 | 98 | 43 | 44% | ||
| Total current liabilities | 3,889 | 3,164 | 725 | 23% | ||
| Total liabilities | 4,579 | 3,887 | 692 | 18% | ||
| Total shareholder's equity and liabilities | 8,361 | 7,242 | 1,118 | 15% |
| Stand-alone statement of cash flows – unaudited results | |||||||
|---|---|---|---|---|---|---|---|
| [RON mn] | 9M 2022 | 9M 2021 | Δ | Δ (%) | |||
| Cash flows before changes to working capital | 409 | 291 | 118 | 40% | |||
| Cash flows from operating activities | 367 | 222 | 145 | 65% | |||
| Net cash from operating activities | 362 | 197 | 165 | 84% | |||
| Net cash used in investing activities | (282) | (263) | (19) | (7%) | |||
| Net cash used in financing activities | 50 | (89) | 139 | n/a | |||
| Net increase/decrease in cash and cash equivalents | 130 | (155) | 285 | n/a | |||
| Cash and cash equivalents as at January 1st | 252 | 554 | (302) | (54%) | |||
| Cash and cash equivalents at the end of the period | 382 | 399 | (17) | (4%) |
In January-September 2022, the total amount of electricity charged for electricity market services (39.50 TWh) decreased by 5.8% compared to the same period in 2021 (the difference between the two periods was - 2.4 TWh).
The segment of profit allowed activities registered an 83% increase in revenues (1,740 million lei in 9M 2022 compared to 952 million lei in 9M 2021) determined by the increase in interconnection revenues and the recording of revenues from OTC capitalization.
As of 30 September 2022, the Company shall apply the provisions of GEO no. 119/2022, whereby the additional costs for the purchase of electricity made between 1 January 2022 and 31 August 2022 to cover its own technological consumption, compared to the expenses seen in the regulated tariffs, shall be capitalised on a quarterly basis.
For the first nine months of 2022, the Company registered revenues in the amount of 279.2 million lei, representing additional OTC calculated as the difference between the net expense of OTC acquisition and the OTC expense included in the regulatory tariff.
Thus, capitalised expenses are amortised over a period of 5 years from the date of capitalisation and are remunerated at 50% of the regulated rate of return approved by ANRE, applicable over the amortisation period of such expenses and are recognised as separate component.
The increase in transmission and other revenues on the energy market (1,045 million lei in 9M 2022 compared to 858 million lei in 9M 2021) is mainly influenced by the increase in the average transmission tariff (for regulated transmission tariff revenues), given the decrease in the amount of electricity delivered to clients, and by the evolution of interconnection revenues.
In January-September 2022, revenues from the allocation of interconnection capacity increased significantly by 281.8 million lei compared to the same period last year, determined by the following:
the unit price of electricity has increased across the European Union, leading to a large price differential between coupled markets increasing the interest of participants for buying interconnection capacity,
the European energy deficit.
Implicit allocations, in which capacity and energy are allocated simultaneously, are strongly influenced by variations in the price of electricity on European exchanges.
The allocation mechanism of interconnection capacities consists of organising annual, monthly, daily and intraday bids. Annual, monthly and intra-day (borders with Serbia, Ukraine) bids are explicit - only transmission capacity is bided, while daily and intra-day (borders with Hungary and Bulgaria) bids are implicit - they are allocated simultaneously with energy and capacity through the coupling mechanism.
On 17 June 2021, the Next Day Market in Romania switched to European-wide coupled mechanism operation with the implementation of the DE-AT-PL-4M MC project, also known as Interim Coupling, with the Romania-Hungary border being integrated into the Single Day-Ahead Market Coupling (SDAC).
As of 27 October 2021, the Romania-Bulgaria border has been integrated into the Single Day-Ahead Market Coupling (SDAC), with cross-border capacity between Romania and Bulgaria allocated by default.
On 8 June 2022 the Core FB MC (Core Flow-Based Market Coupling) project was commissioned, thus initiating day-ahead flow-based market coupling in the Core capacity calculation region. The flow-based market coupling mechanism optimises the European electricity market for 13 countries (Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg, Netherlands, Poland, Romania, Slovakia and Slovenia).
The net revenues from the allocation of interconnection capacities are used in accordance with the provisions of ANRE Order 171/2019, updated, and EU Regulation 943 of 05 June 2019 regarding the internal electricity market as financing source of investments made in order to upgrade and develop interconnection capacities with neighbouring systems.
In coupled markets, energy transactions are made without paying capacity reservation fees on lines, which facilitates trade and thanks to the coupling mechanism energy flows go from the cheapest to the most expensive markets.
These revenues were lower in January-September 2022 compared to the same period in 2021, the decrease being caused by the international political situation that led to a drastic decrease in scheduled energy exchanges with Ukraine.
Revenues from electricity transacted for OTC were mainly derived from the sale of surplus energy resulting from the difference between the long and medium term forecast and the short term forecast on the Intraday Market administered by OPCOM and from the difference between the forecast OTC and the actual made OTC on the Balancing Market.
In the January-September 2022 timeframe (as well as during 2021), the main factor that has a significant impact on energy transaction revenues/expenses for OTC hedging is the context of rising prices across the entire energy market over all time horizons.
The first nine months of 2022 increased compared to the same period in 2021 based on the current wholesale electricity price situation which is significantly different from the situation in previous years, being strongly influenced by the conflict in Ukraine and the international energy crisis.
As of 30 September 2022, revenues from contingency aid amounting to 9.6 million lei were registered, relating to the granting of contingency aid (exported energy) to Ukraine in August and September 2022 following the request of the neighbouring TSO, in accordance with the provisions of the Contract concluded with UKRENERGO.
On the segment of profit allowed activities, expenses (including depreciation) increased by 44% (1,274 million lei in 9M 2022 compared to 883 million lei in 9M 2021).
OTC: In January-September 2022 the costs for energy acquisition to cover one's technological consumption are in the amount of 636 million lei, higher by 121% (+354 million lei) compared to January-September 2021, because of the following:
the price increase in the previous markets, the application of the single settlement price in the balancing market as of 01.02.2021, and the implementation of settlement at the 15-minute granularity interval, led to more than twice as high OTC costs in the balancing market as in the same period last year.
* the average price was calculated on net value (purchases - sales)
Average prices in all markets are considerably higher than in 9M 2021, and the acquisition mix (net quantity) shows the following components in the two studied periods:
Expenses on electricity consumption in RET substations increased by 102% in the period January-September 2022 compared to January-September 2021 (29.5 million lei in 9M 2022 compared to 14.6 million lei in 9M 2021) determined by the increase in electricity acquisition prices but also to the legislative changes applicable from 1 July 2021, namely the provisions of ANRE Order no. 82/2021.
In order to carry out the electricity transmission activity in the substations and to operate the National Electricity System in safe conditions, Transelectrica must purchase electricity to cover the consumption related to internal services in the high voltage substations under the management of the Company.
In the period January-September 2022 such expenses were higher by 20% and represent the monthly payment liabilities/receivables for each transmission system operator (TSO) that are established under the mechanism for compensation/discount of the effects of the use of the electricity transmission network (RET) for electricity transits between TSOs that have joined this mechanism within ENTSO-E.
Profit allowed activities registered an increase of 398 million lei compared to the same period last year, the increase being mainly determined by the revenues from interconnection and the revenues from the OTC capitalization as of September 30, 2022, the date from which the Company applies the provisions of GEO no. 119/2022.
The wholesale electricity market is fundamentally different from the situation in 2021, strongly influenced by the increase in electricity market prices, which has led to increased costs for the Company in the segment of allowed profit activities.
The difference is marked and is evident across the entire European continent, not just Romania.
In this respect, the evolution of energy prices on the European spot market can be observed. The situation at European level has deteriorated rapidly since the second half of 2021, with unprecedented energy stress especially for electricity and natural gas, which are fuel for electricity generation.
Revenues from zero-profit activities registered a significant increase of 136% (+ 1,814 million lei), from 1,330 million lei as at 30 September 2021 to 3,144 million lei as at 30 September 2022, mainly determined by the 1,911 million lei increase in revenues on the balancing market.
The segment of zero-profit activities registered an increase in expenses by 140% (3,114 million lei as at 30 September 2022 compared to 1,299 million lei as at 30 September 2021), mainly due to increased expenses on the balancing market.
The balancing market was mainly influenced by the following elements:
Revenues on the balancing market in 9M 2022 were 1,911 million lei higher than in 9M 2021.
The balancing market expenses in 9M 2022 were 1,924 million lei higher than in 9M 2021. Such expenses result from notifications/achievements of participants in this market.
For the balancing market management activity, according to ANRE regulations, the monthly non-zero balances (revenue surpluses) resulting from this activity are to be compensated by ex-post tariff correction (negative correction) applied by ANRE in the tariff in the years following the one in which the balances were registered.
Technological system services are procured by the Company from producers in order to ensure the maintenance of the safety level in the operation of the NES and the quality of the electricity transmitted at the parameters required by the applicable technical standards.
Such services are contracted as follows:
The procurement of system technology services shall be carried out on a competitive basis through daily tenders in accordance with Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019.
In the first nine months of 2022, the contracting of system technology services under the regulated regime was carried out only for Reactive Energy. Transelectrica contracted Reactive Energy from Hidroelectrica SA, according to ANRE Decision no.1078/2020.
During January-September 2022, revenues from technological system services decreased by 21% compared to January-September 2021 (RON 369 million as at 30 September 2022 compared to RON 467 million as at 30 September 2021), determined by the decrease in the tariff approved by ANRE for these services, as the quantity of electricity delivered to consumers decreased by 5.8%.
The amount of expenses for technological system services in the first nine months of 2022, decreased by 24% compared to the same period in 2021 (339 million lei in 9M 2022 compared to 448 million lei in 9M 2021).
The amount of STS procurement costs for 9M 2022 was mainly determined by the following factors:
the manifestation during January-September 2022 of a high level of concentration of the system technology services market for secondary reserve (SR) system technology services.
The company passes on the value of the technological system services procured from producers to the electricity suppliers licensed by ANRE, who ultimately benefit from these services.
It is also estimated that for the year 2022 the procurement of system technology services through daily and one-way bids carried out in accordance with the provisions of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019, the evolution of ANRE's regulatory framework for the electricity market, will have a significant impact on the evolution of system service procurement expenses at Company level.
For the technological system services activity, according to ANRE regulations, the revenue surplus/deficit compared to the recognized expenses resulting from the performance of this activity is to be compensated by expost tariff correction (negative/positive correction) applied by ANRE in the tariff in the years following the one in which the surplus/deficit was registered. The surplus/deficit of revenue over the expenses resulting from this activity is calculated per tariff scheduling period.
EBIT generated by zero-profit activities registered a positive result of 30 million lei, down by 1.1 million lei compared to the same period last year.
The regulatory framework specific to non-profit activities contains regularisation mechanisms that ensure that the excess or shortfall of revenue is compensated for in relation to the level of costs required to carry out the activities in question.
Total operating revenues for the period January-September 2022 increased by 114% compared to the same period of the previous year (4,884 million lei in 9M 2022 compared to 2,282 million lei in 9M 2021), mainly due to transmission and other energy market revenues in the context of the decrease in the amount of electricity delivered to consumers, as well as the significant increase in revenues from the balancing market.
Total operational expenses (including depreciation) in January-September 2022 increased by 101% compared to the same period of the previous year 4,388 million lei in 9M 2022 compared to 2,182 million lei in 9M 2021).
No significant price decreases are expected in the energy market in the coming period.
The gross result increased during the studied period, from 97 million lei in 9M 2021 to 495 million lei in 9M 2022.
The dynamics between the result registered in 9M 2022 compared to 9M 2021, broken down by the constituent components of the result, are shown in the following graph:
The net financial result for the period January-September 2022 is negative in the amount of 1.1 million lei, determined by the evolution of interest expenses and the execution of GBE for part of the investment contracts.
The evolution of the RON/EUR and RON/USD exchange rate in the first 9 months of 2022 is shown in the following graph:
The net result increased during the studied period, reaching 418 million lei in 9M 2022, compared to 81 million lei in 9M 2021.
Non-current assets registered in the first nine months of 2022 compared to the same period in 2021 an increase of 9% (355 million lei), mainly determined by the OTC capitalization.
Assets related to usage rights of leased assets buildings represent the utilisation right for the spaces the Company rented in Platinum Office Building, according to the provisions of IFRS 16, Leasing Contracts.
Beginning with 01.10.2020 a new lease contract came in force (contract C232/2020 concluded with Dagesh Rom SRL), valid for 5 years.
On 30 September 2021 the accounting value of the utilisation right for spaces the Company rented in Platinum Office Building was in the amount of 23.8 million lei.
Starting from 30 September 2022, the Company shall apply the provisions of GEO no. 119/2022, whereby the additional costs for the procurement of electricity made between 1 January 2022 and 31 August 2023, in order to cover one's technological consumption compared to the costs recognised in the regulated tariffs, shall be capitalised on a quarterly basis.
Thus, capitalised costs are amortised over a period of 5 years from the date of capitalisation and are remunerated at 50% of the regulated rate of return approved by the National Energy Regulatory Authority applicable over the amortisation period of those costs and are recognised as a separate component.
For the first nine months of 2022, the Company capitalized the amount of 279.2 million lei representing additional OTC calculated as the difference between the net cost of OTC acquisition and the cost of OTC included in the regulatory tariff, for the period 01 January-30 September 2022, in accordance with GEO no.27/2022.
Financial assets as at 30 September 2022 increased by 4 million lei (5%) compared to 31 December 2021, the value as at 30 September 2022 was 86 million lei.
Current assets increased by 23% as at 30 September 2022 (4,073 million lei) compared to the amount registered as at 31 December 2021 (3,309 million lei), mainly determined by the increase in trade and other receivables and cash and cash equivalents.
Trade receivables increased by 374 million lei (2,568 million lei at 30 September 2022 compared to 2,194 million lei at 31 December 2021). The most significant developments were:
-clients from operational activity which, due to the increase in transactions resulting from energy market coupling mechanisms, generated a higher balance of receivables from operational activity (1,947 million lei as at 30 September 2022 compared to 1,408 million lei as at 31 December 2021).
-clients on the balancing market, which due to the decrease in the volume of transactions registered a lower balance of clients from contracts concluded for this type of activity on 30 September 2022 (449 million lei) compared to 31 December 2021 (567 million lei).The main clients in balance on the electricity market are MAVIR, OPCOM, IBEX, Joint Allocation Office SA (JAO), Electrica Furnizare SA, RAAN, Cinta Energy SA, Hidroelectrica SA, Enel Energie SA.
The share of the above-mentioned clients is about 80% of total trade receivables.
As of September 30, 2022, the Company registeres receivables from the bonus type support scheme for the promotion of high efficiency cogeneration at approximately 7% compared to 9% as of December 31, 2021 of total trade receivables. The 18% decrease in the balances for the studied period was mainly determined by the decrease in the amount invoiced for the collection of the monthly contribution, closely related to the
decrease in the amount of the cogeneration contribution set by ANRE.
The company carries out the activities related to the bonus type support scheme for the promotion of highefficiency cogeneration, as administrator of the support scheme, in accordance with the provisions of HGR no. 1215/2009, "the main tasks being the monthly collection of the cogeneration contribution and the monthly payment of the bonuses".
As of September 30, 2022, the Company registers receivables in the amount of 170 million lei, represented by invoices issued related to the bonus type support scheme for the promotion of high efficiency cogeneration, of which:
overcompensation for the period 2011-2013 in the amount of 76.70 million lei, respectively from RAAN - 63.46 million lei and CET Govora SA - 13.23 million lei;
Undue bonus for 2014 in the amount of 3.91 million lei, respectively from RAAN - 1.98 million lei, and CET Govora - 1.93 million lei;
undue bonus for 2015 in the amount of 0.56 million lei, respectively from CET Govora - 0.53 million lei, Interagro - 0.03 million lei;
Undue bonus for 2020 in the amount of 0.52 million lei from Donau Chem;
uncollected contribution for cogeneration from electricity consumers suppliers in the amount of 21.2 million lei, respectively from: Transenergo Com - 5.88 million lei, PetProd - 4.39 million lei, Romenergy Industry - 2.68 million lei, RAAN - 2.38 million lei, UGM Energy - 1.50 million lei, CET Govora - 0.90 million lei, KDF Energy - 0.88 million lei and others.
Up to the date of this report, the Company has fully collected the receivables related to the overcompensation of the activity regarding the support scheme for 2021 (amount of 22.89 million lei): CET Govora (15.04 million lei), BEPCO (4.26 million lei) and Electrocentrale București (3.59 million lei), as well as the amount of 32.63 million lei from the undue bonus established by ANRE Decisions for 2022.
In order to settle the claims arising from overcompensation and undue bonus, the Company has requested the producers qualified in the support scheme to make reciprocal compensations. For the producers (RAAN, CET Govora) who did not agree with this way of extinguishing reciprocal claims and debts, the Company applied and still applies the provisions of art. 17 para. 5 of the Order of the President of ANRE no. 116/2013 for the approval of the Regulation on the establishment of the method of collection of the contribution for highefficiency cogeneration and payment of the bonus for electricity produced in high-efficiency cogeneration and withheld from payment the amounts related to the due support scheme.
Other receivables as at 30 September 2022 in the amount of 164 million lei mainly include:
sundry debtors (RON 105 million), of which:
compensation owed by suppliers for non-delivery of electricity: Arelco Power (RON 0.99 million) and Enol Grup (RON 2.54 million).
the receivable to be recovered from OPCOM representing the VAT related to the contribution in kind to the share capital of the subsidiary in the amount of 4.52 million lei.
Pre-booked expenses amounting to 15 million lei are mainly represented by: expenses related to the procurement of OTC (10.2 million lei), membership fees (1.5 million lei), ANRE annual contribution for 2022 (0.9 million lei), taxes and duties for 2022 (1 million lei),
Advances to suppliers paid as at 30 September 2022 are represented by suppliers debtors for services rendered in the amount of 823 million lei down by 17% compared to December 2021 when they amounted to 701 million lei. The balance mainly represents amounts from transactions related to the price coupling mechanism (ICP - Interim Coupling Project, SIDC - Single Intraday Coupling, SDAC - Single Day-ahead Coupling and FBMC - Flow Based Market Coupling) in the amount of 753 million lei - for ICP, FBMC and SDAC and 70 million lei - for SIDC.
The start of the new successful SDAC Single Day-ahead Coupling took place on 28 October 2021 and is the result of the cooperation between the Designated Electricity Market Operators (DEMO) and the Transmission System Operators (TSO) of Bulgaria and
Romania, namely IBEX EAD, OPCOM SA, ESO EAD and Transelectrica.
The launch of Flow Based Market Coupling in the Core region on 08 June 2022 represented the transition from the ICP - Interim Coupling Project coupling mechanism to FBMC - Flow Based Market Coupling, optimising the European electricity market for 13 countries: Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg, Netherlands, Poland, Romania, Slovakia and Slovenia.
In the FBMC project, Transelectrica has the role of both Shipper (Transfer Agent) and CCP - Central Counterparty. As CCP, the Company has the task of transferring the financial flows generated by the electricity flows, following the coupling process.
VAT to be recovered represents the amount of 316.8 million lei related to the statements for the period July-September and October 2020, of which on 6 October, the amount of 91 million lei VAT to be recovered for June and July 2022 was collected.
Transelectrica's policy is to register impairment allowances for loss of value in the amount of 100% for clients in litigation, insolvency and bankruptcy and 100% of trade and other receivables not collected within a period of more than 180 days, excluding outstanding receivables arising from the support scheme.
The largest impairment allowances existing in the balance as at 30 September 2022, represent trade receivables and related penalties for CET Govora (25.1 million lei), Eco Energy SRL (24.7 million lei), Petprod SRL (23,5 million lei), Arelco Power (14.8 million lei), Romelectro SA (14.4 million lei) Total Electric Oltenia SA (14.2 million lei), Romenergy Industry (13.5 million lei), GETICA 95 (12.5 million lei), Elsaco Energy (9.3 million lei), RAAN (8.5 million lei).
Non-current liabilities in the amount of 690 million lei as of 30 September 2022 decreased by 5% compared to the amount of 723 million lei as of 31 December 2021.
As at 30 September 2022 the amount of long-term borrowings has decreased compared to 31 December 2021 mainly due to repayments under existing loan agreements. On the other hand, the value of short-term loans increased from a balance of 25 million lei in December 2021 to 101 million lei as at 30 September 2022 through the use of amounts from short-term bank loans contracted for current activity.
At the same time, current liabilities increased by 23%, from 3,164 million lei as at 31 December 2021 to 3,889 million lei as at 30 September 2022, mainly due to an increase in trade and other liabilities. The impact in the evolution of trade liabilities had:
suppliers on the energy market, which increased by 217 million lei and registered a balance of 2,110 million lei in 9M 2022 compared to 1,893 million lei in 2021.
This development was mainly influenced by:
The suppliers on the electricity market are mainly represented by IBEX, MAVIR, Hidroelectrica SA, Joint Allocation Office, OPCOM, S Complexul energetic Oltenia SA, Electrica Furnizare SA, CIGA Energy SA, Engie Romania SA. As of 30 September 2022, their share of the total energy suppliers is 89.95%.
- the significant decrease in the liabilities related to the support scheme to suppliers (producers) by 161 million lei was due to the reduction of the monthly bonus for high-efficiency cogeneration in September 2022 compared to December 2021.
As of September 30, 2022, there are liabilities to pay to suppliers (producers) in the amount of 35.5 million lei (RAAN - 32.2 million lei and CET Govora SA - 3.4 million lei), representing the monthly cogeneration bonus, pre-overcompensation for 2014 and 2015, the bonus not granted for 2015.
The amounts representing the Company's debts related to the support scheme to RAAN and CET Govora were withheld for payment on the basis of Article 17 para. 5 of the Order of the President of ANRE no. 116/2013, as the suppliers (producers) have payment liabilities towards the Company on the bonus type support scheme.
The structure of "other liabilities" is as follows:
1,015 million lei (increased by 263 million lei compared to 31 December 2021) and represent amounts received in advance from OPCOM (360 million lei), MAVIR (616 million lei), IBEX (31.6 million lei) in transactions related to price coupling mechanisms, ICP (Interim Coupling Project), SIDC (Single Intraday Coupling), SDAC (Single Day-ahead Coupling) and FBMC (Flow Based Market Coupling).
Provisions decreased in value during the studied period compared to 2021, from 51.7 million lei as at 31 December 2021 to 37.9 million lei as at 30 September 2022, mainly due to:
a decrease in the value of provisions for disputes, which at 30 September 2022 amounted to 19.9 million lei compared to 31.2 million lei at the end of 2021,
provisions for mandate contracts which as at 30 September 2022 show a balance of 17.9 million lei (20.4 million lei as at 31 December 2021) and which mainly represent the remuneration of executive and nonexecutive directors representing the variable component related to the OAVT packages allocated and not used during the mandates executed in the period 2013-2017, the remuneration of the variable component of the noncompete compensation and that related to the remaining gross monthly fixed indemnities until the end of the mandate, i.e. 2024 for which the Company is in dispute.
The equity registered an increase mainly due to the recording in the retained earnings of the net profit in the amount of 418 million lei, realized on 30 September 2022. Thus, shareholders' equity as at 30 September 2022 amounted to RON 3,781 million compared to RON 3,355 million as at 31 December 2021.
| Symbol: | - 61 | |
|---|---|---|
| ISIN: | ROTSELACNOR9 | |
| Type: | Shares | |
| Segment: | Main | |
| Category: | Premium | $-302$ |
| Status: | Tradeable |
The year 2022 started with a trading price of 22.80 lei/share. At the end of the period, the market capitalization was 1,242 million lei, finding the share at a period low of 16.95 lei/share. The maximum price of the period of 23.50 lei/share was registered on 11.01.2022.
The company has the ability to adapt to the economic context generated by the energy crisis aggravated by the war between Russia and Ukraine, the repercussions being observed even in the share price which at the end of the period fell by 26% compared to the reference value at the beginning of the year, implicitly the market value registering a decrease of 429 million lei.
Transelectrica shares are part of the following stock exchange indexes: BET, BET-NG, BET-TR, BET-XT, BET-XT-TR, BET-BK, BETPlus, BET-TRN, BET-XT-TRN. Of these the most representative for the Company are:
According to the latest adjustment date registered on 09.09.2022, TEL shares have a weighting of 1.07% in the BET index and 3.43% in the BET-NG index.
The evolution of the TEL share in relation to the two indices is shown in the graph below:
Internationally, Transelectrica's shares make up 0.22% of the MSCI 100 Frontier Markets Index, which tracks the performance of the 100 largest and most liquid companies in the frontier equity markets under the criteria of the American company MSCI.
Risk is an objective concept, which means that it is measurable and can be minimised through preventive measures. Exposure to risk occurs when an action gives rise to a possible gain or loss that cannot be anticipated with certainty.
Uncertainty refers to a situation where there are several alternatives that lead to a specific outcome, but the probability of the outcome is not certain. This is due to insufficient information or knowledge about the current state. It is therefore difficult to define or predict the outcome or future events.
It is clear that knowledge of threats allows them to be ranked according to the likelihood of their occurrence, the extent of their impact on objectives and the costs of measures to reduce the chances of their occurrence or to limit undesirable effects.
Transelectrica regularly and systematically analyzes the risks related to the performance of its own activities, drawing up the Register of identified risks and the Plan of appropriate measures to limit the possible consequences of these risks, in accordance with legal provisions.
Among the items that could have affected the Company's liquidity are:
interest rate fluctuations;
The company took out long-term loans with fixed interest rates and negotiated the best interest rates;
The increase in electricity prices generated by the current economic context led to a significant increase in the Company's working capital financing needs, which was addressed by taking out a short-term credit line with an interest rate of Robor 1M+0.05%.
exchange rate movements;
The Company has foreign currency accounts with various banks to meet its foreign currency liabilities. In addition, Transelectrica negotiates the best exchange rates.
provisions in the grant agreements : in the grant agreements, there are clauses on compliance with financial indicators (covenants), changes of control over the Company, pari passu clauses.
Breach of these clauses may, subject to prior notice and a reasonable period of time, result in early repayment of the credit, with some loans having penalty clauses for early repayment.
To date, the Company has not received any notices of early repayment for default (there have been no instances of default under the Company's financing agreements).
the level of taxation, including the introduction of new taxes and charges. This risk has not materialised in the first 9M of 2022.
Other risks that could affect the Company's financial performance may include:
the risk of credit rating deterioration as a result of worsening macroeconomic and political indicators and climate and/or worsening financial performance of the Company. This risk reflects a complex of factors, with a potential effect on increasing funding costs in the credit market, which may significantly affect the Company given the substantial amount of capital required to be attracted to finance the investment plan for the coming years.
As of the date of this report, Moody's rating agency has not issued another rating, the Company is rated Baa3 (rating granted in October 2021).
However, there is a risk that the rating agencies could downgrade Romania (the Company's rating is heavily dependent on the sovereign rating) due to accelerated inflation, which has exceeded 15%, and the uncertain situation at the country's borders.
Regarding the elements, events or uncertainty factors that have influenced the activity of European funds for financing investment projects we mention:
the work execution plans, with an effect on the implementation deadlines.
The current price situation on the wholesale electricity market continues to maintain the same trend started in 2021, significantly exceeding the values recorded in recent years.
In this context, the Company has been faced in certain periods with a cash shortage caused by:
In order to remedy the temporary lack of liquidity, Transelectrica has resorted to short-term financing by taking out a revolving credit facility.
Transelectrica attaches due importance to the analysis of the risk environment and identifies in advance possible risks that may arise in the future and whose approach must be prepared in advance, it does not limit itself to dealing with the consequences of events that may occur, but adopts a reactive management style, implementing a preventive component through measures taken in advance, aimed at mitigating the risks occurrence.
At the same time, the periodic review of risks, as foreseen in the standards, leads to reallocations of resources in line with changing hierarchies and, therefore, priorities.
The company pays close attention to treasury management through efficient cash flow management and optimization of surplus liquidity to be able to meet financial obligations as they fall due as well as opening up the financing side of active credit facilities when needed.
During the first 9M of 2022, thanks to the solutions found and measures taken in time, the Company met its financial obligations.
The energy transmission companies together with ENTSOE have recently published a preliminary report on the outlook for winter 2022-2023 taking into account the critical situation compared to previous winters.
The baseline scenario assumes: careful monitoring of the hydrological situation, low nuclear availability (which can add stress to energy systems) and electricity supply that is highly dependent on gas in all winter scenarios.
Additional risks identified for country systems may be:
As a preparedness and risk mitigation measure, the major impact can be achieved by reducing electricity demand by 10%, so that adequacy risks can become negligible and gas dependency can be reduced by 30%.
Analysing the evolution of the components of the energy balance, in the period January - September 2022, net domestic consumption1 and net energy production decreased by 6% and 7% respectively compared to the same period of the previous year.
Cross-border physical export trade is up 28% in 9M 2022 compared to 9M 2021 and cross-border import flows are up 30%.
In the period January-September 2022, electricity consumption at the SEN level decreased in all nine calendar months.
The decrease in consumption was influenced on the one hand by the increase in primary fuel prices, which was reflected in the final price of electricity, and on the other hand by the average monthly temperatures, which systematically registered positive anomalies and were generally above climatological norms.
In terms of production mix, in the period January - September 2022 compared to the same period in 2021, there was a decrease in the Nuclear component by 2%,
1 the values do not include consumption related to own services in electricity generation plants; the net consumption value includes losses in transmission and distribution networks as well as pump consumption in pumped storage hydro stations
and in the Hydro component by 26%. Increases were registered from the Thermo component by 2% and from Renewable sources by 13%.
An analysis of the weights of the components of the net generation mix for the period January - September 2022 shows that the largest share, 36%, is represented by the Thermo component followed by the Hydro component 27%, and the share of energy produced from renewable and nuclear sources are about 18% and 19% respectively.
Installed capacity in thermal power plants decreased by about 18%, from 7,016 MW installed on 30 September 2021 to 5,708 MW installed on 30 September 2022.
The installed capacity for the period January - September 2022 versus January - September 2021 is shown in the following graphs:
Installed capacity 9M 2021 (19,599 MW. gross value)
It should be noted that the new geopolitical and energy market reality generated by the crisis in Ukraine, which has amplified the existing energy crisis in the European Union, has highlighted the fact that the continued use of coal in electricity generation should be seen as a necessary temporary solution to help reduce the EU's dependence on an unreliable source of natural gas, as a step in the implementation of the European Green Pact.
The distribution of physical import/export flows on interconnection lines in the period January - September 2022 compared to January - September 2021 is as follows:
Specifically, compared to the period January - September 2021, physical export flows decreased with Bulgaria (-37% -456 GWh), Hungary (-33% -163 GWh) and Ukraine (-76% -241 GWh) and increased on the border with Serbia (+79% +713 GWh) and Moldova (+977 GWh), while physical import flows on the interconnection lines with Bulgaria increased (+1.550 GWh), with Ukraine (+3% +34GWh) and with Moldova (+46 GWh) and decreases on Serbia (-71% -311GWh) and Hungary (-15%, -156GWh).
The physical flows of both imports and exports at each border are shown below:
In the period January - September 2022 the utilisation of the total allocated capacity on the interconnection lines increased for export on the border with Hungary and significantly increased on the import direction on the border with Ukraine.
Degree of utilisation of total allocated capacity (%)
The degree of utilisation of total capacity rights on a border and direction is the ratio, expressed as a percentage, of the energy corresponding to trade carried out (notified) in a month to the energy corresponding to total capacity rights.
Compared to the third quarter of 2021, there was an overall increase in the degree of capacity utilisation allocated to both imports and exports, i.e. a 19% increase in import trade, an increase of about 89% in export trade and 93% in energy transited, against the background of much lower hydroelectricity compared to last year and lower domestic electricity consumption compared to the same period in 2021.
The increase in the use of allocated capacity is also due to the inclusion of imported and exported quantities of electricity as a result of C.N.TE.E. Transelectrica S.A.'s participation as an operational member in the European Imbance Netting Platform (IGCC).
From 01 January 2022 the European platform, International Grid Control Cooperation (IGCC)/In Imbalance Netting (IN) platform for the imbalance netting process between all TSOs, which performs the automatic frequency restoration process under Part IV of Regulation (EU) 2017/1485, became operational.
It should be noted that the International Grid Control Cooperation (IGCC) is the project that was chosen in 2016 by ENTSO-E to become the future European platform for the imbalance compensation process, as defined in Commission Regulation (EU) 2017/1485 of 2 August 2017 laying down guidelines for the operation of the electricity transmission system (Article 22).
