CONSOLIDATED

ANNUAL
REPORT

2014

Report of the Supervisory Board

regarding the consolidated financial statements
drawn up according to the International Financial
Reporting Standards
The Supervisory Board relies on the corporate governance principles, which regulate a responsible
professional ethical attitude of the Company in relation with the main stakeholders. The Board reviews the
Company strategy and the premises of the environment in which it operates, in order to plan
Transelectricas development and performance, while providing a rigorous expression of objectives.
The Companys Executive Board provided the Supervisory Board with detailed information about the
2014 consolidated financial statements. We have assessed the significant transactions of Transelectrica
under plenary meetings based on the Executive Boards reports.
Co Deloitte Audit Ltd has audited the 2014 consolidated financial statements and reviewed the
compliance of the Executive Boards Annual Report with such consolidated financial statements.
Consequently, it has issued an audit opinion without reserves.
The consolidated financial statements and the audit report were submitted for examination to the
Supervisory Board. Having met in order to approve the 2014 financial statements, the Audit Committee
and the Financial and Development Committee issued a report reviewing the results from the 2014
financial year and recommended the Supervisory Board to endorse the consolidated financial statements
elaborated in accordance with Order 1286/2012 of the MFP.
At the same time, the Executive Boards Annual Report, elaborated in accordance with the requirements
of the capital market legislation, was reviewed by the Supervisory Board members. The Executive Board
Report provides an accurate true image of the Companys consolidated results for the 2014 financial
year.
The Audit Committee provides assistance to the Supervisory Board in the achievement of ones own
supervisory responsibilities in the financial reporting process, management reporting, internal control
system, audit process and the organisational monitoring process for the compliance with laws, regulations
and conduct code.
The consolidated financial statements of Transelectrica, elaborated in accordance with the IFRS, were
endorsed on the 24.03.2015 meeting of the Supervisory Board according to the recommendation from the
Audit Committee and were submitted for approval to the Shareholders Ordinary Assembly convened for
the first assembly on 29 April 2015.

Yours faithfully,
Chairman of the Supervisory Board of Transelectrica,
Carmen Georgeta NEAGU

Pag. 2/16

Directors' Report on the consolidated financial

statements prepared in accordance with International
Financial Reporting Standards
To the best of our knowledge, the financial-accounting statements consolidated on 31 December 2014,
elaborated according to the applicable accounting standards, provide an accurate truthful image of the
assets, liabilities, financial position, profit and loss account of Transelectrica Group and the Executive
Board Report includes accurate truthful information with respect to its development and performance, as
well as the main risks and uncertainties specific to the activities performed.
This Report provides only the new elements compared to the 2014 Annual Report, elements which
resulted from the consolidation of the Companys financial statements with those of its subsidiaries.

Executive Board:

Ion Toni TEAU

Constantin VDUVA

Octavian LOHAN

Chief Executive
President of the Executive Board

Member of Executive Board

Member of Executive Board

Pag. 3/16

TABLE OF CONTENTS
TABLE OF CONTENTS .............................................................................................................. 4
1.

Group Structure ........................................................................................................ 5

1.1.

SMART .............................................................................................................................. 6

1.2.

TELETRANS ..................................................................................................................... 6

1.3.

FORMENERG.................................................................................................................... 6

1.4.

ICEMENERG SERVICE ................................................................................................. 7

1.5.

OPCOM.............................................................................................................................. 7

1.6.

ICEMENERG ..................................................................................................................... 7

IDENTIFICATION DATA ........................................................................................................... 8

CONSOLIDATION OF FINANCIAL STATEMENTS ...................................................................... 10
ACTIVITIES ........................................................................................................................... 11
THE MANAGEMENT STRUCTURE .......................................................................................... 13
FINANCIAL REPORT .............................................................................................................. 14

Pag. 4/16

1. Group Structure

Dissolved by HG 925/2010
and reestablished under the
coordination of the Ministry
of Education during 2014

SMART

Icemenerg

Registered: 2003
CAEN: Production of
equipment for electricity
distribution and control

