annual report 2013 - cez · karel kral (*1974) cfo cez group in romania he graduated the faculty of...

Annual Report 2013CEZ Group in Romania

1AboutCEZ Group

2 About CEZ Group

CEZ Romania | Annual Report 2013

CEZ Group is an established, integrated electricity conglomerate with operations in a number of countries in Central and Southeastern Europe and Turkey, headquartered in the Czech Republic. Its principal businesses encompass generation, distribution, trading, and sale of power and heat, trading and sales of natural gas, and coal mining. CEZ Group has 27,000 employees.

The largest shareholder of the parent company, ČEZ, a. s., is the Czech Republic with a stake (as at December 31, 2013) of nearly 70% of the Company’s stated capital. The shares of ČEZ, a. s. are traded on the Prague and Warsaw Stock Exchanges, where they form part of the PX and WIG-CEE stock exchange indexes.

CEZ Group’s primary mission is to maximize investment returns and ensure long-term growth in shareholder value. The corporate culture is focused on safety, performance, and continual improvement of internal efficiency. At the same time, CEZ Group’s business activities are governed by strict ethical standards – this includes acting responsibly toward employees, society, and the environment. In pursuing its business activities, CEZ Group upholds principles of sustainable development, supports energy efficiency, rolls out new technologies, contributes to the development of society as a whole, and creates an environment favorable to its employees’ professional growth.

In the Czech Republic, CEZ Group companies mine and sell coal, generate and distribute electricity and heat, trade in electricity and other commodities, sell electricity, heat, and natural gas to end customers, and provide other services. The generation portfolio consists of nuclear, coal, gas, hydro, and other renewable sources. To ensure continued success in the Czech Republic marketplace, which is crucial to CEZ Group in terms of its business interests, the Group is carrying out an extensive program of renewal, upgrades, and development of its generation portfolio, including preparations for building new nuclear sources, as well as upgrades and development of its distribution networks.

In forming its strategy, CEZ Group responds to new power industry trends. It enters new business areas and offers customers innovative products and services tailored to their needs.

At the international level, CEZ Group focuses in particular on markets in Central and Southeastern Europe, where it operates primarily in electricity distribution, generation, trading, and sales. Members of the CEZ Group in the Netherlands and Ireland act as holding companies and provide certain financing functions.

3About CEZ Group

CEZ Group owns or co-owns generation and distribution assets in Poland, Romania, Bulgaria, Hungary, Slovakia, and Turkey. In Poland, CEZ Group operates two black coal-fired power plants and two hydro power plants near the country’s border with the Czech Republic, and owns a development company that is preparing to build wind power plants. In Romania, CEZ Group is involved in the generation of electricity from renewable sources of energy, as well as electricity distribution and sales operations. In Bulgaria, it distributes and sells electricity in the western part of the country and generates power in a coal-fired power plant. In Turkey, CEZ Group, together with a local partner, operates a distribution and sales company and generates electricity in gas, hydro, and wind power plants.

CEZ Group conducts wholesale trading operations in electricity and other commodities in a number of European countries.

CEZ Group sells electricity and natural gas to end customers in places such as Romania, Bulgaria, Turkey, Hungary, Poland, and Slovakia, in addition to the Czech Republic.

CEZ Group has been present on the Romanian market since 2005, when it took over the power distribution company Electrica Oltenia SA and, after the process of transformation, supplies electricity to seven counties: Argeş, Dolj, Gorj, Mehedinţi, Olt, Vâlcea and Teleorman. CEZ Group’s businesses in Romania are represented by its 8 companies - CEZ Distribuţie, CEZ România, CEZ Vânzare, CEZ Trade, Tomis Team, MW Invest, Ovidiu Development and TMK Hydroenergy Power.

In the Dobrogea area, CEZ Group invested EUR 1.1 billion in the construction of the largest on-shore wind farms in Europe, with total installed power of 600 MW: CEZ Wind Farms from Fântânele, Grădina

and Cogealac.The construction of the farms located north of Constanţa has been done in several stages – the first, located at Fântânele, includes 139 wind turbines with a 347.5 MW capacity. The second stage includes the locations Cogealac and Grădina, and it includes 101 turbines with a 252.5 MW total capacity.

CEZ Wind Farms’ entire capacity was commissioned at the end of 2012. In order to meet the EU Directive requiring that 20% of the total volume of electric power be generated from renewable sources by 2020, the investment carried out by CEZ Group in Dobrogea is of a huge importance.

In 2009, in Romania, only14 MW was installed thus materializing the wind potential.

In 2011, CEZ Group in Romania purchased all shares of the company that owns the hydro-energetic system nearby Reşiţa, in Caraş Severin County, consisting of 4 micro hydropower plants (Grebla, Crăinicel 1, Crăinicel 2 and Breazova) and the adjacent hydro installations from Trei Ape, Gozna, Văliug and Secu, with a total installed capacity of approximately 18 MW and an output of almost 70GWh/year. CEZ Group has invested in the upgrading of this complex from Reşiţa in order to grow efficiency, its production capacity going up to more than 22 MW after the end of the refurbishment process.

2Letter from the CountryManager

5Letter from the Country Manager

2Letter from the CountryManager

Dear Shareholder,

I find myself once again in the posture of presenting you the Country Report and offering you an overview of the CEZ Group’s financial and operating results in Romania, considering also the legal and economical context that surrounds all European businesses.

2013 has put us under considerable pressure, bringing changes in legislation regarding the number of GC given per MWh, changes in price of GC on the market, a new tax on distribution activity, etc. CFR and the Romanian Post increased significantly the debts towards us. Also, the Fântanele Vest wind power plant temporary accreditation has expired in October 2013 and the final accreditation was put on hold by the European Commission, resulting in no GC received in November and December for this power plant.

However, there were also positive things about 2013: besides the continuous improvements that we are focusing on, we successfully finalized the refurbishment of the Resita hydro power plants and we obtained both the update of the license for production and the accreditation for the GC scheme.

CEZ Distribuţie and CEZ Vânzare are now modern companies, fully restructured and providing quality services to our customers, playing an important part in the Romanian electricity market.

Our primary focus at the moment is to consolidate and optimize the performance of our current portfolio and deliver outstanding services for our clients, and you can see that in the figures of 2013 EBITDA reached 931 million RON and the net income was 220 million RON.

Besides the operational excellence, we tried to be close to people and their needs. Including to our own employees, who are given the opportunity to grow and reach performance within a dynamic and challenging professional environment. I am most proud to find that our specialists in wind and hydro are acknowledged for their skills and dedication.

Sincerely yours,

Jan Veskrna

President of Directorate of S.C. CEZ România S.A.President of Directorate of S.C. CEZ Distribuţie S.A.

3Information on Persons responsible for theCountry Report

7Information on Persons Responsible for the Country Report

3Information on Persons responsible for theCountry Report

Karel Kral (*1974) CFO CEZ Group in Romania

He graduated the Faculty of Economic Science from Plzen, the Czech Republic.

During the period 1996 – 1998 he started working in consultancy, at Deloitte Central Europe. He was part of the managing consultancy team for different projects implementing IT systems and re-thinking projects for customers from various sectors.

In 1998 he moved to the tele-communication industry where he had various positions in Finance Controlling, being responsible for all aspects related to reporting, planning and budgeting, as well as to audit and taxes.

In 2002 and 2003 he worked in Paris at the main office of the company supplying signalling systems for railways. There he occupied the position of Controller in the Business Division, being responsible for the consolidation of the reporting and planning processes as well as for the control of projects in Europe in connection with signalling high-speed and urban trains.

He came back to Prague in 2003 as Finance Director at the company supplying telephone services. Up to the end of 2009, he worked for the companies in the Czech Republic, in Slovakia and Hungary, occupying the position of Finance Director in the parent company for Central Europe.

At the end of 2009 he joined CEZ Group in Albania as a Finance Director. There he worked in projects meant to transform the newly set-up Shared Services Company as well as in projects for the distribution and supply companies and starting with March 2011 he was also Operations Director. Since January 2013, he has joined CEZ Group in Romania as a Finance Director.

4Contents

4Contents Cuprins

Contents

1. About CEZ Group 2

2. Letter from the Country Manager 5

3. Information on Persons Responsible for the Country Report 7

4. Contents 9

5. Situation in the Romanian Power Sector 11

6. Important Events 13

7. Equity Holdings in the Country 18

8. Legislative Environment 21

9. Electricity Procured and Supplied within CEZ Group 26

10. Distribution and Sales of Electricity in the Country and Trading 28

11. Business Performance of CEZ Group in Romania 34

12. Results of Individual Companies in Romania 37

13. Capital Expenditures at CEZ Distribuţie 57

14. CEZ Wind Farms 61

15. Hidro Production 64

16. Management of Work Safety 69

17. Environment Protection 71

18. Annual Report Regarding Human Resources 74

19. Donations and Sponsoring 81

20. Litigations 84

21. Received Awards 86

5Situation inthe RomanianPower Sector

11Situation in the Romanian Power Sector

5Situation inthe RomanianPower Sector

The main regulatory bodies in the energy sector are: The National Regulatory Authority in the Energy Sector (ANRE), The National Regulatory Authority in the Communal Services Sector (ANRSC), The Ministry of Economy, Commerce and Business Environment, The Ministry of Energy, and The Competition Council.

The regulatory framework has been developed and harmonized in line with the European Union legislation.

Starting July 2007, the electricity market is fully open. The real degree of opening of the electricity market in Romania was around 55% at the end of 2013.