The IGCC initiative was started in 2010 by operators in Germany and subsequently extended to the central European systems, as a way of optimising secondary frequency regulation - exchange power by reducing the counter-actions of member operators' regulators, resulting in an optimised use of the system reserve "Frequency Restoration Reserve with automatic activation" of the RRF at the overall level.
In August and September 2022, following the request of the neighbouring TSO, it was decided to grant emergency aid (exported energy) to Ukraine.
The reason for the granting of the damage aid to Ukraine was that in the interconnection Continental Europe interzonal voltage swings were detected in the east-west direction with very weak damping and the OTS in Spain requested Ukraine, according to the procedures for emergency interconnection of the energy systems of Ukraine and the Republic of Moldova, to reduce the export balance to 0 MW.
Compared to January-September 2021, in the same period in 2022 the OTC in the RET decreased by ca. 12% and the percentage OTC decreased from 2.48% to 2.20%.
Factors that significantly influenced the OTC in the period January - September 2022, such as precipitation and the distribution of cross-border physical flows, are not under Transelectrica's control.
In January 2022 OTC decreased compared to January 2021 by 14.6%, mainly due to more advantageous distribution of physical flows on interconnection lines, which led to reduced transmission of energy away from sources, but also due to favourable weather conditions with less precipitation, which resulted in lower corona losses.
The percentage of losses relative to energy entering the RET decreased from 2.94% in January 2021 to 2.42% in January 2022. Energy entering the meter increased by 3.6% in January 2022 (141 GWh) compared to the same period in 2021, due to an increase of 3.2% (100.3 GWh) in energy received from generators connected to the RET and an increase of 10.1% (46.6 GWh) in energy received from imports, against a decrease of 1.8% (5.9 GWh) in energy received from the RED.
In February 2022 OTC decreased compared to February 2021 by 32.4% mainly due to more favourable distribution of physical flows on interconnection lines and favourable generation dispatching, which led to reduced transmission away from sources, but also due to favourable weather conditions with lower precipitation, which reduced corona losses.
The percentage of losses relative to energy entering the RET decreased from 2.93% in February 2021 to 2.04% in February 2022. Energy input to the meter decreased by 2.8% (100.8 GWh) in February 2022 compared to the same period in 2021, on the back of a 7.4% (220.3 GWh) decrease in energy received from generators directly connected to the RET and a 7.3% (17.1 GWh) decrease in energy received from the RED, as energy received from imports increased by 33.3% (106.7 GWh).
In March 2022 OTC increased compared to March 2021, by 11%, mainly due to the more disadvantageous distribution of physical flows on the interconnection lines in the south of the country, which led to an increase in transmission away from sources.
The percentage of losses relative to energy entering the RET decreased from 2.57% in March 2021 to 2.36% in March 2022. Energy entering the meter decreased by 2.8% (106 GWh) in March 2022 compared to the same period in 2021, on the back of a decrease of 13.4% (406.1 GWh) in energy received from generators directly connected to the RET and a decrease of 21.1% (69.5 GWh) in energy received from the RED, as energy received from imports increased by 83.8% (369.7 GWh). Precipitation amounts were lower, resulting in lower corona losses.
In April 2022 OTC decreased compared to April 2021 by 2.4%, mainly as a result of favourable generation dispatch, which led to a reduction in remote transmission to sources. The percentage of losses relative to energy entering the RET decreased from 2.58% in 2021 to 2.49% in 2022. Energy entering the grid increased by 1.1% in April 2022 (38.0 GWh) compared to the same period in 2021, due to an increase of 8.6% (35.5 GWh) in energy received from imports and 1.3% (4.4 GWh) in energy received from DER, amid a decrease of 0.1% (1.9 GWh) in energy received from generators connected to the RET. Precipitation amounts were higher, leading to increased corona losses.
In May 2022 OTC decreased compared to May 2021 by 24.8% mainly as a result of more favourable distribution of physical flows on interconnection lines and favourable generation dispatching, which led to reduced transmission away from sources, and favourable weather conditions with lower precipitation, which reduced corona losses. The percentage of losses as a proportion of energy entering the RET decreased from 2.59% in 2021 to 1.9% in 2022. Energy entering the grid increased by 2.5% (79.2 GWh) in May 2022 compared to the same period in 2021, as a result of an increase of 6.3% (159.9 GWh) in energy received from generators directly connected to the RET and an increase of 49.4% (113.5 GWh) in energy imported from imports, while energy received from the RED decreased by 41.4% (194.2 GWh).
In June 2022 OTC decreased compared to June 2021 by 11.6%, as a result of lower energy entering the RET contour, favourable generation dispatching in the territory leading to reduced transmission away from sources, and favourable weather conditions characterised by lower precipitation leading to reduced corona losses. The percentage of losses as a proportion of energy entering the RET decreased from 2.35% in 2021 to 2.11% in 2022. Energy entering the meter decreased by 1.6% (55.1 GWh) in June 2022 compared to the same period in 2021, on the back of a 3.8% (104.5 GWh) decrease in energy received from generators directly connected to the RET and a 55.9% (266.2 GWh) decrease in energy received from the RED, as energy received from imports increased by 143.7% (315.6 GWh).
In July 2022 OTC increased compared to July 2021 by 1%, due to the increase in energy entering the RET contour. The percentage of losses relative to energy entering the RET decreased from 2.05% in 2021 to 2.0% in 2022. Energy entering the contour increased by 3.4% in July 2022 (124.3 GWh) compared to the same period in 2021, due to a 40.5% (198.9 GWh) increase in energy received from imports, amid a 25.2% (54 GWh) decrease in energy received from DER and a 0.7% (20.6 GWh) decrease in energy received from generators connected to the RET. Precipitation amounts were lower, resulting in lower corona losses.
In August 2022 OTC increased compared to August 2021 by 9.1% mainly as a result of the more disadvantageous distribution of physical flows on interconnection lines, which led to increased transmission of energy away from sources, but also due to unfavourable weather conditions, characterised by higher precipitation, which increased corona losses. The percentage of losses to energy entering the RET increased from 1.92% in 2021 to 2.16% in 2022. Energy entering the grid decreased by 3% (110.8 GWh) in August 2022 compared to the same period in 2021, due to a 15.2% (99.2 GWh) increase in energy received from imports, on the back of an 8.5% (12 GWh) decrease in energy received from DER and a 6.8% (198 GWh) decrease in energy received from generators connected to the RET.
In September 2022 OTC decreased compared to September 2021 by 10.3%, as a result of the decrease in energy entering the RET contour and as a result of the advantageous distribution of physical flows on the interconnection lines, which led to a reduction in the transmission of energy away from sources. The percentage of losses relative to energy entering the RET decreased from 2.41% in 2021 to 2.28% in 2022. Energy entering the grid decreased by 5.2% (187.5 GWh) in September 2022 compared to the same period in 2021, on the back of a decrease in energy received from generators directly connected to the RET by 3% (84.1 GWh) and energy received from imports by 23.7% (139.1 GWh), while energy received from the RED increased by 20.2% (35.7 GWh). Precipitation amounts were higher, which increased corona losses.
In conclusion overall in the first quarter of 2022, OTC in the RET decreased by approximately 19.4% compared to the same period in the first quarter of 2021, as a result of the more favourable distribution of physical flows on the interconnection lines in the first two months and favourable weather conditions throughout the period, factors which led to a reduction in corona losses. Relative to energy entering the contour losses decreased from 2.81% to 2.28%.
The overall second quarter of 2022 the OTC in the RET decreased by approx. 12.8% compared to the same period in 2021, as a result of favourable generation dispatching in April and June and advantageous physical flow distribution on interconnection lines in May, which led to a reduction in transmission away from sources, but also due to favourable weather conditions in May and June, which reduced corona losses. Relative to energy entering the contour losses decreased from 2.5% to 2.17%.
The overall second quarter of 2022 the OTC in the RET decreased by approx. 12.8% compared to the
same period in 2021, as a result of favourable generation dispatching in April and June and advantageous physical flow distribution on interconnection lines in May, which led to a reduction in transmission away from sources, but also due to favourable weather conditions in May and June, which reduced corona losses. Relative to energy entering the contour losses decreased from 2.5% to 2.17%.
The overall third quarter of 2022, RET OTC decreased by 0.7% compared to the same period in 2021, due to a 1.6% reduction in energy entering the RET contour and due to favourable weather conditions in July, which reduced corona losses during the period. Relative to energy entering the contour losses increased from 2.12% to 2.14%. It should be noted that the values for September 2022 are preliminary.
The increase in the total value of tangible assets on 30 September 2022 compared to 30 December 2021 was determined by the increase in the value of tangible assets in progress concurrent with the registration of depreciation of tangible assets.
The value of fixed assets registered in the accounting books in the first nine months of 2022 is 240.4 million lei (102 million lei in the same period of 2021), an increase of 138 million lei.
The largest transfers from tangible assets in progress to tangible assets are mainly represented by the commissioning of investment objectives, the most significant of which are listed below:
Procurement of tangible and intangible assets in January-September 2022 amount to 294.2 million lei, down compared to the same period of 2021 when procurements amounted to 358 million lei.
At the same time, the balance of tangible assets in progress according to the financial position as at 30 September 2022, in the amount of 920.7 million lei, is represented by the projects in progress, the most significant of which are listed below:
Refurbishment of 400/110/20 kV Smârdan Station 27,3 mil lei;
Connection of Isaccea-Varna 400 kV LEA and Isaccea-Dobrudja 400 kV LEA in Medgidia South 400 kV Station, Phase I - Extension of Medgidia South 400 kV Station - 58.6 million lei;
The breakdown of capital expenses as at 30 September 2022 by the main chapters of the annual investment programme correlated with the main chapters of the Company's Development Plan is as follows:
The achievement degree of the investment programme at 30 September 2022 is 60.6%. Compared to the achievement at 9M 2021, the realised investment expenditure decreased by 25.1%.
| No. | Types of | 2022 Investment |
Achieved (RON thou.) |
|||
|---|---|---|---|---|---|---|
| expenditures | Programme* (RON thou.) |
9M 2022 | 9M 2021 | |||
| Grand total (A+B) |
469,256 | 284,197 | 379,481 | |||
| A | Company's own expenses |
447,239 | 267,248 | 363,201 | ||
| B | Investments financed from the connection fee |
22,017 | 16,948 | 16,280 |
*2022 Annual Investment Program revision A8
In January-September 2022, 8 project files have been prepared and submitted to the Ministry of Energy in order to access non-reimbursable financing through the Modernisation Fund in the amount of 401,412,513 euros.
In the fourth quarter of 2022 it is expected that the contracting process for the grant funding from the Modernisation Fund will be completed.
At the same time, in January-September 2022, the implementation of 2 investment projects financed by non-reimbursable European funds was carried out, as follows:
- 400 kV d.c. Gutinaș Smârdan LEA (445 poles 21 m high, equipped with cables, insulation and protective conductors, including an end cell in Gutinaș station), as well as
- Cernavodă-Stâlpu internal line (financed by European funds under the Connecting Europe Facility (CEF) mechanism).
At the same time, on 31.08.2022, Transelectrica in partnership with Delgaz Grid submitted to the European Climate Infrastructure and Environment Executive Agency (CINEA) - European Commission the application for grant funding through the Connecting Europe Facility for the project of common interest Carpathian Modernization of Energy Network (CARMEN).
The amount requested for funding for the CARMEN project amounts to approximately 120 million euros, of which 45 million euros reflects Transelectrica's investment (EU contribution - 50% - 22.5 million euros) represented by the installation of FACTS equipment in the Gutinaș and Roșiori stations, as well as the development of the data sharing platform for operational data.
Applications to be approved for funding under the Connecting Europe Facility are due to be published by the end of February 2023, in line with the European Commission's timetable. At the same time, in order to continue the partnership and common interest in the implementation of the CARMEN Project, Delgaz Grid and Transelectrica have started the steps for the reconfirmation of the CARMEN project in the EU CIP List VI. In this regard, new project stages and investments are being defined, which will provide socioeconomic benefits to the entire Eastern European region.
At European level, the energy sector is undergoing a transformation process, with a focus on the transition from a predominantly national model of energy sector evolution and development, to a model of integrated and coordinated development at European level, ensuring a unified development at continental level but also allowing for adaptation to national specifications while pursuing the legitimate interests of European states.
In this context the Company is affiliated to the following entities:
It was established to serve the Transmission System Operators (TSO) of eastern-central-western European part (CORE region) in view of coordinated implementation of European network codes. Affiliation means participating to the shareholders of TSCNET by purchasing company shares.
Decision 9 of SEGA of 05 June 2018 approved Company affiliation to the Security Coordinating Centre of CORE region, TSCNET by participating to its share capital with 470,500 Euro (1 share – 2.500 EUR).
Beginning with 2019 bids allocating long-term capacities have been performed in coordinated manner by JAO, which was nominated Operator of the Single Allocation Platform (SAP).
Transelectrica was invited by JAO to become part of its shareholders.
Decision 10 of SEGA of 20 August 2018 approved the Company's affiliation to the Joint Allocation Office (JAO) by cash subscription of 259,325 Euro, being allotted 50 shares.
Through the Romanian – Bulgarian border Romania is part of the coordinated calculation region of cross-border transfer capacities South-East Europe (SEE). In terms of regional coordination of operational safety services, this region will be served by an independent legal entity exercising the part of regional operational safety coordination centre (further called SEE RSC).
The Company's affiliation to the shareholders of SEE RSC became effective on 22.05.2020 by cash subscription of 50,000 Euro, being allotted 50,000 shares.
On 25 February 2022, the Extraordinary General Meeting of Shareholders approved the exit of the Company from the shareholding of Selene CC, with full recovery of the capital invested by the Company in this company to date (50,000 euro).
Common integration tests and new launch date for the Core Flow-Based Market Coupling project
The project parties involved in the Core Flow-Based Market Coupling project reported that the first phase of the joint regional testing ( Full Integration Testing -FIT) was successfully completed on 13 January 2022.
FIT testing focused on the functionality of all systems involved in the FB MC process and between them, proved that the solution is capable of performing the FB MC process.
Enforcement of Civil Ruling no. 3982/08.10.2018 of the Bucharest Court of Appeal
Following the ruling of the Bucharest Court of Appeal, ANRE Decision no.167/16.02.2022 and ANRE Document 29104/17.02.2022, the following was established:
The regulated procurement price of the technological system services provided by Hidroelectrica for Transelectrica, recalculated for the past periods is:
The resulting price difference between the prices approved by ANRE by Decisions 1377/25.06.2015 and 1035/22.06.2016 in relation to Decision 167/16.02.2022 is in the amount of 21,340,716 lei, according to ANRE's clarifications, detailed below:
| Item name | M.U | ANRE Decision nr.1377/2015 |
ANRE Decision nr.1035/2015 |
|---|---|---|---|
| Recalculated STS-ER regulated supply price |
lei/hour group |
686,67 | 713,42 |
| Regulated price for STS-ER supply approved in previous decision |
lei/hour group |
86,85 | 101,91 |
| Regulated supply price STS-ER difference to be recovered |
lei/hour group |
589,82 | 611,51 |
| Number of hours of STS-ER provision |
hour group |
17.074 | 18.430 |
| Difference to be recovered |
lei | 10.070.587 | 11.270.129 |
| Total difference to be recovered (Decision No 1377/2015 and Decision No 1035/2015) |
21,340,716 lei |
Transelectrica will pay Hidroelectrica the total amount mentioned until 31.12.2022, and will recover the full amount of 21,340,716 lei through the regulated tariff for system services in the following tariff period.
Agreement for EIB advisory services
In order to improve the management processes of investment projects by removing existing blockages and streamlining some activities, the Company has signed a pro-bono support services agreement with the European Investment Bank (EIB) for an in-depth analysis of the Company's internal processes.
This assistance is also intended to expand access to a base of national and international contractors, who until now and for reasons yet to be identified have not collaborated with Transelectrica.
Convening of ordinary and extraordinary general meetings of shareholders
The Company's Board of Directors has convened an Ordinary and Extraordinary General Meeting of Shareholders on 25 February 2022 with the main items on the agenda:
At the Energy Council meeting on 28 February 2022, Member States stressed the importance of the possibility of urgent synchronisation of the Ukrainian electricity network with the electricity network of Continental Europe and the need to consider the impact on the Republic of Moldova.
The Continental European TSOs are focused on identifying the key conditions necessary to support Ukraine's electricity supply as a matter of priority and have committed to respond positively to the request and have analysed the conditions for an emergency synchronisation, while ensuring the security of the power system in Continental Europe. ( www.entsoe.eu).
On 11 March, the OTS of Continental Europe concluded that the conditions for emergency synchronisation of the Moldovan-Ukrainian electricity systems with that of Continental Europe have been met and finalised the technical procedures for connecting the networks on 16 March 2022.
Throughout the process, Continental European OTSs receive support from the European Commission, Member States and regulators ( www.entsoe.eu).
In accordance with its statutory and legal powers, the Supervisory Board decided at its meeting of 23 March 2022, with reference to the expiry on 24.04.2022 of the terms of office as provisional members of the Directorate Gabriel ANDRONACHE, Ștefăniță MUNTEANU, Cătălin Constantin NADOLU, Marius-Viorel STANCIU and Florin Cristian TĂTARU, as follows:
On 25 March 2022 the presentation of the financial results for 2021 was organised. The format of the presentation was teleconference, starting at 12 p.m (Romanian time).
On 28.03.2022 was published in the Official Gazette no.299/28.03.2022 the ANRE Order no. 33/23.03.2022 on the modification of the average tariff for the transmission service, the components of the transmission tariff for the introduction of electricity into the network (TG ) and for the extraction of electricity from the network (TL ), charged by the Company. Therefore, the regulated tariffs for the electricity transmission service, applicable from 01 April 2022, are:
| Service | Tariff applicable from 01 January 2022 |
Tariff applicable from 01 April 2022 |
Variation |
|---|---|---|---|
| lei/MWh | lei/MWh | % | |
| The average tariff for the transmission service, of which |
23.96 | 28.10 | +17.3% |
| Transmission Tariff - feed in component - (TG ) |
1.49 | 2.53 | +69.8% |
| Transmission Tariff - off grid component - (TL ) |
22.47 | 25.57 | +13.8% |
The percentage held on 11 April 2022 by NN Group N.V., is 5.62% of the share capital of the Company.
On 18 April 2022, the Ordinary General Meeting of Shareholders approved the appointment of the following members of the Company's Supervisory Board with a four-month term of office, starting on 22 April 2022 and ending on 21 August 2022:
Mrs Oana-Cristina BALACCIU;
At the same time, it established the remuneration of the members of the Supervisory Board as being calculated in accordance with Article 8 of GEO no. 109/2011, approved with amendments and additions by LG no. 111/2016 and approved the form of the mandate contract to be concluded with the members of the Supervisory Board and the power of attorney of the person who will sign on behalf of the Company the mandate contracts of the members of the Supervisory Board.
On 28 April 2022 the Ordinary General Meeting of Shareholders approved:
On 3 May 2022, the Supervisory Board elected Mr Cătălin-Andrei DASCĂL as Chairman of the SC and appointed the members of the Advisory Committees of the Supervisory Board as follows:
The Smart Grid Carpathian Modernized Energy Network (CARMEN) project, developed by Delgaz Grid SA and NPG Transelectrica SA in partnership with the Hungarian transmission operator, MAVIR Magyar Villamosenergia-ipari Átviteli Rendszerirányító ZRt, has received final approval from the European Union and has been included in the fifth list of Projects of Common Interest (PCI).
Projects of Common Interest are key cross-border energy infrastructure projects for building a more integrated and resilient internal European energy market and for pursuing energy and climate objectives.
The current CIP List includes 98 projects: 67 electricity transmission and storage projects, 20 gas projects, 6 CO2 grid projects and 5 smart grid projects.
The CARMEN project is worth around 150 million euro, with the application for funding due in the second half of 2022.
Implementation will run for 6 years, from 2023 to 2028.
The Extraordinary General Meeting of Shareholders on 16 May 2022 decided:
"(1) "Transelectrica" has its head office in Romania, Bucharest, Olteni str. 2-4, sector 3, building "Platinum Center" and secondary office in Bdul. Hristo Botev nr. 16 - 18, sector 3."
On 31 May 2022, the company marked the completion of the refurbishment of the 220/110 kV Hășdat Transformer Station (Hunedoara county), an investment of over 60 million lei, made with its own funds, during an inauguration ceremony.
The upgrading of the 220/110 kV Hășdat station, commissioned in 1970, aimed at bringing the installations to a level of safety and reliability corresponding to the area in terms of energy, using modern technologies used worldwide.
The investment will help to improve the quality of energy transmission service and increase the security of supply to consumers connected to the electricity transmission network.
The upgrading of the 220 kV and 110 kV voltage levels creates the conditions for reducing maintenance costs as well as for remote monitoring and diagnosis of equipment.
In accordance with the Resolution of the General Meeting of Shareholders no. 5/2022, the amendments provided for in the Articles of Association of the National Power Transmission Company "Transelectrica" SA approved by the shareholders at the extraordinary meeting held on 16 May 2022 have been registered at the National Trade Register Office (ONRC).
Therefore, the new head office of NPG "Transelectrica" S.A. is in Bucharest, Olteni str. 2-4, sector 3, building "Platinum Center".
At its meeting of 21 June 2022, in view of the expiry on 24 June 2022 of the terms of office of Gabriel ANDRONACHE, Ștefăniță MUNTEANU, Cătălin Constantin NADOLU, Florin Cristian TĂTARU and Bogdan TONCESCU as provisional members of the Directorate, pursuant to Article 642 para. (1) of GEO no. 109/2011 on the corporate governance of public companies with subsequent amendments and additions, have been appointed as provisional members of the Directorate:
The term of office of the members of the Directorate shall be 4 months starting from 25 June 2022 with the possibility of extension, for good cause, for another two months, but the term of office shall not exceed the date of completion of the selection procedure of the members of the Directorate of the National Electricity Transmission Company "Transelectrica"-SA under the terms of GEO no. 109/2011, if the procedure is completed within this period.
On 28 June 2022 the Transmission System Operators (TSOs) of Continental Europe confirmed that the technical preconditions to allow electricity trade between Ukraine and neighbouring countries have been met.
This follows the successful synchronisation of the power systems on 16 March 2022 and the acceptance of Ukrenergo as an observer member of ENTSO-E on 26 April 2022.
These achievements have been the result of intensive efforts by all European TSOs, in particular Ukrenergo and operators in neighbouring countries.
Electricity trade with Ukraine/Republic of Moldova is planned to start on 30 June 2022 on the interconnection between Ukraine and Romania.
The trading of electricity on the other interconnectors (Ukraine-Slovakia, Ukraine-Hungary and Moldova-Romania) will follow later, after finalisation of the tendering rules.
Total marketed capacity will be limited to 100 MW in the first phase, and after this initial phase, it is expected that marketed values will gradually increase, following a monthly assessment of the impact of the changed volumes on the stability and security of the power system.
Transelectrica and Moldelectrica signed the contract that makes possible the electricity trade between Romania and Moldova
On 11 August 2022, the Transmission and System Operators (TSOs), Transelectrica and Moldelectrica (the Transmission and System Operator of the Republic of Moldova), signed the contract that will allow the allocation of capacity for commercial exchanges of electricity on the interconnection line between Romania and the Republic of Moldova.
Electricity trade with the Republic of Moldova will start immediately after the completion of the whole process involving the harmonisation of technical details and commercial aspects. Thus, the first electricity transactions between Romania and the Republic of Moldova are expected in October this year.
The Ordinary General Meeting of Shareholders on 18 August 2022 approved: the appointment of the provisional members of the Supervisory Board of the Company:
by four months from 22.08.2022 until 21.12.2022, the approval of the fixed indemnity of the members of the Supervisory Board, the approval of the form of the mandate contract to be concluded with provisional members of the Supervisory Board and the empowerment of the representative of the majority shareholder of the General Secretariat of the Government at the AGOA to sign on behalf of the Company the mandate contracts with the persons appointed as provisional members of the Supervisory Board, concomitantly with the approval of the formulation and filing of the claims against the former members of the Supervisory Board mentioned in the Decision of the Court of Accounts of Romania no. 15/2020.
The Extraordinary General Meeting of Shareholders on 18 August 2022 approved:
The updated form of the Articles of Association can be found in full on the Company's website.
"Electricity Transmission Network Development Plan for the period 2022 - 2031 - main coordinates", which contains the presentation of the necessary RET development projects and the programming of their implementation over time, while mandating the Company's Directorate to approve the amendments to the "RET Development Plan for the period 2022-2031" that will arise from the public consultation launched by the National Energy Regulatory Authority, in compliance with the main coordinates approved by the General Meeting of Shareholders.
The provisional members of the Supervisory Board, appointed by the Decision of the Ordinary General Meeting of Shareholders no. 6 of 18 August 2022, namely: ATANASIU Teodor, DASCĂL Cătălin - Andrei, ORLANDEA Virgil Dumitru, PĂUN Costin-Mihai, STERP VINGĂRZAN Gheorghe, VASILESCU Alexandru-Cristian and ZEZEANU Luminița, have signed before the notary public the declaration of acceptance of their mandates.
The terms of office of all provisional members of the Supervisory Board appointed on 18 August 2022 are therefore effective.
The CARMEN Smart Grid project partners submitted their application for grant funding under the open call for projects of the programme on 30 August 2022.
The Smart Grid Carpathian Modernized Energy Network (CARMEN) project is being developed by Delgaz Grid SA and NPG Transelectrica SA in partnership with the Hungarian transmission operator, MAVIR Magyar Villamosenergia-ipari Átviteli Rendszerirányító ZRt.
The CARMEN project has a value of approximately 120 million euros and the investment covers works to be carried out over 4 years, from 2023 to 2026, in order to transition the infrastructure in the concession area of Delgaz Grid S.A. and NPG Transelectrica S.A. to the Smart Grid concept.
Transelectrica was represented from 28 August to 2 September 2022 at both expert and leadership level at one of the most significant international events in the field of high-voltage grids - the CIGRE Paris Conference, now in its 49th session. The event brought together leading representatives from the international community of energy specialists, with more than 3,800 delegates from around 100 countries.
The company was represented at management level by Mr. Florin Cristian TĂTARU, member of the Directorate, respectively by the members of the Supervisory Board, Mr. Cătălin-Andrei DASCĂL - President, Mr. Costin Mihai PĂUN and Mr. Virgil ORLANDEA.
In the margins of the Conference, Transelectrica's management team had an official meeting with the ENTSO-E delegation led by the President of the Association, Mr Hervé LAFFAYE, as well as a meeting with representatives of RTE International on issues related to the implementation of new technologies in the context of the transformation of the European energy sector.
Appointment of the Chairperson and approval of the composition of advisory committees within the Supervisory Board
In accordance with its statutory and legal powers, the Supervisory Board of Transelectrica, meeting on 6 September 2022, elected Mr. Cătălin-Andrei DASCĂL as Chairman of the Supervisory Board and appointed the members of the advisory committees of the Supervisory Board as follows:
Between 19-23 September 2022, in Buzău, more than 100 Transelectrica energy experts from all the territorial units competed in the most important professional competition in the field: the "Trofeul Energeticianului" - 2022 Edition, which brought together the best experts in specialist areas essential to the Company's core business.
At the end of four days of theoretical and practical tests, in which Transelectrica specialists from all over the country competed, the best 31 of them took 1st, 2nd and 3rd places in the 10 categories of expertise (operational management, CTSI operational management staff, refurbished substation service staff, non-refurbished substation service staff, protection, SCADA system, acceptance staff for work on overhead power lines, OMEPA staff, budget-finance-accounting staff and investment staff).
The Transelectrica Energy Engineer Trophy - 2022 Edition rewarded excellence, professionalism, good training and highlighted the exceptional professional strengths of young engineers and mentors within the Company who work both to maintain the security of the National Energy System and to develop an electricity transmission infrastructure based on digitalization and modern technologies.
On 29 September 2022, the Ordinary General Meeting of Shareholders approved the adjustment of the Company's Income and Expenses Budget for 2022, while setting 21 October 2022 as the date of registration of the shareholders on whom the effects of the Ordinary General Meeting of Shareholders' Decision will be reflected.
On 10 October 2022, Transelectrica's management signed in an official framework, at the Romanian Government, nine non-reimbursable financing contracts from the Modernisation Fund worth 424 million euros for the realisation of 9 national energy infrastructure development projects.
The high level of this grant funding will have a positive effect on the long-term profitability of the Company. At the same time, the financing of investment objectives through non-reimbursable funds ensures an increase in the Company's liquidity indicators.
The major benefits of these investments will materialize relevant indicators such as: increasing the transmission capacity of RET by about 1700 MW, construction of about 480 km of new overhead power lines, extension of 5 power stations with 400 kV voltage level, digital concept retrofitting
At the meeting held on 14 October 2022, the Supervisory Board of the Company, with reference to the expiry on 24.10.2022 of the terms of office of the provisional members of the Directorate, decided to extend, pursuant to the terms and conditions of Article
642 of GEO no. 109/2011 on the corporate governance of public companies, as amended and supplemented, for 2 months starting on 25.10.2022, the terms of office of the provisional members of the Directorate for:
but no later than the completion of the selection procedure in accordance with the provisions of GEO 109/2011 on corporate governance of public companies, as amended.
At the same time, Mr. Gabriel ANDRONACHE has been appointed Chairman of the Directorate, alternatively called Chief Executive Officer of the Company, for the period from 25 October to 24 December 2022.
Convening of the extraordinary general meeting of shareholders
The Company's Directorate has convened, in accordance with the legal provisions, the Extraordinary General Meeting of Shareholders on 21 November 2022, with the main items on the agenda:
On 21 October 2021, the most difficult and challenging technical stage of the project to build the 400kV Cernavodă-Stâlpu Overhead Power Line was marked, namely the crossing of the Danube over a distance of 2.6 kilometres, of which 1.13 kilometres are above water.
The event was attended by Transelectrica's Management, the General Director of Electomontaj SA, Ionuț Tănăsoaica, the Deputy Secretary General of the Government and member of Transelectrica's Supervisory Board, Alexandru-Cristian Vasilescu, the Secretary of State in the Ministry of Energy George Niculescu, Chairman of the Committee on Industry and Services of the Chamber of Deputies, Bende Sándor, and the official representative of the European Climate, Infrastructure and Environment Executive Agency (CINEA), Ona Kostinaite-Grinkeviciene - Head of Sector CEF.
The Danube river crossing stage took about three weeks, including the preparatory phases.
Its complexity and uniqueness involved special efforts from Transelectrica's contractors and teams of experts, being the first such large-scale electrical engineering work carried out in the Romanian Transmission Grid in the last 35 years.
The double-circuit overhead power line is supported on both sides of the Danube by the tallest high-voltage pylons - 150 metres - in the entire national energy infrastructure.
The 400 kV Cernavodă-Stâlpu Overhead Power Line infrastructure objective, an investment worth a total of around 75 million euro, benefits from 27 million euro in non-reimbursable co-financing through the Connecting Europe Facility (CEF).
The project is part of the North-South Interconnection East Electricity (North-South Interconnection East Electricity) corridor and aims to strengthen the crosssection between the western Black Sea coast and the rest of the European system, while contributing to the strengthening of the electricity transmission grid in Romania, increasing the interconnection capacity between Romania and Bulgaria and integrating wind energy produced in the Dobrogea area.
The route of the projected line is 160 kilometres long and crosses the territory of three counties: Constanța county (6 kilometres with double circuit), Ialomița county (94 kilometres with double circuit and 5 kilometres with single circuit) and Buzău county (54 kilometres with double circuit).
The shareholding structure of the Company as of 30.09.2022 is as follows:
| Shareholder name | No. of shares |
Share in total |
|---|---|---|
| The Romanian State through the SGG |
43.020.309 | 58,7% |
| PAVĂL Holding | 4.753.567 | 6,5% |
| Privately Managed Pension Fund NN |
4.007.688 | 5,5% |
| Other shareholders - legal persons |
16.081.363 | 21,9% |
| Other shareholders – natural persons |
5.440.215 | 7,4% |
| Total | 73.303.142 | 100% |
On the date of this report Directorate membership is the following:
| Gabriel ANDRONACHE | Directorate Chairman |
|---|---|
| Ștefăniță MUNTEANU | Directorate Member |
| Cătălin-Constantin NADOLU | Directorate Member |
| Bogdan TONCESCU | Directorate Member |
| Florin-Cristian TĂTARU | Directorate Member |
Transport tariff (transport service + system functional service)
| Tariff | u.m | Applied tariff 1 Jan - 31 Mar 2022 |
Tariff applied 1 Apr - 31 Dec 2022 |
Difference9%) |
|---|---|---|---|---|
| Average tariff for electricity transmission service |
lei/MWh | 23,96 | 28,10 | 17,28% |
| Transmission Tariff - the feed-in component |
lei/MWh | 1,49 | 2,53 | 69,8% |
| Transmission Tariff - the electricity taken out of the grid component |
lei/MWh | 22,47 | 25,57 | 13,8% |
In accordance with the provisions of Article 14, paragraph (1) of Government Emergency Ordinance no.27/2022 on measures applicable to end clients in the electricity and natural gas market for the period 1 April 2022 - 31 March 2023, and for amending and supplementing certain regulatory acts in the field of energy, ANRE has established the amount of additional expenses for the procurement of electricity necessary to cover its own technological consumption generated by the increase in wholesale market prices.