Registered: 2001
CAEN: Electrical equipment
repairs

Teletrans

Registered: 2002
CAEN: Telecommunication
services

TEL
Icemenerg
Service

Registered: 2002
CAEN: Other forms of
training

OPCOM

Registered: 2000
CAEN: Administration
of financial markets

Formenerg

On the issuance date of this report, Transelectrica has four subsidiaries, Romanian legal entities
1
organized as limited liability companies in which the Company is the sole shareholder: OPCOM ,
4
Formenerg , Teletrans, and Icemenerg Service.
In the case of SMART, following the capital increase carried out on 23.12.2014, by the Board of Directors
of SMART with the value of the lands for which a certification was previously obtained attesting to
ownership, the Company became a majority shareholder with 70% of share capital.
Based on GD. 925/2010 and other related acts (GD no. 185/2013) the National Trade Register Office Trade Register of Bucharest Tribunal, through resolution no. 41515/07.04.2014, granted the application
for dissolution of Subsidiary ,,Institute for Energy Research and Modernization - Icemenerg" SA and
through resolution no. 41923/07.04.2014 granted the application and authorized the Ministry of Education

According to GEO 86/2014 the Ministry of Economy, Trade and Tourism is authorised to initiate and aprove all necessary steps for
moving operations and shares held by Transelectrica in the "Electricity and Gas Market Operator OPCOM " - SA and The
Romanian Energy Personnel Training Company Formenerg SA into State ownership, administered by the Ministry of Economy,
Trade and Tourism, under applicable law.

Pag. 5/16

to register the "National Institute of Research and Development for Energy - Icemenerg Bucharest" (J40/
4323/ 2014).
Out of all the subsidiaries of the Company, only SMART and Teletrans are included in the consolidation
of the Groups financial statements. Icemenerg-Service and Formenerg are not consolidated since, under
applicable accounting legislation, the volume of their activity is considered insignificant for consolidation
purposes. OPCOM is subject to ANRE regulation and has an independent position in the energy market,
as a result Transelectrica has no control over it.

1.1. SMART

The main activities of SC SMART SA subsidiary are inspections and repairs for electrical equipment,
transformers and autotransformers, incident remediation and micro-production of electrical
equipment. The company has 8 unincorporated branches, located on the same premises as
Transelectricas branches.

SMARTs share capital on 01.12.2014 was 38,529 thousand RON, Transelectrica participating as
sole shareholder. SMART is one of the subsidiaries whose results are consolidated with the
Companys financial statements.

Following the address no. 165/13.01.2015 (registered at Transelectrica under no. 1552/14.01.2015)
submitted by the subsidiary, ownership structure as of 30.12.2014, following the capital increase by
contribution in kind with value of lands for which an ownership certificate has been obtained, is as
follows:
o

CNTEE Transelectrica SA 70.005% - 3,852,860 shares

Romanian State through the Government General Secretariat 29.994% - 1,650,770 shares

1.2. TELETRANS

SC Teletrans SA was established by General Shareholder Meeting of Transelectrica, Resolution no.

13/04.12.2002, pursuant to Law no. 31/1990 and Ministry of Industry and Trade Orders no. 3098 and
no. 3101 dated 23.10.2002.

Teletrans shares are 100% owned by Transelectrica.

Under the applicable Statute and laws, Teletrans performs telecommunication services, having the
relevant certificate no. 29056 issued by the National Authority for Management and Regulation in
Communications ("ANCOM") dated 27.09.2010, obeying the rules of this public institution under the
law (GEO no. 79/2002).

Share capital at 31.12.2014 is 6,874 thousand RON, Transelectrica being the sole shareholder.
Teletrans is part of the subsidiaries whose results are consolidated with the Companys financial
statements.

1.3. FORMENERG

SC Formenerg SA is a subsidiary whose main activity is training energy personnel. Energy Romania,
GDF SUEZ Energy Romania, Hidroelectrica, Nuclearelectrica, Romgaz, Transelectrica and Transgaz
Media are some of its clients. The company offers a wide range of short courses (for a week or two)
in public procurement, human resources, finance and accounting, marketing and communication,
operations, maintenance, energy strategy, natural gas, IT, legislation, electrician certificates, etc.
Pag. 6/16

Share capital is 1,948 thousand RON, fully paid, represented by 194,842 shares with nominal value
of 10 RON each.