Five out of the eight main distribution/supply companies in Romania were privatized. Power generation is still almost integrally owned by the state; the exceptions are the investments done in the renewable energy sector (with noticeable results such as CEZ Wind Farms from Fântânele - Cogealac, with a 600 MW total installed capacity at the end of 2012), and the combined - cycle power plant of OMV Petrom, based on gas and with a capacity of 800 MW.

The former company Electrica Oltenia SA participated in the Romanian market of electric power as a licensed distributor and supplier of energy, based on License no.457/29.04.2002 for electric power distribution and License no. 458/29.04.2002 for the supply of electric power, both given by ANRE.

Starting March 15th, 2007, as a result of the unbundling process, the company was legally divided into CEZ Distribuţie SA and CEZ Vânzare SA, and the licenses were changed accordingly: No. 457/2005 for distribution and No. 776/15.03.2007 for supply, as modified by ANRE Decision no. 2007/03.09.2009.

By ANRE Order no. 47/2013, CEZ Vânzare SA was designated Supplier of Last Resort (SoLR) for the period July 1st, 2013 – June 30th, 2014. According to the market opening calendar, Annex

1 to ANRE Order no. 82/2013, starting 01.01.2014, non-residential customers will not benefit of regulated tariffs. Following the total opening of the energy market for non-residential customers, order no. 82/2013 sets the regulatory basis for two more new categories of non-residential customers: supplied in SoLR regime and supplied in the Universal Service regime.

The total market share of CEZ Vânzare in 2013 was 7.7% and 12.68% on the regulated market.

6ImportantEvents

13Important Events

6ImportantEvents

JANUARY�� Starting the authorization of works at the transformer station of 6.3/35/110 kV Grebla

and of the MV networks refurbishment;�� Approval of the 2013 budget of revenues and expenses and of the 2013 annual

programs of maintenance at the company TMK Hydroenergy Power SRL, part of CEZ Group in Romania;

�� Continuing the refurbishment works at the hydropower plants and pumping station Timiş Trei Ape;

FEBRUARY�� Issuance of the construction authorization and beginning of works at the transformer

station of 6.3/35/110 kV Grebla and at the afferent power networks;�� Sending to ANRE the annual report for monitoring RES based on the support scheme

with green certificates for TMK Hydroenergy Power SRL;�� Continuing refurbishment works at the pumping station Timiş Trei Ape;�� Starting the procedure for demolishing some appended parts from CHE Grebla

(historical monument), with the need of accomplishing the civil works for the refurbishment of CHE Grebla;

14 Important Events


MARCH �� CEZ România participates at the debate on „Competition, Fair Prices, Non-Discriminating

Access only in a Real Energy Market” organized by Energy Centre;�� The Diplomat with the support of CEZ Group in Romania organizes the event called „Access

to the Grid”, a meeting dedicated to discussions meant to offer practical information about how to connect to the network the projects involving generation of electric power from renewable sources;

�� It is issued the authorization for the demolishment of annexes afferent to CHE Grebla (historical monument) and the beginning of demolishment works that allow us to continue refurbishment activities;

�� The company’s sole shareholder approves the annulment procedure for the assets afferent to the hydropower plants affected by works of demolishment, necessary for the refurbishment of the hydropower system;

�� Administrators agree and the sole shareholder approves to give for free to Enel Distribuţie Banat the right of use for the land plot inside CHE Grebla, so as a new connection of 110 kV to SEN/RED would be constructed;

�� Through the Procurement Division, contracts are signed for investments related to the refurbishment of the dams Văliug (Breazova), Canalul Superior and the accomplishment of the tele-metering system at the dams owned by TMK Hydroenergy Power SRL;

�� Continuing the refurbishment works in all authorized sites of the hydropower system;

ApRil�� On 29.04.2013 the works of expansion at the Command Centre of CEZ Wind Farms were

finalized;�� Debates about green energy at the Green Forum conference organized by Intact Media

Group with the support of CEZ România take place;�� The agreement for granting the right to use the land plot from CHE Grebla to Enel Distribuţie

Banat is signed, in order to build a new connection of 110 kV to SEN/RED;�� Starting the repairing works with own forces at the channels from the hydropower system;�� Continuing refurbishment works in all authorized sites of the hydropower system;

MAY�� The addendum to the contract connection concluded with Enel Distribuţie Banat is signed,

for works of connection to the 110 kV RED;�� Approval of the financial situations for the company TMK Hydroenergy Power SRL by the

sole shareholder as per the audit report done by the auditors;�� Meetings with Enel Distribuţie Banat and Transelectrica (ST Timişoara, DET Timişoara) in

order to set conditions for connection to SEN and approval of the afferent technical projects at the transformer stations Grebla and UCMR;

�� Continuing refurbishment and repairing works in all authorized sites from the hydropower system;

JUNE�� Starting construction works at the 110 kV RED belonging to Enel Distribuţie Banat;�� The construction authorization for the refurbishment of the Văliug (Breazova) dam is

obtained. Public consultations are organized with all public local authorities in order to empty Văliug lake, necessary to replace the bottom pipes and the safety and service valves;

JUlY�� CEZ Group in Romania supports the Business Days event organized by ADESCO in Craiova,

for entrepreneurs, managers and for the entire local and regional business community;

15Important Events

�� On 30.07.2013, it is obtained from Transelectrica the Certificate for Conformity with N 51 for all 3 wind farms made by: Tomis Team, MW Team Invest and Ovidiu Development;

�� Finalization of construction works afferent to Fantanele Wind Farm on 19.07.2013;�� It is performed the controlled emptying of Văliug lake and refurbishment works start;�� It is obtained the authorization for the construction and refurbishment of Canalul Superior

(replacement of the existing metallic pipe with another one, of a bigger cross-section) and refurbishment works are started;

�� The Procurement Division signs the agreement for refurbishment works at the big water dischargers from the Gozna and Văliug dams and the Gozna tunnel;

�� The Procurement Division concludes 5 agreements for the refurbishment of feed pipes. Starting works of repairs and re-making the feed pipes in parallel with refurbishment works;

�� The sole shareholder approves the dismantling of some land-plots and the sale or rental of some non-energy assets. Action is finalized in December 2013;

�� Administrators approve and it is agreed with SC UCM Reşiţa S.A. the conclusion of free loan agreements for the space occupied by the installations located in the 110 kV UCMR transformer station, respectively for the use of the 110 kV bay modernized by the company, as well as the conditions for connection to SEN/RED for feeding to UCMR places of use;

�� Continuing the works of refurbishment and repairing in all authorized sites from the hydropower system;

AUGUST�� Finalization of construction works afferent to Cogealac Wind Farm on 31.08.2013;�� The construction works afferent to the weather - registration towers at Cogealac Wind Farm,

including mounting of equipment, were finalized on 30.08.2013;�� The sole shareholder approves the conclusion of free loan agreement regarding the space

occupied by the installations located in the 110 kV UCMR transformer station, respectively the use of the 110 kV bay modernized by the company as well as the conditions for connection to SEN/RED, by UCMR, in order to supply its places of use;

�� Continuing refurbishment and repairing works in all authorized sites of the Caraş - Severin hydropower system;

SEpTEMBER�� It is obtained the construction authorization to re-make the big water dischargers from the

Gozna and Văliug dams, and the Cozia tunnel and works are started;�� Finalization of works for mounting hydro-generators, and starting of dry testing;�� Continuing refurbishment and repairing works in all authorized sites from the hydropower

system;

OCTOBER�� On the 30th of October 2013, the accreditation obtained by Tomis Team for Green

Certificates ended; it was no longer extended;�� A record production of 1.25 TWh was obtained. 500 GWh KPI on 20.04.2013 and 1 TWh on

18.10.2013; the value will be of reference from now on;�� Finalization and connection to the 110 kV SEN/Red of the 6.3/35/110 kV Grebla transformer

station through the 110 kV connection installation built by the company with money from connection fees;

�� Finalization of modernization works at Canalul Superior and increase of the transport capacity;

�� The sole shareholder approves the conclusion of a loan agreement for the company in order to finance the investment works;

16 Important Events


NOVEMBER�� Inauguration of the new offices of CEZ in Piteşti, starting from 18.11.2013, all employees from

Piteşti working for CEZ Group in Romania work in a single building;�� Finalization of refurbishment and repairing works at the Văliug dam;�� Finalization of works at the big water dischargers from the Văliug and Gozna dams and the

Cozia tunnel;�� Finalization of refurbishment works at the Principal channel Şafra and Semenic (partially);�� Through the transformer station Grebla the entire local network of the company TMK

Hydroenergy Power SRL, including CHE Crăinicel 1, CHE Crăinicel 2, CHE Breazova and the Pump Station Timiş Trei Ape is connected to the power grid;

�� CHE Grebla and CHE Crăinicel 1 deliver the first MWh of electric power into SEN/RED with their new equipment, during the testing period;

�� Performance of complex tests in all power plants and in the Pump Station Timiş Trei Ape;�� The administrators of the company TMK Hydroenergy SRL approve the new organizational

scheme of the company, valid from 01.01.2014, as a result of the alignment to the TOM project decisions and the Group’s rules;

�� Commissioning of CHE Gebla, CHE Crăinicel 1, CHE Crăinicel 2 and of the feeding channels;

�� The assets of the company TMK Hydroenergy Power SRL are assessed by an ANEVAR certified assessor;

DECEMBER�� Finalization of modernization works and launching of the 110/20 kV Craiova Centre power

station by CEZ Distribuţie;�� Commissioning of CHE Breazova, of TTA Pump Station, and of Grebla and UCMR

transformer stations;�� With a third party, there are made complex tests with hydro-generators in line with the

requests of Transelectrica – DEN, obtaining the technical certification of conformity with standards;

�� Submission to ANRE of the complete documentation regarding the updating of license for TMK Hydroenergy SRL. By decision of ANRE President, the company’s commercial exploitation license is updated;

�� Submission to ANRE of complete documentation and issuance of ANRE President’s decision regarding accreditation of the support scheme with green certificates for the refurbished hydropower plants with Pi < 10 MW;

�� Insuring the fixed assets of TMK Hydroenergy Power SRL, including the new assets resulting from refurbishment; insurance made with the Generali Asigurări company.