Thus, compared to the value of the average price of electricity for regulated OTC coverage taken into account ex-ante in the calculation of tariffs for 2021 of 288.762 lei/MWh, the new average price of electricity for regulated OTC coverage recognized by ANRE was set at 455.28 lei/MWh.
In view of the above, the table below shows:
with applicability from 1 April 2022, according to ANRE Order no. 33/23.03.2022.
The tariff for the system service (formerly technological system services), applicable from 1 January 2022, according to ANRE Order no.124/24.11.2021, did not change during the second quarter of 2022.
| Tariff | m.u | Applied tariff 1 Mar - 31 Dec 2021 |
Applied tariff 1 Jan - 31 Dec 2022 |
Difference (%) |
|---|---|---|---|---|
| System service |
lei/MWh | 10,82 | 9,32 | -13,86% |
2 Price resulting from the calculation: 262.71*1.0206*1.077=288.76, where: 262.71 lei/MWh - the forecast CPT price for 2021 in real terms of 2019 1.0206 - inflation in 2020
1.077 - the estimated inflation to be achieved in 2021, according to the autumn forecast issued by the National Forecast Commission
The most important litigations impacting the Company are presented below: Note: For ease of reading and understanding, all amounts in this chapter are expressed in lei/eur.
File 2088/107/2016 pertained to "Bankruptcy & request to be admitted in the creditors' list".
Transelectrica has filed a request for registration to the creditor's list with the amount of 16 million lei. The claim was admitted and entered in the Preliminary Table.
A hearing term has been set on 12.12.2022 for the continuation of the bankruptcy proceedings.
File 9089/101/2013/a140 pertained to contestation against the additional Receivables Table and against debtor RAAN.
Comments: Following the partial entry of the total amount requested by Transelectrica in the amount of 89,360,986.06 lei and the address no. 4162/03.10.2016, by which the judicial liquidator communicates that only the amount of 11,264,777.30 lei has been entered in the additional table in the category of claims resulting from the continuation of the debtor's activity, and the amount of 78,096,208.76 lei has been rejected, an objection to the additional table of claims has been filed within the legal term.
At the hearing on 14.02.2019, it was ordered that case no. 9089/101/2013/a152 be joined to case no. 9089/101/2013/a140 (concerning claims – payment demand).
Decision 163/20.06.2019: It admits the exception of decline. It partly admits the main matter as well as the connected contestation. It compels the defendant to pay 16,950,117.14 Lei to the claimant; receivable occurred during the procedure and decided registering this amount in the creditors' table constituted against debtor RAAN. It denies the other connected requests.
Transelectrica appealed within the legal term. The appeal was dismissed as groundless. Transelectrica filed review request for contradictory rulings, registered under file 1711/54/2019 and will be heard by the High Court of Cassation and Justice. The objections of untimeliness and inadmissibility were raised. The solution of the Court of First Instance: the objection of lateness of the request for review is upheld. The next hearing term set is 06.10.2022.
At the term of 06.10.2022, a term was granted for the continuation of the proceedings, i.e. for the valuation of the assets, the collection of the claims and the completion of the other liquidation operations, and the next term was set for 09.02.2023.
There are also other cases between RAAN and Transelectrica at various stages of the proceedings. RAAN's actions against NPG Transelectrica SA arising from contract No C137/08.04.2011.
File no. 3694/3/2016 - Claims 15.698.721,88 lei. Hearing date 08.11.2021: the case has been deferred until the final settlement of Cases No. 26024/3/2015 and No. 28458/3/2017. Decision of 09.05.2022: Rejects the request for the case to be resumed as groundless. With appeal for the duration of the suspension.
Case no. 24206/3/2015 - Transelectrica requested the court to declare that the amount of RON 16,896,664 was compensated by law. An appeal was filed, which was dismissed as groundless by the ICCJ on 9 December 2021.
Case No 26024/3/2015 - Casefile: order the defendant to pay the sum of RON 10 048 628,86. ICCJ decision of 01.03.2022: Admit the appeal filed by RAAN and refer the case back to the CAB. Final. term for ruling at the CAB: 14.11.2022.
Case No 28458/3/2017 - Casefile: order the defendant to pay a total of RON 2 106 843. At the hearing on 03.03.2022: Dismisses as groundless the appeal brought by the respondent-claimant Transelectrica against civil decision no. 825/12.05.2021 delivered by the Bucharest Court of Appeal, in contradiction with the respondent-claimant RAAN. Final.
File No 28460/3/2017 - Casefile: order the defendant to pay a total of RON 12,346,063. CAB solution 27.09.2021: suspend the appeal proceedings until the final settlement of the cases No. 28458/3/2017, No. 26024/3/2015. Decision of 23.05.2022: Rejects as groundless the request to reopen the case. The appeal is suspended.
Case no. 2428/2/2014 - by the appeal which is the subject of the request, the claimant CET Govora requested the annulment of the Decision of the President of ANRE no. 738/28.03.2014, and by the Precizare filed on 29.10.2014 requested that, if the appeal is upheld, the sums of money withheld by the administrator of the support scheme, NPG Transelectrica SA, in the execution of the
overcompensation decision, for the recovery of the amount of 53,742,755 lei, be ordered to be refunded.
By the Notes of the hearing registered in the file on 13.10.2021 and on 04.01.2022, respectively, the Plaintiff CET Govora SA requests the admission of the request for clarification of the action filed for the term of 29.10.2014, indicating that the amount extinguished by offsetting the mutual claims between CET Govora SA and NPG Transelectrica SA is 40,507,668.67 lei.
Transelectrica was brought into the case, as a forced intervener, by the Court's Decision of 18.10.2021.
By the request for ancillary intervention in the interest of CET Govora SA, the County of Valcea - County Council of Valcea requests the admission of the action brought by CET Govora and the annulment of the Decision of the President of ANRE no. 738/28.03.2014, considering that it is unjustified, being an unlawful act. Decision of 16.05.2022: Dismiss the request as amended as groundless. Dismisses the request for ancillary relief in favour of the claimant as groundless.
Case no. 2494/115/2018**, registered at the Court of Caras Severin.
File: By the request, the claimant, Municipiul Reșița, requests that the defendant Transelectrica SA be ordered to pay the following amounts: RON 2 129 765,86, representing the rent for the area of land temporarily occupied from the forestry fund for 2015; RON 2 129 765,86, representing the rent for the land for 2016; RON 2 129 765,86, representing the rent for the land for 2018; statutory penalty interest from the due date until actual payment.
The Court of First Instance (CS): suspends the proceedings on the request brought by the claimant, the Municipality of Reșița, through the Mayor, against the defendant Transelectrica, concerning claims under Article 413(1)(1) of the Civil Procedure Code. With an appeal to the superior court while the proceedings are suspended. Document: Order - Suspension 22.03.2021.
The case has been deferred until the final resolution of case no. 3154/115/2018* of the Court of Caras Severin.
File No 8993/299/2018 in which the Company challenged the enforcement of the enforceable title No 13540/22.08.2017, which is based on Tax Decision No F-MC 439/30.06.2017 issued by ANAF - General Directorate for the Administration of Large Taxpayers
Settlement in brief: It admitted the judgment suspension request filed by the contester. In accordance with article 413 para (1) pct. 1 of the Civil Procedural Code it suspended judgment until final settlement of file 1802/2/2018, on the docket of the Appeal Court Bucharest, Section VIII Administrative and Fiscal Disputes. Appeal right was granted during the entire suspension; appeal to be submitted to the Law Court Bucharest 1. It was ruled in open court. Document: Conclusion - Suspension 17.04.2018.
Case No 1802/2/2018 - At the hearing on 20.10.2020 in brief judgment: the requests were upheld in part.
Annulled in part Decision No 122/13.03.2018 on the resolution of the appeal against Tax Decision No F-MC 439/30.06.2017 issued by ANAF - General Directorate for Dispute Resolution and on 12.07.2017 by ANAF - General Directorate for the Administration of Large Taxpayers, as well as the Tax Inspection Report No F-MC 222 concluded on 30.06.2017, which was the basis for the issuance of the tax decision, to the effect that:
to pay the principal and accessory tax claims in relation to that amount.
The other provisions of Decision No 122/13.03.2018 on the settlement of the appeal against Tax Decision No F-MC 439/30.06.2017 are maintained. The remainder of the claims are rejected as groundless.
Dismisses as groundless the request for costs in the form of a stamp duty. Orders the defendants, jointly and severally, to pay the claimant's costs in the sum of 4 000 lei, representing the fee for the expert's report in the accounting and tax field, in proportion to the admissibility of the request.
Transelectrica and ANAF filed an appeal in March 2022. Decision of 24.05.2022: Dismissed as groundless the request for clarification and supplementing of the operative part. Admit the request for rectification of the material error in that the amounts of money by way of principal and accessory tax liabilities in respect of the 349 tax invoices, as set out in the contested tax decision, are to be mentioned as correct. Orders that the material error be corrected by removing the incorrect name of the claimant from the contested judgment.
The parties appealed. The case is in the filter procedure at the ICCJ.
The subject matter of the file no. 36755/3/2018 is the finding of unjustified refusal to conclude an Addemdum of connection contract RET C154/2012 and claims in the amount of 17,216,093.43 lei, the damage incurred and 100,000 euro, the countervalue of the estimated unrealized benefit.
The case is deferred to 28.09.2022 for lack of reply to the objections. The new hearing date is 07.12.2022.
Case No 22567/3/2019 - Subject-matter of the case: action at common law.
Order the defendant OPCOM SA to pay the amount of 4,517,460 lei, related to the invoice series TEL 16 AAA no. 19533/29.07.2016, representing the VAT countervalue, related to the contribution made by NPG Transelectrica SA to the share capital of OPCOM SA, issued on the basis of the Loan Agreement no. 7181RO/2003, commitment to finance the investment project "Electricity Market Project".
Order the defendant OPCOM SA to pay the amount of 1.293.778,27 lei related to the invoices TEL 19 T00 no.17/28.01.2019 and TEL 19 T00 no. 131/10.07.2019 representing the legal penalty interest, calculated for the non-payment on time of the invoice series TEL 16 AAA no. 19533/29.07.2016.
Suspends the case until the final resolution of the case 31001/3/2017, concerning the action for annulment of the Opcom AGM decision (to which Transelectrica is not a party and in which on 01.02.2021 the appeals filed were dismissed, the decision being final).
The TMB's decision Admit the plea of limitation. Dismiss the action as time-barred. With right of appeal within 30 days of communication, to be filed with the Bucharest Court, Civil Section VI. Pronounced by making the decision available to the parties through the court registry. Document: Decision 3021/03.12.2021. To date the judgment in this case has not been drafted. After the drafting and communication of the Civil Judgment No.
3021/ 03.12.2021, the Company will be able to file an appeal against this judgment. Transelectrica has filed an appeal.
Decision of the CAB according to Decision No 532/12.10.2022: Dismiss the appeal as groundless. Orders the appellant to pay the respondent the sum of 11,325.21 lei by way of costs. With appeal within 30 days of communication.
Case no. 24242/3/2021 - Bucharest Tribunal, Civil Division VI - Re: The claimant OPCOM requests a declaration of nullity of the deed - contribution in kind.
Hearing term: 22.11.2022 for taking evidence.
Case No 7976/3/2021, registered before the Bucharest Court of First Instance, concerns the request for summons, by which the claimant Grand Voltage requests that the defendant NPG Transelectrica SA be ordered to pay compensation for the damage caused to the undersigned in the amount of EUR 6,125.822,13 lei as a result of the culpable non-fulfilment of the obligations related to the Works Contract no. C 111/23.05.2018 concerning the "Connection of the 100kV Isaccea -Varna LEA and the 400 kV Isaccea-Dobrujda LEA in the 400 kV Medgidia Sud Station Stage II-LEA 400kV d.c. Connections Medgidia Sud Station".
Decision of 25.07.2022 in accordance with Decision 1812: dismiss the action as groundless. With right of appeal within 10 days of notification. The request for appeal shall be submitted to the Bucharest Court - Section VI, under penalty of nullity.
File no. 4921/2/2014 requesting either the amendment of Order no. 51/26.26.2014 or the issuance of a new order, recalculating the RRR value at the level of 9.87% (recalculated with a coefficient (β) of 1.0359, according to Transelectrica's internal analyses) or, if this request is rejected, using the same percentage of 8.52% set by ANRE for 2013 and the first half of 2014.
On 06.10.2020, the request was rejected with the following summary: the plea of inadmissibility was rejected as groundless. The action was dismissed as groundless. With appeal within 15 days from the communication. The decision is made available to the parties through the court registry. Judgment 362/2020.
At the hearing of 11.01.2021, the request to complete the device is admitted. It is ordered to complete the operative part of the civil judgment no. 362/06.10.2020 with the decision given on the request for ancillary intervention, in the sense that: the request for ancillary intervention, made by the intervener ALRO SA in support of the defendant ANRE, is admitted. With the right to appeal within 15 days of communication, the appeal request to be filed with the Bucharest Court of Appeal.
Transelectrica filed an appeal, which was heard on 25.05.2022 and dismissed as groundless, final judgment. The dispute did not affect the relationship with ANRE.
At the hearing of 13.06.2018, the action of the claimant-Transelectrica SA is partially admitted. Annuls in part the decision no. 7/20.02.2014, the decision no. 37/9.12.2013 and the inspection report no. 35521/6.11.2012 issued by the defendant in relation to the measures ordered by the decision referred to above in paragraph. I.1, I.3, I.6, I.8, I.11, II.14, II, 15, II.17, II.18, II.20, II.21, II.22 and partially the measure at points I.1, I.3, I.6, I.8, I.11, II.14, II, 15, II.17, II.18, II.20, II.21, II.22 and partially the measure at points I.1, I.6, I.8 and I.11. II.13 in the sense of removing the phrase "including those found for invoices issued by SC FLOREA ADMINSTRARE IMOBILIARĂ SRL". Dismisses the remainder of the claimant's action as groundless. Approves the electro-energetic technical expertise report drawn up by expert Toaxen Vasile.
Orders the defendant to pay to the claimant the sum of 121,375 lei in costs (in part expert's fees and stamp duty). With right of appeal within 15 days of notification. Document: decision 2771/13.06.2018. Transelectrica filed the appeal on 14.06.2019.
At the public sitting of 21.10.2020, dismisses the appeals brought by the claimant and the defendant against judgment No 2771 of 13 June 2018 of the Administrative and Fiscal Jurisdiction Chamber of the Supreme Administrative Court (CAB) - Eighth Section as groundless. Definitive.
New case no. 2985/1/2021 hearing at ICCJ: 24.11.2022.
Following an audit carried out in 2017, the Court of Auditors ordered certain measures to be implemented by the Company as a result of some deficiencies found during this audit. The Company filed a number of 8 appeals against the measures ordered by the Court of Accounts of Romania (CoA) by Decision no. 8/27.06.2017, requesting their annulment, as well as the Decision no. 77/03.08.2017, registered at the
Company's registry under no. 29117/08.08.2017, respectively the Control Report no.19211/26.05.2017. The appeals are pending before the Bucharest Court of Appeal (2 files: file no.6576/2/2017 concerning the annulment of the findings under points 7.1, 7.2 and 8, as well as the measure ordered under point II.10, hearing 20.01.2021, solution: the objections of inadmissibility, raised in the statement of defence, are rejected, the request is rejected as groundless, TEL filed an appeal on 19.11.2021 and file no.6581/2/2017 on the annulment of the findings in point 6 as well as the measure ordered in point II.9, hearing 18.11.2022.
Five cases were definitively settled, with the dismissal of the request for annulment by the Bucharest Court of Appeal and the dismissal of the appeals by the High Court of Cassation and Justice (case no. 6574/2/2017 concerning the annulment of the findings in point 5.2 and the measure ordered in point II.8, case no. 6577/2/2017 concerning the annulment of the findings in point 13 and the measure ordered in point II.13, now case no. 1614/1/2020, case no. 6578/2/2017 on the annulment of the findings in paragraph 9 and the measure ordered in paragraph II.11, case No 6580/2/2017 on the annulment of the findings in paragraph 10 and the measure ordered in paragraph II.12, case No 6582/2/2017 on the annulment of the findings in paragraph 11 and the measure ordered in paragraph I.5 and case No 6583/2/2017 on the annulment of the findings in paragraph 5.1 and the measure ordered in paragraphs II.7 and II.8).
At the hearing on 10.12.2021, the CAB rejects the Company's request for summons.
At the same time, the Company is also involved in litigation with former members of the Executive Board and Supervisory Board, and for these disputes the Company has updated the provisions representing the value of the OAVTs (virtual stock options), as well as in lawsuits concerning claims for contract price adjustment under GEO no.114/2018.
| [RON mn] | 9M 2022 -unaudited |
2021 | Δ | Δ (%) |
|---|---|---|---|---|
| 1 | 2 | 3=1-2 | 4=1/2 | |
| ASSETS | ||||
| Non-current assets | ||||
| Tangible assets | 3,890 | 3,815 | 75 | 2% |
| Assets of the usage rights for leased | ||||
| assets -buildings | 24 | 30 | (6) | (20%) |
| Intangible assets | 9 | 7 | 2 | 28% |
| Intangible assets-Supplementary OTC | 279 | 0 | 279 | n/a |
| Financial assets | 86 | 82 | 4 | 5% |
| Total non-current assets | 4,288 | 3,933 | 355 | 9% |
| Current assets | ||||
| Inventories | 41 | 40 | 1 | 2% |
| Receivables | 3,650 | 2,996 | 655 | 22% |
| Cash and cash equivalents | 382 | 252 | 130 | 51% |
| Profit tax recoverable | 0 | 21 | (21) | n/a |
| Total current assets | 4,073 | 3,309 | 764 | 23% |
| Total assets | 8,361 | 7,242 | 1,118 | 15% |
| SHAREHOLDERS' EQUITY AND | ||||
| LIABILITIES | ||||
| Shareholders' Equity | ||||
| Share capital, of which | 733 | 733 | - | 0% |
| Subscribed share capital | 733 | 733 | - | 0% |
| Share premium | 50 | 50 | - | 0% |
| Legal reserves | 138 | 138 | - | 0% |
| Revaluation reserves | 719 | 769 | (50) | (6%) |
| Other reserves | 39 | 31 | 8 | 26% |
| Retained earnings | 2,102 | 1,634 | 468 | 29% |
| Total shareholders' equity | 3,781 | 3,355 | 426 | 13% |
| Non-current liabilities | ||||
| Long term deferred revenues | 440 | 443 | (3) | (1%) |
| Long term borrowings | 62 | 79 | (18) | (22%) |
| Other loans and assimilated liabilities - | ||||
| Long-term building leasing | 17 | 23 | (6) | (26%) |
| Deferred tax liabilities | 112 | 117 | (6) | (5%) |
| Employee benefit liabilities | 60 | 60 | - | 0% |
| Total non-current liabilities | 690 | 723 | (33) | (5%) |
| Current liabilities | ||||
| Trade and other liabilities | 3,639 | 3,034 | 606 | 20% |
| Other loans and assimilated liabilities - | ||||
| Building leasing | 8 | 8 | 0,1 | 2% |
| Other taxes and social security liabilities | 10 | 14 | (4) | (28%) |
| Short-term borrowings | 101 | 25 | 76 | n/a |
| Provisions | 38 | 52 | (14) | (27%) |
| Short-term deferred revenues | 34 | 32 | 2 | 7% |
| Income tax payable | 59 | - | 59 | n/a |
| Total current liabilities | 3,889 | 3,164 | 725 | 23% |
| Total liabilities | 4,579 | 3,887 | 692 | 18% |
| Total shareholders' equity and | 8,361 | 7,242 | 1,118 | 15% |
| liabilities |
| [RON mn] |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Indicator | 9M 2022 -unaudited |
9M 2021 -unaudited |
2021 | 2020 | Budgeted 9M 2022 |
Achieved 9M 2022 vs 9M 2021 |
Achieved 9M 2022 vs 9M 2021 (%) |
Achieved vs Budgeted 9M 2022 |
Achieved vs Budgeted 9M 2022 (%) |
| 0 | 1 | 2 | 3 | 4 | 5 | 6=1-2 | 7=1/2 | 8=1-5 | 9=1/5 |
| Operating income | |||||||||
| Transmission revenues | 1,416 | 910 | 1,252 | 1,035 | 1,242 | 506 | 56% | 174 | 14% |
| System services revenues | 379 | 479 | 624 | 795 | 395 | (100) | (21%) | (15) | (4%) |
| Balancing market revenues | 2,774 | 863 | 1,823 | 495 | 1,500 | 1,911 | 221% | 1,275 | 85% |
| Other revenues | 35 | 29 | 57 | 42 | 31 | 6 | 20% | 4 | 13% |
| Revenues from OTC capitalisation | 279 | - | - | - | - | 279 | n/a | 279 | n/a |
| Total operating revenues | 4,884 | 2,282 | 3,756 | 2.367 | 3,167 | 2,602 | 114% | 1,717 | 54% |
| Operating expenses | |||||||||
| System operating expenses | 681 | 325 | 576 | 310 | 626 | 356 | 109% | 55 | 9% |
| Balancing market expenses | 2,775 | 851 | 1,810 | 495 | 1,506 | 1,924 | 226% | 1.269 | 84% |
| Technological system services expenses | 339 | 448 | 610 | 566 | 431 | (109) | (13%) | (92) | (21%) |
| Depreciation and Amortisation | 193 | 196 | 274 | 268 | 198 | (3) | (2%) | (5) | (2%) |
| Personnel expenses | 204 | 178 | 244 | 273 | 204 | 26 | 14% | 0,3 | 0% |
| Repairs and maintenance expenses | 78 | 65 | 97 | 98 | 87 | 13 | 20% | (8) | (10%) |
| Materials and consumables | 10 | 6 | 10 | 8 | 11 | 4 | 68% | (2) | (15%) |
| Other operating expenses | 107 | 113 | 123 | 170 | 131 | (5) | (5%) | (23) | (18%) |
| Total operating expenses | 4,388 | 2,182 | 3,745 | 2,188 | 3,194 | 2,206 | 101% | 1,194 | 37% |
| Operating profit | 496 | 100 | 11 | 180 | (26) | 397 | n/a | 523 | n/a |
| Financial income | 45 | 6 | 6 | 10 | 6 | 39 | n/a | 39 | n/a |
| Financial expenses | 46 | 9 | 15 | 15 | 9 | 37 | n/a | 37 | n/a |
| Net finance result |
(1) | (3) | (9) | (5) | (3) | 2 | 61% | 2 | 64% |
| Profit before income tax | 495 | 97 | 2 | 175 | (29) | 398 | n/a | 525 | n/a |
| Income tax |
77 | 16 | 1 | 30 | 0.5 | 61 | n/a | 77 | n/a |
| Profit for the year | 418 | 81 | 0.45 | 145 | (30) | 337 | n/a | 448 | n/a |
| [Mil RON] | 9M 2022 | 9M 2021 | Δ |
|---|---|---|---|
| Cash flows from operational activities | |||
| Profit/loss for the period | 418.19 | 80.80 | 337.4 |
| Income tax expense | 77.13 | 16.04 | 61.1 |
| Amortisement expense | 193.14 | 196.13 | (3.0) |
| Revenues from the production of intangible assets - Additional OTC | (279.24) | - | (279.2) |
| Expenses with adjustments for trade receivables impairment | 1.47 | 14.35 | (12.9) |
| Revenues from reversal of adjustments for trade receivables | (1.35) | (2.38) | 1.0 |
| impairment | |||
| Losses from various debtors Net expenses/income with adjustments for various debtors |
- | 0.04 | (0.04) |
| impairment | 10.18 | 2.23 | 7.9 |
| Net expenditures with adjustments for inventories impairment | 0.05 | 1.29 | (1.2) |
| Net profit/loss on sale of tangible assets | 0.05 | 0.43 | (0.4) |
| Net expenses on value adjustments in respect of tangible assets | - | 0.30 | (0.3) |
| Net expenses /revenue on provisions for risks and expenses | (13.78) | (21.58) | 7.8 |
| Interest expense. interest revenue and unrealised exchange rate | 2.75 | 3.19 | (0.4) |
| gains | |||
| Cash flows before changes to working capital | 408.61 | 290.85 | 117.8 |
| Changes in: | |||
| Clients and assimilated accounts - energy and other activities | (819.79) | (285.21) | (534.6) |
| Clients - balancing Clients - cogeneration |
117.81 37.09 |
(4.73) 19.09 |
122.5 18.0 |
| Inventories | (0.76) | (2.82) | 2.1 |
| Trade and other liabilities - energy and other activities | 820.40 | 311.42 | 509.0 |
| Liabilities - balancing | (30.25) | (17.79) | (12.5) |
| Liabilities - cogeneration | (160.60) | (85.68) | (74.9) |
| Debts paid Tax decision NAFA | - | (2.14) | 2.1 |
| Other loans and assimilated debts - Building lease | - | (6.57) | 6.6 |
| Other taxes and social insurance liabilities | (4.00) | (7.55) | 3.5 |
| Deferred revenues | (1.30) | 13.64 | (14.9) |
| Cash flows from operating activities | 367.23 | 222.50 | 144.7 |
| Interest paid | (5.55) | (3.26) | (2.3) |
| Income tax paid | - | (22.27) | 22.3 |
| Net cash generated from operational activities | 361.68 | 196.97 | 164.7 |
| Cash flows from the investment activity | |||
| Acquisition of tangible and intangible assets | (294.18) | (358.03) | 63.9 |
| Proceeds from EC non-reimbursable financing | 8.68 | 93.15 | (84.5) |
| Interest received | 1.94 | 2.05 | (0.1) |
| Dividends received | 1.53 | 0.02 | 1.5 |
| Net cash used in investment activity | (282.01) | (262.80) | (19.2) |
| Cash flows used in financing activity | |||
| Repayments of non-current borrowings | (17.78) | (17.75) | (0.02) |
| Use of working capital credit line | 75.78 | - | 75.8 |
| Building leasing payments Dividends paid |
(7.93) (0.08) |
(7.88) (63.60) |
(0.1) 63.5 |
| Net cash used in financing activity | 49.98 | (89.23) | 139.2 |
| Net increase/(decrease) in cash and cash equivalents | 129.65 | (155.06) | 284.7 |
| Cash and cash equivalents at 1 January | 252.23 | 554.00 | (301.8) |
| Cash and cash equivalents at end of period | 381.88 | 398.94 | (17.1) |
| Indicators | Calculation formula | 9M 2022 - unaudited |
2021 |
|---|---|---|---|
| Current liquidity indicator (x) | Current assets | 1.05 | 1.05 |
| Current liabilities | |||
| Indebedtness indicators (x): | |||
| Debt capital x 100 | 4.3% | 3.1% | |
| (1) Indebtedness indicator | Shareholder's equity | ||
| Debt capital x 100 | 4.1% | 3.0% | |
| (2) Indebtedness indicator | Committed capital | ||
| Average client balance* x no.days | 50.1 | 67.8 | |
| Clients' turnover (days) | Turnover | ||
| Turnover | 1.07 | 0.94 | |
| Non-current assets turnover (x) | Non-current assets |
*The clients contributing to the turnover (energy, balancing, other clients, and clients with invoices to issue) were taken into consideration. The values corresponding to doubtful clients, from the market coupling mechanism, the cogeneration scheme and the overcompensation were not included in the average balance.
All these changes were approved in Resolution No. 5 of the AGEA dated 16 May 2022 and Resolution No. 7 of the AGEA dated 18 August 2022, both registered with the National Trade Registry Office.
At the meeting held on 23.03.2022, the members of the Supervisory Board unanimously decided to extend the terms of office of the provisional members of the Directorate for two months, starting on 25 April 2022 and ending on 24 June 2022, for Gabriel ANDRONACHE, Ștefăniță MUNTEANU, Cătălin-Constantin NADOLU, and Florin-Cristian TĂTARU.