1.4. ICEMENERG SERVICE

Icemenerg Service SA subsidiary is focused on the design, production and distribution of

measurement, management and control equipment for power systems, certified ISO 9001 and IQ
NET by SRAC ROMANIA, ANRE certified.

Share capital is 493 thousand RON, fully paid dated 22.08.2013, represented by 49,300 shares with
nominal value of 10 RON each.

By order of Ministry of Economy and Trade no. 855/10.12.2004 (regarding special administration and
financial supervision) starting with 23.12.2004, the special administration and financial supervision
procedure was established in ICEMENERG SERVICE SA during the privatisation of the subsidiary,
in order to establish management procedure and necessary measures aimed at accelerating the
privatisation of the company.

1.5. OPCOM

OPCOM was established under GD no. 627/2000 following the reorganization of the National
Electricity Company SA, as a subsidiary whose sole shareholder is Transelectrica.

The main activities of OPCOM are: organization, administration and supervision of centralized electric
energy and natural gas markets.

Transelectrica does not exercise direct control over the actual decision-making mechanism of
OPCOM, whose administration is conducted according to regulations established by ANRE. In line
with those mentioned above, according to GEO no. 86/2014, OPCOM is to be transferred under the
administration of the Ministry of Economy, Trade and Tourism.

1.6. ICEMENERG

Icemenerg provides services for power plants, substations and electrical networks and is engaged in
research and development in physical and natural sciences and engineering, in processes and
equipment for the generation, transmission, distribution and use of electrical and thermal energy,
innovation, studies, strategy development, design, planning, engineering and other technical
services, research and consulting services.

Through GD no. 1065/ 2003, on the reorganisation of Transelectrica and Icemenerg SA through
merger by acquisition, the reorganisation was approved with Icemenerg as a wholly owned subsidiary
of Transelectrica.

Through GD no. 185/2013, on the organization and functioning of the Ministry of National Education,
Icemenerg, along with other national research and development institutes, was transferred under the
coordination of the Minister Delegate for research.

The National Trade Register Office - Trade Register of Bucharest Tribunal, through resolution no.
41515/07.04.2014, granted the application for dissolution of Subsidiary ,,Institute for Energy
Research and Modernization - Icemenerg" SA and through resolution no. 41923/07.04.2014 granted
the application and ordered the registration of "National Institute of Research and Development for
Energy - Icemenerg Bucharest" (J40/ 4323/ 2014) on the basis of GD no. 925/2010 and other related
legislation (GD no. 185/2013).
Pag. 7/16

The Appeal Court of Bucharest posted on 12.02.2015, the outcome of case no. 15483/3/2014,
namely Decision no. 173/2015 which dismissed Transelectricas appeal as unfounded, the final
decision in the lawsuit contesting National Trade Register Offices resolution.

IDENTIFICATION DATA
OPCOM
Headquarters
Number in the Commercial Register
Single (fiscal) registration code
Share capital
Sole shareholder
Establishment document

Bucharest 3, Bd. Hristo Botev no. 16-18

J40 / 7542 / 2000
13278352
3,547,850 RON divided into 354,785 nominative shares of
10 RON nominal value each
Transelectrica
Governmental Decision 627/ 2000

SMART
Headquarters
Number in the Commercial Register
Single (fiscal) registration code
Share capital
Sole shareholder
Establishment document

Bucharest 1, Bd. Gen. Gh. Magheru no. 33

J40 / 8613 / 2001
14232728
55.036.300 RON, divided into 5.503.630 nominative shares
of 10 RON nominal value each
Transelectrica 70,005%
Romanian State 29,995%
GD 710/2001 regarding establishment of the trading
company for Maintenance Services of the Electricity
Transmission Grid SMART SA by reorganising certain
activities of the National Power Grid Company
Transelectrica SA

TELETRANS
Headquarters
Number in the Commercial Register
Single (fiscal) registration code
Share capital
Sole shareholder
Establishment document

Bucharest 3, Bd. Hristo Botev no. 16-18

J40/ 12511/ 2002
15061510
6.874.430 RON, divided into 687.443 nominative shares of
10 RON nominal value each
Transelectrica
AGA decision of 20.03.2002