7EquityHoldings inthe Country

7EquityHoldings inthe Country

18 Equity Holdings in the Country


At the end of 2013 the structure of shareholders in CEZ companies from Romania is as follows:

CEZ, a.s. CEZ poland Distribution

BV

SC CEZ România

SA

CEZ Korporatni Sluzby S.R.O.

SC Tomis Team

SRl

CEZ Distribuţie 99.99999861% 0.00000139%

CEZ Vânzare 99.99999861% 0.00000139%

CEZ România 99.9995% 0.0005%

CEZ Trade România

99.99375% 0.00625%

Tomis Team 99.999998% 0.000002%

Ovidiu Development

95% 5%

MW Team invest

100%

TMK Hydroenergy power

100%

Among the most important approvals issued throughout 2013 by the General Assembly of Shareholders of SC CEZ România SA we mention:

�� Budget of revenues and expenses for the year 2013;�� Financial statements on 31.12.2012, profit disbursement and Directorate financial release;�� Modification of Incorporation Act.

Among the most important approvals issued throughout 2013 by the General Assembly of Shareholders of SC CEZ Distribuţie SA we mention:

�� The budget of revenues and expenses for the year 2013;�� Financial statements on 31.12.2012, profit disbursement and Directorate financial release;�� Investment program for 2013;�� Investment programs for the 2014 - 2018 period;�� Maintenance program for 2013;�� Modification of Incorporation Act.

Among the most important approvals issued throughout 2013 by the General Assembly of Shareholders at SC CEZ Vânzare SA we mention:

�� The budget of revenues and expenses for the year 2013;�� Financial statements on 31.12.2012, profit disbursement and Directorate financial release;�� Modification of Incorporation Act.

19Equity Holdings in the Country

Among the most important approvals issued throughout 2013 by the General Assembly of Associates in SC Tomis Team SRl we mention:

�� The appointment of Mr. Jan Jires and the appointment of Mr. Daniel Răduţ as Company administrators as of 1st of March 2013.

Among the most important approvals issued throughout 2013 by the General Assembly of Associates in SC Ovidiu Development SRl we mention:

�� The appointment of Mr. Jan Jires and the appointment of Mr. Daniel Răduţ as Company administrators beginning as of 1st of March 2013.

Among the most important approvals issued throughout 2013 by the General Assembly of Associates in SC MW Team invest SRl we mention:

�� The appointment of Mr. Jan Jires and the appointment of Mr. Daniel Răduţ as Company administrators as of 1st of March 2013.

8Legislative Environment



Legislaţia în ţară

primary legislation�� Government Emergency Ordinance no. 57/2013 – regarding the modification and

completion of Law no. 220/2008 for the establishment of the system promoting energy generation from renewable sources of energy. Date:10.06.2013, OG 335/7.06.2013;

�� Government Emergency Ordinance no. 79/2013 regarding the modification of letter e) of paragraph (6) from article 3 in Law no. 220/2008 for the establishment of the system promoting energy generation from renewable sources of energy;

�� Government Decision no. 994/2013 regarding the approval of measures to reduce the number of green certificates in the situations stipulated in article (6) paragraph (2) letter a), c) and f) from Law no. 220/2008 for the establishment of the system promoting the energy generation from renewable sources of energy;

�� Government Decision no. 1028/2013 regarding the abrogation of Government Decision no. 90/2008 for the approval of the Rules regarding the connection of Users to the electric power networks of public interest.

The main ANRE regulations from 2013�� Order no. 1 from 2013-01-03 regarding the modification of the Methodology for the

establishment and adjustment of prices at electric and thermal power produced and delivered from co-generation power plants which use the support scheme, respectively the bonus for co-generation of high efficiency, approved by Order no. 3/2010;

�� Order no. 2 from 2013-01-23 regarding the approval of the Rules for authorization of suppliers of electricity and natural gas with regard to access to tenders organised for emissions of gas with greenhouse effect, on a common platform, as per the EU Regulation no. 1031/2010 issued by the Commission of 12th of November 2010;

�� Order no. 8 dated 2013-02-27 regarding the establishment of the mandatory quota of green certificates for the year 2012;

�� Order no. 10 dated 2013-03-13 regarding the update of cap values for green certificates and the value of one green certificate that has not been purchased, applicable for the year 2013;

�� Order no. 17 dated 2013-03-27 regarding the modification of the Methodology implemented to monitor the system for promotion of energy from renewable sources through green certificates, approved by ANRE Order no. 6/2012;

�� Order no. 18 dated 2013-03-27 regarding the approval of the tariff for transit received by the transport and system operator to perform the energy transit service from/to the countries neighbouring the national electro-power system;

�� Order no. 20 dated 2013-04-10 abrogating ANRE Order no. 23/2004 regarding the approval of the procedure for supervising the issuance of origin guarantees for the electric power generated from renewable sources;

�� Order no. 21 dated 2013-04-10 regarding approval of methodology for the establishment of the tariff for the electric power distribution service by the operators, others than the licensee distribution operators;

�� Order no. 23 dated 2013-05-15 regarding the approval of the Rules attesting the economic agents that design, make and test electric installations;

�� Order no. 29 dated 2013-05-17 regarding the modification and completion of the Technical Norm – Technical conditions for the connection to the electric power networks of public interest in the case of wind power plants, approved by ANRE Order no. 51/2009;

�� Order no. 30 dated 2013-05-17 regarding the approval of the Technical Norms for the connection to the electric power networks of public interest of the photo-voltaic power plants;

�� Order no. 31 dated 2013-05-22 regarding the setting on regulatory basis of the conditions for taking over the energetic capacity of electric power distribution;

�� Order no. 32 dated 2013-05-22 regarding the approval of the Rules for programming the production units and the dispatchable consumers;

�� Order no. 33 dated 2013-05-22 regarding the modification of Order no. 117/2008 for the approval of the Methodology regarding the reporting of information related to industrial

22 Legislative Environment


consumers of natural gas and of the Methodology regarding reporting of information related to the industrial consumers of electric power;

�� Order no. 35 dated 2013-06-05 for the approval of the procedures regarding the way of solving/intermediating the conflicts that appear at the time when contracts for energy are concluded;

�� Order no. 40 dated 2013-06-27 approving the regulated tariffs for the electric power supplied to the suppliers of last resort, the residential consumers and those assimilated to them who have not exercised their eligibility right;

�� Order no. 41 dated 2013-06-27 approving the regulated tariffs for electric power supplied by the suppliers of last resort to the final consumers who have not exercised the eligibility right, others than the residential consumers and those assimilated to them as well as of the prices for the reactive energy;

�� Order no. 47 dated 2013-06-28 for the appointment of the suppliers of last resort who have the obligation to supply electric power to their final customers who are in the situation of not being supplied any longer for reasons that are not integrally imputable to them;

�� Order no. 48 dated 2013-06-28 regarding the approval of the Rules for granting licenses and authorizations in the electric power sector;

�� Order no. 49 dated 2013-07-12 regarding the approval of the Rules for the organized framework of trading on the centralized market with continuous double negotiation of bilateral agreements for electricity;

�� Order no. 53 dated 2013-07-19 regarding the approval of the Methodology for setting the tariffs for electricity transport service;

�� Order no. 54 dated 2013-07-19 regarding the approval of the Frame Agreement for running the transport service, the system services and the services carried out by the electric power market operator for the participants to the electricity wholesale market, between the National Company for Electric Power Transport Transelectrica SA and the beneficiary;

�� Order no. 55 dated 2013-08-19 regarding the modification and completion of the Rules for accreditation of energy producers in order to apply the promotion system through green certificates, approved by ANRE Order no. 42/2011;

�� Order no. 56 dated 2013-07-19 for the modification and completion of the Rules for issuance of green certificates approved by Order no. 43/2011;

�� Order no. 57 dated 2013-07-19 approving the Rules for the organization and functioning of the green certificates market;

�� Order no. 58 dated 2013-08-02 regarding the modification of ANRE Order no. 52/2012 regarding the approval of the average tariff for the transport service, the tariff for the system service, the tariff of the electric power market operator and of the zone tariffs for the transport service charged by the economic agents from the electric power sector;

�� Order no. 59 dated 2013-08-02 regarding the approval of the Rules for the connection of users to the electric power networks of public interest;

�� Order no. 60 dated 2013-08-02 regarding the approval to issue new rules on the balancing market;

�� Order no. 61 dated 2013-08-02 approving the Rules for the organization and functioning of the commission meant to solve disputes on the wholesale and on the retail market, disputes that may have appeared among the participants to the electricity and natural gas markets;

�� Order no. 62 dated 2013-08-02 approving the Rules for the notification, acknowledgement and sanctioning the deviations from the rules issued in the energy sector;

�� Order no. 67 dated 2013-09-04 approving the Methodology for establishing the regulated tariff used by the electricity market operator;