Also, pursuant to Article 642 paragraph (1) of GEO no.109/2022 on corporate governance of public companies with subsequent amendments and additions, they appointed Mr. Bogdan TONCESCU as a provisional member of the Directorate for a term of two months, starting on 25 April 2022 and ending on 24 June 2022.
| Contract | Contractual object | Value | Contract | Legal | Procurement | |||
|---|---|---|---|---|---|---|---|---|
| No. | Number | RON Thou. |
EUR Thou. |
Type | Basis | Procedure | ||
| 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 1 | C 838/2022 | Connection of 400 kV Isaccea-Varna and 400 kV Isaccea-Dobrudja LEA to 400 kV Medgidia South station - stage II - 400 kV D. C. LEA connections to Medgidia South station |
18 | 76.556,86 | - | Works | Law 99/2016 + GD 394/2016 |
Open tender |
| 2 | TM 52/2022 | Specialized security, monitoring and intervention services at UTT Timisoara objectives |
36 | 12.803,54 | - | Services | Law 99/2016 + GD 394/2016 |
Open tender |
| 3 | TC 9C40/2022 |
Specialized security, monitoring and intervention services for the objectives of UTT Constanta |
9 | 3.053,84 | - | Services | Law 99/2016 + GD 394/2016 |
Own procedure |
| 4 | C 896/2022 | VRF/VRV type air conditioning installations for office spaces and hallways within UNO DEN, located at 16-18 Hristo Botev Boulevard, sector 3, Bucharest |
7 | 2.500 | - | Supply | Law 99/2016 + GD 394/2016 |
Open tender |
| 5 | EN 58/6110/20 22 |
Mowing and vegetation removal services to prevent fires in power stations managed by UTT Pitesti |
36 | 531,20 | - | Services | Law 99/2016 + GD 394/2016 |
Open tender |
| "ANRE" | National Regulatory Authority in the Electricity domain |
|---|---|
| "BAR" | Regulated asset base |
| "BVB" | Bucharest Stock Exchange. the operator of the regulated market on which the Shares are traded |
| "CAB" | Bucharest Court of Appeal |
| "EEC" | European Economic Community |
| "Company". "NPG". "TEL" | National Power Transmission Company Transelectrica SA |
| "OTC" | One's own Technological Consumption (grid losses) |
| "CS" | Supervisory Board |
| "DEN" | National Energy Dispatcher |
| "EBIT" | Operating profit before interest and income tax |
| "EBITDA" | Operating profit before interest, income tax and amortisement |
| "EBT" | Operating profit before income tax |
| "ENTSOE" | European Network of Transmission and System Operators for Electricity |
| "HG" | Government Decision |
| "IFRS" | International Financial Reporting Standards |
| "LEA" | Overhead power lines |
| "Leu" or "Lei" or "RON" | Official currency of Romania |
| "MFP" | Ministry of Public Finance |
| "MO" | Official Gazette of Romania |
| "OG" | Government Ordinance |
| "OPCOM" | Operator of the Romanian Electricity Market OPCOM SA |
| "OUG" | Government Emergency Ordinance |
| "PZU" | Day-ahead Market |
| "RET" | Electricity Transmission Grid. national and strategic interest electricity grid with nominal line voltage higher than 110 kV |
| "SEN" | National Power System |
| "RS" | Secondary adjustment |
| "RTL" | Slow tertiary adjustment |
| "SMART" | Commercial Company for the Maintenance Services of the Electric Transmission Grid SMART SA |
| "SSF" | Functional system service |
| "SST" | Technology System Service |
| "TEL" | Stock market indicator for Transelectrica |
| "TSR" | Total shareholder return |
| "EU" | European Union |
| "u.m." | Unit of measurement |
| "USD" or "US dollars" | US dollar. official currency of the United States of America |
| "WACC" | Weighted Average Cost of Capital |
Stand-alone Interim Simplified Financial Statements as of and for the nine months' period ended on 30 September 2022
Elaborated in accordance with International Accounting Standard 34 - "Interim Financial Reporting"
Stand-alone simplified statement of financial position on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
| Note | 30 September 2022 | 31 December 2021 | |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Tangible assets | 3,889,845,121 | 3,814,698,495 | |
| Assets related to the usage rights of assets under leasing - buildings |
23,856,718 | 29,820,897 | |
| Intangible assets | 9,101,510 | 7,105,259 | |
| Intangible assets - Additional CPT | 279,236,607 | - | |
| Financial assets | 86,000,088 | 81,742,973 | |
| Total non-current assets | 4 | 4,288,040,044 | 3,933,367,624 |
| Current assets | |||
| Inventories | 40,695,955 | 39,939,697 | |
| Trade and other receivables | 5 | 3,650,123,682 | 2,995,581,608 |
| Receivable income tax | - | 21,213,984 | |
| Other financial assets | - | - | |
| Cash and cash equivalents | 6 | 381,877,064 | 252,225,142 |
| Total current assets | 4,072,696,701 | 3,308,960,431 | |
| Total assets | 8,360,736,745 | 7,242,328,055 | |
| Shareholders' equities and liabilities | |||
| Shareholders' equities | |||
| Share capital, of which: | 733,031,420 | 733,031,420 | |
| - Subscribed share capital | 733,031,420 | 733,031,420 | |
| Share premium | 49,842,552 | 49,842,552 | |
| Legal reserves | 137,926,619 | 137,926,619 | |
| Revaluation reserves | 719,363,792 | 769,348,928 | |
| Other reserves | 39,310,392 | 31,145,250 | |
| Retained earnings | 2,101,987,057 | 1,633,807,204 | |
| Total shareholders' equities | 7 | 3,781,461,832 | 3,355,101,973 |
| Non-current liabilities | |||
| Non-current deferred revenues | 8 | 440,303,793 | 443,434,048 |
| Borrowings | 9 | 61,580,506 | 79,455,068 |
| Other loans and similar liabilities - Building leasing - long term |
10 | 16,846,566 | 22,751,934 |
| Deferred tax liabilities | 111,503,686 | 117,343,340 | |
| Employee benefit obligations | 59,960,381 | 59,960,381 | |
| Total non-current liabilities | 690,194,932 | 722,944,771 | |
| Current liabilities | |||
| Trade and other liabilities | 10 | 3,639,385,551 | 3,033,542,108 |
| Other loans and similar liabilities - Building leasing - short term |
10 | 8,423,283 | 8,273,431 |
| Other taxes and social security liabilities | 11 | 10,325,046 | 14,323,661 |
| Borrowings | 9 | 100,608,605 | 24,871,963 |
| Provisions | 10 | 37,902,520 | 51,688,960 |
| Current deferred revenues | 8 | 33,930,491 | 31,581,188 |
| Payable income tax | 58,504,485 | - | |
| Total current liabilities | 3,889,079,981 | 3,164,281,311 | |
| Total liabilities | 4,579,274,913 | 3,887,226,082 | |
| Total shareholders' equities and liabilities | 8,360,736,745 | 7,242,328,055 |
Note: On 30.09.2022, the amount of 4,254,800 lei was reclassified from the item "Trade and other receivables" to the item "Financial assets",
Stand-alone profit and loss account for the nine months' period ending on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
| Note | 01 July - 30 September 2022 |
01 July - 30 September 2021 |
01 January - 30 September 2022 |
01 January - 30 September 2021 |
|
|---|---|---|---|---|---|
| Revenues | |||||
| Transmission revenues | 583,355,898 | 297,843,847 | 1,415,905,429 | 910,311,281 | |
| System service revenues | 127,509,184 | 157,685,444 | 379,228,945 | 479,037,932 | |
| Revenues from the balancing market | 1,279,597,001 | 394,230,699 | 2,774,427,999 | 863,096,725 | |
| Other revenues | 10,324,960 | 10,282,013 | 35,349,844 | 29,350,661 | |
| Revenues from CPT capitalisation | 279,236,607 | - | 279,236,607 | - | |
| Total revenues | 13 | 2,280,023,650 | 860,042,003 | 4,884,148,824 | 2,281,796,599 |
| Operational expenses | |||||
| System operation expenses | 14 | (215,449,493) | (123,175,399) | (681,485,560) | (325,320,603) |
| Balancing market expenses | 14 | (1,279,728,347) | (394,566,807) | (2,774,593,938) | (850,692,688) |
| Expenses regarding technological system services | 14 | (108,099,635) | (156,502,406) | (338,920,113) | (447,964,440) |
| Amortisement | (65,019,997) | (65,960,995) | (193,140,247) | (196,132,897) | |
| Personnel expenses | 15 | (72,308,699) | (65,462,466) | (204,258,587) | (178,447,852) |
| Repairs and maintenance | (37,269,749) | (28,227,271) | (78,279,341) | (65,134,608) | |
| Materials and consumables | (3,704,764) | (2,654,732) | (9,731,667) | (5,800,089) | |
| Other operational expenses | 16 | (37,911,527) | (46,910,331) | (107,307,282) | (112,605,568) |
| Total operational expenses | (1,819,492,211) | (883,460,407) | (4,387,716,735) | (2,182,098,745) | |
| Operational income | 460,531,439 | (23,418,404) | 496,432,089 | 99,697,854 | |
| Financial revenues | 38,271,833 | 2,207,206 | 44,828,253 | 5,697,270 | |
| Financial expenses | (36,658,104) | (3,209,842) | (45,930,972) | (8,550,656) | |
| Net financial result | 17 | 1,613,729 | (1,002,636) | (1,102,719) | (2,853,386) |
| Profit before income tax | 462,145,168 | (24,421,040) | 495,329,370 | 96,844,468 | |
| Income tax | 12 | (72,014,353) | (851,219) | (77,134,653) | (16,043,342) |
| Profit of the time interval | 390,130,815 | (23,569,821) | 418,194,717 | 80,801,126 |
The attached notes 1 to 21 constitute integrant part of these stand-alone interim simplified financial statements.
Stand-alone profit and loss account for the nine months' period ending on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
| Note | 01 July - 30 September 2022 |
01 July - 30 September 2021 |
01 January - 30 September 2022 |
01 January - 30 September 2021 |
|
|---|---|---|---|---|---|
| Profit of the time interval | 390,130,815 | (23,569,821) | 418,194,717 | 80,801,126 | |
| Other comprehensive items | - | - | - | - | |
| Comprehensive result | 390,130,815 | (23,569,821) | 418,194,717 | 80,801,126 |
The submitted stand-alone interim simplified financial statements were signed by the Company's governing team on 04 November 2022,
| Chairman | Member | Member | Member | Member |
|---|---|---|---|---|
| Gabriel ANDRONACHE | Florin-Cristian TĂTARU | Ștefăniță MUNTEANU | Cătălin-Constantin NADOLU | Bogdan TONCESCU |
Economic-Financial and Administrative Unit Manager Accounting Department Manager Ana-Iuliana DINU Georgiana-Beatrice ȘTEFAN
| Share capital | Share premium |
Legal reserves |
Revaluation reserve |
Other reserves |
Retained earnings |
Total | |
|---|---|---|---|---|---|---|---|
| Balance on 1 January 2021 | 733,031,420 | 49,842,552 | 137,832,724 | 841,699,025 | 17,441,687 | 1,615,652,289 | 3,395,499,697 |
| Comprehensive result of the period | |||||||
| Profit of the time interval | - | - | - | - | - | 449,891 | 449,891 |
| Other comprehensive result items, of which : Recognition of actuarial gains of the defined benefit plan |
- | - | - | - | - | 9,222,556 | 9,222,556 |
| Surplus from revaluation of tangible assets Deferred tax liability ass, to revaluation reserve |
- - |
- - |
- - |
||||
| Transfer of revaluation reserves into retained earnings |
(72,350,097) | - | 72,350,097 | - | |||
| Total other comprehensive result items | - - - |
- - |
- | (72,350,097) | - | 81,572,653 | 9,222,556 |
| Total comprehensive result ot the period | - | - | - | (72,350,097) | - | 82,022,544 | 9,672,447 |
| Other items | |||||||
| Legal reserve indexation | - | - | 93,895 | - | - | (93,895) | - |
| Other items - decrease in reserve to increase capital | - | (599,411) | - | (599,411) | |||
| Total other items | - | - | 93,895 | - | (599,411) | (93,895) | (599,411) |
| Contributions from and distributions to shareholders |
|||||||
| Derecognition of assets such as public domain | - | - | - | - | - | - | - |
| Subsidies related to assets from the state public domain |
- | - | - | - | 14,302,974 | - | 14,302,974 |
| Dividends distribution | - - |
- | - | - | - | (63,773,734) | (63,773,734) |
| Total contributions from and distributions to shareholders |
- | - | - | - | 14,302,974 | (63,773,734) | (49,470,760) |
| Balance on 31 December 2021 | 733,031,420 | 49,842,552 | 137,926,619 | 769,348,928 | 31,145,250 | 1,633,807,204 | 3,355,101,973 |
| Balance on 1 January 2022 | 733,031,420 | 49,842,552 | 137,926,619 | 769,348,928 | 31,145,250 | 1,633,807,204 | 3,355,101,973 |
| Comprehensive result of the period | |||||||
| Profit of the time interval | - | - | - | - | - | 418,194,717 | 418,194,717 |
| Other comprehensive result items, of which | - - |
- - |
- | - | - | - | - |
| Recognition of actuarial profit / loss of the defined benefit plan |
- - |
- | - | - | - | - | - |
| Surplus from revaluation of tangible assets | - | - | - | - | - | - | - |
| Deferred tax liability ass, to revaluation reserve Transfer of revaluation reserves into retained |
- | - | - | - (49,985,136) |
- | - 49,985,136 |
- |
| earnings | - | ||||||
| Total other comprehensive result items | - | - | - | (49,985,136) | - | 49,985,136 | - |
| Total comprehensive result of the interval Other items |
- - |
- | - | -- (49,985,136) |
- | 468,179,843 | 418,194,707 |
| Legal reserve indexation Other items |
- - |
- | - | - - |
- - |
- - |
- |
| Total other items | - | - - |
- - |
- | - | - | - - |
| Contributions from & distribution to shareholders |
|||||||
| Derecognition of assets such as public domain | - | - | - | - | - | - | - |
| Subsidies related to assets from the state public domain |
- | - | - | - | 8,165,142 | - | 8,165,142 |
| Dividends distribution | - | - | - | - | - | - | - |
| Total contributions from and distributions to shareholders |
- | - | - | - | 8,165,142 | - | 8,165,142 |
| Balance on 30 September 2022 | 733,031,420 | 49,842,552 | 137,926,619 | 719,363,792 | 39,310,392 | 2,101,987,057 | 3,781,461,832 |
Stand-alone cash flow statement on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
9 months' period ended 30.09.2022 9 months' period ended 30.09.2021 Cash flows from operational activities Profit of the time interval 418,194,717 80,801,126 Allowances for: Income tax expense 77,134,653 16,043,341 Amortisement expense 193,140,247 196,132,897 Income from the production of intangible assets - Additional CPT (279,236,607) - Allowance expense to impair trade receivables 1,465,363 14,353,966 Reversal of impairment allowances for trade receivables (1,354,269) (2,382,967) Losses from receivables and sundry debtors - 35,619 Net expense/income to impair sundry debtors 10,184,468 2,234,733 Net expense of allowances to impair inventories 49,938 1,287,505 Net profit/loss on sale of property, plant and equipment 54,383 427,378 Net expenses for value allowances regarding tangible assets - 299,462 Net income on provisions for risks and charges (13,775,211) (21,580,174) Net revenues regarding provisions for risks and expenses 2,753,174 3,192,679 Cash flows before changes into current capital 408,610,856 290,845,565 Changes into: Clients and assimilated accounts - electricity and other activities (819,787,388) (285,213,596) Clients – balancing 117,807,773 (4,733,205) Cliențs - cogeneration 37,092,462 19,093,448 Inventories (756,258) (2,819,517) Trade and other liabilities - electricity and other activities 820,402,265 311,422,716 Liabilities – balancing (30,246,170) (17,793,579) Liabilities - cogeneration (160,595,655) (85,684,328) Liabilities paid acc, to ANAF's taxation decision - (2,140,264) Other loans and assimilated liabilities – building leasing - (6,574,230) Other tax and social security liabilities (3,998,615) (7,548,486) Deferred revenues (1,299,566) 13,641,742 Cash flows from operational activities 367,229,704 222,496,266 Interest paid (5,548,324) (3,260,592) Income tax paid - (22,267,033) Net cash generated from operational activites 361,681,380 196,968,641 Cash flows from investments Procurements of tangible and intangible assets (294,175,276) (358,028,581) Proceeds from EC non-reimbursable financing 8,683,756 93,150,539 Cashed interest 1,942,368 2,052,489 Cashed dividends 1,534,971 23,352 Proceeds from the sale of tangible assets 156 - Net cash used in investments (282,014,025) (262,802,201) Cash flows used in financing Repayments of non-current borrowings (17,778,385) (17,753,391) Utilisation of cogeneration credit line - - Utilisation of working capital credit line 75,776,569 - Building leasing payments (7,933,825) (7,877,401) Dividends paid (79,792) (63,598,418) Net cash used in financing 49,984,567 (89,229,210) Net growth of cash and cash equivalents 129,651,922 (155,062,770) Cash and cash equivalenhts on 1 January 252,225,142 554,003,528 Cash and cash equivalenhts at the end of the period 381,877,064 398,940,758
Note: On 30.09.2022 the change in the building lease liability was reclassified from "Other borrowings and similar liabilities - Building leasing" to "Trade and other liabilities - Energy and other activities",
The attached notes 1 to 21 constitute integrant part of these stand-alone interim simplified financial statements.
The main activity of CNTEE Transelectrica SA ("the Company") consists in: providing electricity transmission and system service, balancing market operator, administrator of the bonus type support scheme and other related activities. These activities are carried out in accordance with the provisions of the Operational Licence no. 161/2000 issued by ANRE, updated by ANRE Decision no. 687/04.05.2022, with the licence-associated General Conditions approved by ANRE Order no. 104/2014, as amended and supplemented, and with the Company's final certification as transmission & system operator of the National Power System in accordance with the ownership unbundling model by ANRE Order no. 164/07.12.2015.
For the time being, part performs activities in the working location of 2-4 Olteni Street, sector 3, Bucharest, business point which coincides with the headquarters.
The stand-alone interim financial statements elaborated on 30 September 2022 have not been audited.
These stand-alone interim simplified financial statements have been elaborated in accordance with IAS 34 Interim Financial Reporting. They do not include all the information necessary for a complete set of financial statements in accordance with the International Financial Reporting Standards ("IFRS"). Nevertheless, certain explanatory notes have been included to explain events and transactions significant for understanding the changes occurred in the Company's financial position and performance since the last annual stand-alone financial statements as of the date and for the financial period ended on 31 December 2021.
The significant reasoning that the governance team have used in applying the Company's accounting policies and the main uncertainty sources regarding estimations were the same with those applied to the stand-alone financial statements for the financial period ended on December 31, 2021.
The accounting policies applied to these stand-alone interim simplified financial statements are the same with those applied to the Company's stand-alone statements elaborated for the financial period ended on December 31, 2021.
The growth in the total value of tangible assets on 30 September 2022 compared to December 31, 2021 was determined by high values of tangible assets in progress concurrent with the recording of tangible assets amortisment,
In the first nine months of 2022, tangible assets in progress are mainly represented by the determined by investment works performed into high voltage electric substations and lines, as follows:
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
Converting the Iron Gates - Resita - Timisoara - Sacalaz - Arad axis to 400 kV - Phase I the 400 kV simple circuit OHL Iron Gates - (Anina) - Resita - 15,213,533;
Installing the AT2 400 MVA, 400/231/22 kV as well as related cubicles in Iernut Station and upgrading the 400/220/110/6 kV control system of Iernut Station - 11,356,767;
Replacing the HV and transformer in electrical stations - Stage 2, Phase 2 - LOT 1 - LOT 2 - 11,037,171;
Converting the Iron Gates - Resita - Timisoara - Sacalaz - Arad axis to 400 kV - Stage I - 400/220/110 kV Resita Station - 9,757,082;
Site clearance and coexistence conditions fulfilment between the CNAIR SA's suspended bridge over the Danube in the Braila area and the electric networks managed by CNTEE Transelectrica SA - 4,911,246;
Purchasing and installing the 21 monitoring systems for transformer units in CNTEE Transelectrica SA stations - 3,596,498;
Replacement of hardware components, update and development of specific applications of the Balancing Market Platform - II DAMAS, Component Purchase of migration services and upgrade of specific applications of the Balancing Market - 1,905,212;
Refurbishing the 220/110 kV Hășdat Station - 1,293,164;
Centre for research and development of live working technologies (LST) and rapid intervention in SEN - phase II - 1,142,938;
In the period January-September 2022, the largest transfers from tangible assets in progress to tangible assets, amounting to 240,409,129, are mainly represented by commissioning investment objectives, of which the most significant are provided below:
Connecting the Isaccea-Varna 400 kV LEA and Isaccea-Dobrudja 400 kV LEA in Medgidia South 400 kV Station, Phase
Installing the AT2 400 MVA, 400/231/22 kV and related cubicles in Iernut Station and upgrading the 400/220/110/6 kV control system of Iernut Station - 19,852,781;
Replacing the HV and transformer in electric stations - Stage 2, phase 2 - LOT 1 - LOT 2 - 10,056,715;
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
Upgrading the power supply at UNO-DEN offices - 8,983,074;
Upgrading in view of diminishing galloping effects on the 400 kV OHL in Baragan - Fetesti region; diminishing the galloping effects on the 400 kV OHL Bucharest South - Gura Ialomitei & the 400 kV OHL Cernavoda - Gura Ialomitei (circuit 2) - 3,745,749;
Relocating the high voltage networks LEA 220 kV d,c, Lotru - Sibiu South, Lot 1 km 0+000 - km 13+170 - 3,280,087;
Installing the AT2 400 MVA, 400/231/22 kV as well as related cubicles in Iernut Station and upgrading the 400/220/110/6 kV control command system of Iernut Station - 3,080,691;
Acumulator batteries in 400/220/110/20 kV Suceava Station, 400/110 kV Roman Nord Station and 220/110/20 kV Focșani Vest Station - 792,370;
Replacing the 220VDC acumulator batteries no.1 and no.2 220VDC in the 400/220/110 kV Sibiu South Station - 330,377;
Hydrocarbon (oil) separators for concrete platforms in Isaccea Station (SF) - 372,125;
Connecting the RED 110 kV Ploiesti Parc Station to the grid with the works in the line cell of the 110 kV Brazi Vest-Ploiesti Nord substation of the 400/220/110/20 kV Brazi Vest substation - 330,377;
Connecting the RET for the works in the 220/110 kV Săcălaz Electricity Station, following the connection of the new 110/20 kV Covaci 2x25 MVA Electric Station in the 110 kV Săcălaz - Ortișoara LEA - 320,828;
Increasing the capacity of the ground leakage coil for the neutral treatment of the medium voltage network - 201,925;
Surveying and computing equipment (hardware and software): GNSS system and accessories; Total station and accessories; Graphic station; Laptop; Toposys topo-geodetic software; Topo LT application package; Global Mapper software - 127,250;
Equipping the TEL data centres with necessary equipment - Professional air conditioning and industrial air dehumidification units - 117,000,
The balance of tangible assets under execution on 30 September 2022, amounting to 920,745,017, is represented by projects in progress, of which the most significant are:
LEA 400 kV d.c. Cernavodă - Stâlpu and connection in Gura Ialomiței - 308,776,895;
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
Converting the Iron Gates - Resita - Timisoara - Sacalaz - Arad axis to 400 kV, Phase I - the 400 kV simple circuit OHL Iron Gates - (Anina) - Resita - 107,912,637;
LEA 400 kV d.c. Gutinaș - Smârdan - 66,952,720;
Connecting to RET the 300 MW WPP Ivesti, the 88 MW WPP Falciu 1 and the 18 MW WPP Falciu 2 by the new (400)/220/110 kV substation Banca - 46,884,984;
Switching to 400 kV voltage of the Iron Gates - Resita - Timisoara - Sacălaz - Arad axis - Phase I - 400/220/110 kV Resita Station - 19,043,563;
Extending the 400 kV Cernavodă Station - Phase I+II, Replacement of 2 compensation coils, Connection of new lines - 12,184,350;
Site clearance and coexistence conditions between the CNAIR SA's suspended bridge over the Danube in the Braila area and the electric networks managed by CNTEE Transelectrica SA - 4,911,246;
Switching to 400 kV voltage of the Iron Gates - Resita - Timisoara - Sacălaz - Arad axis, phase II, 400 kV d.c. Resita - Timisoara - Sacălaz - 3,380,480;
Extension with new functionalities of the computerized access control and record-keeping system for CNTEE Transelectrica SA objectives - 3,200,918;
Connecting to the national grid of WPP 136 MW Platonești, jud, Ialomița, by building a 110 kV cell in the 400/110 kV Gura Ialomiței power station - 2,889,337;
Integrated Power Station Security System, Phase III - 2,802,472;
Replacing the hardware components, updating and developing specific applications of the Balancing Market Platform - II DAMAS, Component Purchase of migration services and upgrade of specific applications of the Balancing Market - 2,626,762;
Connecting the RET of WPP Dumești 99 MW and WPP Românești 30 MW, Iasi county, by building a 110 kV line cell in the 220/110 kV FAI - 2,545,853 power station;
Installing the AT2 400 MVA, 400/231/22 kV and related cubicles in Iernut Station and upgrading the 400/220/110/6 kV control system of Iernut Station - 1,990,220;
Carrying out the fiber optic communication between Pitești Sud Station and the remote control and supervision center of UTT Pitești (SF) - 1,806,259;
LEA 220 kV double circuit Ostrovu Mare - RET - 1,613,284;
Centre for research and development of live working technologies (LST) and rapid intervention in SEN - phase II - 1,533,905;
Metering and data management system for electricity metering on the wholesale market - 1,282,514;
Connecting the 400 kV Isaccea - Varna and 400 kV Isaccea - Dobrudja LEA to 400 kV Medgidia South Station, Phase I - Extension of 400 kV Medgidia South Station - 1,277,989;
Integrated security system at the new (400) 220/110 kV Bank Power Station - 1,133,202;
Provisional works for the 220 kV Lacu Sărat-Filești LEA, to ensure the conditions for the execution of the relocation of utilities, by clearing the site and achieving coexistence conditions between the suspension bridge over the Danube in the Braila area - 1,040,787.
On 30 September 2022, the balance of intangible assets is consisting of:
the net value of intangible assets established up to this date, and
the balance of intangible assets in progress, amounting to 6,020,341. This is represented by projects in progress, of which the most significant are provided below:
Implementing a new Electronic Archive and Document Management system into CNTEE Transelectrica SA 5,474,290;
Starting from 30 September 2022, the Company shall apply the provisions of GEO no, 119/2022 amending and supplementing GEO no, 27/2022 on measures applicable to end customers in the electricity and natural gas market for the period between 1 April 2022 and 31 March 2023, as well as supplementing certain regulatory acts in the field of energy, whereby the additional costs with the electricity purchase made in the period between 1 January 2022 - 31 August 2023, in order to cover its own technological consumption and technological consumption, respectively, compared to the costs included in the regulated tariffs, shall be capitalised on a quarterly basis.
Capitalised costs are amortised over a period of 5 years from the date of capitalisation and are remunerated at 50% of the regulated rate of return approved by the National Energy Regulatory Authority applicable over the amortisation period of those costs and are recognised as a separate component.
Thus, as of 30 September 2022, the Company has capitalized the amount of 279,236,607 in additional CPT calculated as the difference between the net cost of CPT acquisition and the cost of CPT included in the regulatory tariff for the period 1 January to 30 September 2022.
The increase in the balance of financial assets at 30 September 2022 compared to 31 December 2021 is determined by:
the reclassification of the amount of 4,254,115, mainly represented by guarantees for temporary occupancy of the land, calculated and withheld in accordance with Article 39(2) of the Financial Regulation, (1), par, (2) and par, (5) of Law No 46/2008 on the Forestry Code, in order to carry out the investment objective of the 400 kV Reșița - Pancevo (Serbia) power line.
In addition to the reclassification of 4,254,115, financial assets also include the net value of shares held by the Company amounting to 81,745,973 on 30 September 2022 compared to 81,742,973 on 31 December 2021.
Such assets represent the utilisation right for the assets the Company has leased in the Platinum Office Building, according to the provisions of IFRS 16 – Leasing Contracts.
Contract No C232 entered into force on 01.10.2020, valid for 5 years and amounting to 9,000,000 Euro (excluding VAT).
On 30 September 2022, the accounting value of the utilisation right for spaces the Company leased in the Platinum Office Building amounted to 23,856,718 lei.
Under this contract the Company pays a monthly quantum of 16.67 euro/sqm (excluding VAT) for the rental of office space, resulting in an annual amount of approx, 1,8 million Euros.
On 30 September 2022 and 31 December 2021, trade and other receivables were as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Trade receivables | 2,567,882,694 | 2,194,153,312 |
| Other receivables | 164,366,969 | 189,968,790 |
| Down payments to suppliers | 823,366,857 | 701,351,443 |
| Receivable VAT | 316,853,779 | 122,134,375 |
| Impairment allowances for doubtful receivables | (145,252,705) | (145,107,946) |
| Impairment allowances for other doubtful receivables | (77,093,912) | (66,918,366) |
| Total trade and other receivables | 3,650,123,682 | 2,995,581,608 |
The structure of trade receivables is the following:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Clients on the electricity market, of which: | 2,566,359,287 | 2,182,908,347 |
| - Clients - operational activity | 1,946,730,050 | 1,408,378,875 |
| - Clients - balancing market | 448,919,071 | 566,726,844 |
| - Clients - bonus type support scheme to promote high efficiency cogeneration |
170,710,166 | 207,802,628 |
| Cliens from other activities | 1,523,407 | 11,244,965 |
| Total trade receivables | 2,567,882,694 | 2,194,153,312 |
CNTEE Transelectrica SA performs operational activities based on Operational Licence 161/2000 issued by ANRE, updated by Decision no. 687/04.05.2022, of ANRE President for provision of electricity transmission services, system services and balancing market administration.
As of 30 September 2022, clients on balance from operational activities and balancing market registered increase compared to 31 December 2021 mainly determined higher volume of transactions resulting from energy market coupling mechanisms in the third quarter of 2022 compared to the fourth quarter of 2021.
In the balancing market, the decrease in the volume of transactions in the third quarter of 2022 compared to the fourth quarter of 2021 also led to a decrease in the balance of customers in contracts concluded for this type of activity.
The main clients in the total trade receivables are: MAVIR, OPCOM, IBEX, Ciga Energy SA, Joint Allocation Office SA (JAO), Electrica Furnizare SA, RAAN, Cinta Energy SA, Hidroelectrica SA, Enel Energie SA. Their share is 80.13% in the total trade receivables.
CNTEE Transelectrica SA carries out the activities under the bonus type support scheme to promote high efficiency cogeneration in capacity of support scheme administrator, in accordance with the provisions of HGR no. 1215/2009 with subsequent additions and amendments, "the main attributions being the monthly collection of the contribution for cogeneration and the monthly payment of bonuses".
On 30 September 2022, the Company registered collectable receivables from the bonus type support scheme to promote high efficiency cogeneration in proportion of about 7% (as at 31 December 2021 - 9%) of the total trade receivables.
Clients under the bonus type support scheme to promote high efficiency cogeneration registered receivable decrease, as of 30 September 2022, a decrease mainly determined by the lower invoiced values for the collection of monthly contribution, closely related to the decrease in the amount of the cogeneration contribution, set by ANRE, for the period from the third quarter of 2022 to the fourth quarter of 2021.
As of 30 September 2022, the Company registered collectable receivables amounting to 170,710,166, represented by issued invoices under the bonus type support scheme to promote high efficiency cogeneration, of which:
Up to the date of this financial report, the Company has collected the receivables related to over-compensated activities on
under the support scheme for 2021 (in the amount of 22,893,841) from CET Govora (15,041,215), BEPCO (4,257,616) and Electrocentrale București (3,595,000), as well as the amount of 32,632,040 of the undue bonus established by ANRE Decisions for 2022, from the following producers: Bepco SRL, Complexul Energetic Hunedoara, Complexul Energetic Oltenia, CET Govora, Colonia Cluj Napoca Energie, Contourglobal Solutions, Electrocentrale București, Electro Energy Sud, Electroutilaj SA, Poligen Power, Soceram SA, Termoficare Oradea and UATAA Motru.
In order to extinguish receivables generated by overcompensation and undue bonus in previous years, the Company requested the generators qualified under the support scheme to make mutual compensations. In case of generators that did not agree with this manner to extinguish mutual receivables and liabilities (RAAN, CET Govora) the Company has applied and further applies the provisions of article 17 para 5 from Order 116/2013 of ANRE President approving the Regulation establishing the collection mode of the contribution for high efficiency cogeneration and the bonus payment for the electricity generated under high efficiency cogeneration: "in case the generator did not make the payment in full to the support scheme administrator for its payment obligations resulted in accordance with the provisions of this Regulation, the support scheme administrator pays to the producer the difference between the producer invoices and its payment obligations under the support scheme, with explicit mention of the respective amounts on the payment document" and withheld from payment the due amounts under the respective support scheme.
According to item 11 of GD no. 925/2016 amending and supplementing GD no. 1215/2009 regarding the establishment of criteria and conditions for the implementation of the support scheme for the promotion of high efficiency cogeneration based on useful heat demand, ANRE is to develop the regulatory framework for the financial closure of the scheme. At the time of writing, the debate on the Draft Order approving the Methodology for establishing the principles applicable to the financial closure of the support scheme for the promotion of high-efficiency cogeneration has not been finalised.
In view of the provisions of the Government Decision no. 925/2016 as amended, the Company does not register expenses with client impairment adjustments for the support scheme, the unrecovered amount of these receivables will be included in the cogeneration contribution.
File no. 9089/101/2013/a140 was registered on the docket of Mehedinti Tribunal, Section II Civil of Administrativeand Fiscal Disputespertaining to "claims in sum of 86,513,431", where the Company was claimant and the Autonomous Authority for Nuclear Activities, RAAN was the defendant.
The summons filed by Transelectrica SA requested compelling defendant RAAN to pay 86,513,431.
On 19.05.2016, Mehedinti Tribunal, Section II Civil of Administrative and Fiscal Disputes pronounced hearing conclusion and ordered as follows: "In accordance with article 413 pt, 1 Civil Procedural Code decides suspending the case until settlement of file 3014/2/2014 found on the docket of the High Court for Cassation and Justice, Appeal right is valid during the entire suspension term; pronounced on 19 May 2016 at public hearing"; hearing term on 06.06.2019. Mention should be made file 3014/2/2014 on the docket of the High Court for Cassation and Justice pertained to appeal in order to cancel ANRE Decision 743/28.03.2014, the parties being RAAN (claimant) and ANRE (defendant).
Mention should be also made the hearing conclusion of 18.09.2013 issued by Mehedinti Tribunal under file 9089/101/2013 pronounced opening the general insolvency procedure against debtor Autonomous Authority for Nuclear Activities RA (RAAN).
Sentence 387/20.03.2014 of Mehedinti Tribunal confirmed the reorganisation plan of debtor Autonomous Authority for Nuclear Activities, proposed by the judiciary administrator Tudor&Asociatii SPRL and voted by the General Assembly of Creditors according to the minutes of 28.02.2014.
By the intermediate ruling 10/28.01.2016 pronounced by Mehedinti Tribunal, Section II Civil of Administrative and Fiscal Disputes, the syndic judge decided initiating the debtor's bankruptcy procedure based on article 107 para 1 let, C of Law 85/2006, as well as breaking up the debtor and cancelling its administration right.
Ruling 563/14.06.2016 of the Appeal Court Craiova, Section II Civil denied the appeals filed against the intermediate ruling 10/28.01.2016 pronounced by Mehedinti Tribunal, Section II Civil of Administrative and Fiscal Disputes.
Once submitting the receivable statement under RAAN's bankruptcy procedure Transelectrica SA can resort to the provisions of article 52 from Law 85/2006, applicable to RAAN's bankruptcy procedure, provisions resumed in article 90
of Law 85/2014 on the creditor's right to invoke compensation for its receivables with its debtors to it, whenever the lawprovided conditions for legal compensation are complied with on the procedure opening date, Transelectrica SA was recoded with 11,264,777 Lei in the table of debtor RAAN, in the category of receivables resulting from the debtor's uninterrupted activity. The actual amount the Company requested was 89,360,986 Lei, but 78,096,208,76 Lei were not registered in the preliminary receivable table because "such sum was not recorded as owed liability in RAAN's accounting books". Moreover, the judiciary liquidator considered the request to record 78,096,209 Lei was made late since it pertained to 2011 - 2013, for which reason the receivable statement should have been submitted when the insolvency procedure began, namely on 18,09,2013.
Since only a part of the total amount requested by Transelectrica in quantum of 89,360,986,06 Lei was registered and according to letter 4162/03.10.2016 whereby the judiciary liquidator notified us only 11,264,777,30 Lei were recorded in the additional table in the receivables column resulting from the debtor's continued activity, and 78,096,208,76 Lei were denied. We filed contestation to the Additional receivable table within the legal term.