FORMENERG
Headquarters
Number in the Commercial Register
Single (fiscal) registration code
Share capital

Bucharest 4, Bd. Gheorghe Sincai no. 3

J40/ 2265/ 2002
14529126
1,948,420 RON divided into 194,842 nominative shares of
10 RON nominal value each

Pag. 8/16

Sole shareholder
Establishment document

Transelectrica
Decision 33 of AGA Transelectrica of 19.11.2001

ICEMENERG SERVICE
Headquarters
Number in the Commercial Register
Single (fiscal) registration code
Share capital

Sole shareholder
Establishment document

Bucureti, Bd. Energeticienilor no. 8, sector 3

J40 / 11414 / 2003
15689117
493,000 RON divided into 49,300 nominative shares of 10
RON
nominal value each
Transelectrica
GD 2294 / 9.12.2004 approving the transfer of the share
stock held by the trading company Energy Research and
Modernising Institute ICEMENERG SA Bucharest in the
trading company subsidiary ICEMENERG-SERVICE SA
Bucharest to the National Power Grid Co. Transelectrica SA

Pag. 9/16

CONSOLIDATION OF FINANCIAL STATEMENTS

The general results from the Group activities on 31.12.2014 have been as follows:
Indicators
[thousand
RON]
Operational
revenues
Operational
expenses
Gross
operational
profit
Financial
result
Profit before
tax
Net profit
Indicators
[thousand
RON]
Fixed assets
Floating assets
TOTAL
ASSETS
Equities
Total debts
- Long term
debts
- Short term
debts
TOTAL
EQUITIES AND
DEBTS

TEL

SMART

TELETRANS

ICEMENERG

Consolidation
adjustments

TOTAL

2,817,457

105,839

44,692

1,437

(145,334)

2,822,654

(2,375,377)

(103,156)

(36,803)

(1,419)

142,440

(2,372,896)

442,080

2,683

7,889

18

(2,894)

449,758

(8,496)

(502)

206

(3)

(12,657)

(21,449)

433,584

2,181

8,095

15

(15,551)

428,309

359,395

2,181

7,367

15

(15,551)

353,392

TEL

SMART

TELETRANS

ICEMENERG

Consolidation
adjustments

TOTAL

3,484,289
1,956,749

49,411
51,847

6,846
30,461

8,588
4,522

(56,761)
(37,077)

3,492,373
2,006,502

5,441,038

101,258

37,307

13,110

(93,839)

5,498,875

2,801,779
2,639,259

56,549
44,709

30,380
6,927

11,318
1,792

(59,491)
(34,347)

2,840,535
2,658,340

1,120

(1,120)

1,413,135

1,413,135
1,226,124

44,709

6,927

672

(33,227)

1,245,205

5,441,038

101,258

37,307

13,110

(93,839)

5,498,875

Source: Transelectrica

The general results of the group, consisting of the Company and the three subsidiaries that are
consolidated, have been as follows:
Indicators
[thousand lei]
Total revenues
Total revenues
Gross profit
Net profit

2014

2013

2012

14/13 [%]

2,867,396
2,439,087
428,309
353,392

2,570,756
2,322,025
248,731
206,432

2,886,741
2,818,214
68,527
47,876

12%

Source: Transelectrica

Pag. 10/16

5%
72%
71%

ACTIVITIES
In 2014 the three subsidiaries included in the consolidation carried out activities according to their main
business as follows:

TELETRANS its activities have been as follows:

o

Services in the information technology domain:

Services for telecommunications:

For Transelectrica: services under Service Level Agreements (SLA) and system
services upon order;
For governmental bodies and other clients on the liberalised telecommunications
market of Romania - rented line services, dark fibre and collocation services as well
as their associated services.