�� Order no. 68 dated 2013-09-11 approving the Methodology used in monitoring the regulated market of electric power;

�� Order no. 72 dated 2013-10-02 – Methodology establishing the tariffs for the electric power distribution service;

�� Order no. 73 dated 2013-10-10 approving the Rules for organizing and functioning of the intraday market of electricity;


�� Order no. 74 dated 2013-10-27 regarding the approval of the Procedure used to put under voltage during the testing period and for certification of technical conformity of the wind and photovoltaic power plants;

�� Order no. 75 dated 2013-10-23 approving the Methodology for the assessment of conditions for financing investments with regard to the electrification of localities or for the extension of electricity distribution networks;

�� Order no. 77 dated 2013-10-23 regarding the approval of the reference price and of the regulated prices for electricity, applicable in 2014 to the producers of electric and thermal power in co-generation who get the bonus;

�� Order no. 78 dated 2013-10-23 regarding the approval of bonuses of reference for the electric power produced in co-generation of high efficiency and of the reference prices for the thermal power produced in co-generation, applicable in 2014;

�� Order no. 80 dated 2013-11-06 approving the General Conditions associated to the setting - up authorization and of the General Conditions associated to the license for exploitation of electric power generation capacities and, as the case may be, for the thermal power produced in co - generation;

�� Order no. 82 dated 2013-11-20 approving the Methodology of establishing prices and tariffs for end customers who do not make use of the eligibility right;

�� Order no. 83 dated 2013-11-20 approving the Methodology to establish the prices for electric power sold to producers based on regulated agreements and of the quantities of electricity from the regulated agreements, signed between the producers and the suppliers of last resort;

�� Order no. 84 dated 2013-11-27 for determining and monitoring the over-compensation of the activity of electric and thermal power production in co-generation of high efficiency, benefiting of bonus-type schemes of support;

�� Order no. 86 dated 2013-11-27 regarding the modification of art. 5 of Order no. 40/2013 for the approval of regulated tariffs at the electricity supplied by the suppliers of last resort to residential customers and those assimilated to them, who have not used the eligibility right;

�� Order no. 87 dated 2013-12-04 regarding the approval of the methodology to establish the tariffs for the system service;

�� Order no. 88 dated 2013-12-11 approving the regulated tariff charged by the electric power market operator;

�� Order no. 89 dated 2013-12-11 for approval of the Frame Agreement related to the electric power transport service and of the system service between the National Company for Electric Power Transport Transelectrica SA and the beneficiary;

�� Order no. 90 dated 2013-12-11 approving the certification of the National Company for Electric Power Transport „Transelectrica” SA as a transport and system operator of the national electro-power system;

�� Order no. 91 dated 2013-12-11 regarding the implementation of the electric power intelligent metering systems;

�� Order no. 94 dated 2013-12-11 suspending the implementation of provisions from item 2.3 from the Procedure of putting under voltage during the testing period and the certification of technical conformity for wind and photo-voltaic power plants approved by Order 74/2013;

�� Order no. 95 dated 2013-12-18 regarding the approval of tariffs and contributions in cash received by ANRE;

�� Order no. 96 dated 2013-12-18 regarding the approval of the average tariff for the transport service, of the tariff for the system service, of the zone tariffs afferent to the transport service and of the tariffs for the reactive energy charged by the economic operators from the electric power sector;

�� Order no. 97 dated 2013-12-18 approving the rules for procurement of electric power to cover the technological consumption afferent to power networks;

�� Order no. 98 dated 2013-12-18 regarding approval of specific tariffs for the electric power distribution service and of prices for the reactive power for the distribution operators lessees of SC FDEE Electrica Distribuţie Muntenia Nord SA;

24 Legislative Environment


�� Order no. 99 dated 2013-12-18 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC CEZ Distribuţie SA;

�� Order no. 100 dated 2013-12-18 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC Enel Distribuţie Muntenia SA;

�� Order no. 101 dated 2013-12-18 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC Enel Distribuţie Banat SA;

�� Order no. 102 dated 2013-12-23 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC CEZ Enel Distribuţie Dobrogea SA;

�� Order no. 103 dated 2013-12-23 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC E.ON Moldova SA;

�� Order no. 104 dated 2013-12-23 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC FDEE Electrica Distribuţie Transilvania Nord SA;

�� Order no. 105 dated 2013-12-23 regarding approval of specific tariffs for the electricity distribution service and of prices for the reactive energy for the distribution operator lessee of SC CEZ FDEE Electrica Distribuţie Transilvania Sud SA;

�� Order no. 112 dated 2013-12-18 modifying the annex to Order no. 60/2013 regarding some rules from the balancing market;

�� Order no. 113 dated 2013-12-18 regarding the conditions in which electricity supply is done for the final customers of the suppliers of last resort;

�� Order no. 114 dated 2013-12-18 regarding the approval of Rules for qualification of electric power produced in co-generation of high efficiency, for checking and monitoring the consumption of fuels by producers of electricity and thermal power in co-generation of high efficiency;

�� Order no. 115 dated 2013-12-18 approving the Procedure for approval of new projects or for refurbishment of co-generation power plants;

�� Order no. 116 dated 2013-12-18 approving the Rules for the establishment of the means of collecting the contribution for co-generation of high efficiency and for payment of the bonus for electric power produced in co-generation of high efficiency;

�� Order no. 117 dated 2013-12-18 approving the Methodology for determining and monitoring the contribution for co - generation of high efficiency;

�� Order no. 119 dated 2013-12-20 for approving the contribution for co-generation of high efficiency and of some provisions regarding its billing;

�� Order no. 122 dated 2013-12-30 regarding approval of the Sale/purchase frame agreement regarding the thermal power produced by the economic agents who are subject to the regulatory competence of ANRE.

9ElectricityProcuredand Supplied within CEZ Group

9ElectricityProcuredand Supplied within CEZ Group

26 Electricity Procured and Supplied within CEZ Group


At the end of 2013, the refurbishment process from the company TMK Hydroenergy Power SRL, started in July 2012, was finalized. Thus, the net production at the end of the year 2013 was 5 GWh (19 GWh below the 2012 level)

CEZ wind farm operated at full capacity in 2013 (600 MW installed power) generating 1250 GWh total production (285 GWh over the 2012 level).

Sales to final customers also went down in 2013 by 8.7% versus 2012, both as a result of the decrease in their consumption compared to the previous year.

Sales on wholesale markets grew in 2013 as compared to 2012 by 40%, especially because of the energy sold by CEZ Wind Farms to CEZ, a.s.

Losses in networks went up by 1% in 2013 as compared to 2012.

2012 2013 index2013/2012 (%)

Electricity procured:

Generated in-house 989 1255 126.8

Own consumption, including overrun 0 0 -

Supply of electric power 0 0 -

Purchased for distribution and sale 5799 5958 102.7

Total electricity procured : 6789 7213 106.2

Electricity consumed:

Sold to end customers 3688 3365 91.3

of which : sold to end customers in CEZ Group in Romania, including sales to cover losses 257 380 147.9

Sold in the wholesale market (net) 1833 2567 140.0

Sold outside CEZ Group in Romania 1833 2567 140.0

Purchased outside CEZ Group in Romania 0 0 -

Grid losses 1268 1281 101.0

Total electricity consumed: 6789 7213 106.2

10Distribution and Sales of Electricity in the Country

and Trading

10Distribution and Sales of Electricity in the Country

and Trading

28 Distribution and Sales of Electricity in the Country and Trading


The electricity market is completely open, any customer having the capacity to select a supplier from the competition - set market and the unbundling of activities was fully done. As not all suppliers have made use of their eligibility right, a calendar has been established in order to gradually eliminate the regulated tariffs for electricity, so that at the end of 2013 all non - residential consumers had non - regulated tariffs. Starting January 1st 2014, regulated tariffs are used only for 70% of the residential consumption. Out of the total consumption of the end clients that changed their supplier or negotiated their contracts with the last resort suppliers that powered them, only 58% made use of their eligibility right, the rest receiving energy from the Suppliers of last resort.

In 2013, internal consumption decreased by 6.1% compared to 2012, the electric power production decreased by 1.7% (the production trend was as follows: 18.5% decrease in thermal power plants, 1.3% increase in nuclear power, 2.9% increase in hydropower, and 77.65% increase in wind power production – wind farms accounting to 7.6% of total energy production at the country level); Romania’s exports increased by 214.78% and the imports decreased by 67.86%.

From July 1st, 2013, the transport tariffs have been eliminated from the export tariff and at the end of 2013; the co-generation fee afferent to exports has been reduced by 20%.

The installed power in renewable energy increased by 60%, up to 3 563 MW (2 605 MW in wind farms) of which 600 MW are installed in CEZ Wind Farm and 22 MW in the hydropower system managed by TMK Hydroenergy Power, also belonging to CEZ Group.

Hidroelectrica, the biggest energy producer in Romania up to the establishment of CEO (the Oltenia Energy Complex) went out of insolvency beginning with June 1st, 2013.

The total volume of energy sold by CEZ Trade România in 2013 was 988 485.52 MWh, up compared to the previous year and most of transactions were taken over by CEZ, a.s., which has become a main counter-party of CEZ Group for Romania.

Our customers are: CEZ, a.s., OPCOM (the Day Ahead Market) and Transelectrica (the Balancing Market).