On the hearing term 14.02.2019 Mehedinti Tribunal decided joining file 9089/101/2013/a152 and file 9089/101/2013/a140 (pertaining to claims – payment request), File judgment was postponed because the court deemed it useful for case settlement to submit Civil ruling 2969/26.09.2018, pronounced by the High Court for Cassation and Justice under file 3014/2/2014, pertaining to cancelling Decision 743/2014 of ANRE president.
Settlement of Mehedinti Tribunal: "It admits the exception of decline, It partly admits the main issue and associated contestation. It compels defendant RAAN to pay to claimant Transelectrica the amount of 16,950,117,14 Lei as liability accrued during the procedure, judging to record it in the creditors' table constituted against debtor RAAN. The other associated requests are denied. In accordance with article 453 para 2 from the Civil Procedural Code it compels the defendant to pay 1000 Lei law court expenses to the claimant. Appeal right is granted. It was pronounced on 20.06.2019 at public hearing. Document: Ruling 163/2019 / 20.06.2019.
Transelectrica filed appeal within the legal term, The Appeal Court Craiova established the first hearing term on 30.10.2019. The appeal was denied as groundless. Transelectrica filed review request for contradictory decisions, registered under file 1711/54/2019, with hearing term on 26.03.2020 at the Appeal Court Craiova, which will refer the file to the High Court for Cassation and Justice for competent settlement.
On 26.03.2020, the hearing term was changed and the next one was set on 21.05.2020.
On 21.05.2020 the case was taken out of the docket with the following settlement: the exception of material incompetence of the Appeal Court Craiova was admitted and the decision was taken to refer the case to ICCJ, Administrative and Fiscal Disputes Section; Ruling 140/21.05.2020; term 03.02.2021.
On the 03.02.2021 hearing term ICCJ admitted the exception of tardive review request and did not pronounce on its inadmissibility.
There are four more files between RAAN and Transelectrica found under various judgment stages.
Under RAAN's bankruptcy file registered under number 9089/101/2013 Mehedinti Tribunal deferred the case on the terms 08.10.2020 and 04.02.2021, Settlement in brief: term was granted to continue the liquidation procedures, to represent the debtor's interests in the disputes found on the docket of law courts; to consolidate the creditors' table, to continue measures in view of recovering receivables and further public bids in order to capitalise the debtor's assets.
On the 14.10.2021 term the case was deferred and the settlement in brief was: "it granted term to continue the procedure, namely to capitalise the assets and carry out the other liquidation activities".
The case is adjourned to 10.02.2022, the summary decision being: for the conduct of the procedure, i.e. the recovery of assets, the collection of claims and the performance of other liquidation operations, the parties will be summoned by the BPI" and the next deadline is set for 02.06.2022.
On the 06.10.2022 hearing a term is granted to continue the procedure, i.e. capitalise the assets and recover receivables and the completion of the other liquidation operations and the next term is set for 09.02.2023.
CNTEE Transelectrica SA concluded with CET Govora SA an agreement to compensate and spread out the payment of
amounts representing receivables from the 2011-2013 overcompensation and the 2014 undue bonus (Agreement C 135/30.06.2015 and Addendum 1/04.08.2015). The Agreement term was about 1 year (July 2015-August 2016) and it provided the Company's right to calculate and cash penalties during payment spread-out.
In accordance with such Agreement the Company's receivables collectable from CET Govora SA were compensated with its liabilities to CET Govora SA, represented by cogeneration bonus for May 2014 – October 2015 amounting to 40,507,669, withheld by applying the provisions of article 17 para 5 of ANRE President's Order 116/2013 and the Agreement provisions, in the amount of 40,507,669.
Since ANRE Decision 738/28,03,2014 which had determined the 2011-2013 overcompensation was suspended by court civil judgment 3185/27,11,2015 CET Govora SA had no longer complied with its obligations under the Agreement terms.
Beginning with 9 May 2016 the general insolvency procedure was initiated for CET Govora. In view of recovering the receivables accrued before opening the insolvency procedure the Company followed the specific procedures specified by the Insolvency Law 85/2014 and requested the court to admit its receivables, as per legal provisions. Taking into account the above, beginning with 9 May 2016 the Company ceased applying the provisions of article 17,5 from Order 116/2013 of ANRE President approving the Regulation establishing the collection mode of the contribution for high efficiency cogeneration and the bonus payment for electricity generated by high efficiency cogeneration and paid monthly the cogeneration bonus to CET Govora.
Civil ruling 2430/05.10.2016 of the High Court of Cassation and Justice admitted the appeal filed by ANRE against civil ruling 3185/27.11.2015, partly cancelled the sentence appealed against and denied the suspension request of CET Govora, such decision being final. Thus, beginning with 05.10.2016 the effects of ANRE Decision 738/28.03.2014 are no longer suspended, bearing full effects.
Under such circumstances the Company applies the provisions of article 17 para 5 of ANRE Order 116/ 2013 for mutual receivables and liabilities occurred after the insolvency procedure, namely withholding the bonus due to CET Govora SA up to the concurrence of amounts related to the support scheme that were not paid to the Company. Transelectrica was registered in the Preliminary and final receivables table with total amount of 28,200,440,31, of which 25,557,189,98 relate to the support scheme. Mention should be made this receivable amounting to 21,962,243,71 Lei representing principal and penalties related to invoice 8116/08.04.2016, was registered under the suspensive condition of pronouncement of a final juridical ruling in favour of ANRE under file 2428/2/2014 on the docket of the Bucharest Court of Appeal, pertaining to cancelling ANRE decision 738/28.03.2014.
On 18.07.2018 Valcea Tribunal pronounced the following settlement:
It confirmed the reorganisation plan of Co, CET Govora SA proposed by the judiciary administrator EURO INSOL SPRL, submitted on 25 May 2018 to the file and printed in the Bulletin of Insolvency Procedures 11924 of 13 June 2018, - It denied the contestations submitted by creditors Energy Complex Oltenia SA, SNTFM CFR Marfa SA, Solek Project Delta SRL, Solek Project Omega SRL, Clean Energy Alternativ SRL and Solar Electric Curtisoara SRL,
It set 8 October 2018 as substantial term to continue the procedure.
Appeal right within 7 days from notification performed by means of the Bulletin of Insolvency Procedures; pronounced at public hearing of 18 July 2018; Document: Ruling 1196/18.07.2018.
Ruling 766/03.12.2018 of the Appeal Court Pitesti cancelled the amount of 28,013,984.83 representing a liability the Company registered in the Creditors'Table (File 1396/90/2016).
Under such circumstances the Company included the amount of 22,188,224.16 from the support scheme in the sundry debtors' account, which is analytically distinct - ANRE, and impacts the net position of the support scheme.
The amount of 22,188,224.16 represents receivable to be cashed from CET Govora under the support scheme amounting to 25,557,189.98, corrected with the bonus of 3,368,965.82 the Company withheld according to article 17 para 5 from Order 116/2013 of ANRE President.
On 30 September 2022, other receivables amounting to 164,366,969 included in the main:
penalties under the support scheme).The greatest delay penalties were registered by the following clients: RAAN (16,901,449), Romelectro (14,373,489), CET Govora (9,606,504), Electrocentrale București (9,409,174), Eco Energy SRL (8,909,843), Petprod SRL (8,894,000) and the other customers (8,894,000),655), Next Energy Partners (8,395,132), Total Electric Oltenia (3,288,967), Electromontaj (2,738,705), OPCOM (2,641,146). Impairment allowances were registered for the penalties calculated for late payment of receivables from operational activities;
Receivable to recover from OPCOM representing VAT associated to the contribution in-kind to the subsidiary's capital amounting to 4,517,460.
Deferred expenses amounting to 15,007,468 mainly represented by: expenses related to the purchase of CPT (10,252,799), membership fees (1,498,634), ANRE annual contribution for the year 2022 (940,033), taxes and duties for the year 2022 (1,003,116), rent and maintenance of office building (739,695), insurance policies (115,826) and others;
Other social receivables amounting to 3,373,408 representing medical leaves the employer paid to employees, which will be recovered from the National Health Insurance House according to applicable legislation.
On 30 September 2022, down payments paid to suppliers are represented by debtor suppliers for service provision amounting to 823,366,857 and are mainly sums from transactions under the price-coupling mechanism (ICP - Interim Coupling Project, SIDC - Single Intraday Coupling, SDAC - Single Day-ahead Coupling and FBMC - Flow Based Market Coupling) (753,300,454 - for ICP, FBMC and SDAC and 70,015,692 - for SIDC).
The price coupling mechanism was applied beginning with 19 November 2014, date when the '4 Markets Market Coupling (4MMC)' project providing connection of the DAM (day-ahead electricity markets) from Romania, Hungary, Czech Republic and Slovakia became operational. Such price coupling mechanism of day-ahead markets means the electricity exchanges correlate the electricity transactions for the following day based on bids, taking into account the interconnection capacity made available by the TSO, whereby it is implicitly allocated. CNTEE Transelectrica SA as TSO transfers electricity both in physical and commercial terms to the neighbouring TSO (MAVIR, Hungary) and manages the congestion revenues on the respective interconnection (article 139 from ANRE Order 82/2014), and in relation to OPCOM SA it is Implicit Participant to the Day-Ahead Market.
In its capacity of Transfer Agent and Implicit Participant CNTEE Transelectrica SA has the commercial task to settle the electricity transacted between OPCOM SA and MAVIR.
On 19 November 2019, the 2nd wave was launched under the single European intraday markets coupling (SIDC – Single Intraday Coupling), with first deliveries on 20 November, seven countries: Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania and Slovenia joined the fourteen states: Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, the Netherlands, Portugal, Spain and Sweden that have been already operating under coupled regime since June 2018.
The single intraday coupling mechanism provides uninterrupted matching of sale and purchase offers made by market participants from a bidding zone with the sale and purchase offers from within one's own bidding zone and from any other bidding zone with available cross-border capacity.
In its capacity of Transfer Agent CNTEE Transelectrica SA has the commercial task to settle the electricity transacted between OPCOM SA, MAVIR and IBEX.
28 October 2021, marks the start of the new successful SDAC Single Day-ahead Coupling, the result of cooperation between the Designated Electricity Market Operators (DEMO) and the Transmission System Operators (TSO) of Bulgaria and Romania, namely IBEX EAD, OPCOM SA, ESO EAD and CNTEE Transelectrica SA. The aim of the SDAC is to create a single pan-European cross-border day-ahead energy market. An integrated day-ahead market increases the overall efficiency of trading by promoting effective competition, increasing liquidity and enabling more efficient use of generation
resources across Europe.
In its capacity of transfer agent for Romania's bidding zone, CNTEE Transelectrica SA has the task to settle the energy transacted between OPCOM SA and IBEX.
The launch of Flow Based Market Coupling in the Core region on 08 June 2022 represented the transition from the ICP - Interim Coupling Project coupling mechanism to FBMC - Flow Based Market Coupling, optimising the European electricity market for 13 countries: Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg, Netherlands, Poland, Romania, Slovakia and Slovenia.
In the FBMC project, Transelectrica has the role of both Shipper (Transfer Agent) and CCP - Central Counterparty. As CCP, the Company has the task of transferring the financial flows generated by the electricity flows, following the coupling process.
VAT to be recovered (316,853,779) - amount relating to the statements of account for the period July to September 2022 and October 2020.
On 6 October 2022, the Company collected from the State the amount of 91,057,551, representing the value added tax claimed for refund for June and July 2022.
The policy of Transelectrica provides registration of allowances for value losses amounting to 100% for clients under disputes, under insolvency and bankruptcy and to 100% of trade receivables and other receivables not cashed within more than 180 days, except for outstanding receivables generated by the support scheme.
The greatest impairment allowances on 30 September 2022, calculated for trade receivables and their associated penalties were registered for CET Govora (25,136,400), Eco Energy SRL (24,736,066), Petprod SRL (23,539,650), Arelco Power (14,788,022), Romelectro SA (14,382,452), Total Electric Oltenia SA (14,185,577), Romenergy Industry (13,512,997), GETICA 95 (12,540,731), Elsaco Energy (9,276,118), RAAN (8,516,707).
The Company took the following steps to recover such receivables adjusted for depreciation: notifications, court proceedings, registration in the creditors' table, requesting explanations from ANAF (for the VAT amount to be cashed from Opcom), etc.
It includes the balances of cash, deposits on sight and deposits with initial maturities up to 90 days from establishment date, with insignificant exposure to the risk of having their fair value modified, which the Company uses to manage current commitments.
On 30 September 2022 and 31 December 2021, cash and cash equivalents were as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| 1, Current bank accounts and deposits with original maturities of up to 90 days, of which: |
381,711,791 | 252,110,965 |
| a) current bank accounts and deposits with initial maturities of up to 90 days of current activity |
144,393,974 | 39,926,219 |
| b) current bank accounts and deposits with original maturities of up to 90 days restricted, of which: |
237,317,817 | 212,184,746 |
| - cash and deposits from high efficiency cogeneration | 189,352,606 | 157,024,160 |
| - cash and deposits from interconnection capacity allocation revenues used for network investment |
1,824,152 | 3,154,664 |
| - cash from the connection fee | 17,677,724 | 30,164,016 |
|---|---|---|
| - European funds | 24,782 | 287,049 |
| - other restricted accounts (securities for the electricity market and | 28,438,553 | 21,554,857 |
| dividends) | ||
| Cash desk | 91,502 | 114,177 |
| Other cash equivalents | 73,771 | - |
| Total | 381,877,064 | 252,225,142 |
In accordance with the provisions of OUG 86/2014 establishing reorganisation measures for public central administration and amending and adding certain norms, on 20 February 2015 the Company's Shareholder Register recorded the transfer of 43,020,309 shares from the Romanian State's account managed by the Secretariat General of the Government into the Romanian State's account managed by the Ministry of Economy, Trade and Tourism.
In accordance with the provisions of article 2 from OUG 55/19 November 2015 establishing reorganisation measures for public central administration and amending and adding certain norms, the Ministry of Economy, Trade and Business Environment Relations (MECRMA) was established by reorganising and taking over the activities of the Ministry of Economy, Trade and Tourism that was cancelled while the Ministry of Energy, Small & Medium Sized Enterprises and Business Environment took over the activities and structures in the SME domain.
In accordance with the Governmental Emergency Ordinance (OUG) 68/2019 establishing measures for public central administration and amending and adding certain norms, published in Romania's Official Gazette 898/06.11.2019, beginning with 6 November 2019 the Secretariat General of the Government has exercised the rights and performed the obligations ensuing from the state capacity of shareholder for the National Power Grid Company.
On 14.11.2019 the Central Depositary SA registered the transfer of 43,020,309 shares (representing 58,69% of the share capital) issued by CNTEE Transelectrica SA from the Romanian State's account through the Ministry of Economy into the Romanian State's account represented by the Government through the Secretariat General of the Government in consequence of applying the provisions of the Governmental Emergency Ordinance 68/06.11.2019 establishing measures for public central administration and amending and adding certain norms.
On 30 September 2022, the shareholders of CNTEE Transelectrica SA are: the Romanian State represented by the General Secretariat of the Government holding 43,020,309 shares (58.69%), NN Group NV holding 4,007,688 shares (5.47%), PAVAL HOLDING holding 4,753,567 shares (6.49%), other Legal Person shareholders holding 16.081.363 shares (21.94%) as well as Natural Person shareholders holding 5,440,215 shares (7.41%),
At the end of each reporting period the Company's full share capital subscribed and paid amounting to 733,031,420 is divided into 73,303,142 ordinary shares of 10 Lei/share nominal value each and it corresponds to the one recorded with the Trade Register Office.
The shareholding structure on 30 September 2022 and 31 December 2021 were the following:
18
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
| 30 September 2022 | 31 December 2021 | |||
|---|---|---|---|---|
| Shareholder | Number of actions |
% of share capital |
Number of shares |
% of share capital |
| The Romanian State through the SGG | 43,020,309 | 58.69% | 43,020,309 | 58,69% |
| Other legal person shareholders | 16,081,363 | 21.94% | 16,172,331 | 22,05% |
| PAVAL HOLDING | 4,753,567 | 6.49% | 4,753,567 | 6,49% |
| NN Group NV | 4,007,688 | 5.47% | 4,007,688 | 5,47% |
| Other natural person shareholders | 5,440,215 | 7.41% | 5,349,247 | 7,30% |
| Total | 73,303,142 | 100.00% | 73,303,142 | 100.00% |
The increase in shareholders' equity as at 30 September 2022 compared to 31 December 2021 was mainly due to the recognition in retained earnings of net profit amounting to 418,194,717 realised as at 30 September 2022.
They are mainly represented by: the connection fee, other subsidies for investments, non-returnable Eeuropean funds cashed from the Ministry of European Funds and revenues from the utilisation of interconnection capacities.
On 30 September 2022, the deferred revenues were as follows:
| 30 September 2022 |
Of which: the current part on 30.09.2022 |
31 December 2021 |
Of which: the current part on 31.12.2021 |
|
|---|---|---|---|---|
| Deferred revenues – allocation of interconnection capacities |
9,572,669 | 9,572,669 | 7,649,266 | 7,649,266 |
| Deferred revenues - European funds | 2,532,919 | 2,532,919 | 2,076,417 | 2,076,417 |
| Funds from the connection fee | 254,312,564 | 14,861,377 | 260,879,623 | 14,814,156 |
| European Funds | 182,639,693 | 2,920,779 | 178,667,003 | 6,137,909 |
| Other subsidies | 25,176,439 | 4,042,747 | 25,742,927 | 903,440 |
| Total | 474,234,284 | 33,930,491 | 475,015,236 | 31,581,188 |
The development of current deferred revenues in January - September 2022 was the following:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Balance at the beginning of the time interval | 31,581,188 | 28,853,237 |
| Deferred proceeds rel, to the interconnection capacities | 86,016,654 | 38,428,451 |
| Proceeds from European funds | 633,101 | 1,091,813 |
| Transfer from non-current deferred revenues | (30,603) | (2,913,635) |
| Revenues from the use of interconnection capacities | (84,093,249) | (33,452,345) |
| Revenues from European funds | (176,600) | (426,333) |
| Total | 33,930,491 | 31,581,188 |
The development of non-current deferred revenues in January - September 2022 was as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Balance at the beginning of the time interval | 443,434,048 | 352,028,637 |
| Connection subsidies | (2,904,857) | 3,660,512 |
| Non-returnable funds | (8,686,812) | (93,133,164) |
| Non-returnable funds to repay | - | - |
| Transfer into current deferred revenues | 25,569,368 | 203,482,936 |
| Resuming subsidies into revenues | (17,107,954) | (22,604,873) |
| Total | 440,303,793 | 443,434,048 |
On 30 September 2022, the value of non-current borrowings diminished in comparison with 31 December 2021 mainly because of repayments made according to existent loan agreements. In January - September 2022 there were no drawings from loans.
In the nine months' period ended on 30 September 2022 borrowings were as follows:
| Currency | Interest rate | Accounting value | Due date | |
|---|---|---|---|---|
| Balance on 1 January 2022 | 103,314,496 | |||
| New drawings | - | |||
| Repayments, of which: | (17,778,385) | |||
| EIB 25709 | EUR | 3.596% | (11,806,528) | 10-Sep-2025 |
| EIB 25710 | EUR | 3.856%+2.847% | (5,971,857) | 11-Apr-2028 |
| Exchange rate differences on repayment date | (91,837) | |||
| Balance on 30 September 2022 | 85,444,274 |
On 30 September 2022 and 31 December 2021, he balances of non-current loans contracted from credit institutions were as follows:
| Description | 30 September 2022 | 31 December 2021 |
|---|---|---|
| EIB 25709 | 35,742,778 | 47,648,371 |
| EIB 25710 | 49,701,496 | 55,666,125 |
| Total non-current borrowings from credit institutions, of which: |
85,444,274 | 103,314,496 |
| Current part of non-current loans | (23,863,768) | (23,859,428) |
| Total non-current loans, net of current instalments |
61,580,506 | 79,455,068 |
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
The non-current part of borrowings will be re repaid as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Between 1 to 2 years | 23,863,768 | 23,859,428 |
| Between 2 to 5 years | 36,765,008 | 54,168,304 |
| Over 5 years | 951,730 | 1,427,336 |
| Total | 61,580,506 | 79,455,068 |
The Company did not provide coverage for risks associated to its liabilities in foreign currency or for its exposure to risks associated to interest rate.
All non-current loans, contracts EIB 25709 and EIB 25710 bear fixed interest rate.
● Current borrowings
Current borrowings are detailed as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Current part of non-current borrowings | 23,863,768 | 23,859,428 |
| Current bank loan | 75,776,569 | - |
| Interest associated to current and non-current loans | 968,268 | 1,012,535 |
| Total current borrowings | 100,608,605 | 24,871,963 |
On 30.03.2022, Transelectrica concluded credit contract no, C624 as overdraft account with Banca Comercială Română for a period of 12 months in order to finance the support scheme bonus for high efficiency cogeneration, in the amount of RON 175 million, with an interest rate calculated according to the ROBOR 1M reference rate, 0.35% margin is added and a commission of 0.088%.
The credit line is secured by means of:
On September 30, 2022, the line of credit is undrawn.
On 10.03.2022, Transelectrica concluded credit contract no, C588 with Banca Transilvania for a period of 12 months to finance the working capital of the Company, in the amount of 200,000,000 with an interest calculated based on the ROBOR 1M reference rate, to which a margin of 0.05% is added.
The credit contract in the amount of 200 million lei has the following structure:
The credit line is secured by means of:
On 09.05.2022, Transelectrica signed Addendum No. 1 to credit contract No. C588/2022, concluded with Banca Transilvania, having as object the extension of the use validity of the credit line to 24 months, and on 16.06.2022, Transelectrica concluded Addendum No. 2 to credit contract No. C588 having as object the increase of the ceiling for issuing bank security letters from 25 million lei to 40 million lei.
On September 30, 2022, drawings on the credit line in the amount of 75,776,569 were made.
On 30 September 2022 and 31 December 2021, trade and other liabilities were as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Suppliers on the electricity market | 2,110,329,640 | 1,893,042,316 |
| Suppliers of assets | 103,575,776 | 158,369,109 |
| Suppliers of other activities | 51,843,204 | 38,990,780 |
| Amounts owed to employees | 8,535,562 | 8,675,618 |
| Other liabilities | 1,390,371,218 | 965,489,650 |
| Total | 3,664,655,400 | 3,064,567,473 |
On 30 September 2022 and 31 December 2021, the liabilities on balance from the electricity market amounting to 2,110,329,640 and 1,893,042,316 respectively, were structured as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Suppliers on the electricity market, of which: | ||
| - suppliers - operational activity | 1,533,339,818 | 1,125,210,670 |
| - suppliers - balancing market | 519,695,181 | 549,941,350 |
| - suppliers - bonus type support scheme for promotion of high-efficiency cogeneration |
57,294,641 | 217,890,296 |
| Total | 2,110,329,640 | 1,893,042,316 |
Electricity market suppliers are mainly represented by IBEX, MAVIR, Hidroelectrica SA, Joint Allocation Office, OPCOM, S Complexul energetic Oltenia SA, Electrica Furnizare SA, CIGA Energy SA, Engie Romania SA, As of 30 September 2022, their share in the total number of electricity suppliers was 89.95%.
The higher liability balance for operational activities was mainly determined by the increase in the third quarter of 2022 in the volume of transactions resulting from the coupling of electricity markets.
The lower liability balance of the balancing market was determined by the increase in the volume of transactions registered on the balancing market in the third quarter of 2022 compared to the fourth quarter of 2021.
The decrease of liabilities related to the support scheme to suppliers (producers) was mainly determined by the decrease in the monthly bonus for high efficiency cogeneration from September 2022 to December 2021.
On 30 September 2021, payment liabilities to suppliers (producers) were registered amounting to 35,549,294 (RAAN –
32,180,328 and CET Govora SA – 3,368,966), representing the monthly cogeneration bonus, the ex-ante overcompensation for 2014 and 2015, and the bonus not paid in 2015. The amounts representing Company liabilities under the support scheme to RAAN and CET Govora were withheld from payment according to article 17 para 5 of Order 116/2013 of ANRE President, because suppliers (producers) registered payment liabilities to the Company under the bonus type support scheme.
The Company requested the suppliers (producers) that did not pay the overcompensation invoices their agreement to compensate mutual liabilities at minimum level by means of the Training Centre for Industry Personnel Bușteni - Bucharest Branch, which uniformly manages all information received from tax-payers according to the provisions of GD no.773/2019.
Producers (RAAN, and CET Govora) did not agree with this manner of extinguishing mutual receivables and liabilities, therefore the Company has applied and further applies article 17 para 5 from Order 116/2013 of ANRE president approving the Regulation establishing the collection mode of the contribution for high efficiency cogeneration and bonus payment for electricity generated under high efficiency cogeneration: "in case the generator did not make the payment in full to the support scheme administrator of its payment liabilities resulted in accordance with the provisions of this Regulation, the support scheme administrator pays to the producer the difference between the producer invoices and its payment liabilities under the support scheme, with explicit mention of the respective amounts on the payment document" and withheld from payment the due amounts under the respective support scheme.
CNTEE Transelectrica SA concluded with CET Govora SA a compensation agreement to spread out the payment of amounts representing receivables from the 2011-2013 overcompensation and the 2014 undue bonus (Agreement C 135/30.06.2015 and Addendum 1/04.08.2015). The Agreement term was of 1 year (July 2015-August 2016) and provided the Company's right to calculate and collect penalties during payment spread-out.
In accordance with such Agreement the Company's receivables collectable from CET Govora SA were compensated with its liabilities to CET Govora SA, represented by cogeneration bonus for May 2014 – October 2015 amounting to 40,507,669, withheld by applying the provisions of article 17 para 5 from Order 116/2013 of ANRE President and the Agreement provisions.
Since ANRE Decision 738/28.03.2014 was suspended by court civil ruling 3185/27.11.2015, which had determined the 2011-2013 overcompensation, CET Govora SA had no longer complied with the Agreement terms. Beginning with 9 May 2016 the general insolvency procedure was initiated for CET Govora. Taking into account the provisions of the Insolvency Law 85/2014 the Company ceased, beginning with 9 May 2016, to apply the provisions of article 17,5 from Order 116/2013 of ANRE President approving the Regulation establishing the collection mode of the contribution for high efficiency cogeneration and the payment mode of the bonus for electricity generated under high efficiency cogeneration and pays monthly the cogeneration bonus owed to CET Govora, Civil ruling 2430/05,10,2016 of the High Court of Cassation and Justice admitted the appeal filed by ANRE against civil ruling 3185/27,11,2015, partly cancelled the sentence appealed against and denied the suspension request of CET Govora, such decision being final. Thus, beginning with 05.10.2016 the effects of ANRE Decision 738/28.03.2014 are no longer suspended, bearing full effects.
Under such circumstances the Company applies the provisions of article 17 para 5 of ANRE Order 116/2013 for mutual receivables and liabilities accrued after the insolvency procedure, meaning it withheld the bonus due to CET Govora SA up to the concurrence of amounts related to the support scheme that were not paid to the Company.
The decrease of the asset suppliers' balance on 30 September 2022 compared to 31 December 2021 was mainly owed to payments falling due.
Liabilities to the suppliers of other activities are mainly represented by liabilities associated to services provided by third parties that did not reach maturity, which have increased in comparison with 31 December 2021.
On 30 September 2022, the Company did not register outstanding liabilities to suppliers (state budget, local budget or other public institutions).
The liability structure under "other liabilities" was the following:
23
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Sundry creditors | 299,576,997 | 145,712,314 |
| Client - creditors | 1,014,813,677 | 751,982,307 |
| Dividends to pay | 154,395 | 234,188 |
| Liabilities - Current building leasing | 8,423,283 | 8,273,431 |
| Liabilities - Non-current building leasing | 16,846,566 | 22,751,934 |
| Other liabilities | 50,556,300 | 36,535,476 |
| Total | 1,390,371,218 | 965,489,650 |
"Sundry creditors", amounting to 299,576,997 on 30 September 2022, mainly represent:
The net support scheme position represents the difference between:
The contribution to be collected from the suppliers of electricity consumers; the overcompensation for electricity and heat generated under high efficiency cogeneration; the undue bonus to collect from producers according to ANRE decisions on the one hand, and
The cogeneration bonus; the ex-ante overcompensation and ungranted bonus to pay to electricity producers for high efficiency cogeneration that are beneficiaries of the support scheme on the other hand;
5,361,073 study contracts for RET connection solutions,
913,619 royalty quarter III 2022 and others.
" Client creditors ", on 30 September 2022, amounting to 1,014,813,677, of which 1,008,149,621 represent amounts received in advance from OPCOM (360,169,273), MAVIR (616,313,677), IBEX (31,582,420) and JAO (84,251) under transactions related to the price coupling mechanisms, ICP (Interim Coupling Project), SIDC (Single Intraday Coupling) SDAC (Single Day-ahead Coupling) and FBMC (Flow Based Market Coupling).
On 30 September 2022 and 31 December 2021, the provision situation were as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Provisions for disputes | 19,980,823 | 31,199,387 |
| Provisions for mandate contracts | 17,918,862 | 20,478,148 |
| Other provisions | 2,835 | 11,425 |
| TOTAL | 37,902,520 | 51,688,960 |
Provisions for disputes found on balance at 30,09,2022, amounting to 19,980,823, are mainly represented by provisions constituted for the following disputes:
File 36755/3/2018 - Claimant Conaid Company SRL (17,216,093) – more details on this file are provided in Note 18 - Disputes and Contingencies.
File No 3083/3/2020 - claimant NUCLEARELECTRICA SA (1,472,785)
On 26.06.2020, Nuclearelectrica sued the Company in order to pay 1,290,533,156 lei representing negative imbalance and 182,251.94 lei, legal interest.
After several terms when the case was deferred (26.06.2020, 16.10.2020, and 11.12.2020) for various reasons, on 22.12.2020 the Court obliged the Company to pay 1,290,533,156 lei as compensatory damages to the claimant; to pay the update of such sum with the inflation rate from 27.09.2018 until actual payment date; to pay 182,251.94 Lei representing legal penalty interest calculated from 27.09.2018 until 31.01.2020, and to further pay the legal penalty interest calculated from 01.02.2020 until actual payment date. It also compelled the defendant to pay 23,441.66 Lei to the claimant as law court expenses, consisting of judiciary stamp tax. It denied the defendant's request for law court expenses as groundless. Appeal right granted within 30 days from notification, (Ruling 2698/2020 / 22.12.2020).
CNTEE Transelectrica SA filed appeal with the Bucharest Court of Appeal. In the hearing of 25.11.2021, the Bucharest Court of Appeal admits the appeal. Changes in part the civil ruling appealed against, in the sense that: Rejects as groundless the summons. Upholds the order of the first court dismissing as groundless the defendant's claim for court fees. Orders the plaintiff to pay the defendant the sum of 20 591.66 by as appeal court fees. With a second appeal within 30 days from the date of communication, the second appeal request to be filed with the Bucharest Court of Appeal - Civil Section VI. Nuclearelectrica has filed a second appeal, which is in the filter procedure.
"Provisions for mandate contracts" in the amount of 17,918,862, on 30 September 2022, consist of:
the remuneration of executive and non-executive directors representing the variable component related to the allocated and unused OAVT packages during the period of the mandates executed in the period 2013-2017;
the remuneration representing the variable component, the non-competition compensation and the remuneration related to the remaining gross monthly fixed compensation until the end of the term of office for the members of the Supervisory Board/Management Board, i.e. until 2024, for which the Company is in dispute.
"Other provisions" amounting to 2,835 represent holidays that were not taken.
On 30September 2022 and December 31, 2021, other taxes and social security liabilities include:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Contribution to social security funds | 7,860,980 | 10,987,591 |
| Salary tax | 1,474,295 | 1,966,512 |
| Other payable taxes | 989,771 | 1,369,558 |
| Total | 10,325,046 | 14,323,661 |
On 30 September 2022, the Company registered payment liabilities for the contributions to social security funds, salary tax and other taxes, which were due and paid in October 2022.
The current and deferred Company income tax is determined at 16% statutory rate.
The income tax expense for the third quarter of 2022 and the third quarter of 2021, as well as the income tax expense on 30 September 2022 and 30 September 2021, were as follows:
| Quarter III 2022 | Quarter III 2021 | 30 September 2022 | 30 September 2021 | |
|---|---|---|---|---|
| Current income tax | 74,778,169 | 1,027,765 | 82,974,307 | 20,574,083 |
| Deferred income tax | (2,763,816) | (1,878,984) | (5,839,654) | (4,530,741) |
| Total | 72,014,353 | (851,219) | 77,134,653 | 16,043,342 |
Thes are revenues achieved by the Company by providing transmission and system services on the electricity market, by allocating the interconnection capacities, balancing market operation and other revenues.
