The half-year consolidated financial statements are presented to the Audit Committee and then approved by the Board of Directors. The annual consolidated financial statements are reviewed by the Audit Committee, then closed at 31 December of the fiscal year by the Board of Directors and lastly, approved by the Shareholders’ General Meeting.
Each half-yearly and annual closing gives rise to the preparation of instructions specifying the main deliverables expected from each party involved in the publication of the financial statements as well as the preparation of the management report and the Universal Registration Document (URD) for the annual financial statements. Meetings with EDF departments and the subsidiaries facilitate the preparation of these financial statements and make it possible to anticipate changes with regard to certain treatments thereby increasing the reliability of the accounting and financial information published. An analysis after the event of the conditions concerning completion of the foregoing (compliance with deadlines, quality of information, etc.) allows for regular improvement of the process for preparing and analysing the consolidated financial statements.
Quarterly reporting of information on the EDF group’s balance sheet and the profit and loss statement serves to anticipate the processing of complex operations and contributes to enhancing the reliability of the results.
Management forecasts and outturns are generated using a single reference framework and tools shared between accounting and management. This system contributes to the coherence of Group management, facilitates dialogue at all levels of the organisation, and helps promote both the sharing of information between the different parties and the quality of the information produced.
The corporate financial statements are prepared annually and semi-annually by the Parent Company Financial Statements Department of the Accounting Consolidation Division. The annual corporate financial statements are closed on 31 December of the fiscal year, approved by the Board of Directors of EDF, and then approved by the Shareholders’ Meeting.
The condensed half-year corporate financial statements are closed on 30 June of the fiscal year, and then approved by the Board of Directors. EDF’s transactional accounting (excluding the Nuclear Fuel Division, the Island Energy Systems Division, the Decommissioning and Waste Projects Division and the Executive Talents Managers Training Department for the payroll accounting aspect) is entrusted to the Shared Accounting and Consulting Services Centre (CSP2C) of the Tertiary Services Department, which also handles the transactional accounting for certain French subsidiaries. The treatment of transactional accounting is organised by process. “Governance pacts” set out the respective responsibilities of the operational and functional departments, of the CSP2C or, where applicable, the accounting operators in the operational business lines and the Accounting Consolidation Division.
Meetings are organised on a quarterly basis with the EDF departments to prepare the financial statements and anticipate changes with regard to certain processes to increase the reliability of the published accounting and financial information.
As is the case with the Covid-19 pandemic, the Group’s activities may also be affected by natural disasters (floods, landslides, earthquakes, etc.), significant climatic variations (droughts, etc.) and any other event the scope of which is difficult to predict (pandemic, major industrial accident in the world, etc.); this was the case with the storms Amélie (2019), Alex (2020) in metropolitan France, and Irma (2017) in the West Indies, and with episodes of extreme cold (winter 2017) or heat waves (summer 2019). In the event of an exceptional incident, the measures adopted may generate costs beyond those of repairing the damage caused by the disaster and the loss of earnings from the interruption of the supply of goods and services by the Group.
To manage this risk, EDF has defined a Crisis Management and Business Continuity policy that takes into account the Group’s territorial presence and the importance of the Group’s industrial activities and public service to the economy from the standpoint of business continuity. This policy defines the organisation principles and sets out the entire system required for implementing that policy. This policy consists in particular of:
A crisis drills programme allows regular testing of the effectiveness and overall consistency of these mechanisms.
In 2019, the EDF group set up an action plan to increase the entities’ preparedness with regard to business continuity issues. In this context, the development of a pandemic crisis drill, including the revision of the EDF group’s pandemic plan, was initiated in the summer of 2019. These activities proved to be particularly valuable for managing the Covid crisis in 2020. By relying on operational, prepared and tested mechanisms, the EDF group was able to deal proactively with and anticipate the health crisis as from the end of January 2020. Feedback after the summer of 2020 enabled the Group to approach the second lockdown, in November 2020, with the lessons learned regarding requirements for continuing its activity.
In 2021, an Information Systems coordination activity was conducted to ensure consistency and mutual understanding between the IS section of the business lines’ BCP and the IS BC.
In 2022, the in-depth analysis of business continuity focused on temporary unavailability of electricity and its impacts, particularly on telecommunications. Crisis drills on these themes aim at validating these BCPs, and any points for improvement required. Beyond validation of processes, the drills, particularly in areas usually perceived as reserved to specialists, provide opportunities for learning, awareness-raising, and sharing among the different business-line priorities, thanks to a dialogue based on concrete examples. These themes are covered by regularly conducted analyses, as in the case of IS crises, for example, even if they are of limited extent, and/or drills and action plans if areas of vulnerability remain.
In 2021, opportunities arose for testing the robustness of the crisis mechanism and its agility in the face of the different phases of lockdown and changing telework conditions during the Covid crisis, particularly with regard to its impact on the availability of the nuclear plant, and the special attention to be paid to the components for balancing supply and demand during the winter of 2021/2022. In 2022, this theme was thoroughly explored with the Ministry for Ecological Transition, by means of crisis drills and actions conducted in the context of crisis on the energy markets. Continuity plans were developed from the standpoint of possible selective shut-downs, in addition to an in-depth analysis of their IS aspects in 2021. These studies support mutual cooperation between the business lines and the IS experts, in order to respond to cyber-attack risks.
In order to protect its assets and limit the impact of certain events on its financial position, the EDF group has dedicated insurance programmes that cover its major risks relating to property damage, civil liability and personal insurance. Note that nuclear risks are subject to the specific civil liability regime described below.
The Group Insurance Division is responsible, while upholding the management independence of the regulated infrastructure operators, for preparing the EDF group policy covering insurance, steering and tracking its implementation throughout the Group, in order to optimise the overall costs of its insurable risks (1).
The Insurance Managers of entities and controlled subsidiaries that are included in the Group’s programmes are responsible for:
(1) Risks that can be transferred to both the insurance markets and the alternative markets.