Services for process information activities:

Services provided for corporate clients on the Romanian market and requested by
Transelectrica - outsourcing type services to manage computer systems,
management of IT networks, IT systems and applications, elaborating IT applications
specific to clients, design and achievement of LAN, MAN and WAN networks, design
and implementation of IT systems, building IT systems and applications using
relational databases, ERP systems, Internet sites, web-based applications, support
services, preventive/corrective maintenance for IT equipment and systems,
maintenance services for hardware and software;
IP provided on the Romanian market to corporate clients, telecommunications and
Internet suppliers: wide band Internet services, physical supports for this kind of
connection;

Maintenance of process information systems / equipment;

Management of process information systems;
Elaborating and implementing new applications or developing the existent ones;
Implementing and commissioning process information systems;
Integrating into the EMS/SCADA the new command-control systems from the
refurbished electric substations;
Remote control / tele-management of electrical substations from the Territorial Power
Dispatcher (DET) / National Power Dispatcher (DEN);

SMART its activities have been:

o

As provider of services and work for:

As supplier of consultancy and design,

The maintenance of electric power installations;

Refurbishment and upgrading of electric power installations.

Achieving specific products related to electric power installations.

Provider of:

Installation of (vacuum, SF6, oil, air insulated) primary equipment;

Pag. 11/16

Installation of digital equipment and systems for protections, metering and command
- control devices;
Laying and connecting (high voltage, secondary circuits, optical fibre) cables;
Regulations and parameter setting to numerical pieces of equipment.

Technical revisions and inspections, current and capital repairs, interventions in cases of
accidental events, expertise tests for clients in the energy domain and not only, mainly with
respect to:

Installations and equipment for electricity transmission and distribution at low,

medium high and very high voltage (750 kV included);
Equipment and circuits for protections, automations, metering and command-control
in the transformer and connection electric substations;
Transformers and autotransformers of all capacities and voltage levels (up to 500
MVA and 750 kV);
Cable overhead lines (from 110 kV to 750 kV).

Pag. 12/16

THE MANAGEMENT STRUCTURE

The executive management of subsidiaries was provided in 2014 by the following persons:

SMART:
Dumitru Constantin IACOV

General Director

Adrian CORBU

Deputy General Director

Liviu PETRACHE

Director, Maintenance and Development Division

Alexandru Tiberiu DEKANY

Director, Economic Division

Dan MANOLACHE

Director, Procurement and Marketing Division

TELETRANS:
Bogdan Gabriel NEIDONI

General Director

Claudiu Tudorel PREOTEASA Deputy General Director

Dan BORDEA

Technical Director

Eliza PALADE PREDA

Director, Economic Department

Mihail Ovidiu MIHIL

Director, International Relations

Communication Department

Ovidiu CODREANU

Director, IT Department

Clara MINDROC

Director, Procurement and Contracts Department

Strategy,

ICEMENERG SERVICE:
Nicolae DUL

General Director

Constantin Ulmeanu

Economic Director

FORMENERG:
Dragos FLORESCU

General Director

Marcel NICULESCU

Economic Director

Dominic Valentin COSTEA

Director of Professional Development

Ioana VOICESCU

Marketing Director

OPCOM:
Anca DOBRICA

Chairman of the Board of Administration

Victor IONESCU

General Director

Silvia FEDIUC

Economic Director

Luminita LUPULUI

Director of Transactions and Electricity Settlement

Pag. 13/16

Programmes,

and

FINANCIAL REPORT
FINANCIAL POSITION STATEMENT
The consolidated statement of the financial position at Group level is as follows:

Indicator
[thousand lei]
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Other investments

31.12.2014

31.12.2013

14/13 [%]