The ANRE-approved tariffs for services provided on the electricity market in quarter 3, 2022 and quarter 3, 202 were as follows:
| Average tariff of transmission services |
Tariff for system services |
|
|---|---|---|
| Order No 33/23,03,2022 for the period 1 July to 30 September 2022 |
28.10 | 9.32 |
| Order No 10/24,02,2021 for the period 01 July - 30 September 2021 |
20.55 | 10.82 |
The average electricity transmission tariff has two components: one for electricity introduction into the network (TG) and one for electricity extraction from the nework (TL).
Zone tariffs of transmission services to inject electricity in the grid (TG) and to take electricity out of the grid (TL) were approved by ANRE Order 214/2020 beginning with 1 January 2022.
The electricity quantities delivered to consumers which were applied tariffs for services provided on the electricity market were as follows:
| 01 July 2022 - 30 September 2022 |
01 July 2021 - 30 September 2021 |
|
|---|---|---|
| Electricity quantity delivered to consumers (MWh) | 12,593,323 | 13,647,248 |
Operational revenues achieved in the third quarter of 2022 and the third quarter of 2021 were the following:
| Quarter III 2022 | Quarter III 2021 | |
|---|---|---|
| Transmission revenues | 351,210,379 | 278,054,292 |
| Revenue from the allocation of interconnection capacities | 188,037,738 | 12,051,750 |
| Revenue from reactive electricity | 75,871 | 171,313 |
(All amounts are expressed in LEI, unless otherwise provided)
| Inter TSO Compensation (ITC) revenues | 856,686 | 1,825,820 |
|---|---|---|
| CPT transaction revenues | 43,175,224 | 5,740,672 |
| Transmission revenues – total | 583,355,898 | 297,843,847 |
| Revenues from technological system services | 117,793,476 | 148,913,426 |
| Revenue with unplanned exchanges on DAM | - | 8,772,018 |
| Revenue from unplanned/planned exchanges-FSKAR-Ukraine | 102,972 | - |
| Revenue from emergency aid | 9,612,736 | 0 |
| Revenue from system services - total | 127,509,184 | 157,685,444 |
| Revenues on the balancing market | 1,279,597,001 | 394,230,699 |
| Other income | 10,324,960 | 10,282,013 |
| Revenues from capitalisation of CPT | 279,236,607 | - |
| TOTAL REVENUE | 2,280,023,650 | 860,042,003 |
Revenues from transmission service increased in the third quarter of 2022 compared to the third quarter of 2021 by 73,156,087, due to the increase in the average tariff for transmission service approved by ANRE (see the table on tariffs approved by ANRE for the period under review, presented above), while the quantity of electricity delivered to clients decreased by 7.72%, i.e. by 1,053,925 MWh.
Revenue from the allocation of interconnection capacities increased in Q3 2022 compared to Q3 2021 in the amount of 175,985,988, corresponding to the utilisation degree of available interconnection capacities by traders on the electricity market.
The market allocating the interconnection capacities is fluctuating and prices develop depending on the demand and need of participants on the electricity market to procure interconnection capacity. The increase over the period under review is due both to the unit price of electricity which has increased across the European Union, leading to a large price differential between the coupled markets, and to the European energy shortage. Implicit allocations, where capacity and energy are provided for simultaneously, are strongly influenced by variations in the price of electricity on European exchanges.
ITC revenues were lower in Q3 2022 compared to Q3 2021 by 969,134. These revenues come from scheduled electricity exchanges with Ukraine. The reduction in Q3 2022 is due to the international political situation which led to a drastic decrease in scheduled energy exchanges with Ukraine.
Energy trading revenues for CPT were mainly derived from the sale of excess electricty resulting from the difference between the long- and medium-term forecast and the short-term forecast on the Intraday Market administered by OPCOM and from the difference between forecast CPT and actual CPT achieved on the Balancing Market, respectivel., These revenues were higher in Q3 2022 compared to Q3 2021 by 37,434,552, influenced by the increase in electricity market prices.
Revenues from technological system services decreased in the third quarter of 2022 compared to the third quarter of 2021 by 31,119,950, due both to the decrease in the tariff approved by ANRE for these services (according to the previously provided table with ANRE-approved tariffs in the studied periods) and to the reduction in the electricity quantities delivered to consumers by 7.72%, i.e. by 1,053,925 MWh.
The income from the emergency aid in the amount of 9,612,736 was registered in accordance with the provisions of Contract No. 578/08.03.2022 concluded with UKRENERGO, concerning the granting of emergency aid (exported energy) to Ukraine in August and September 2022, following the request of the neighbouring TSO. The total amount of electricity granted by CNTEE Transelectrica SA for the emergency aid was 3,725 MWh. The reason for granting the Ukraine the outage aid was the fact that in the interconnection Continental Europe interzonal voltage swings were detected in the eastwest direction with very weak damping and the Spanish TSO requested Ukraine, according to the procedures for emergency interconnection of the power systems of Ukraine and the Republic of Moldova, to reduce the export balance to 0 MW.
Revenues on the balancing market increased in Q3 2022 compared to Q3 2021 by 885,366,302, mainly determined by the following issues:
Revenues and expenses related to planned energy exchanges (FSKAR-FCP-EU) and unplanned energy exchanges (FSKAR-EU) are recorded under the indicators balancing market revenues and balancing market expenses, respectively, in view of the change in the rules for the settlement of imbalances in the energy market, with planned and unplanned exchanges being integrated into the balancing market settlement mechanism.
the automatic frequency restoration process under Part IV of Regulation (EU) 2017/1485, became operational. Please note that the International Grid Control Cooperation (IGCC) is the project that was chosen in 2016 by ENTSO-E to become the future European platform for the imbalance compensation process, as defined in Commission Regulation (EU) 2017/1485 of 2 August 2017 laying down guidelines for the operation of the electricity transmission system (Article 22). The IGCC initiative was started in 2010 by operators in Germany and has subsequently been extended to central European systems, representing a way to optimise secondary frequency regulation - exchange power by reducing the counteracting actions of member operators' regulators, resulting in an optimised use of the system reserve "Automatically Triggered Frequency Restoration Reserve" of the FRR on an aggregate level.
ANRE-approved tariffs for services provided on the electricity market in the Interval were as follows:
| Average transmission tariff |
Tariff for system services |
|
|---|---|---|
| Order No 33/23,03,2022 | 28.10 | 9.32 |
| for the period 01 April - 30 September 2022 | ||
| Order No 124/25,11,2021 for the period from 1 January to 31 March 2022 |
23.96 | 9.32 |
| Order No 10/24,02,2021 for the period 01 March - 30 September 2021 |
20.55 | 10.82 |
| Order No 214/09,12,2020 for the period 01 January - 28 February 2021 |
20.55 | 11.96 |
The electricity quantity delivered to consumersin the period 01 January 2022-30 September 2022 and 01 January 2021-30 September 2021, respectively, was the following:
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
|
|---|---|---|
| Electricity quantity delivered to consumers (MWh) | 39,496,587 | 41,925,308 |
The operating revenues for the period from 1 January 2022 to 30 September 2022 and from 1 January 2021 to 30 September 2021 respectively are as follows:
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
|
|---|---|---|
| Transmission revenues | 1,045,012,939 | 857,516,345 |
| Revenue from the allocation of interconnection capacities | 314,618,144 | 32,841,624 |
| Revenue from reactive energy | 808,247 | 459,295 |
| Inter TSO Compensation (ITC) revenues | 1,091,869 | 2,733,579 |
| Revenuesfrom CPT transactions | 54,374,230 | 16,760,438 |
| Transmission revenues- total | 1,415,905,429 | 1 9 910,311,281 6 1 |
| Revenues from technological system services | 369,468,715 | , 0 7 467,080,377 , |
| Revenues with unplanned exchanges on DAM | - | 6 11,957,555 3 |
| Revenues from unplanned/planned exchanges-FSKAR-Ukraine | 147,494 | 0 1 - , |
| Revenues from emergency aid | 9,612,736 | 1 - 4 , |
| Revenues from system services - total | 379,228,945 | 3 479,037,932 2 8 |
| Balancing market revenues | 2,774,427,999 | 8 1 863,096,725 |
| Other revenues | 35,349,844 | 29,350,661 |
| Revenues from capitalisation of CPT | 297,236,607 | - |
| TOTAL REVENUE | 4,884,148,824 | 2,281,796,599 |
Revenues from transmission service increased in the period January-September 2022 compared to January-September 2021 by 187,496,594, determined by the increase in the average tariff for transmission service approved by ANRE (ccording to the previously provided table with ANRE-approved tariffs in the studied periods), in the context of the decrease in the amount of electricity delivered to consumers by 5.79%, i.e. by 2,428,721 MWh. The decrease in quantity was influenced by the increase in primary fuel prices, which was reflected in the final price of electricity on the one hand, and by the average monthly temperatures, which systematically registered positive anomalies and were generally above climatological norms on the other hand.
Revenue from the allocation of interconnection capacity increased in the period January-September 2022 compared to January-September 2021 in the amount of 281,776,520, corresponding to the utilisation degree of available interconnection capacities by the traders on the electricity market.
The market allocating the interconnection capacities is fluctuating and prices develop depending on the demand and need of participants on the electricity market to procure interconnection capacity. The increase during the studied period is determined both by the unit price of electricity which has increased across the European Union, leading to a large price differential between the coupled markets, and by the European energy shortage. Implicit allocations, where capacity and energy are provided for simultaneously, are strongly influenced by variations in the electricity price on European exchanges.
The mechanism allocating the interconnection capacities consists of annual, monthly, daily and intra-day bids. The annual, monthly and intraday (only on the border with Serbia) bids are explicit - only transmission capacity is bided, while the daily (borders with Hungary, Bulgaria) and intraday (borders with Hungary and Bulgaria) bids are implicit - they are allocated simultaneously with energy and capacity through the coupling mechanism.
The establishment of regional energy exchanges by Romania, Hungary, the Czech Republic and Slovakia on 19 November 2014 means that these four countries will have a single price for electricity traded on the spot markets. The allocation of capacity between Romania and Hungary, the only one of the three countries with which Romania shares a border, is carried out by the transmission operators Transelectrica and MAVIR, through a joint mechanism, on the basis of a bilateral agreement. On 17 June 2021, the Romanian Day-Ahead Market switched to a Europe-wide coupled mechanism with the implementation of the DE-AT-PL-4M MC project, also known as Interim Coupling, with the Romania-Hungary border being integrated into the Single Day-Ahead Market Coupling (SDAC). On 8 June 2022, the Core FB MC (Core Flow-Based Market Coupling) project was put into operation, thus initiating the coupling of the day-ahead market on a flow basis in the Core capacity calculation region. The flow-based market coupling mechanism optimises the European electricity market for 13 countries (Austria, Belgium, Croatia, Czech Republic, France, Germany, Hungary, Luxembourg, Netherlands, Poland, Romania, Slovakia and Slovenia).
As of 27 October 2021, the Romania-Bulgaria border has been integrated into the Single Day-Ahead Market Coupling (SDAC), with cross-border capacity between Romania and Bulgaria allocated by default.
As of November 2019, the second wave of the Single Intraday Coupling (SIDC) European Single Intraday Market Coupling solution has been launched. The Single Intraday Market Coupling mechanism ensures the seamless matching of bids and offers of market participants in one bidding zone with bids and offers from within its own bidding zone and from any other bidding zone where cross-border capacity is available. Thus, in the SIDC, intra-border capacity allocation auctions on the borders with Bulgaria and Hungary are implicit.
Since 2016 the UIOSI - Use It Or Sell It principle has been implemented on the borders with Bulgaria and Hungary, and since 2017 also on the border with Serbia. According to this principle, participants who do not use the capacity won on annual and monthly bids are remunerated (by Transelectrica) for that capacity. Unused capacity is then sold in daily bids.
The use of net revenues from the allocation of interconnection capacity is carried out in accordance with the provisions of ANRE Order No. 171/2019 and Regulation (EU) 2019/943 of 5 June 2019 on the internal market in electricity, as a source of financing investments for the modernisation and development of interconnection capacity with neighbouring systems.
These revenues were lower in January-September 2022 compared to January-September 2021 by 1,641,710, the reduction being determined by the international political situation which led to a drastic decrease in scheduled energy exchanges with Ukraine.
Energy trading revenues for CPT were higher in January-September 2022 compared to January-September 2021 by 37,613,792. These revenues were mainly obtained by selling the excess electricity resulting from the difference between the long- and medium-term forecast and the short-term forecast on the Intraday Market administered by OPCOM and the difference between forecast CPT and actual obtained CPT on the Balancing Market, respectively.
In the context of rising prices on the whole energy market, on all time levels, and as a result of the 11% decrease in the value of CPT made compared to the value made in the previous year, the studied period registered an increase of more than 10 times in revenues on the Intraday Market compared to the revenues registered in the same period last year and an increase of almost 4 times compared to the budgeted value. For the Balancing Market, revenues increased by about 2 times compared to the same period last year and by about 1,5 times compared to the budgeted amount.
The current price situation on the wholesale electricity market is significantly different from the situation in previous years, being strongly influenced by the conflict in Ukraine and the international energy crisis. The difference is marked and is evident across the entire European continent, not just in Romania. The situation at European level has deteriorated rapidly since the beginning of the year, with unprecedented energy stress, especially for electricity and natural gas.
Revenues from technological system services registered decrease in January-September 2022 compared to January-September 2021 in the amount of 97,611,662, determined by diminished ANRE-approved tariff for such services (according to the previously provided table with ANRE-approved tariffs in the studied periods) and to the reduction in the electricity quantities delivered to consumers by 5.79%, i.e. by 2,428,721 MWh.
The regulatory framework specific to technological system services contains regularisation mechanisms compensating the excess or deficit of revenues as compared to expenses necessary for such activities. Thus, according to ANRE regulations the revenue surplus / deficit against the recognised costs resulting from such activities is to be compensated by ex-post tariff (negative / positive) correction applied by ANRE into the tariff in the years following that when such surplus / deficit was recorded. The revenue surplus / deficit against costs resulting from such activities is calculated for tariff scheduling periods (usually 12 months).
The revenues from the emergency aid in the amount of 9,612,736 was registered in accordance with the provisions of Contract No. 578/08.03.2022 concluded with UKRENERGO, on the provision of emergency aid (exported energy) to Ukraine in August and September 2022, following the request of the neighbouring TSO. The total amount of electricity granted by CNTEE Transelectrica SA for the emergency aid was 3,725 MWh. The reason for granting the Ukraine the outage aid was the fact that in the interconnection Continental Europe interzonal voltage swings were detected in the eastwest direction with very weak damping, and the Spanish TSO requested Ukraine, according to the procedures for emergency interconnection of the power systems of Ukraine and the Republic of Moldova, to reduce the export balance to 0 MW.
Revenues on the balancing market increased in January-September 2022 compared to January-September 2021 by 1,911,331,274, mainly determined by the following issues:
approved by ANRE Order No. 213/2020,
The regulations implemented in national legislation in line with the provisions of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the electricity market, the implementation of 15-minute granularity interval settlement, the application of the single settlement price in the balancing market, the European context of the evolution of the electricity market, the evolution of the price of CO2 certificates have had and will have significant impact on the balancing market revenues / expenses.
The regulatory framework specific to balancing market administration contains regularisation mechanisms compensating the revenue excess or deficit compared to expenses necessary for such activities, Thus according to ANRE regulations the monthly non-null balances (revenue surpluses/deficits) resulting for these activities are to be compensated by ex-post tariff (negative/positive) correction applied by ANRE into the tariff in the years following that when such balances were registered
Revenues from capitalisation of own technological consumption (CPT)
According to Article III of GEO No. 119/2022 amending and supplementing GEO No. 27/2022 on the measures applicable to final customers in the electricity and natural gas market for the period 1 April 2022 - 31 March 2023, and for the amendment and completion of certain regulatory acts in the energy field, for licensed economic operators providing electricity transmission services, the additional costs for the purchase of electricity made in the period 1 January 2022 - 31 August 2023, in order to cover their own technological consumption, compared to the costs included in the regulated tariffs, shall be capitalised, and the assets resulting from the capitalisation shall be depreciated over a period of 5 years from the date of capitalisation.
Thus, as of 30 September 2022, the Company has registered CPT capitalization revenues in the amount of 279,236,607, representing additional CPT calculated as the difference between the net cost of CPT acquisition and the cost of CPT included in the regulatory tariff, for the period from 1 January to 30 September 2022.
Expenses in Q3 2022 compared to Q3 2021 were as follows:
| Third quarter 2022 | Third quarter 2021 | |
|---|---|---|
| Expenses regarding one's technological consumption | 201,937,744 | 106,349,106 |
| Congestion expenses | - | 178 |
| Expenses regarding electricity consumption in RET substations | 8,911,749 | 4,335,588 |
| Expenses regarding functional system services | - | 8,948,017 |
| Inter TSO Compensation (ITC) expenses | 4,600,000 | 3,542,510 |
| Total operational expenses | 215,449,493 | 123,175,399 |
| Expenses regarding technological system services | 108,099,635 | 156,502,406 |
| Balancing market expenses | 1,279,728,347 | 394,566,807 |
| Total | 1,603,277,475 | 674,244,612 |
They are expenses to procure electricity on the free electricity market to cover one's technological consumption (CPT) in the RET; they were higher in Q3 2022 compared to Q3 2021 by 95,588,638, taking into account a number of aspects, as follows:
The average price of energy purchased from the DAM was higher in the third quarter of 2022 compared to the same period in 2021;
Given that day-ahead markets are coupled under the CORE FB MC mechanism from June 2022 onwards, the increase in prices across Europe, driven by low hydropower, amid prolonged drought and very high temperatures across Europe, and the reduced availability of nuclear power plants in France has had a significant impact in increasing the electricity deficit and the cost of covering CPT;
Congestions (grid constraints) are requests for transmission of electricity beyond the technical capacity limits of the grid, requiring corrective action by the transmission system operator, and occur when, during scheduling or real-time operation, the movement of power between two nodes or system areas leads to non-compliance with safety parameters in the operation of an electricity system.
There were no congestion expenses in Q3 2022.
In order to perform electricity transmission activities within electric substations and to operate the National Power System under safe operational terms CNTEE Transelectrica SA has to procure electricity and cover the consumption of auxiliary services from high voltage electric substations managed by the Company.
Such expenses increased with 4,576,161 in the third quarter of 2022 compared to the third quarter of 2021, growth owed to higher procurement prices for electricity, as well as to to legislative changes applicable as of 01 July 2021, namely the provisions of ANRE Order 82/2021.
They represent monthly payment liabilities / collection rights of each transmission & system operator (TSO). They are established under the compensation / settlement mechanism for the effects of using the electricity transmission grid (RET) for electricity transits in-between TSO-s of the 35 countries that adhered to such mechanism within ENTSO-E. In the third quarter of 2022, such expenses were 1,057,490 higher than in the same period of last year.
The Company procures such services from producers in order to provide and maintain safe operation of SEN as well as electricity quality while being transmitted at parameters required by aplicable technical norms based on needs established by the National Power Dispatcher (organisational unit of the Company) liable to provide stability and safe operation of SEN.
These services are contracted both under competitive and under regulatory regime (based on Decisions of the National Regulatory Authority in the Energy domain), in case of reactive electricity reserves.
The procurement of system technology services shall be carried out on a competitive basis through daily bids in accordance with the provisions of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019.
In the third quarter of 2022, the echnological system services were contracted under regulatory regime only for reactive electricity according to ANRE Decision 1078/2020, being provided by the Company Generating Electricity in Hydropower Plants Hidroelectrica SA.
Expenses regarding technological system services decreased in Q3 2022 compared to Q3 2021 by 48,402,771, In Q3 2022, there was a high level of technological system services market concentration for secondary reserve (SR) technological system services.
The balancing market expenditure of 1,279,728,347 in Q3 2022 was 885,161,540 higher than in Q3 2021. These expenses result from notifications/realisations by participants in this market.
Expenses for the period 01 January 2022-30 September 2022 compared to the period 01 January 2021-30 September 2021 were as follows:
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
|
|---|---|---|
| Expenses regarding one's technological consumption | 636,124,181 | 282,381,092 |
| Congestion expenses | 220,843 | 355 |
| Expenses regarding electricity consumption in RET substations | 29,539,486 | 14,588,051 |
| Expenses regarding functional system services | 30,721 | 15,404,999 |
| Inter TSO Compensation (ITC) expenses | 15,570,329 | 12,946,106 |
| Total operational expenses | 681,485,560 | 325,320,603 |
| Expenses regarding technological system services | 338,920,113 | 447,964,440 |
| Balancing market expenses | 2,774,593,938 | 850,692,688 |
| Total | 3,794,999,611 | 1,623,977,731 |
They are expenses made in order to procure electricity from the free electricity market, namely the Centralised Market of Bilateral Contracts (PCCB), the Day-Ahead Market (DAM), the Balancing Market (PE) and the Intraday Market (PI) with a view to cover the technological consumption (CPT) within RET.
Such expenses were higher by 353,743,089 in the period January-September 2022 compared to January-September 2021, taking into account issues such as:
Given that day-ahead markets are coupled under the CORE FB MC mechanism from June 2022 onwards, the increase in prices across Europe, driven by low hydropower, amid prolonged drought and very high temperatures across Europe, and the reduced availability of nuclear power plants in France has had a significant impact in increasing the electricity deficit and the cost of covering CPT;
price increases in the upstream markets, the application of the single settlement price in the balancing market, the transition of the balancing market to the 15-minute settlement interval, led to more than twice as high CPT costs for the balancing market compared to the same period last year.
During the period January-September 2022, congestion expenses amounting to 220,843 were registered, mainly determined by:
Such expenses increased by 14,951,435 in the period January-September 2022 compared to January-September 2021, growth owed to indexed electricity procurement prices, as well as to legislative changes applicable beginning with 01 July 2021, namely the provisions of ANRE Order 82/2021.
They represent monthly payment liabilities / collection rights of each transmission & system operator (TSO). They are established under the compensation / settlement mechanism for the effects of using the electricity transmission grid (RET) for electricity transits in-between TSO-s of the 35 countries that adhered to such mechanism within ENTSO-E. In the period January-September 2022, such expenses were 2,624,223 higher than in the same period last year.
The Company procures such services from producers with a view to provide and maintain safe operation of SEN and the quality of transmitted electricity at parameters requested by aplicable technical norms according to the needs established by the National Power Dispatcher (organisational unit of the Company), liable to provide stability and safe operation of SEN.
These services are contracted both under competitive and under regulatory regime (based on Decisions of the National Regulatory Authority in the Energy domain), in case of reactive electricity reserves.
The technological system services are procured under competitive regime by daily bids in accordance with the provisions of Regulation (EU) 2019/943 of the European Parliament and Council of 5 June 2019.
In the period January-September 2022, technological system services were contracted under regulatory regime for reactive electricity according to ANRE Decision 1078/2020, being provided by the Company Generating Electricity in Hydropower Plants Hidroelectrica SA.
Expenses regarding technological system services increased in the period January-September 2022 compared to January-September 2021, by 109,044,327. Procurement prices of system services on the competitive market in the period January-September 2022 remained around the values:
There was also a high level of concentration in the technological system services market for secondary reserve (SR) technological system services during the period January-September 2022.
For the next period from 2022, it is expected that the procurement of technological system services through daily and oneway bids in accordance with the provisions of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019, the evolution of ANRE's regulatory framework for the electricity market, as well as the European context of evolution of the electricity market, will have a significant impact on the evolution of system service procurement costs at CNTEE Transelectrica SA level.
The balancing market expenses amounting 2,774,593,938 in January-September 2022 were 1,923,901,250 higher than in January-September 2021. Such expenses result from the notifications/achievements of participants on this market.
| Quarter III 2022 | Quarter III 2021 | |
|---|---|---|
| Salary expenses | 59,073,963 | 54,204,115 |
| Social expenses | 4,704,906 | 4,351,661 |
| Expenses on tickets granted to employees | 2,756,040 | 1,971,660 |
| Expenses for mandate contracts and other committees, commissions | 1,029,026 | 950,523 |
| Social security and protection expenses | 4,535,119 | 3,693,125 |
| Provisions constituted for salary expenses and assimilated | (1,705) | (1,768) |
| Other expenses | 211,350 | 293,150 |
| Total | 72,308,699 | 65,462,466 |
The total personnel expenses in Q3 2022 increased compared to Q3 2021, mainly determined by the indexation of basic salaries, increased expenses on employee tickets (holiday vouchers were granted in 2022 and not in 2021), as well as social security and protection expenses.
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
|
|---|---|---|
| Salary expenses | 172,447,385 | 156,619,638 |
| Social expenses | 8,358,704 | 8,392,905 |
| Expenses on tickets granted to employees | 9,109,330 | 6,263,440 |
| Expenses regarding employees' participation to the profit obtained in the previous year |
- | 3,825,122 |
| Expenses for mandate contracts and other committees, commissions | 3,001,160 | 2,988,089 |
| Social security and protection expenses | 13,603,049 | 12,772,050 |
| Provisions constituted for salary expenses and assimilated | (2,567,877) | (13,208,810) |
| Other expenses | 306,836 | 795,418 |
| Total | 204,258,587 | 178,447,852 |
The total personnel expenses for the period January-September 2022 shows an increase compared to the same period of the previous year, mainly determined by higher salary expenses, social expenses, expenses on tickets granted to employees (holiday vouchers and an increase of 10 lei in meal vouchers from September 2022), as well as the resume into revenues of part of the provisions made, together with the payment made for the OAVT certificates (OAVT = remunerations of executive and non-executive administrators consisting of the variable component related to to OAVT packages allocated but not capitalised during the mandates executed in 2013-2017), payments made according to enforceable court rulings for the Company.
| Quarter III 2022 | Quarter III 2021 | |
|---|---|---|
| Other expenses with services executed by third parties Postal expenses and telecommunication fees |
25,330,607 77,927 |
20,673,998 211,952 |
| Royalties and rents | 1,500,046 | 1,216,597 |
| (Net) operational expenses on impairment allowances for current assets |
79,051 | 15,205,535 |
| Other expenses, of which: | 10,923,896 | 9,602,249 |
| - Net) expenses with provisions for other operational expenses | (497,656) | (7,501) |
| - Expenses for OAVT-s according to court rulings - Tax and charge expenses (ANRE fee, natural monopoly tax, other local taxes and charges) |
- 4,385,276 |
- 4,910,112 |
| - Expenses on electricity procured for administrative consumption | 997,588 | 666,840 |
| - Expenses on fines and penalties | 248,412 | 1,500 |
| - Other operating expenses | 5,790,276 | 4,031,298 |
| Total | 37,911,527 | 46,910,331 |
In the third quarter of 2022, these expenses decreased by 8,998,804 compared to the third quarter of 2021, mainly determined by:
(All amounts are expressed in LEI, unless otherwise provided)
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
|
|---|---|---|
| Other expenses with services executed by third parties | 64,116,088 | 55,919,392 |
| Postal expenses and telecommunication fees | 299,666 | 565,466 |
| Royalties and rents | 4,461,880 | 3,867,981 |
| (Net) operational expenses on impairment allowances for current assets |
10,345,500 | 15,493,237 |
| Other expenses, of which: | 28,084,148 | 36,759,492 |
| - (Net) expenses with provisions constituted for other operational | (11,207,334) | (8,071,902) |
| expenses | ||
| - Expenses for OAVT-s according to court rulings | 4,226,609 | 9,419,836 |
| - Tax and charge expensess (ANRE fee, natural monopoly tax, other local taxes and charges) |
13,775,443 | 17,263,022 |
| - Expenses on electricity procured for administrative consumption | 3,415,246 | 962,468 |
| - Expenses on fines and penalties | 1,567,586 | 2,851,306 |
| - Other operational expenses | 16,306,598 | 14,334,762 |
| Total | 107,307,282 | 112,605,568 |
In the period January-September 2022, such expenses decreased by 5,298,286 compared to the period January-September 2021, mainly determined by changes in the following expenses items:
Decrease in some expenses items such as: OAVT expenses, payments made according to enforceable law court rulings (the performance bonus associated to OAVT Certificates granted to former executive and non-executive members and not capitalised, remuneration according to mandate contracts concluded in 2013 – 2017), expenses related to taxes and charges, expenses for fines and penalties from existing disputes etc.;
resuming into revenues provisions made for disputes.
| Quarter III 2022 | Quarter III 2021 | |
|---|---|---|
| Interest revenues | 1,456,997 | 528,776 |
| Revenues from exchange rate differences | 36,731,612 | 1,675,160 |
| Other financial revenues | 83,224 | 3,270 |
| Total financial revenues | 38,271,833 | 2,207,206 |
(All amounts are expressed in LEI, unless otherwise provided)
| (1,400,935) | (1,051,079) |
|---|---|
| (35,257,169) | (2,158,763) |
| (36,658,104) | (3,209,842) |
| 1,613,729 | (1,002,636) |
| 01 January 2022 - 30 September 2022 |
01 January 2021 - 30 September 2021 |
| 1,939,789 | 1,892,562 |
| 39,958,324 2,930,140 |
3,754,236 50,472 |
| 44,828,253 | 5,697,270 |
| (6,322,771) | (3,240,336) |
| (39,608,201) | (5,310,320) |
| (45,930,972) | (8,550,656) |
| (1,102,719) | (2,853,386) |
On 30 September 2022, the Company registered net financial result (loss) amounting to 1,102,719, lower by 1,750,667 compared to the same period of 2021. This was mainly influenced by the interest rates applied during the studied period, but also by the evolution of the exchange rate of the national currency against the foreign currencies in which the Company has contracted bank loans to finance investment plans.
On 30 September 2022, in the total amount of 6,322,771 (interest expense), the amount of 818,714 represents interest calculated on assets related to the rights of use of leased assets - buildings, as required by IFRS 16 – Leasing Contracts.
Other financial revenues mainly represents the execution of the performance security for works contract no. C260/2017 - Modernisation of 110 and 400(220) kV installations in Focșani-Vest substation in the amount of 1,282,950 and the countervalue of dividends received from subsidiaries in the amount of 1,537,971.
The exchange rate of the national currency recorded on 30 September 2022 compared to that recorded on 30 September 2021 was the following:
| Currency | 30.09.2022 | 30.09.2021 |
|---|---|---|
| Lei / Euro | 4.9490 | 4.9471 |
| Lei / US Dollar | 5.0469 | 4.2653 |
The managerial team regularly analyses the ongoing disputes, and after consulting with legal representatives decides the need to create/cancel provisions for the amounts involved or their introduction into financial statements.
Taking into account the existing information the Company's management believes there are no significant ongoing disputes in which the Company is defendant, except for the following ones:
On the docket of Mehedinti Tribunal, Civil Section II, Administrative and Fiscal Disputes Section file no. 3616/101/2014 was recorded, involving the "claims in the amount of 1,090,831.70, value of invoice no. 1300215/31,12,2013", a file in which the Company is defendant and defendant being the Autonomous Authority for Nuclear Activities RAAN.
Civil ruling 127 pronounced on 10 October 2014 by Mehedinti Tribunal admitted the request filed by defendant RAAN and ordered CNTEE Transelectrica SA to pay the amount of 1,090,831.70 Lei, the value of invoice 1300215/31.12.2013.
The Company filed appeal and requested the Law Court to decide in the ruling to be pronounced to admit the appeal as filed, to cancel the decision and sentences appealed against, refer the case to the territorial competent court for judgment, and to ascertain fulfilment of requirements from articles 1616-1617 of the Civil Code, reason for which it was also required to declare the occurrence of mutual debts compensation and their redemption up to the smallest amount among them, namely the total amount requested by the plaintiff in the application for summons, ordering the appeal - plaintiff to pay the expenses made with this appeal.
The appeal was registered on the docket of the High Court of Cassation and Justice that decided to reverse decision 843/2015 and to remand the case for retrial to the same court, the Appeal Court Craiova.
Ruling 124/2017 of the Appeal Court of Craiova admitted the appeal filed by Transelectrica and cancelled sentence 127/2014 pronounced by Mehedinti Tribunal, while the case was referred for retrial to Bucharest Tribunal, Section VI Civil. On the docket of the Bucharest Tribunal the case was registered under no. 40444/3/2017 which by civil ruling 4406/04.12.2017 admitted the request filed by RAAN and ordered Transelectrica to pay the amount of 1,090,831.70 Lei. The sentence was appealed against, The Bucharest Court of Appeal᾽s resolution: it denied the appeal as groundless; final. It was ruled in open court on 13.12.2018.
In 2014-2015, the Company withheld from payment the bonus owed to RAAN under the support scheme based on the provisions of ANRE regulations, namely article 17 para 5 of Order 116/2013 of ANRE President.