In 2013, due to the new energy law, the only possible means of trading energy was through OPCOM, on its following platforms: PCCB, PZU, ID and the Balancing Market. Beginning with September, the reversed taxation has been introduced for the wholesale transactions with energy, this clearing the access of non-residential consumers to PZU and ID, thus CEZ, a.s. being able to participate in all means of transaction used in Romania.

a) Electricity TradingThe market is continuously developing, now having 186 licensed suppliers (as compared to 179 last year); of these, approximately 75 are active, plus 38 big producers and 558 small producers.

The average price of energy traded on PZU was of 156.06 LEI/MWh. Of the total traded energy, 32.9% was traded on PZU and 8.4% on the Balancing Market. The average sale price obtained by CEZ Trade România was of 143.79 LEI/MWh in 2013, compared to 213.73 LEI/MWh in 2012.

Of the total of 10 133 040 green certificates issued (6 390 576 from wind energy) in 2013, 1 774 678 were issued on behalf of Tomis Team (1 011 329) and Ovidiu Development (763 349). CEZ Trade România made market transactions through bilateral contracts on the bourse for 2 038 015 green certificates.

CEZ Trade România, part of CEZ Group, is a small company with 4 employees: a General Director, a Marketing Director, an economist and a specialist in weather forecasting.

29Distribution and Sales of Electricity in the Country and Trading

The main activities of CEZ Trade were: the trading of electric power on the Romanian wholesale market, the procurement of natural gas needed by CEZ Vânzare, the trading of green certificates on behalf of Tomis Team, Ovidiu Development and TMK Hydroenergy Power and the accomplishment of energy production prognosis for the wind farm. In 2010, CEZ Trade România got the ISO 9001:2008 certificate, necessary to obtain and maintain the license for natural gas supply. The company got a re-certification in 2013.

An extremely important activity for CEZ Trade România is that of supporting the trading department of CEZ, a.s. in Prague.

b) Sales of Electricity According to the methodology in force, tariffs for the electric power supplied to captive consumers are computed based on pass-through principle of regulated costs and a 2.5% regulated profit applied to acquisition costs.

Tariffs Evolution in 2013:

�� Tariffs for captive residential consumers are unique at national level with an increase of 6% on January 1st, 2013 and, respectively, a reduction of 1.3% on July 1st, 2013;

�� Starting with 2008, ANRE approved differentiated regional tariffs for captive industrial consumers; for SC CEZ Vânzare SA these tariffs had a 6% increase from January 1st 2013 and, respectively, a decrease of 1.3% from July 1st, 2013;

�� Beginning with September 1st, 2012, the customer companies who did not make use of their eligibility right have been charged a new tariff for the active energy, called The Competition - set Market Component (CPC) in conjunction with the elimination of regulated tariffs. The tariff is calculated based on the acquisition of energy from the competition - set market, by applying a regulated profit to the costs with procurement and it is approved by ANRE.

As of January 1st 2013, the CPC tariff has also been charged to residential customers who have not used their eligibility right.

The share market of SC CEZ Vânzare is of approximately 7.7% of final consumption on the retail market.

At the end of 2013, SC CEZ Vânzare had 1 408 999 consumers (up 0.4% compared to 2012), of whom 13 148 places of use at eligible consumers (up 245% compared to 2012) and 1 395 851 captive consumers (0.2% less than in 2012), 20 on HV (up 17.6% compared to 2012), 2 665 on MV (up 6.7% compared to 2012) and 1 406 314 on LV (up 0.4% compared to 2012); 86 865 economic agents (up 0.7% compared to 2012), 587 453 residential consumers in urban areas (up 0.5% compared to 2012) and 734 681 residential consumers in rural areas (up 0.4% compared to 2012).

In 2013, SC CEZ Vânzare SA sold 3 365 453 MWh to final clients – 71.4 % to captive consumers and 28.6 % to eligible ones, of which 194 973 MWh to clients from outside the distribution area of CEZ Distribuţie SA.

The structure of the electricity on voltage levels is the following:

�� High voltage: 236 962 MWh – 31.6% less than in 2012;�� Medium voltage: 713 893 MWh – 10.8% less than in 2012;�� Low voltage: 2 414 598 MWh – 5% less than in 2012.



c) Electricity Distribution and Sale

In 2013, a volume of 9 615 GWh electric power circulated through the distribution network of SC CEZ Distribuţie SA, compared to the year 2012, respectively 10 228 GWh. A maximum peak load of 1.61 GWh MW was recorded on April 5th, at 9 PM.

The chart with maximum peak loads in the distribution network of SC CEZ Distribuţie SA (max MWh/week).

In 2013, the functioning of the distribution network under best conditions was affected by weather phenomena. However, the failures and break-downs in network decreased in number as compared to 2012.

The volume of distributed energy in 2013 decreased to 6.45 TWh from 6.97 TWh in 2012 (a 7.52% decrease). During the analyzed period, there were recorded decreases of energy distributed on all voltage levels, as follows: 10.82% on HV, 8.03% on MV and 4.33% on LV.Significant modifications of distributed energy volumes are at HV for: Oltchim -24% (-105 GWh), Electrocarbon Slatina -37% (-62 GWh). At MV for: Turceni -19% (-32 GWh), DONAU CHEM -65% (-95.7 GWh), CE Rovinari -7% (-12.4 GWh).

In 2013, SC CEZ Distribuţie SA focused upon the fulfilment of the investment plan approved by ANRE in order to improve the quality of distribution services. Basically, investments were directed to the LV network (47%) and the MV network (41%).2013 targets regarding the improvement of operations and dispatching, improvement of quality indicators (SAIFI and SAIDI) and improvement of meter reading were achieved.In 2013, the tariffs specific to the electric power distribution service were increased by 5.1% compared to those in force in 2012.

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31Distribution and Sales of Electricity in the Country and Trading

d) Specific distribution tariffs

e) Description of the Energy Market

The main players on the electric power wholesale market are: Producers, Suppliers, Distributors, Transport and System Operator (CN Transelectrica SA), and Market Operator (OPCOM).

The electric power market of Romania is structured as per the following specific markets:

�� The market of bilateral contracts – in which owners of licenses are free to enter bilateral contracts for trading electric power;

�� The Day-Ahead Market (DAM) is a centralized market where contracts are traded on a daily basis, for each trading period of the corresponding day of supply, based on the offers sent by the participants at DAM; it is a voluntary market managed by the market operator OPCOM;

�� The Balancing Market (BM) is a centralized market, mandatory for the electric power producers where the Transmission and System Operator buys and/or sells active electric power from/ to the participants on the market, who own units / dispatched consumptions, to compensate the scheduled deviations between the energy production and consumption;

�� The market of technological system services – is a centralized market, using market mechanisms – tenders on specific periods and/ or bilateral contracts – just enough as to secure the volume of technological system services available for the Transmission and System Operator;

�� The centralized market for allocation of international inter-connection capacities is a voluntary market organized by the TSO; allocation is done based on implicit tenders, separately for the imports done based on contract, for periods of up to one year and separately for the transactions on the Day-Ahead Market;

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�� The Green Certificates Market – a centralized market managed by OPCOM, for trading the certificates issued in order to promote the electric power generated from renewable sources;

�� The centralized market of bilateral contracts (CMBC), granted based on public tender, is a voluntary market organized by the market operator OPCOM, where there are traded the contracts with physical delivery of electric power among the participants to the market, based on some specific rules. Starting from 2007, OPCOM has also organized a new platform CMBC – CN (forward contracts);

�� The intra-Day Market (iM) – starting from 2011, OPCOM has organized a new platform as a component of the wholesale electricity market, on which there are made firm hourly transactions with active electric power, with the delivery date on the day following the day of the transaction. 11

BusinessPerformanceof CEZ Groupin Romania

11BusinessPerformanceof CEZ Groupin Romania

34 Business Performance of CEZ Group in Romania


Revenues, Expenses and profit CEZ Group in Romania reported in 2013 an EBITDA of 931 164 thsd LEI, up by 211 713 thsd LEI compared to 2012. The increases were due to the activity of wind energy generation (354 012 thsd LEI), mainly through the recognition of received but not sold green certificates as revenues from subsidies and through an increase of volume of generated energy.

EBITDA from distribution and supply activities decreased by 136 718 thsd LEI compared to the year before, which was much affected by the impact of collection of receivables from the National Railways Company CFR SA.

CEZ Group in Romania closed the year 2013 with better results than in the previous year in terms of net profit too, registering 220 107 thsd LEI in profit, respectively an increase of 31 058 thsd LEI compared to 2012, the increase being mainly due to the wind energy generation.

Units 2012 2013 index (%) 2013/ 2012

Installed capacity MW 600 622 104%

Distribution of electricity to end customers GWh 6,978 6,453 92%

Sales of electricity 1) GWh 3,688 3,365 91%

Electricity gross marginthousand

LEI 968,756 1,392,803 144%

Other operating revenuesthousand

LEI 126,664 120,492 95%

Other operating expenses (less depreciation)

thousand LEI 375,969 582,131 155%

EBITDA thousand

LEI 719,451 931,164 129%

EBITthousand

LEI 357,053 483,569 135%

Net profitthousand

LEI 189,049 220,107 116%

Shareholders equity (including minority interests)

thousand LEI 3,090,529 3,205,977 104%

Capital expenditures (CAPEX) – All sources

thousand LEI 1,487,583 345,830 23%

Employee headcount at the end of the period Persons 1,839 1,813 99%

1) sales to final consumers

35Business Performance of CEZ Group in Romania

Assets StructureOn November 30th 2013, respectively December 31st 2013 the re-evaluation of land - plots, buildings and equipment belonging to TMK Hydroenergy Power SRL, respectively of CEZ Distribuţie SA was conducted.

