REG - Soc EnergElectricaSA - Litigation Electrica - DEER - Measures from CCR

Societatea Energetica Electrica SAAnnouncement

26/02/2024 16:15

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RNS Number : 4989E  Societatea Energetica Electrica SA  26 February 2024

To:                              Bucharest Stock
Exchange (BSE)

                                    London
Stock Exchange (LSE)

Romanian Financial Supervisory Authority (FSA)

 

Current report in compliance with the Law 24/2017 on issuers of financial
instruments and market operations, the Romanian Capital Market Law no.
297/2004, FSA Regulation no. 5/2018, and the Bucharest Stock Exchange Code

Report date: February 26, 2024

Company name: Societatea Energetica Electrica S.A. (Electrica)

Headquarters: 9 Grigore Alexandrescu Street, 1(st) District, Bucharest,
Romania

Phone/fax no.: 004-021-2085999/004-021-2085998

Fiscal Code: RO 13267221

Trade Register registration number: J40/7425/2000

Subscribed and paid in share capital: RON 3,464,435,970

Regulated market where the issued securities are traded: Bucharest Stock
Exchange (BSE) and London Stock Exchange (LSE)

 

Significant events to be reported: Implementation of measures ordered by CCR -
action filed by Electrica against DEER for the recovery of the damages found
by the Romanian Court of Accounts's Decision no. 12/27 December 2016

During 19.09.2016 - 29.11.2016, Electrica's activity was subject to an audit
by the Court of Accounts, with the topic "the  management of the patrimony
for the distribution and supply of electricity"  during the period 01.01.2013
- 30.06.2014.

The findings of the audit team were recorded in the Control Report drawn up on
29.11.2016 by the external public auditors of the Romanian Court of Accounts,
Department IV, Directorate 2, registered with Societatea Energetică Electrica
SA under no. 9900/20307/29.11.2016.

Through the above-mentioned Control Report, inter alia, the following
deviations were found:

1. "Employment of funds in the estimated amount of 224,622,940 lei (without
VAT), for the execution of the investment work "AMR System (Automatic Meter
Reading) measurement and consumption dispatcher activities at SC Electrica SA
level", for which, although the purchased goods, were highlighted in the
accounting, there are not physically found in the patrimony, nor were they
used for the activities carried out according to the object of activity;

2. Unjustified increase in operating expenses with an estimated amount of
273,500 lei (without VAT) representing studies developed for activities that
are not within the scope of activity of SC DFEE "Electrica" SA, being related
to activities belonging to other legal entities (their subsidiaries);

3. Unjustified increase in expenses for technical assistance services intended
for carrying out the activity of other legal entities (distribution
subsidiaries), in an estimated amount of 2,337,657.50 lei (without VAT);

4. Unjustified increase in operating expenses by the amount of 74,667.60 lei
(without VAT), representing maintenance services for communication equipment
provided to other legal entities (their subsidiaries).

Subsequent to the control report, the Decision no. 12/27.12.2016 and the
Conclusion no. 12/27/02/2017 were issued.

Against Decision no. 12/27.12.2016 and Conclusion no. 12/27.02.2017,
Societatea Energetică Electrica SA filed an action for annulment, which forms
the subject of file no. 2229/2/2017*. Electrica informed its investors about
this file through the annual reports, starting with the one for 2017.

We mention that the first instance admitted Electrica's appeal regarding the
above-mentioned violations and abolished them. The Romanian Court of Accounts
appealed against the decision of the court of first instance, the appeal being
pending before the High Court of Cassation and Justice, with a trial date of
27 March 2024.

Electrica informs the shareholders that, in order to implement the measures
ordered by CCR to remedy the deviations found in paragraphs 1-4 of the CCR
Decision no. 12/27 December 2016, issued as a result of the control on the
management of Electrica's patrimony for the period 01 January 2013 - 30 June
2014, submitted, on 23 February 2024, a request to be summoned to court,
against its subsidiary Distributie Energie Electrica Romania SA (DEER), for:

·    obliging DEER to pay the amount of 235,567,249 lei, the amount that
will be updated with the inflation rate, based on unjust enrichment, as
follows:

- the amount of 232,451,693 lei (composed of 205,829,399 lei - payments made
until 30.06.2014, 22,950,254 lei - unjustified increase in operating
expenses/depreciation expenses and 3,672,040 lei - reduction of profit tax) ;

- the amount of 2,711,682 lei (2,337,657 lei - payments made and 374,025 lei -
profit tax);

- the amount of 86,614 lei (74,667 lei - payments made and 11,947 lei - profit
tax);

- the amount of 317,260 lei (273,500 lei - payments made and 43,760 lei -
profit tax);

·    obliging the defendant DEER to pay the legal interest calculated
starting with the date of enrichment of the defendant, until the date of
payment of the amount that is the main object of the action.

 

Contact Details: Electrica Investor Relations - ir@electrica.ro
(mailto:ir@electrica.ro)   ; +40731796111

 

 

CEO

Alexandru Aurelian Chirita

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