Under such circumstances RAAN calculated penalties for late payment of the due cogeneration bonus amounting to 3,496,914, withheld from the payment by the Company on account of non-cashed receivables. The Company refused paying the amount of 3,496,914 and did not register it as liability in the support scheme.
File 9089/101/2013/a152 pertains to contesting the additional Receivables Table against debtor RAAN, the litigated amount being 89,360,986 Lei.
Transelectrica SA was recorded in the table of debtor RAAN with only 11,264,777 Lei, under receivables resulting from continued activities of such debtor but the amount the Company requested was 89,360,986 Lei. The sum of 78,096,209 Lei was not registered in the preliminary receivables table because "it did not appear as owed amount in the accounting books of RAAN". Moreover, the judiciary liquidator considered the request to register the sum of 78,096,209 Lei in the table has been executed late as it pertained to 2011 – 2013, for which reason the receivable statement should have been made when the insolvency procedure had been instituted, namely on 18.09.2013. Contestation of the preliminary Receivables Table was submitted within the legal term and Mehedinti Tribunal admitted the accounting expertise evidence.
On the 14.06.2018 term case judgment was suspended until settlement of file 3014/2/2014 found on the docket of the ICCJ, and on 14.02.2019 Mehedinti Tribunal decided joining file 9089/101/2013/A152 to file 9089/101/2013/a140 (pertaining to claims – payment request). Thus, file judgment was postponed because the court considered it useful for case settlement to submit Civil ruling 2969/26.09.2018, pronounced by the High Court of Cassation and Justice under file 3014/2/2014, with respect to cancelling decision 743/2014 of ANRE President.
The settlement of Mehedinti Tribunal by Ruling 163 / 20.06.2019 was: It admitted the exception of decline. It partly admitted the main issue and associated contestation. It compelled defendant RAAN to pay to claimant Transelectrica the amount of 16,950,117.14 Lei accrued during the procedure, judging to record it in the creditors' table constituted against debtor RAAN. The other associated demands were denied. In accordance with article 453 para 2 from the Civil Procedural Code it compelled the defendant to pay 1000 Lei law court expenses to the claimant. Appeal right was granted. It was pronounced on 20.06.2019 at public hearing, Document: Ruling 163/20.06.2019.
Transelectrica appealed within the legal time limit. On the 06.11.2019 term the Appeal Court Craiova decided rejecting Transelectrica's appeal as groundless; final, Ruling 846/06.11.2019.
Transelectrica filed review request for contradictory rulings, registered under file 1711/54/2019 with hearing term on 25.03.2020 in the Appeal Court Craiova, which will refer the file to the High Court of Cassation and Justice for competent settlement.
On 26.03.2020 the hearing term was changed and the next one was set on 21.05.2020.
On 21.05.2020 the case was taken out of the docket with the following settlement: the exception of material incompetence of the Appeal Court Craiova was admitted and the decision was taken to refer the case to ICCJ, Administrative and Fiscal Disputes Section; Ruling 140/21.05.2020; term 03.02.2021.
On the 03.02.2021 hearing term ICCJ admitted the exception of tardive review request and did not pronounce on its inadmissibility.
There are four more files between RAAN and Transelectrica found under various judgment stages.
Under RAAN's bankruptcy file registered under number 9089/101/2013 Mehedinti Tribunal deferred the case on the terms 08.10.2020 and 04.02.2021, Settlement in brief: term was granted to continue the liquidation procedures, to represent the debtor's interests in the disputes found on the docket of law courts; to consolidate the creditors' table, to continue measures in view of recovering receivables and further public bids in order to capitalise the debtor's assets.
On the 14.10.2021 term the case was deferred and the settlement in brief was: "it granted term to continue the procedure, namely to capitalise the assets and carry out the other liquidation activities".
The case the case was deferred to 10.02.2022, the summary decision being: 'for the conduct of the proceedings, i.e. the recovery of assets, the collection of claims and the performance of other liquidation operations. The parties will be summoned by the BPI" and the next hearing is set for 02.06.2022.
At the 02.06.2022 hearing, a term is granted for the continuation of the proceedings, i.e. for the valuation of the assets, the collection of claims and the completion of the other liquidation operations and the next term is set for 06.10.2022.
At the 06.10.2022 hearing, a term is granted for the continuation of the proceedings, i.e. for the valuation of the assets, the collection of claims and the completion of the other liquidation operations and the next term is set for 09.02.2023.
Following an inspection performed in 2013, the Court of Audit issued several measures to be implemented by the Company as a result of some deficits, which were detected upon such control, The decision and protocol issued by the Court of Audit were appealed against before the Appeal Court of Bucharest and file 1658/2/2014 was constituted, pertaining to "cancellation of control deeds" – Conclusion 7/20,02,2014 issued by the Court of Audit.
On 13.06.2018 the claimant's suit was partly admitted, It cancelled a part of conclusion 7/20.02.2014, decision 37/9.12.2013 and the audit report 35521/6.11.2012 issued by the defendant with respect to the measures in the above decision indicated in points I.1, I.3, I.6, I.8, I.11, II.14, II.15, II.17, II.18, II.20, II.21, II.22 and partially the measure of pt. II.13, meaning to remove the phrase "including what has been found about the invoices issued by Florea Administrare Imobiliara SRL". The court rejected the remainder of the claimant's request as groundless. It standardised the electric power expertise report executed for this case by expert Toaxen Vasile. It compelled the defendant to pay 121,375 Lei law suit expenses to the claimant (partially expert fees and judiciary stamp tax), Document: Ruling 2771/13.06.2018.
At the High Court of Cassation and Justice, case number 1658/2/2014 became case number 2985/1/2021, The term for the hearing is 24.11.2022.
As result of an audit conducted in 2017 the Court of Audit issued certain measures to be implemented by the Company as it ascertained certain deficits, CNTEE Transelectrica SA filed 8 contestations against the measures decided by Romania's Court of Audit (CCR) by Decision 8/27.06.2017, requesting their cancellation as well as cancelling the Conclusion 77/03.08.2017, registered in the Company under number 29117/08.08.2017, and the Audit Report 19211/26.05.2017. Contestations are under settlement - on the docket of the Bucharest Court of Appeal (2 files: 6576/2/2017 pertaining to cancelling the findings regarding item 13, and the measure decided in item II.13, term: 20.01.2021, settlement: the exceptions of inadmissibility claimed in the summons were rejected; the request was rejected as groundless - Transelectrica filed a second appeal on 19.11.2021, and casefile no. 6581/2/2017 on cancelling the findings from item 6, and the measure
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
decided in item II.9, hearing term on 17.09.2021); on the docket of the High Court of Cassation and Justice (4 files: 6577/2/2017 on cancelling the findings from item 13, and the measure decided in item II.13, which became file 1614/1/2020, hearing term set on 27.01.2022, dismissing the appeal filed by the claimant, Compania Națională de Transport al Energiei Electrice Transelectrica S,A,, against Ruling no, 2678 of 30 December 2019 of the Bucharest Court of Appeal - Administrative and Fiscal Disputes Section VIII, delivered in Case no. 6577/2/2017, as groundless. Final, Case no. 6578/2/2017, on cancelling the findings s in paragraph 9, as well as the measure ordered in paragraph II.11, hearing date 28.06.2022, dismissing, as untimely filed, the appeal filed by the claimant Compania Națională de Transport al Energiei Electrice Transelectrica S,A, against the civil ruling no. 1566 of 23 April 2019, delivered by the Bucharest Court of Appeal - Administrative and Fiscal Disputes Section VIII, regarding the decision ordered on the, Dismisses the appeal brought by the claimant Compania Națională de Transport de Energiei Electrice Transelectrica S,A, against the same ruling, as regards the decision on the cancellation request, as groundless. Final, case no. 6574/2/2017 on cancelling the findings in paragraph 5,2, as well as the measure ordered in paragraph II.8, hearing date 19.10.2021- Dismisses the appeals filed by the recurrentclaimant Compania Națională de Transport de Energiei Electrice Transelectrica S,A, against Civil Ruling no. 1074 of 8 March 2018 and the Hearing conclusion of 11 January 2018, pronounced by the Bucharest Court of Appeal - VIII Administrative and Fiscal Disputes Section, as groundless. Three files were settled for good by cancellation request rejected by the Bucharest Court of Appeal and appeals denied by the High Court of Cassation and Justice (file 6583/2/2017 on cancelling the findings from item 5.1, and the measure decided in items II.7 and II.8 and file 6582/2/2017 on cancelling the findings from item 11, and the measure decided in item I.5; file 6580/2/2017 on cancelling the findings from item 10, and the measure decided in item II.12).
In January-July 2020 Romania's Court of Audit was in control in all Territorial Transmission Units of CNTEE Transelectrica, and in 25.05 – 27.08.2020 such audit continued in the Company's executive branch. CCR's audited issue was "control on the circumstances, development and administration of the state's public and private domains, and the legality of revenues achieved and expenses made in 2017-2019" in CNTEE Transelectrica SA.
The audit on the above-mentioned topic began 25.05.2020 in the Company's executive offices and was suspended by CCR because it started another audit pertaining to "control on the management of public resources during the emergency state". It began on 02.06.2020 and was completed on 26.06.2020.
The audit report elaborated by CCR auditors about the "control on the management of public resources during the emergency state", registered in the Company under no. 24225/26.06.2020 did not find deficiencies therefore no Decision was issued to provide measures to be taken.
When the audit on the administration of the state's public and private domains and on the legality of revenues achieved and expenses made in 2017-2019 has been completed on 06.10.2020 Audit Report 40507/06.10.2020 was issued, and on 09.11.2020 Romania's Court of Audit issued Decision 15 by Department IV, which decision contained 10 measures with completion term on 31.05.2021, but CCR upon Company request extended such term until 31.12.2021.
The Company filed objections and submitted Contestation 50090/26.11.2020, registered by the Court of Audit under no. 139775/26.11.2020, and requested it to cancel the measures. CCR's auditors examined and studied the Contestation submitted by the Company and Conclusion 2 of 10.03.2021 admitted cancelling only one measure of the 10 required.
On 02.04.2021, the Company filed an appeal for the cancelation of the administrative act, file registered at the Bucharest Court of Appeal under no. 2153/2/2021. On the 10.12.2021 hearing, the CAB rejects the summon filed by the claimant COMPANIA NAȚIONALĂ DE TRANSPORT AL ENERGIEI ELECTRICE "Transelectrica" SA against the defendant ROMANIAN COURT OF AUDIT, as groundless. Dismisses the suspension request as groundless. With a right of appeal within 15 days of communication and with a right of appeal within 5 days of communication in respect of the head of claim concerning the suspension; the application for appeal to be filed with the Bucharest Court of Appeal.
CNTEE Transelectrica SA filed complaint against Order 51/26.06.2014 of ANRE President, registered with ANRE under no. 47714/4,08,2014, and an appeal before the Appeal Court of Bucharest under file 4921/2/2014, requesting either the amendment of the aforementioned Order or the issuance of a new one, which should recalculate the RRR value at the level of 9.87% (recalculated with a (β) coefficient of 1.0359, according to the internal analyses conducted by Transelectrica) or, should this complaint be rejected, using the same percentage of 8.52% set by ANRE for 2013 and in the first semester of 2014.
On 26.06.2014 ANRE Order 51 was issued and published in the Official Gazette 474/27.06.2014 regarding approval of the average tariff for transmission services, the system service tariffs and zone tariffs for transmission services charged by the National Power Grid Company Transelectrica SA and cancelled annex 1 to Order 96/2013 of ANRE President approving the average tariff for transmission services, the system service tariffs and zone tariffs for transmission services and the tariffs for reactive electricity charged by economic operators of the electricity sector. The values taken for the calculation of the regulated rate of return (RRR) by ANRE according to the Methodology establishing the tariffs of electricity transmission services approved by ANRE Order 53/ 2013 ("Methodology") determined the RRR at 7.7%,
On the 27.03.2018 term the expert fee placed on the claimant's behalf was paid and a letter will be sent to the expert in order to execute the entrusted expertise report and submit it to the file.
On 25.09.2018 the settlement in brief was to resume the letter to the expert with a view to make the expertise report and submit it to the file, in order to prove it is impossible to submit the expertise report by the hearing term, in which respect it decided postponing the case.
At the hearing term on 22.01.2019 the court agreed in principle the accessory intervention request to the defendant's interest (ANRE), expressed by intervenient ALRO SA, appeal granted with the principal issue. On 25.06.2019 the decision was taken to postpone the case to enable the parties to get acquainted with the content of the expertise report and a new hearing term was set.
On the 10.09.2019 term taking into account the request of the claimant's representative to get acquainted with the content of objections filed by the intervenient and to be able to answer them, considering also the claimant has equally submitted meeting notices accompanied by writs requiring translation, it admitted the case postponement request and decided setting a new hearing term.
On the 03.12.2019 term the decision was to postpone the case and set a new hearing term in order to resend letter to the expert to submit his answers to the objections made to the file, mention should be made he was to appear in court at the next hearing term. It will draw the expert's attention to submit a copy of his answer to objections to each party before the next hearing term.
At the following term on 12.05.2020 the file was suspended during the entire emergency state.
On 23.06.2020 the case was deferred to enable the parties to get acquainted with the answer to objections. Also, on the 21.07.2020 hearing term the case was deferred and the ruling decided to send a letter to the expert to show up in court.
On 06.10.2020 the request was denied with the following settlement in brief: the exception of inadmissibility was admitted as groundless. The suit was rejected as groundless. Appeal right granted within 15 days from notification. It was pronounced by placing the settlement at the parties' disposal by means of the court clerk; Ruling 362/2020.
On 16.11.2020 the case was deferred; settlement in brief: In accordance with article 230 Cpc it changed ex officio the hearing term established on 17.11.2020 to 11.01.2021. It decided quoting the parties by copy from the term changing conclusion; appeal right together with the substance issue.
On 11.01.2021 settlement in brief was: It admitted the request to complete the device. It decided completing the device of civil sentence 362/06.10.2020 with the settlement on the accessory intervention, meaning that: It admitted the accessory intervention request filed by intervenient ALRO SA to support defendant ANRE. Appeal right was granted within 15 days from notification, to be submitted to the Appeal Court Bucharest. It was pronounced on 11.01.2021 by placing the settlement at the parties' disposal by means of the court clerk.
CNTEE Transelectrica filed an appeal on 06.08.2021.
Hearing term at ICCJ:11.05.2022.
The appeal brought by the recurent-claimant Compania Națională de Transport al Energiei Electrice Transelectrica SA against ruling no. 362 of 6 October 2020, delivered by the Bucharest Court of Appeal - Administrative and Fiscal Disputes Section VIII, is dismissed as groundless, Definitive, Delivered in open court today, 25 May 2022.
Mention should be made this dispute has not impacted the relationship with ANRE or the Company's financial results.
The Bucharest Court has registered the case no. 22567/3/2019, which has as subject matter "claims", a case in which the Company is the claimant, the defendant being OPCOM SA.
By its summon, the claimant CNTEE Transelectrica SA requested the court to order in its ruling:
Compel the defendant OPCOM SA to pay the amount of 4,517,460 lei, relating to invoice number TEL 16 AAA No 19533/29.07.2016, representing the VAT equivalent of the contribution made by CNTEE Transelectrica SA to the share capital of OPCOM SA, issued on the basis of Loan Agreement No 7181RO/2003, a commitment to finance the investment project 'Electricity Market Project';
Compel the defendant OPCOM SA to pay the amount of RON 1,293,778.27 relating to invoices TEL 19 T00 No 17/28.01.2019 and TEL 19 T00 No 131/10.07.2019, representing the statutory penalty interest calculated for non-payment on time of the invoice series TEL 16 AAA No 19533/29.07.2016.
Compel the defendant OPCOM SA to pay the costs.
On the hearing of 03.07.2020, the court discussed the suspension request in case no. 22567/3/2019, made by OPCOM, and the case remained pending.
At the hearing of 17.07.2020, the court issued the following summary decision: suspends the case until the final resolution of the case no. 31001/3/2017, concerning the action for annulment of the Opcom AGM decision (to which Transelectrica is not a party and in which on 01.02.2021 the appeals filed were dismissed, the decision being final). With appeal for the entire period of suspension. Pronounced by making the decision available to the parties through the court registry today, 17.07.2020. Document: Order - Suspension 17.07.2020.
After the final settlement of case no. 31001/3/2017, CNTEE Transelectrica SA filed a request to reopen case no. 22567/3/2019, as the reason for the suspension of the case no longer existed. The Bucharest Court has resumed the case, setting a hearing date of 05.11.2021.
At that hearing, following the appeal, the court gave the parties the floor on the 'plea of limitation of the substantive right of action'. After the oral submissions of the parties on this objection, the court postponed the ruling and adjourned the hearing until 3 December 2021.
On 03.12.2021, the Bucharest Court of Justice rendered the following settlement in brief: "Admit the exception of the limitation of the substantive right of action, Dismisses the action as time-barred, With the right to appeal within 30 days from the date of communication, to be submitted to the Bucharest Court, Civil Section VI, Pronounced by making the decision available to the parties through the court registry, today, 03.12.2021, Document: Ruling 3021/2021 03.12.2021".
The court dismisses the appeal as groundless. Orders the recurrent to pay the defendant, the sum of 11,325.21 lei by way of law suit expenses. With appeal within 30 days from the communication of the decision. Delivered today, 12 October 2022, by making the decision available to the parties through the court registry: Ruling 1532/12.10.2022.
The Bucharest Court of Justice is hearing case no. 24242/3/2021, in which OPCOM SA is the claimant and CNTEE Transelectrica SA is the defendant.
This case concerns the nullity of the act - contribution in kind, materialized by intangible assets, trading platform - Commercial Exchange and Regional Electricity Exchange, financed by loans contracted by CNTEE Transelectrica SA from the BIRD, based on loan contract no. 7181RO/17.07.2003, and from CNTEE Transelectrica SA's own sources, which were carried out on the basis of service and deliverable contracts no,: P081406-O-C,78, P081406-O-C,125 and P081406-O-C,300/2005, materialized by AGEA Resolution no. 6/15.06.2016 and, subsequently, AGOA Resolution no. 2/25.05.2017 and AGOA Resolution no. 7/24.05.2018.
On the 11.04.2022 hearing, the court discussed the objections raised by CNTEE Transelectrica SA in its statement of defence. The evidence proposed to be taken in this case was also discussed in this hearing. The Court adjourned the case to the term set for 22.11.2022, in order to administer the evidence of the financial-accounting expert's report to be carried out in this case.
In 2013 Conaid Company SRL sued CNTEE for its unjustified refusal to sign an addendum to the connection contract or a new connection contract and requested compensations for the expenses incurred up to that date amounting to 17,419,508 Lei and for unrealised profits in 2013-2033 amounting to 722,756,000 EUR. To date the Company has not concluded an
addendum to the connection contract because the suspensive terms included in the contract were not complied with by Conaid Company SRL. A new connection contract should have been concluded by 11 March 2014, expiry date of the technical connection endorsement, File 5302/2/2013 was found on the docket of the High Court of Cassation and Justice, Section of Administrative and Fiscal Disputes, and pertained to an obligation to issue anadministrative deed; law court stage – appeal and hearing term on 09.12.2015. On this term the High Court of Cassation and Justice admitted in principle the appeals and set a hearing term of such appeals, for the main issue, on 08 April 2016. Panel 4 was entrusted to summon the parties.
Case judgement was deferred to 17.06.2016, when the court postponed pronouncement to 29.06.2016, when it pronounced Ruling 2148/2016 whereby it decided as follows: "It denies the exceptions invoked by the recurrent-claimant SC Conaid Company SRL by means of the judiciary administrator RVA Insolvency Specialists SPRL and by the recurrent-defendant the National Power Grid Company Transelectrica SA. It admits the appeal filed by the defendant National Power Grid Company Transelectrica SA against the hearing conclusion of 18 February 2014 and civil ruling 1866 of 11 June 2014 pronounced by the Appeal Court Bucharest, Section VIII of Administrative and Fiscal Disputes. It cancels the contested conclusion and partly the ruling and refers the case to Bucharest Tribunal, Section VI Civil to settle the claimant's case in contradiction with the National Power Grid Company Transelectrica SA. It maintains the other ruling provisions as regards the claimant's suit against the National Regulatory Authority in the Energy domain. It denies the appeals filed by claimant SC Conaid Company SRL by means of the judiciary administrator RVA Insolvency Specialists SPRL and by the intervenient SC Duro Felguera SA against civil ruling 1866 of 11 June 2014, pronounced by the Appeal Court Bucharest, Section VIII of Administrative and Fiscal Disputes. It denies the appeal filed by the defendant National Power Grid Company Transelectrica SA against the hearing conclusion of 25 March 2014, pronounced by the Appeal Court Bucharest, Section VIII of Administrative and Fiscal Disputes; final". It was pronounced at public hearing on 29 June 2016.
The file was registered under no. 12107/3/2017 on the docket of Bucharest Tribunal. The Tribunal's civil sentence 4364/23.11.2017 admitted the exception of inadmissibility and denied the request as inadmissible. It also denied the intervention request on the claimant's behalf. Appeal right granted within 30 days from notification. The appeal was filed to the Appeal Court Bucharest, Section VI Civil and the court clerk office notified it on 23.11.2017.
On 02.11.2018, on the docket of Bucharest Tribunal, Section VI Civil new summons were filed by Conaid Company SRL under file 36755/3/2018, by which the claimant requested the court to compel Transelectrica SA to "repair the prejudice caused to the claimant as a result of the defendant's culpable non-execution of obligations in quantum of 17,216,093.43 Lei, consisting of actual damage incurred and unrealised benefit, provisionally estimated at 100,000 Euro "taking into account the unjustified refusal of Transelectrica SA to conclude and sign an addendum to Contract C154/27.04.2012, and in case the instance deem in formal terms the claimant's obligation of suspensive terms cannot be considered as fulfilled, such nonexecution is owed to the exclusive guilt of Transelectrica SA, as the defendant prevented the compliance with the terms".
On the 15.10.2019 term it denied as groundless the exceptions of absence of active processual capacity and absence of interest. It joined the exception of prescription to the main issue; appeal right on the same date with the main issue. It was pronounced by placing the settlement to the parties' disposal by means of the court clerk.
It established the term on 26.11.2019 to continue investigating the case and summon the parties; appeal right on the same date with the main issue. It was pronounced by placing the settlement to the parties' disposal by means of the court clerk.
It was deferred in order to bring the expertise evidence and a new term was established on 21.01.2020.
On 21.01.2020 the case was deferred provide the expertise and the next term was established on 31.03.2020.
On the 31.03.2020 term the settlement in brief was: Lawfully suspended according to article 42 para 6 from the Decree 195/2020 of Romania᾽s president instituting the emergency state on Romanian territory, during the entire emergency period.
After several deferrals, the next hearing term is set for 28.09.2022 for the expert evidence. On 28.09.2022, the case was deferred for lack of reply to the objections and the next hearing term is on 07.12.2022.
File 2088/107/2016 on the docket of Alba Tribunal pertained to "Bankruptcy & request to be admitted in the creditors' list". Transelectrica filed request to be recorded in the creditors' list with 16,112,165.18 mill Lei, and the receivable was admitted and registered in the preliminary table.
Settlement in brief: It established the term on 14.10.2019 to continuae the bankruptcy procedure by capitalising the assets and recovering the receivables. The judiciary liquidator was to execute and submit to the file: - every 15th day of the month the monthly activity reports of the preceding month as provided in para 1 of article 59 from Law 85/2014; - 5 days before the verification term the synthetic report of 120 days, provided in the final part of para 3 of article 59, Law 85/2014.
On the 27.01.2020 term the verification was established on 11.05.2020 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables. The judiciary liquidator was to execute and submit to the file: - every 15th day of the month the monthly activity reports of the preceding month as provided in para 1 of article 59 from Law 85/2014; - 5 days before the verification term the synthetic report of 120 days, provided in the final part of para 3 of article 59, Law 85/2014.
On 11.05.2020 judgment was lawfully suspended during the emergency state instituted in Romania.
On the 22.06.2020 term the case was deferred; settlement in brief: the report was admitted about the funds obtained from liquidating the debtor's assets and the distribution plan of 03.06.2020.
On the 05.10.2020 term the case was deferred; settlement in brief: term was established on 18.01.2021 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
On the 18.01.2021 term the case was deferred; settlement in brief: Report 1334 was approved about the funds obtained from liquidating the debtor's assets and Plan 1335 for funds distribution.
On the 27.09.2021 term a new hearing term was set on 31.01.2022 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
On the 27.09.2021 term a new hearing term was set on 31.01.2022 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
On the 31.01.2022 term, a new hearing term was set on 16.05.2022 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
On the 16.05.2022 term, a new hearing term was set on 19.09.2022, to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
On the 19.09.2022 term, a new hearing term was set on 12.12.2022 to continue the bankruptcy procedure by capitalising the assets and recovering the receivables.
File 2494/115/2018* registered on the docket of Caras Severin Tribunal pertains to summons whereby the claimant Resita City requests compelling defendant Transelectrica SA to pay the following amounts:
2,129,765.86 lei, representing rent for the land temporarily taken up from the forest fund in 2015;
2,129,765.86 lei, representing the land rent for 2016;
Settlement in brief: It admitted the exception of territorial incompetence for Caras Severin Tribunal. It declined the settlement competence of the request filed by claimant Resita City through the mayor in contradiction with defendant CNTEE Transelectrica SA in favour of Bucharest Tribunal. No appeal according to article 132 para 3 Civil Procedural Code. It was pronounced at public hearing on 11 March 2019, Document: Ruling 313/11.03.2019.
On the hearing term of 25.10.2019 the exception is admitted of territorial incompetence of Bucharest Tribunal. It declined the settlement competence of this case in favour of Caras-Severin Tribunal. It ascertains the occurrence of a negative competence conflict between Bucharest Tribunal and Caras-Severin Tribunal. It suspended the case and referred the file to the High Court of Cassation and Justice, in order to settle the negative competence conflict. No appeal was granted;
pronouncement will take place by placing the settlement at the parties' disposal through the court clerk; Ruling 2376/25.10.2019.
On the 16.07.2020 term the High Court of Cassation and Justice issued ruling 1578 and established the case settlement competence in favour of Caras Severin Tribunal, Section I civil.
At the term on 16.11.2020 the court deferred the case and granted time to study the writs submitted on this hearing term to the case file by the representative person of CNTEE Transelectrica SA, setting a new term on 22.03.2021.
On the 22.03.2021 term settlement in brief: It suspended judging the summons filed by claimant Resita City through the Mayor in contradiction with the defendant National Power Grid Company Transelectrica SA pertaining to claims, according to article 413 para (1) pt, 1 Civil Procedural Code, Appeal granted during the entire judgment suspension, to the higher instance.
The case was suspended until the final decision in case no. 3154/115/2018* of the Court of Caras Severin.
In 2017 a general fiscal audit was completed that had started in Transelectrica SA on 14.12.2011, control targeting the interval December 2005 – December 2010.
The general fiscal audit began on 14.12.2011 and ended on 26.06.2017, date of the final discussion with Transelectrica SA. When the audit has ended ANAF – DGAMC established additional fiscal obligations payable by the Company, namely income tax and VAT, as well as accessory fiscal liabilities (interest/delay indexations and penalties) with respect to technological system services (STS) invoiced by energy suppliers, considered non-deductible after the fiscal audit.
In accordance with the taxation decision F-MC 439/30.06.2017 in total sum of 99,013,399 Lei, ANAF – DGAMC established additional fiscal liabilities payable by the Company, amounting to 35,105,092 Lei, as well as accessory fiscal ones (interest/delay indexations and penalties), amounting to 63,908,307 Lei.
ANAF's Tax inspection report mainly records the following additional payment liabilities: corporate tax amounting to 13,726,800 plus accessories, owed for a number of 123 unused invoices identified as missing (they were destroyed in the fire that broke out the night of 26-27 June 2009, at the business office in the Millennium Business Centre from 2-4, Armand Calinescu Street, Bucharest 2, where the company carried out its activity), documents under special regime.
These invoices were subject to a dispute with ANAF, the latter sending a tax inspection report on 20 September 2011 which estimated the amount of collected VAT for a number of 123 unused invoices identified as missing.
The Company filed contestation against Taxation Decision F-MC 439/30.06.2017 within the legal term according to OG 92/2003 on the Civil Procedural Code.
ANAF issued the enforcement title 13540/22.08.2017 based on which the additional payment liabilities were executed as established under the Taxation Decision F-MC 439/30.06.2017.
The Company requested cancellation of the enforcement title 13540/22.08.2017 from the Appeal Court, under file 7141/2/2017. Settlement in brief: it admitted the exception of material incompetence of the Appeal Court Bucharest, SCAF. It declined the material competence of case settlement in favour of Law Court of Bucharest 1; no appeal granted. It was pronounced at public hearing on 08,02,2018, Document: Ruling 478/2018 of 08.02.2018.
After such declination of competence file 8993/299/2018 was registered on the docket of Law Court of Bucharest 1 whereby the Company contested the enforcement performed according to the enforcement title 13540/22.08.2017, based on the Taxation Decision F-MC 439/30.06.2017.
After the Company's contestation of the fiscal administrative deed Decision F-MC 439/30.06.2017 ANAF notified the Company Decision 122/13.03.2018 whereby it rejected as groundless the contestation filed by CNTEE Transelectrica SA, such decision being received on 16.03.2018, after submitting the summons under file 1802/2/2018.
Settlement in brief: It admitted the judgment suspension request filed by the contester, In accordance with article 413 para (1) pt, 1 of the Civil Procedural Code it suspended judgment until final settlement of file 1802/2/2018, on the docket of the Appeal Court Bucharest, Section VIII Administrative and Fiscal Disputes. Appeal right was granted during the entire suspension; appeal to be submitted to the Law Court Bucharest 1. It was ruled in open court, Document: Conclusion - Suspension 17.04.2018.
File 1802/2/2018 is on the Appeal Court docket whereby the Company contested the administrative fiscal Decision F-MC 439/30.06.2017.
On the 06.11.2018 session term the court admitted the administration of the expertise evidence, in the accounting - fiscal specific domain, Hearing scheduled for: 12.05.2020.
At CAB's hearing term on 21.07.2020 pronouncement was deferred.
On 30.07.2020 the case was resumed on the docket for additional explanations.
At the 20.10.2020 term it admitted in part the request with the following settlement in brief: the suspended requests were partly admitted. Ruling 122/13.03.2018 was partly cancelled with respect to settling the contestation filed against the Taxation Decision F-MC 439/30.06.2017 issued by the National Agency of Fiscal Administration, General Directorate Settling Contestations; Taxation Decision F-MC 439/30.06.2017 issued on 12.07.2017 issued by the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers; Taxation Decision F-MC 439/30.06.2017 issued by the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers, and the Fiscal Inspection Report F-MC 222 concluded on 30.06.2017, which were used as grounds in issuing the taxation decision, meaning that: - it removed the obligation to pay the profit tax amounting to 18,522,280 Lei, the VAT amounting to 5,694,636 Lei and fiscal accessories pertaining to such main fiscal debits in quantum of 48,436,653 Lei, and the fiscal liabilities established for the 349 fiscal invoices of special regime found as missing from the claimant᾽s management; - it cancelled the non-deductible nature of 27,001,727 Lei in the calculation of taxable income, which represent system technological services invoiced by electricity suppliers, considered as non-deductible after the fiscal audit, and it compelled payment of the main fiscal liabilities and accessories associated to such amount; - it cancelled the non-deductible nature of 343,629,91 Lei in the calculation of taxable income, representing "services for weeds removal" and it compelled payment of main fiscal receivables and accessories related to such amount; - it cancelled the non-deductible nature of 230,685,491 Lei in the calculation of taxable income, representing expenses with promotional and protocol products and the payment liability of main fiscal receivables related to such amount; - it cancelled the non-deductible nature of VAT in quantum of 46,417,1 Lei associated to 343,629,91 Lei representing "weeds removal services" and the payment liability of main fiscal receivables related to such amount; - it cancelled the non-deductible nature of VAT in quantum of 37,693,88 associated to 230,685,49 Lei, representing expenses with promotional and protocol products and the payment liability of main fiscal receivables and accessories related to such amount; - it cancelled the mention regarding the obligation of the Transmission Branch Sibiu within CNTEE Transelectrica SA to register 576,846,80 Lei as taxable revenue on 30,06,2010 at the latest, date when the verified unit was accepted to be recorded in the creditors᾽ table by such amount, mention regarding the nature of taxable revenue when calculating the profit for 576,846,80 in accordance with the provisions of article 19 para 1 from Law 571/2003 on the Fiscal Code, with later amendments and additions, corroborated with pt, 23 let, d of HG 44/2004 including the Methodological Norms to apply Law 571/2003; the chapter regarding the income tax, namely Chapter VII Accounts operation of Order 3055 / 29 October 2009 approving the Accounting Regulations complying with European directives and the payment liability of main fiscal receivables and accessories related to such amount; - in the Minutes it cancelled the ascertainment with respect to "determining the deductible value added tax to a lower value than that registered by the claimant, thus resulting a difference in sum of 13,141 Lei" (annex 15), and the payment liability of main fiscal receivables and accessories related to such amount; - it cancelled the payment liability of delay penalties which have a sanctioning juridical regime, calculated for more than 6 months from the beginning date of fiscal inspection with respect to the main fiscal liabilities maintained by the law court in this ruling, as established by Taxation Decision F-MC 439/30.06.2017 issued on 12.07.2017 by the the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers, Taxation Decision F-MC 439/30/06/2017 issued by the the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers and Decision 122/13.03.2018 on settling the contestation filed against the Taxation Decision F-MC 439/30,06,2017 issued by the National Agency of Fiscal Administration, General Directorate Settling Contestations. It maintained the other provisions of Decision 122/13.03.2018 on settling the contestation filed against the Taxation Decision F-MC 439/30.06.2017 issued on 12.07.2017 by the the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers and Taxation Decision F-MC 439/30.06.2017 issued by the the National Agency of Fiscal Administration, General Directorate Managing Large Tax Payers. It denied the other suspended requests as groundless. It denited as groundless the request to grant law court expenses consisting of the stamp judiciary fee. It compelled the defendants to jointly pay the claimant the law court expenses amounting to 4,000 Lei, representing fee for the execution of accounting-fiscality expertise, proportional to the request admittance. Appeal right granted within 15 days from communication, to be submitted to the Appeal Court Bucharest, Ruling 382/20.10.2020.