In 2013, refurbishment works continued and were finalized at TMK Hydroenergy Power SRL and the accreditation for the support scheme with green certificates was obtained for a period of 10 years. Based on this, the Company receives 2 green certificates for each MWh of energy generated and delivered to the national power system.

Financial assets grew due to the change of accounting policies in connection with green certificates received by the companies that generate energy from renewable sources, as per the Government Emergency Ordinance no. 57/2013 and the Order of the Ministry of Public Finances no. 2067/2013, determined by the postponement in trading of one from the two certificates for each MWh of energy generated, according to Law no. 220/2008 with its subsequent modifications and completions, issued for the period July 2013 – March 2017.

Current assets decreased due to the green certificates received for the quantity of energy generated from renewable sources in balance at the end of the financial exercise, as well as due to the decrease by 38% in balance of amounts given to CEZ, a.s. within the cash pooling scheme.

Units 2012 2013

Tangibles and intangibles thousand LEI 6,982,936 6,926,169

Financial assets thousand LEI 172,686 254,413

Current assets thousand LEI 1,268,747 934,830

Pre-paid expenses thousand LEI 16,841 19,026

Total thousand LEI 8,441,210 8,134,438

Equity and liabilitiesThe stated capital of CEZ Group in Romania grew slightly, mainly due to the favourable results recorded by the companies from Fântânele - Cogealac wind farm.

In 2013, provisions recorded an increasing trend, with increases in provisions for dismantling, for litigations, for pensions and other similar obligations.

Deferred revenues decreased due to the change in accounting policies connected to the registration of green certificates received by the companies generating electricity from renewable sources, in line with the Order of the Finance Ministry no. 2067/2013.In 2013 it was reimbursed the rest of the loan in amount of 121 480 893 EUR contracted with Bayerische Landesbank for funding the investment in the wind farm.

Units 2012 2013

Stated capital thousand LEI 3,090,529 3,205,970

Liabilities thousand LEI 4,690,825 4,311,685

Provisions thousand LEI 166,852 198,067

Deferred income thousand LEI 493,004 418,716

Total thousand LEI 8,441,210 8,134,438

12Results of

in Romania

IndividualCompanies

37Results of Individual Companies in Romania

12Results of

in Romania

IndividualCompanies

CEZ Distribuţie SA (“The Company”) is a joint stock company resulted from the unbundling of SC FDEE Electrica Oltenia SA, with registered office in 2, Brestei Street, Craiova, Dolj County, Romania, registered at the Register of Commerce at no. J16/148/2002, unique registration code 14491102.

CEZ Distribuţie carried out in 2013 the distribution of electric power in Olt, Dolj, Gorj, Vâlcea, Argeş, Mehedinţi and Teleorman counties, with 207 conversion stations, 93 supply points, 10 241 transformation points and electric lines of a total length, without connections, of 58 516 kilometres.

The activity of the Company is regulated by the Romanian Energy Regulatory Authority (“ANRE“). The purchase price paid to the electric power producers / suppliers owned by the State for the electricity received from the National Electric Power System and the distribution service tariffs are not entirely influenced by the decisions of the Company, being regulated by ANRE. Beginning on April 1st, 2013 the procurement of electricity to cover the own technological consumption is done from the free energy market.

Beginning on September 30th, 2005, CEZ, a.s. became majority shareholder (51%) of the Company, followed by Electrica SA (49%).

According to the Law no. 247/2005, in October 2006, 12% (8 582 816) of the Company’s shares, previously held by Electrica SA, were transferred to Fondul Proprietatea, and in 2007 12 874 225 shares were assigned by Electrica SA to SC Fondul Proprietatea SA according to GEO no. 81/2007.

During September, respectively October 2009, the majority shareholder CEZ, a.s. purchased the shares held by SC Fondul Proprietatea, respectively by Electrica SA, becoming the sole shareholder of the Company.

On June 2010, the sole shareholder CEZ, a.s. approved the contract for the transfer of shares concluded with ČEZ Poland Distribution BV. Thus, CEZ, a.s. sells one share, remaining with a portfolio of 71 523 468 shares representing 99.99999861% of the Company’s share capital, and CEZ Poland Distribution BV buys one share, representing 0.00000139% of the Company’s share capital.

As a subsidiary of CEZ, a.s., the Company is consolidated into CEZ, a.s. starting with October 1st, 2005.

The financial statements of CEZ Distribuţie SA are drawn up according to:

�� Accountancy Law no. 82/1991 (republished);

�� The provisions of the Order of the Public Finances Minister no. 3055/2009 („OMF 3055/2009”), with the subsequent changes.

The financial statements were audited by an independent auditor.

According to the auditor’s opinion, the financial statements faithfully present in all the significant aspects, the financial position of the Company on December 31st 2013, as well as the results of the treasury flows and operations for the year concluded on that date, in line with the Order of Public Finances Ministry no. 3055/2009 with its subsequent modifications and completions, and with the accounting policies described in the financial statements.

During the year 2013, the net amount of tangible assets increased from 2 617 380 thousand LEI to 2 661 265 thousand LEI. The intangible assets increased from 1 809 thousand LEI to 2 940 thousand LEI. The gross accounting value of completely amortized intangibles on the 31st of December 2013 is 8 275 thousand LEI (2012: 7 229 thousand LEI).

On the 31st of December 2013, the re-evaluation of land plots, buildings and equipment belonging to the Company was done. This re-evaluation was done by an expert, in conformity with OMF3055/2009 and the national standards issued by ANEVAR. The re-evaluation targeted the adjustment of net accounting values of the elements included in this category, up to their correct value, considering both the physical status and their market value.

The net value of the commercial receivables is 157 232 thousand LEI (2012: 182 192 thousand LEI) and they consisted, mainly, in receivables from the distribution of electric power. These receivables

38 Results of Individual Companies in Romania


usually carry penalties and generally have collection deadlines between 30 and 60 days. The provisions registered for the commercial receivables uncollected on due date amount to 7 876 thousand LEI (2012: 6 369 thousand LEI).

The amounts to be collected from affiliated entities and other connected parties, on December 31st, 2013, are in amount of 388 673 thousand LEI (2012: 461 009 thousand LEI) and the amounts to be paid to other connected parties are in amount of 62 259 thousand LEI (2012: 29 567 thousand LEI)

The legal reserves on the 31st of December 2013 are in amount of 6 961 thousand LEI (2012: 1 693 thousand LEI), and they are formed of cash, accounts in banks and short - term bank deposits.

According to the Decision made by the General Assembly of Shareholders on the date of 29.05.2013, it was decided that the non-distributed profit for the year 2012, in total amount of 81 359 thousand LEI to be distributed as dividends to the Company’s shareholders.

At the end of the year 2013, CEZ Distribuţie has short - term loans awarded (including afferent interests) to CEZ România SA in total amount of 47 024 thousand LEI (2012: 64 085 thousand LEI) and to TMK Hydroenergy Power SRL in total amount of 138 719 thousand LEI (2012: 94 076 thousand LEI).

The Company’s debts on December 31st, 2013 are 149 098 thousand LEI (2012: 153 359 thousand LEI) and consist in: commercial debts in amount of 115 346 thousand LEI (2012: 132 519 thousand LEI), other debts including fiscal ones and social insurance in amount of 14 128 thousand LEI (2012: 20 814 thousand LEI) and debts to other connected parties in amount of 19 624 thousand LEI (2012: 26 thousand LEI).

The Company has no contracted short and long - term loans on 31st of December 2013.

On December 31st, 2011 the Company registers provisions for risks and expenses in amount of 79 127 thousand LEI, of which:

Provisions for litigations 28 629 thousand LEI

Provisions for pensions and other similar obligations 44 879 thousand LEI

Provisions for environmental protection 807 thousand LEI

Provisions for penalties at meters with expired metrological duration 500 thousand LEI

Other provisions for risks and expenses 4 312 thousand LEI

Following the settlement of some of the ongoing trials at the end of 2012, part of the provisions recorded on the 31st of December 2012 for litigations was resumed in 2013.

Among the litigations for which the Company made provisions we mention the litigation with Electrica SA, in which the plaintiff asks for payment of penalties in amount of 4 429 thousand LEI for outstanding debts that were not paid on the due date and subsequent trial expenses; respectively for the litigation judged in Pitești Court for civil damages in amount of 11 212 thousand LEI, as per the file 24605/280/218.

On December 31st 2013, the Company has deferred revenues in amount of 343 523 thousand LEI (2012: 299 760 thousand LEI), most of them representing subsidies for connection fees.

The subsidies for the connection fee include the un-depreciated part of the capitalized value of this fee, received from the customers after their connection to the national electricity grid.


During the year 2013 there were made legal reserves in amount of 661 thousand LEI, and on the 31st of December 2013 the balance was of 70 453 thousand LEI, and they were restricted from distribution as per the legislation in force.

CEZ Distribuţie registered in 2013 an income from the distribution of electricity in amount of 704 881 thousand LEI, from the sale of active and reactive electricity in amount of 51 769 thousand LEI, from renting activities in amount of 29 189 thousand LEI, as well as other incomes from services in amount of 22 215 thousand LEI, therefore a sold production of 808 054 thousand LEI.

To these incomes we add incomes from the sale of merchandise in amount of 2 084 thousand LEI, incomes from stock variation in amount of (5) thousand LEI, incomes resulting from own production in amount of 1 201 thousand LEI, other operations incomes in amount of 28 672 thousand LEI, and financial incomes of 12 841 thousand LEI. The total incomes recorded for the year 2013 is 852 849 thousand LEI.