3,440,626
40,122
11,625

3,623,555
43,983
5,989

5%
9%
94%

3,492,373

3,673,527

5%

48,187
1,064,082
894,233
2,006,502
5,498,875

46,613
855,953
635,163
1,537,729
5,211,256

3%
24%
41%
30%
6%

733,031
49,843
78,616
23,712
501,477
1,448,646

1,091,526
49,843
57,895
3,207
555,327
883,244

33%
0%
36%
639%
10%
65%

2,835,325

2,641,042

7%

5,210
2,840,535

2,641,042

8%

559,489
792,044
25,828
35,744
1,413,135

543,739
951,063
31,061
34,145
1,560,008

3%
17%
17%
2%
9%

953,002
27,675
10,376
206,950
33,070
14,132
1,245,205
2,658,340
5,498,875

707,927
15,092
10,164
231,222
35,472
10,329
1,010,206
2,570,214
5,211,256

36%
26%
2%
10%
7%
37%
23%
3%
6%

Total non-current assets

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
SHAREHOLDERS EQUITY AND LIABILITIES
Shareholders equity
Share capital
Share premium
Legal reserves
Other reserves
Revaluation reserves
Retained earnings
Equity attributable to the owners of the
Group
Non-controlling interests
Total equity
Non-current liabilities
Deferred income
Borrowings
Deferred tax liability
Employee benefits obligations
Total non-current liabilities
Current liabilities
Trade and other liabilities
Provisions
Other tax and social security liabilities
Borrowings
Deferred income
Income tax payable
Total current liabilities
Total shareholders equity and liabilities
Source: Transelectrica

Pag. 14/16

PROFIT AND LOSS ACCOUNT

The profit and loss statement at Group level is as follows:

Indicator
[thousand lei]
Revenues
Transmission revenues
System services revenues
Balancing market revenues
Other revenues

2014

2013

14/13[%]

2,822,654
1,309,064
750,904
703,376
59,310

2,494,800
1,156,483
629,318
631,847
77,152

13%
13%
19%
11%
23%

(2,372,896)
(238,349)
(703,376)
(653,441)
(341,291)
(247,997)
(17,309)
(125,195)
(45,938)

(2,224,284)
(267,282)
(631,847)
(574,488)
(342,522)
(238,448)
(17,651)
(118,662)
(33,384)

7%
11%
11%
14%
0%
4%
2%
6%
38%

Operating profit

449,758

270,516

66%

Finance income
Finance cost

44,742
(66,191)
(21,449)

75,956
(97,741)
(21,785)

41%
32%
2%

428,309
(74,917)
353,392
4,68

248,731
(42,299)
206,432

72%

2,82

66%

Operating expenses
System operating expenses
Balancing market expenses
Technological system services expenses
Depreciation and amortization
Personnel expenses
Repairs and maintenance expenses
Other operating expenses
Consumables

Net finance result

Profit before income tax
Income tax expense
PROFIT FOR THE YEAR
Basic and diluted earnings per share (lei/share)
Source: Transelectrica

Pag. 15/16

77%
71%

TREASURY FLOWS
The treasury flows statement at Group level is as follows:
Indicator
[thousand lei]
Cash flows from operating activities
Profit for the year

2014

2013

343,341

206,432

74,917
341,291
40,724
(11,832)
5,583
12,583
509
10,233

42,299
342,522
21,516
(7,756)
(702)
9,521
718
-

8,944

22,772

826,112

637,322

(235,147)
1,574
294,034
(571)
19,845
906,029

(25,130)
16,273
5,700
(7,016)
42,587
650,694

(38,335)
(77,717)
789,977

(33,299)
(40,108)
577,287

Cash flows used in investing activities

Purchase of property, plant and equipment and of intangible assets
Proceeds from sale of property, plant and equipment
Dividends received
Interest received
Net cash used in investing activities

(196,155)
2
567
14,103
(181,483)

(254,905)
300
6,580
(248,025)

Cash flows used in financing activities

Proceeds from long term borrowings
Repayments of long term borrowings
Repayments of short term borrowings
Bonds issue
Cash flows from operating activities

(186,211)
(164,648)
(350,859)

11,163
(189,175)
200,000
(29,633)
(7,645)

Net increase in cash and cash equivalents

257,635

321,617

Cash and cash equivalents as at 1 January

630,325

308,708

Cash and cash equivalents at the end of the period

887,960

630,325

Adjustments for:
Income tax expense
Depreciation and amortization
Increase in allowances for doubtful debts
Decrease in allowances for doubtful debts
Reversal of impairment of property, plant and equipment
Increase in provisions
Net loss from disposal of property, plant and equipment
Net loss from deconsolidation of Icemenerg Service
Interest expense, interest income and unrealised foreign exchange
gains
Changes in:
Trade and other receivables
Inventories
Trade and other liabilities
Other tax and social security liabilities
Deferred income

Interest paid
Income tax paid

Source: Transelectrica

Pag. 16/16