On 12.04.2022, the Bucharest Court of Appeal deferrs the case to 10.05.2022, in order to give the claimant the opportunity to take cognizance of the content of the statement of defence.
At the hearing of 24.05.2022, CAB rejects as groundless the application for clarification and supplementing of the operative part. The application for rectification of the material error is granted in so far as it states that the amounts of money in respect of the 349 tax invoices, as set out in the contested tax decision, are to be stated to be correct by way of principal and ancillary tax liabilities. Orders that the material error be corrected by removing the incorrect name of the applicant from the contested ruling. Appeal within 15 days of notification.
The parties appealed. The case is in the filter procedure at the ICCJ.
Case No. 17976/3/2021, registered on the Bucharest Law Court, concerns the application of summons, by which the claimant Grand Voltage requests that the defendant CNTEE Transelectrica SA be compeled to pay compensation for the damage caused to the undersigned in the amount of EUR 6,125,822.13 lei as a result of the culpable non-fulfilment of the obligations related to the Works Contract no. C 111/23,05,2018 concerning the "Connection of the 100kV Isaccea -Varna LEA and the 400 kV Isaccea-Dobrujda LEA in the 400 kV Medgidia Sud Station Stage II-LEA 400kV d.c. Connections Medgidia Sud Station".
Hearing term: 09.05.2022 - expert report missing.
At the hearing on 23.05.2022, the decision in brief: rejects the defendant's application for the removal of expert Pavel Violeta as groundless. With appeal together with the merits. Delivered by making the decision available to the parties through the court registry today, 23.05.2022.
At the hearing on 25.07.2022, TB dismisses the action as groundless. With right of appeal within 10 days of communication. The request for appeal shall be submitted to the Bucharest Law Court - Section VI, under penalty of nullity. Pronounced by making the decision available to the parties through the court registry today, 25.07.2022, Document: Decision 1812/2022 25.07.2022.
The Company is involved in significant disputes specially to recover trade receivables (e.g.: Next Energy Partners, Petprod SRL, Total Electric Oltenia SA, Regia Autonomă de Activități Nucleare, Romenergy Industry SRL, Energy Holding SRL, UGM Energy Trading SRL, CET Iasi, CET Bacău, CET Govora, CET Brasov, Elsaco Energy SRL, Arelco Power SRL, Arelco Energy SRL, Menarom PEC SA Galati and others).
At the same time the Company is involved in disputes with former members of the Management and Supervisory Boards regarding the mandate contracts concluded between them and the Company, The Company has made provision for these disputes.
As at 30 September 2022, contingent liabilities amount to 36,303,031 lei. These relate to disputes concerning claims for additional costs following the increase in the minimum wage in the construction sector for investment contracts.
File No 20780/3/2020 - claimant ENERGOMONTAJ SA (7,092,389)
The subject-matter of the case is claims for additional costs relating to the increase in the minimum wage in the construction sector and an order to conclude an addendum to contract C54/2018.
The subject of contract C54/2018 is the investment project - Refurbishment of 220/110 kV Craiova Nord station.
After several postponements of the hearings due to the absence of the expert report, the next term was set for 20.04.2022.
At the hearing of 20.04.2022, the TMB admits the request for annulment of the forensic expert's report made by the claimant ELECTROMONTAJ SA, It orders the annulment of the forensic technical expertise report, specialising in
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accounting, drawn up by Mrs OPRESCU RUXANDRA and the carrying out of a new expertise with objectives:
determine the additional costs incurred by the claimant ELECTROMONTAJ SA as a result of the increase in the minimum wage in the construction sector to the amount of 3,000 lei/month for work carried out under works contract No C54 of 27.02.2018 for the period from January 2019 to January 2021;
to determine the additional costs arising from the increase in the minimum wage in the construction sector to the amount of 3,000 lei/month for the work to be carried out under works contract No C54 of 27.02.2018, from February 2021 until completion of the work.
The hearing term is set for 15.09.2022.
On 15.09.2022, the Bucharest Court of Appeal deferrs the case to 24.11.2022, the solution: due to the lack of expert report.
The case concerns claims for additional costs related to the increase of the minimum wage in the construction sector for the investment contract C229/2015 - Switching to 400 kV voltage of the Portile de Fier - Resita - Timisoara - Sacalaz - Arad /LEA 400 kV Portile de Fier (Anina) - Reșița axis.
Hearing term: 25.08.2022 - submission of expert report.
At the hearing on 25.08.2022, ruling was deferred until 13.09.2022. On 13.09.2022, the TMB rejects the objections to the expert's report in the field of accounting submitted by the defendant as groundless, Admit the objections to the expert's report in the field of accounting submitted by the applicant. An address will be issued to the expert Cojocaru Mihaela with the mention to reply to the objections and to file the reply. With appeal against the merits. Hearing term: 08.11.2022.
File No 27001/3/2021 - Claimant Romelectro (3,523,710)
The case concerns claims for additional costs related to the increase of the minimum wage in the construction sector for the investment contract C264/2017 - Modernisation of the 110 kV Bacău Sud and Roman Nord stations on the 400 kV Moldova axis.
At the hearing term of 09.09.2022, another date is set for 16.12.2022 to continue the hearings.
Case No 22368/3/2021 - Claimant Romelectro (2,275,653)
The case concerns claims for additional costs related to the increase of the minimum wage in the construction sector for the investment contract C260/2017 - Modernisation of 110 and 400(220) kV installations in Focșani West station. At the hearing on 24 June 2022, dismisses the application as groundless, With appeal within 10 days of service. The application for appeal shall be lodged with the Bucharest Court - Civil Section VI, The ruling is not drafted.
File No 30801/3/2021 - Claimant Romelectro (2,271,075)
The case concerns claims for additional costs related to the increase of the minimum wage in the construction sector for the investment contract C145/2018 - Refurbishment of the 110 kV Medgidia South station.
At the hearing of 20.04.2022, the TMB's solution is: "Grant the evidence of an expert accountant with the following objectives:
Please clarify to the expert whether Romelectro meets the condition set out in Article 66 of GEO 114/2018, i.e. whether 80% of Romelectro's turnover is generated from construction works, both in the year preceding the reference period (2018) and in the reference period (2019);
to calculate the expert the cost difference generated by the increase in the salaries of the human resources actually employed by Romelectro in carrying out the work related to Contract No C145/2018, in the reference period and the first two months preceding it, respectively:
a) Specify for each employee (human resource actually employed) separately whether his/her gross salary was below 3000 lei/month or higher in November and December 2018;
b) When the HR salary was increased to 3000 lei/month;
(e) Specify the actual cumulative cost difference in the salary of the human resources used by Romelectro in the actual performance of the work covered by Contract No C145/2018 for the reference period.
to determine the expert, on the basis of the analytical estimates, what is the percentage, i,e, the amount by which Transelectrica must adjust the price of Contract No. C145/2018 for the labour relating to the work remaining to be carried out on 01.01.2019, as a result of the legislative amendments introduced by GEO No. 114/2018 in order to increase the minimum wage in the construction sector to the amount of 3000 lei/month;
determine the expert the days/months of delay recorded in the execution of the works related to Works Contract No. C145/2018 as a result of the financing problems encountered by Romelectro S.A. following Transelectrica's refusal to pay the price at the adjusted value, respectively how the execution schedule was affected by Transelectrica's failure to adjust the price of the Contract following the legislative changes introduced by GEO 114/2018 in order to increase the minimum wage in the construction sector to the amount of 3000 lei/month.
Sets a hearing term on 29 April 2022, at 9:00 a.m., when the parties will be summoned. At the hearing on 29 April 2022, the case is deferred for the taking of evidence and the hearing is deferred to 14.10.2022.
At the hearing of 14.10.2022, the decision in brief: In view of the absence of the expert report, deferrs the case and set the hearing term for 13.01.2023.
Case No 37332/3/2021 - Claimant Romelectro (4,433,591)
The case concerns claims - GEO 114/2018 for the contract C112/2019 - Refurbishment of the 110kv station of the Porțile de Fier - Anina- Reșița-Timișoara-Săcălaz-Arad - 400Kv station Timișoara axis.
At the deadline of 22 June 2022, the Bucharest Court admits the plea of untimeliness, Annuls the application as untimbred. With appeal within 10 days of communication.
File No 8193/3/2022 - Claimant Tempos Sev (2,437,253)
The case concerns claims - GEO 114/2018 for contract C80/2018 - Refurbishment of 220/110kv station Hășdat.
At the hearing on 10 June 2022, the case is deferred to 14.10.2022. At the hearing on 14.10.2022 the case was deferred to 21.10.2022. Decision of 21.10.2022: Pursuant to Articles 258 and 255 of the Civil Procedure Code, the Court grants both parties leave to produce written evidence and the defendant also grants leave to produce evidence of the applicant's crossexamination and of an expert's report. Orders that the expert accountant's report shall have the objectives indicated by the defendant in its statement of defence, to which shall be added the additional objectives indicated by the defendant in the evidence note lodged at the hearing on 14 October 2022 and the objectives indicated by the applicant in the notes for the hearing lodged at the same hearing. The applicant is ordered to produce the documents requested by the defendant in its note for evidence of 14 October 2022. Requests the claimant to submit to the file the reply to the interrogatory which was communicated together with the statement of defence, under the signature of the legal representative, under penalty of the application of the provisions of Article 358 of the Civil Procedure Code. Delivered today, 21.10.2022, with the decision being made available to the parties by the court registry.
Hearing term for ruling: 09.12.2022.
Case No 8440/3/2022 - Claimant Tempos Sev (2,437,253)
The case concerns claims - GEO 114/2018 for contract C80/2018 - Refurbishment of 220/110kv station Hășdat. At the Hearing term of 13.09.2022 the case was deferred to 08.11.2022, in order to take the evidence requested.
The subject matter of the case is the execution of the administrative contract for the contract C80/2018 - Refurbishment of the 220/110kV station Hășdat.
At the hearing term of 16.09.2022, the plea of relatedness is admitted. Refer the case back to the panel first seised with the case No 8193/3/2022, i.e. panel 12, for the case No 8442/3/2022 to be joined to case No 8193/3/2022. Appeal together with the merits. Delivered today, 16.09.2022, with the decision being made available to the parties by the Court Registry. Document: Final ruling (disinvestment) 16.09.2022.
Notes to the stand-alone interim simplified statements on 30 September 2022 (All amounts are expressed in LEI, unless otherwise provided)
Case No 527/1285/2021 - Claimant ELM Electromontaj Cluj (402,274)
The subject matter of the file is claims - GEO 114/2018 for contract C4/6882/21,01,2019 - Modernization of Vetis station. The solution of the Cluj Tribunal: The request brought by the claimant ELM ELCTROMONTAJ CLUJ S,A, is granted, in contradiction with the defendant CNTEE, "TRANSELECTRICA" SA. Compels the defendant to conclude with the claimant an additional deed to the Works Contract no. C4/6882/21,01,2019, having as object the modification of the contract price as a result of the increase of the minimum gross basic salary per country guaranteed in payment for the construction sector, by art. 71 of OUG no. 114/2018, according to the statements of works settled as from May 2020 and until the completion of the works related to the contract. Orders the defendant to pay to the applicant the sum of 402,273.61 lei (excluding VAT), representing the difference between the costs of the workmanship tendered and the costs of the workmanship executed and accepted under Works Contract No C4/6882/21,01,2019, relating to the statements of works drawn up for the period from May 2020 to 31 May 2021, as well as further, in the same manner, to pay the differences between the costs of the workmanship tendered and the costs of the workmanship executed and accepted until the acceptance on completion of the works. Compels the defendant to pay to the claimant the sum of 13,666.70 lei in late payment penalties of 0.02%/day, calculated on the principal debt from the due date until 31.05.2021, as well as the late payment penalties calculated thereafter until full payment of the principal debt. Orders the defendant to pay to the claimant the sum of 8,436.06 lei in respect of the costs of the proceedings and the legal stamp duty. With a right of appeal within 10 days from the date of notification, the application for appeal to be 'submitted with the Cuj Specialised Court. Pronounced by placing the decision at the disposal of the parties through the court registry today, 22 October 2021. The company appealed.
All amounts in cases involving claims for additional costs requested by the claimants and subject to works contracts will be reflected in the value of the investments if they are settled in court and invoiced by the respective partners, except for court costs and penalties set by the court.
Control Ministry of Finance - General Directorate for Economic and Financial Inspection
As of 06.09.2022, the control action of the Ministry of Finance - General Directorate of Economic and Financial Inspection has been resumed at the Company's premises. This control action was initiated on the basis of Service Order No. 65/15.09.2017, as well as Service Order No. 19/12.06.2018 and suspended on 17.07.2018, according to Address No. 261775/17.07.2018.
The objectives of the economic and financial inspection are set out below:
At present there are on the docket disputes with Romania's Court of Audit with respect to their audits performed in 2013, 2017 and 2020, described under Disputes.
Taking into account the findings of the Court of Auditors recorded in its Decisions following its audits of the quarterly, half-yearly and annual financial statements, we specified in the financial statements elaborated each quarter, semester and year there may be possible to result additional fiscal liabilities for payment, but which cannot be accurately determined now according to the provisions of Standardul IAS 37 - Provisions, contingent liabilities and contingent assets.
| Entity | Country of Origin |
30 September 2022 % of shares |
31 December 2021 % of shares |
|---|---|---|---|
| SMART SA | Romania | 100 | 100 |
| TELETRANS SA | Romania | 100 | 100 |
| ICEMENERG SA *) | Romania | - | - |
| OPCOM SA | Romania | 97.84 | 97.84 |
| FORMENERG SA | Romania | 100 | 100 |
| ICEMENERG SERVICE SA **) | Romania | 100 | 100 |
The net value of shares held by the Company in its subsidiaries is 78,038,750 at both 30 September2022 and 31 December 2021.
The gross value of the Company's shareholdings into its subsidiaries is as follows:
Company SMART SA seated in Blvd. Magheru 33, Bucharest 1 and headquarters in the working location of Blvd. Gheorghe Sincai 3, Formenerg Building, 1st floor, Bucharest 4, București, has as main business the maintenance of the transmission-dispatcher system and was established under HG 710/19.07.2001 on 1 November 2001.
On 30 September 2022, the share capital of Co. SMART SA was of 38,528,600 divided into 3,852,860 nominative shares, each one worth 10 Lei, fully subscribed and paid by the Company.
Company TELETRANS SA seated in Blvd. Hristo-Botev 16 - 18, Bucharest 3 with headquarters in the working location of Stelea Spătarul Street, no. 12, sector 3, Bucharest, has as main business maintenance services of process and managerial information, specific telecommunication and information technology services within RET, telephone, data transmissions and was established by AGA Decision 3/2002.
The share capital on 30 September 2022 is 6,874,430, fully subscribed and paid up.
Subsidiary Company Energy Research and Modernising Institute ICEMENERG SA seated in Blvd. Energeticienilor 8, Bucharest 3 has as main business the research and development of physical and natural science, innovation, studies, development strategies, design, urbanism, engineering and other technical services, being established under HG 1065/04.09.2003.
On 30 September 2022 in the Company's accounting books the share capital of Subsidiary Icemenerg SA was of 1,083,450 fully subscribed and paid.
*) On 07.04.2014 the National Office of the Trade Register admitted file 121452/03.04.2014 pertaining to cancelling the Subsidiary Energy Research and Modernising Institute ICEMENERG SA Bucharest, Order 123/13.03.2014 (registration deed also licensing the operation) enabled recording the 'National Energy Research-Development Institute Bucharest' with the Trade Register (HGR 925/2010). The Company filed complaint against the ORC director's resolution enabling registration of cancellation for Subsidiary ICEMENERG SA Bucharest in the trade register.
Bucharest Tribunal, Section VI Civil by ruling 3569/14.07.2014 pronounced under file 15483/3/2014, where the Company
was in contradiction with defendants Energy Research and Modernising Institute Icemenerg SA Bucharest and the National Energy Research-Development Institute Icemenerg Bucharest, denied the Company's complaint on grounds that HG 925/2010 was not abrogated until the cancellation date with the ORC. The Appeal Court notified on 24.02.2015 the settlement pronounced under file 15483/3/2014, namely Ruling 173/2015, denying the appeal of CNTEE Transelectrica SA as groundless, such decision being final.
Transelectrica SA filed cancellation contestation against Ruling 173/2015 pronounced by the Appeal Court Bucharest, under file 1088/2/2015 found on the docket of the Appeal Court Bucharest, Section VI Civil, with hearing term on 13.05.2015. On 13.05.2015 Ruling 777/2015 of the Appeal Court Bucharest denied as groundless the cancellation contestation, such decision being final.
In the meetings of 28.03.2016 and 30.08.2016, the AGEA did not approve the reduction of the share capital of CNTEE Transelectrica SA by the amount of 1,084,610, representing the subscribed and paid-up share capital of the subsidiary ICEMENERG SA Bucharest, by reducing the Romanian State's shareholding in the share capital of CNTEE Transelectrica SA, in application of the provisions of GD no. 925/2010.
The company recorded in 2015 an impairment allowence in the amount of 1,083,450 for the shares held in the subsidiary Institutul de Cercetări și Modernizări Energetice - ICEMENERG SA Bucharest which was written off.
Company OPCOM SA seated in Blvd. Hristo Botev 16-18, Bucharest 3, with legal personality has as main business the organisation, administration and supervision of the electricity market, being established under HG 627/2000.
On 30 September 2022, the share capital of OPCOM SA was of 31,366,090 Lei, representing a number of 3,136,609 nominative shares of 10 Lei each and a participation quota of de 97.84% from CNTEE Transelectrica SA to benefits and losses.
Company FORMENERG SA seated in Blvd. Gh, Sincai 3, Bucharest 4, with legal personality has as main business the initial permanent professional training in all activity domains of personnel in the energy sector, as well as of other beneficiaries, being established under AGA Decision 33/2001.
The share capital on 30 September 2022 is 1,948,420, fully subscribed and paid up.
Company ICEMENERG SERVICE SA seated in Blvd. Energeticienilor 8, Bucharest 3 has as main business the concept, production, implementation, repair, modernisation and marketing of apparatuses, equipment and specific installations.
The share capital on 30 September 2022 is 493,000, fully subscribed and paid up.
**) By GD no. 2294/09,12,2004, it was approved the transfer of the package of shares held by the Trading Company Subsidiary Energy Research and Modernising Institute ICEMENERG SA Bucharest into the Trading Company Subsidiary ICEMENERG-SERVICE SA Bucharest to the National Power Grid Company Transelectrica SA.
In 2016 the Company registered impairment allowance of 493,000 for the shares held in Subsidiary ICEMENERG SERVICE SA.
On 09.06.2017 Bucharest Tribunal, Section VII Civil ordered the bankruptcy by means of simplified procedure of debtor Company Subsidiary ICEMENERG SERVICE SA, and thus designated Solvendi SPRL in capacity of provisional judiciary liquidator.
On 27.04.2021, the Special Administrator of the Subsidiary ICEMENERG Service SA informs that on 23.04.2021, following the bid, the assets of the Subsidiary ICEMENERG Service SA, both movable and immovable, were sold en bloc, the buyer being Portland Trust Developments Five SRL.
| AFFILIATED | Trade | receivables*) | Trade | liabilities |
|---|---|---|---|---|
| ENTITY | 30 September 2022 | 31 December 2021 | 30 September 2022 | 31 December 2021 |
| SMART SA | 411,040 | 713,183 | 18,075,144 | 8,944,881 |
| TELETRANS SA | 133,579 | 145,830 | 16,575,099 | 13,435,678 |
| FORMENERG SA | - | - | - | - |
| OPCOM SA | 537,959,731 | 634,763,661 | 521,153,703 | 627,502,394 |
| TOTAL | 538,504,350 | 635,622,674 | 555,803,946 | 649,882,953 |
Balances with subsidiaries held by the Company were as follows:
*) Trade receivables are provided at gross values.
Transactions with the Company's subsidiaries during the reporting period are detailed as follows:
| AFFILIATED | Sales | |||
|---|---|---|---|---|
| ENTITY | Third quarter 2022 | Third quarter 2021 | 9 months 2022 | 9 months 2021 |
| SMART SA | 236,004 | 114,580 | 869,135 | 444,806 |
| TELETRANS SA | 173,166 | 86,343 | 1,098,146 | 254,229 |
| FORMENERG SA | - | - | - | - |
| OPCOM SA | 2,756,445,228 | 393,016,443 | 5,381,731,438 | 701,674,346 |
| TOTAL | 2,756,854,398 | 393,217,366 | 5,383,698,719 | 702,373,381 |
| AFFILIATED | Procurements | |||
|---|---|---|---|---|
| ENTITY | Third quarter 2022 | Third quarter 2021 | 9 months 2022 | 9 months 2021 |
| SMART SA | 23,999,434 | 29,364,063 | 74,098,510 | 62,536,781 |
| TELETRANS SA | 9,733,537 | 9,805,683 | 32,184,609 | 25,954,032 |
| FORMENERG SA | - | - | 286 | - |
| OPCOM SA | 666,431,875 | 278,926,670 | 1,593,465,522 | 745,888,139 |
| TOTAL | 700,164,846 | 318,096,416 | 1,699,748,927 | 834,378,952 |
Credit risk is the risk that the Company incurs a financial loss as a result of a customer or counterparty to a financial instrument failing to meet its contractual obligations. This risk arises mainly from trade receivables and cash and cash equivalents.
The treatment of counterparty risk is based on the Company's internal and external success factors. External success factors - which have an effect on risk reduction in a systematic way - are: decentralisation of the energy sector where generation, transmission, distribution and supply are distinct activities and the interface for the customer is the supplier, trading of electricity on the Romanian market in two market segments: the regulated market and the competitive market, Internal success factors in the treatment of counterparty risk include: diversification of the customer portfolio and diversification of the number of services offered in the electricity market.
Financial assets that may subject the Company to collection risk are primarily trade receivables and cash and cash equivalents. The Company has put in place a number of policies to ensure that the sale of services is made to customers with adequate collection by including in commercial contracts the obligation to provide financial guarantees. The amount of receivables, net of adjustments for impairment, represents the maximum amount exposed to collection risk. The maximum exposure to collection risk at the reporting date was:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Financial assets | ||
| Net trade receivables | 2,422,629,989 | 2,049,045,366 |
| Other net receivables and down payment to suppliers | 910,639,914 | 824,401,867 |
| Receivable VAT | 316,853,779 | 122,134,375 |
| Cash and cash equivalents | 381,877,064 | 252,225,142 |
| Other financial assets | - | - |
| Total | 4,032,000,746 | 3,247,806,750 |
The age of receivables on the elaboration date of the financial position is provided below:
| Gross value | Impairment allowance |
Gross value | Impairment allowance |
|
|---|---|---|---|---|
| 30 September 2022 |
30 September 2022 |
31 December 2021 | 31 December 2021 | |
| Not reached to maturity | 2,332,542,965 | 451,826 | 1,935,282,443 | 43,381 |
| Expiry date between 1 - 30 days | 934,555 | 2,119 | 22,558,019 | - |
| Due date exceeded from 31 to 90 days | 21,454 | 6,840 | (343,107) | - |
| Due date exceeded, 90 to 180 days | 356,660 | 35,017 | 13,072,815 | 12,540,751 |
| Due date exceeded, 180 to 270 days | 203,013 | 16,650 | 92,051 | 22,582 |
| Due date exceeded, 270 to 365 days | 8,103 | - | 622,364 | 74,967 |
| More than one year | 233,815,944 | 144,740,253 | 222,868,727 | 132,426,265 |
| Total | 2,567,882,694 | 145,252,705 | 2,194,153,312 | 145,107,946 |
The ageing of other receivables at the date of the statement of financial position is shown below:
| Gross value 30 September 2022 |
Impairment allowance 30 September 2022 |
Gross value 31 December 2021 |
Impairment allowance 31 December 2021 |
|
|---|---|---|---|---|
| Not reached to maturity | 1,196,792,200 | 26,345 | 915,346,210 | 8,469,053 |
| Expiry date between 1 - 30 days | 903,044 | - | 197,143 | 14 |
| Due date exceeded from 31 to 90 days | 1,486,166 | 242,547 | 11,358,697 | 2,107,673 |
| Due date exceeded, 90 to 180 days | 4,155,455 | 95,017 | 1,350,180 | 483,743 |
| Due date exceeded, 180 to 270 days | 9,922,620 | 9,981,662 | 1,170,464 | 482,365 |
| Due date exceeded, 270 to 365 days | 10,960,634 | 10,830,149 | 3,420,760 | 970,217 |
| More than one year | 80,367,486 | 55,918,192 | 80,611,154 | 54,405,301 |
| Total | 1,304,587,605 | 77,093,912 | 1,013,454,608 | 66,918,366 |
Transelectrica's policy is to record 100% impairment adjustments for loss of value for customers in litigation, insolvency and bankruptcy and 100% of trade and other receivables outstanding for more than 180 days, excluding overdue receivables arising from the support scheme.
The highest impairment adjustments at 30 September 2022, calculated for trade receivables and related penalties, were recorded for CET Govora (25,136,400), Eco Energy SRL (24,736,066), Petprod SRL (23,539,650), Arelco Power (14,788,022), Romelectro SA (14,382,452), Total Electric Oltenia SA (14,185,577), Romenergy Industry (13,512,997), GETICA 95 (12,540,731), Elsaco Energy (9,276,118), RAAN (8,516,707).
In order to recover the receivables adjusted for depreciation, the Company has taken the following measures: notifications, SGB executions, legal action, registration of the receivables, request for clarification from ANAF (for VAT receivable from Opcom) etc.
The evolution of bad debt impairment adjustments is presented as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Balance on 1 January | 145,107,946 | 134,733,880 |
| Recognition of impairment allowances | 1,465,364 | 14,686,349 |
| Reversal of impairment allowances | 1,320,605 | 4,312,283 |
| Balance at end of the interval | 145,252,705 | 145,107,946 |
The evolution of impairment allowances for other doubtful receivables were as follows:
| 30 September 2022 | 31 December 2021 | |
|---|---|---|
| Balance on 1 January | 66,918,366 | 56,855,137 |
| Recognition of impairment allowances | 10,974,949 | 14,780,396 |
| Reversal of impairment allowances | 799,403 | 4,717,167 |
| Balance at the end of the interval | 77,093,912 | 66,918,366 |
Financial assets that may subject the Company to collection risk are mainly trade receivables and cash and cash equivalents. The Company has put in place a number of policies to ensure that the sale of services is made to customers with adequate collection by including in commercial contracts an obligation to provide financial guarantees. The amount of receivables, net of adjustments for impairment, represents the maximum amount exposed to collection risk. The collection risk on these receivables is limited as these amounts are mainly due from state-owned companies.
The cash is placed in financial institutions, which are considered to have minimal risk.
On 10 October 2022, Transelectrica's management signed in an official setting, at the Romanian Government, a new grant contracts from the Modernisation Fund worth €424 million for the implementation of 9 national energy infrastructure development projects.
The high level of this grant funding will have a positive effect on the Company's profitability on long term. At the same time, the financing of investment objectives through non-reimbursable funds ensures an increase in the Company's liquidity indicators.
The major benefits of these investments will materialize relevant indicators such as: increasing the transmission capacity of RET by about 1700 MW, building about 480 km of new overhead power lines, expanding 5 power stations with a voltage level of 400 kV, upgrading the Alba Iulia station to digital concept - a first for Romania -, increasing the interconnection capacity by 600 MW (cumulated on the borders with Serbia and Hungary), implementing power quality monitoring systems in 15 stations, as well as optimizing and monitoring overhead power lines through digital systems.
Extension of the terms of office of the provisional members of the Executive Board
At the meeting held on 14 October 2022, the Supervisory Board of the Company, with reference to the expiry on 24.10.2022 of the terms of office of the provisional members of the Management Board, decided to extend the terms of office of the provisional members of the Management Board for 2 months starting from 25.10.2022, pursuant to Article 642 of GEO no. 109/2011 on corporate governance of public companies, as amended, for:
but no later than the completion of the selection procedure in accordance with the provisions of GEO no. 109/2011 on corporate governance of public companies, as amended.
At the same time, Mr. Gabriel ANDRONACHE has been appointed Chairman of the Board of Directors, alternatively called Chief Executive Officer of the Company, for the period from 25 October to 24 December 2022.
Convening of the extraordinary general meeting of shareholders
The Company's Board of Directors has convened, in accordance with the legal provisions, the Extraordinary General Meeting of Shareholders on 21 November 2022, with the main items on the agenda:
Approval of the minimum sum insured and the maximum insurance premium for liability insurance professional qualifications of members of the Supervisory Board and the Management Board,
Information on purchases of products, services and works, commitments involving significant obligations of the Company with a value of more than EUR 5,000,000, as well as loans and guarantees for loans with a value of less than EUR 50,000,000.
400 kV Cernavodă-Stâlpu line, historic crossing of the Danube
On 21 October 2021, the most difficult and challenging technical stage of the project to build the 400kV Cernavodă-Stâlpu Overhead Power Line was marked, namely the crossing of the Danube over a distance of 2.6 kilometres, of which 1.13 kilometres is above water.
The event was attended by Transelectrica's Management, the General Director of Electomontaj SA - Ionuț Tănăsoaica, the Deputy Secretary General of the Government and member of Transelectrica's Supervisory Board - Alexandru-Cristian Vasilescu, the Secretary of State in the Ministry of Energy - George Niculescu, Chairman of the Committee on Industry and Services of the Chamber of Deputies - Bende Sándor and the official representative of the European Climate, Infrastructure and Environment Executive Agency (CINEA) - Ona Kostinaite-Grinkeviciene - Head of Sector CEF.
The Danube river crossing stage took about three weeks, including the preparatory phases.
Its complexity and uniqueness involved special efforts from Transelectrica's contractors and teams of experts, being the first such large-scale electrical engineering work carried out in the Romanian Transmission Grid in the last 35 years. The double-circuit overhead power line is supported on both sides of the Danube by the tallest high-voltage pylons - 150 metres - in the entire national energy infrastructure.
The 400 kV Cernavodă-Stâlpu Overhead Power Line infrastructure objective, an investment worth a total of around €75 million, benefits from €27 million in non-reimbursable co-financing through the Connecting Europe Facility (CEF).
The project is part of the North-South Interconnection East Electricity (North-South Interconnection East Electricity) corridor and aims to strengthen the cross-section between the western Black Sea coast and the rest of the European system, while contributing to the strengthening of the electricity transmission grid in Romania, increasing the interconnection capacity between Romania and Bulgaria and integrating wind energy produced in the Dobrogea area. The route of the planned line is 160 kilometres long and crosses the territory of three counties: Constanța county (6 kilometres with double circuit), Ialomița county (94 kilometres with double circuit and 5 kilometres with single circuit) and Buzău county (54 kilometres with double circuit).
The undersigned ASTRATINI IRINA, duly sworn translator and interpreter for the foreign languages French and English pursuant to License nr, 19675/2011, issued by the Ministry of Justice, hereby certify that this translation from Romanian into English is complete and true to the intended meaning and contents of the original document that has been presented to me for translation,
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