The expenses registered by the Company during the year 2013 were in amount of 835 230 thousand LEI, of which 290 992 thousand LEI expenses with raw materials and other materials, expenses with electric power and related services, 85 590 thousand LEI personnel expenses, 203 996 thousand LEI expenses with the amortization and depreciation of tangible and intangible assets, 7 096 thousand LEI expenses with value adjustments at circulating assets, 236 384 thousand LEI other operating expenses, 9 305 thousand LEI expenses with provisions. The financial expenses were in amount of 1 867 thousand LEI.

CEZ Distribuţie SA closed the year 2013 with a gross profit of 17 619 thousand LEI and a net profit of 661 thousand LEI.

The net profit in amount of 661 thousand LEI was distributed to the legal reserve fund according to the legal regulations in force.

In 2013, the Company had a reduction in gross profit mainly due to the diminishing of gross margin from electric power distribution activities and the introduction of new taxes and fees.

The decrease of gross margin was determined, on the one hand, by the 7.5% reduction in the volume of distributed energy and, on the other hand, by the 14% increase in the price of procurement of energy for own technological consumption (CPT), as a result of market opening.

To improve its results, the management of the Company wants to continue the measures related to costs control, reduction of technological losses (implementation of measures identified in zonal energy balance projects, respectively the re-sealing of metering units), the negotiation of more advantageous prices for the procured energy.

The Company has commitments regarding the acquisition of various tangibles needed to carry out its normal activity. On December 31st, 2013, these commitments amounted to a total of 134 343 thousand LEI.

SC CEZ Vânzare SA (“The Company”) is a joint stock company registered at the Trade Register under the number J16/517/14.03.2007, having its registered office in 2nd, Brestei Street, Craiova, Dolj County, Romania.

The Company’s activity is regulated by the Romanian Energy Regulatory Authority (ANRE) whose role is to work out, approve and monitor the implementation of the mandatory rules necessary for the power market to function in conditions of efficiency, based on competition, and to protect the consumers.

CEZ Vânzare was established in March 2007, due to the reorganization of Electrica Oltenia in compliance with the unbundling requirements imposed by Directive 2003/54/EC, transposed into the national legislation by the provisions of art. 45 of the Energy Law no. 13/2007.



The structure of shareholders at the time of establishment was the following:

Shareholder No. of sharesShares value

(thousand lEi) %

CEZ, a. s. 36 481 412 20 430 51.0062117

Electrica SA 26 459 238 14 817 36.9937845

Fondul Proprietatea 8 582 816 4 806 11.9999996

Zapadoceska Energetika a.s. 1 0.00056 0.0000014

Severomoravska Energetika a.s. 1 0.00056 0.0000014

Vychodoceska Energetika a.s. 1 0.00056 0.0000014

TOTAl 71 523 469 40 053 100

In 2007, Zapadoceska Energetika a.s., Severomoravska Energetika a.s. and Vychodoceska Energetika a.s. merged, being absorbed by CEZ, a.s., an operation authorized by the resolution of the competent authorities of the Czech Republic, and a number of 12 874 225 shares were transferred by Electrica SA to Fondul Proprietatea, as per OUG no. 81/2007.

Thus, the shareholding structure was modified as follows:


(thousand lEi) %

CEZ, a. s. 36 481 415 20 430 51.0062159

Electrica SA 13 585 013 7 607 18.9937837

Fondul Proprietatea 21 457 041 12 016 30.0000004

TOTAl 71 523 469 40 053 100

During the period September 2009 - October 2009, the majority shareholder CEZ, a.s. purchased the shares owned by Fondul Proprietatea SA and Electrica SA, thus becoming the sole shareholder.

CEZ, a.s. is a commercial company registered and functioning in compliance with the legislation in force in the Czech Republic, with its registered office in Prague, Duhová 2/1444, Post Code 140 53, Czech Republic, registered at the Trade Office under no. 45274649, tax code CZ45274649.

In June 2010, the sole shareholder CEZ, a.s. approved the contract for the transfer of shares concluded with CEZ Poland Distribution B.V. Thus, CEZ, a.s. sells one nominate share of the Company, remaining with 71 523 468 shares, representing 99.99999861% of the Company’s share capital, while CEZ Poland Distribution B.V. buys one share, representing 0.00000139% of the Company’s share capital.

CEZ Poland Distribution B.V. is a company established in and functioning in compliance with the laws of Holland, with its registered office in Amsterdam, Hogehilweg 5d, 1101 CA, registered at the Chamber of Commerce of Holland at no. 24301380.


As a result of this transfer of shares, the structure of shareholders has changed as follows


(thousand lEi) %

CEZ, a. s. 71 523 468 40 053 99.99999861

CEZ Poland Distribution B.V. 1 0.00056 0.00000139

TOTAl 71 523 469 40 053 100

The individual financial statements of CEZ Vânzare SA are drawn up in compliance with:

�� Accountancy Law no. 82/1991, republished;

�� Provisions of the Order of the Public Finances Minister no. 3055/2009 („OMF 3055/2009”), with the subsequent amendments.


The auditor’s opinion states that the financial statements faithfully present, under all significant aspects, the financial position of the Company of the 31st of December 2013, as well as the results of operations and treasury flows for the year closed on that date, as per the Order of Public Finance Ministry no. 3055/2009, with its subsequent modifications and completions, and the accounting policies described by the notes to the financial statements.

On December 31st, 2013 the total assets are 441 664 thousand LEI (2012: 486 050 thousand LEI). The rate in total assets is represented by the commercial receivables on the 31st of December 2013 in net amount of 324 615 thousand LEI (2012: 350 097 thousand LEI) and they mainly derive from the sale of electricity. The commercial receivables carry penalties and, in general, have due dates of 10 calendar days since the invoice date in the case of economic agents and of 15 calendar days since the invoice date plus a period of grace of 30 days when no penalties are charged, in the case of residential consumers.

Receivables with affiliated companies/connected parties are on December 31st 2013 in amount of 46 264 thousand LEI (2012: 60 745 thousand LEI) and they derive from cash-pooling operations carried out among the companies that form CEZ Group in Romania.

Other receivables in net amount of 54 009 thousand LEI (2012: 62 319 thousand LEI) mainly include receivables afferent to collections from customers done through CN Poșta Română and with delayed settlement in the Company’s bank accounts.

The liquidities of the company are formed of cash, bank accounts and short - term bank deposits, with a balance on 31st of December 2013 of 16 772 thousand LEI (2012: 12 886 thousand LEI).

According to the General Shareholders’ Assembly Decision made on 29.05.2013, the Company distributed dividends to its shareholders in amount of 15 248 thousand LEI from the finance profits reported for the year 2012.

The total debts of the Company on the 31st of December 2013 are in amount of 292 735 thousand LEI (2012: 354 454 thousand LEI), and they consist of short - term debts in amount of 291 393 thousand LEI (2012: 353 558 thousand LEI) and long - term debts in amount of 1 342 thousand LEI (2012: 896 thousand LEI).

The short - term debts consist of commercial debts in amount of 247 339 thousand LEI (2012: 320 363 thousand LEI) and other debts including fiscal ones and debts with social insurance in amount of 44 054 thousand LEI (2012: 33 195 thousand LEI).

The Company has no short and long-term loans contracted on the 31st of December 2013.



On the 31st of December 2013, the Company registers provisions for risks in amount of 38 599 thousand LEI, of which:

Provisions for litigations 15 770 thousand LEI

Provisions for environmental protection 22 122 thousand LEI

Provisions for bonuses to employees 707 thousand LEI

Of the litigations for which the Company set aside provisions, we mention the litigation with Vital Avi Natural SRL, in which the plaintiff asks for payment of damages caused by its having been disconnected. The value of the provision for this litigation represents 50% of the amount of damages asked for by the plaintiff, namely 14 580 thousand LEI. Though facts point to a favourable solution for the Company in this case, in establishing the value of the provision the management considered the fact that the plaintiff obtained a favourable solution in the first stage of the trial, solution that was contested by CEZ Vânzare at the Court of Appeal.

On the 31st of December 2013, the Company made a provision for environmental protection in amount of 22 122 thousand LEI, corresponding to a number of 100 555 green certificates still to be purchased in order to meet the annual quota, and also considering a trading price of 220 LEI/certificate, representing the best estimation of the management, based on analyses done in relation with the green certificates’ market.

The Company’s turnover is 1 565 487 thousand LEI and it results from the sale of electricity and natural gas in amount of 1 542 146 thousand LEI, other revenues afferent to the sale of electricity and natural gas in amount of 16 092 thousand LEI, and other revenues from services in amount of 7 249 thousand LEI.

To these incomes are added other operational incomes in amount of 22 626 thousand LEI, incomes from sale of green certificates in amount of 139 313 thousand LEI, and financial revenues in amount of 1 518 thousand LEI, so that total incomes in 2013 amount to 1 728 944 thousand LEI.

The operations expenses registered by the Company on 2013, December 31st are 1 674 035 thousand LEI and they are formed of: expenses with the acquisition of electricity, natural gas and other materials in amount of 831 942 thousand LEI, personnel expenses in amount of 4 831 thousand LEI, expenses regarding the adjustment in value of current assets in amount of 67 939 thousand LEI, other operations expenses in amount of 773 374 thousand LEI, and expenses regarding provisions in amount of (4 052) thousand LEI. The financial expenses are in amount of 104 thousand LEI and thus, the Company’s total expenses in 2013 amounted to 1 674 139 thousand LEI.

At the end of the financial year 2013 the Company registers gross profit in amount of 54 805 thousand LEI and a net result in amount of 37 530 thousand LEI, the tax on profit being 17 275 thousand LEI.

From the profit registered at the end of the year 2013, the Company distributed 1 004 thousand LEI to the reserve fund so as the legal reserve of the Company set on the basis of the provisions from the Commercial Companies’ Law is on 2013, December 31st, 8 011 thousand LEI.

The legal reserve is formed in line with the legal provisions based on which 5% of the annual accounting profit is transferred to the legal reserve until the balance of it reaches 20% of the Company’s share capital. If this reserve is completely or partially used in order to cover losses or for any kind of distribution, it becomes taxable.

The Board of Directors from CEZ Vânzare proposes that the amount of 62 265 thousand LEI be distributed as dividends to the Company’s shareholders.


On the 31st of December 2013 the Company has commitments for the procurement of electricity needed to normally carry out its activities in total amount of 329 205 thousand LEI. Considering the contract for the procurement of electricity concluded by the Company and the volume of electricity traded as well as the sale prices, the Company estimates that in 2014 its operations will generate profits.

As a result of the intensified efforts for receivables recovery, on March 2014 the Company concluded with its client SN CFR an agreement regarding the payment of some debts, with SN CFR paying 84 100 thousand LEI representing 91.30% of the value of electricity, the Radio - TV fee, and other fees billed but not paid up to the 31st of December 2013; on the date the amounts were cashed, the Company cancelled the afferent penalties in amount of 8 147 thousand LEI.

During Q1 2014, an agreement was concluded for the payment of due amounts afferent to the contract for the collection by the National Company Poșta Română (CNPR) of the payment of invoices issued by CEZ Vânzare so that, up to the 31st of March 2014, the Company collected the entire value of due amounts which remained in balance on the 31st of December 2013. On the date the agreement was signed, the Company cancelled penalties in amount of 4 728 thousand LEI.

The Company also estimates an increase in receivables collection success rate and a decrease of costs with provisions created for the risk of receivables non-collection, based on the partnerships established since 2009 with famous and experienced companies specialized in collection of receivables both amiably and in court, on the one hand, and on the impact brought by the escalation and prioritization of disconnection activities, according to the age of receivables.

As of 2013, July 1st, the Company has applied the provisions of Order no. 40/2013 issued by ANRE based on which the suppliers of last resort also charge on the invoice for residential and assimilated consumers who have not exercised their eligibility right the tariff for active electricity, called „The competitive market component” (CPC). This tariff is calculated based on a methodology for establishing prices and tariffs for final consumers in conformity with the „calendar for the elimination of regulated tariffs” and is separately stated on the invoice received by the consumer.

The license for the supply of natural gas, obtained on January 2010, allows the Company to offer full services of electricity and natural gas supply to its customers, so that, through a sole point of contact, benefits of clients will be maximized by reducing the time needed to solve any kind of request.

The legislative changes of the year 2013 in the electricity sector have generated an unpredictable business environment and have considerably influenced the projections upon the future results of the companies operating in this field with regard to the profitability of their investments. The increasing opening of the energy market, the trading of energy and of green certificates given as subsidies for the energy generated from renewable sources only on the trading platforms of OPCOM have generated the development of competition.

In 2013, the Company was focused both upon the implementation of the legislative changes generated by the market opening and on the increase of its portfolio of clients in parallel with the increase of quality and the diversification of its offered services.

SC CEZ România SA (“The Company”) is a joint stock company, with entirely private capital, founded in 2005, having its registered head office in Bucharest, 2B ion ionescu de la Brad Street sector 1, Romania. The company is registered with the Trade Register at number J40/20570/07.12.2005.

The Company offers services of consultancy and management, as well as services of data processing, controlling, IT, HR, customer care, and treasury mainly for the companies that form CEZ Group in Romania.

SC CEZ România SA is a company managed under a two-tier system.

On the 29th of October 2010, the Company’s shareholders approved, by Extraordinary Decision of the General Assembly of Shareholders, the merging of the Company as absorber with the company CEZ Servicii SA, as absorbed company; the project for the merging of the two companies was published



in the Official Gazette of Romania, Part IV, no. 4754/24th of November 2010. Beginning with the 1st of January 2011, the Company took over all transactions performed by CEZ Servicii SA.

The Company issued a number of 142 119 shares, representing 1 421 thousand LEI, in favour of the absorbing company’s shareholder, CEZ, a.s.

The merging bonus established for this capital increase made on the basis of the merging project was 7 380 thousand LEI, the unfavourable balance between the merging bonus on the effective merging date and the one established in the merging project was (1 266) thousand LEI.

The Company maintained in its analytic account, separate from the legal reserves (by reconstructing from the merging bonus on the effective date the amount of 6 114 thousand LEI) the amount of 427 thousand LEI, representing the legal reserves that belonged to the absorbed companies, so that the total legal reserves of the absorbing company, after merging, are in amount of 527 thousand LEI.

The structure of shareholders on the 31st of December 2013, respectively 2012, is the following:

Shareholder

Balance on 2012, December 31st (thousand lEi) %

Balance on 2013, December 31st (thousand lEi) %

CEZ, a. s. 1,921 99.9995 1,921 99.9995

CEZ Poland Distribution B.V. 0.01 0.0005 0.01 0.0005

Total 1,921 100 1,921 100

CEZ, a.s. is a commercial company registered and operating under the laws of the Czech Republic, with headquarters in Prague, Duhova2/1444, Post Code 140 53, Czech Republic, registered with the Trade Register at number 45274649, fiscal code CZ45274649.

CEZ Poland Distribution B.V. is a company established in Holland, with registered office in Hogehilweg 5D 1101 CA Amsterdam, Holland, registered at the Chamber of Commerce of Holland at number 24301380.

During the year 2011, CEZ România SA purchased the 100% share package of TMK Hydroenergy Power SRL, thus becoming the sole shareholder.

TMK Hydroenergy Power SRL is a limited liability company with its main office in Reşiţa, 4B Primăverii Street, 1st floor, and its object of activity is the generation of electric power from renewable sources (CAEN code 3511).

The Company had 22 work sites on the 31st of December 2013.

The financial statements of CEZ România SA are drawn up in compliance with:


�� Provisions of the Order of Public Finances Minister no. 3055/2009 („OMF 3055/2009”), with subsequent modifications.

The financial situations were audited by an independent auditor.

According to the auditor’s opinion, the financial statements faithfully present, in all significant respects, the financial position of the Company as of December 31st, 2013, as well as the results of treasury operations and cash flows for the year ended on that date, in compliance with the Order of Public Finances Ministry no. 3055/2009, with is subsequent modifications and completions, and with the accounting policies described in the notes to the financial statements.


On December 31st, 2013, the net accounting value of other intangibles is 1 953 thousand LEI (2012: 1 122 thousand LEI). These intangibles mainly consist of software licenses and the use period for intangibles is of 3 years.

The entry value of other intangibles procured in 2013 is 1 662 thousand LEI (2012: 31 thousand LEI).

On December 31st, 2013, the Company had intangibles in execution in amount of 227 thousand LEI, representing corporate IT applications (in 2012: the Company had no intangibles in execution).

The entry value of tangibles procured in 2013 is 4 964 thousand LEI (2012: 644 thousand LEI), the value of tangibles in execution representing equipment for the security system, the balance on 2013, December 31st being 507 thousand LEI (2012: the Company had no tangibles in execution on the 31st of December 2012).

In 2013, the Company sold tangibles of net value of 3 thousand LEI (2012: 29 thousand LEI), the profit made out of their sale being 3 thousand LEI (2012: 148 thousand LEI).

On December 31st, 2013 the financial assets are formed of: shares in affiliated entities (TMK Hydroenergy Power SRL) in amount of 84 898 thousand LEI, and shares in the Association of Utilities Companies in the Energy Sector, in amount of 9 thousand LEI, taken over by the Company as a result of the process of merging with CEZ Servicii SA and immobilized receivables consisting in long - term deposits as guarantees of execution for a contract for rental of office space, in amount of 6 648 thousand LEI.

The commercial receivables in balance on the 31st of December 2013 are in net value of 27 302 thousand LEI (20 452 thousand LEI on the 31st of December 2012) and they mainly result from transactions with the companies inside the Group; their collection does not represent an insecurity for the Company, the payment deadline being 30 days, with a 90 days period of grace.

The receivables with affiliated entities / connected parties on the 31st of December 2013 are in amount of 159 151 thousand LEI (285 304 thousand LEI on the 31st of December 2012). As part of them, the receivables deriving from cash-pooling operations are in amount of 132 433 thousand LEI (265 524 thousand LEI on the 31st of December 2012).

The payables of the Company on the 31st of December 2013 are in amount of 344 854 thousand LEI (437 440 thousand LEI on the 31st of December 2012), and they mainly consist of: debts to affiliated entities/connected parties, commercial debts to third parties, other debts and amounts due to credit institutions.

Debts to affiliated parties / connected parties as of 2013, December 31st are in amount of 301 869 thousand LEI (415 368 thousand LEI on the 31st of December 2012) and mainly derive from cash - pooling operations, in amount of 221 400 thousand LEI (2012: 327 018 thousand LEI), and debts afferent to the short-term loan in amount of 47 024 thousand LEI (2012: 64 085 thousand LEI).

The commercial payables to third parties, in balance on the 31st of December 2013, are in amount of 40 228 thousand LEI (18 380 thousand LEI on the 31st of December 2012).

Other debts in balance on the 31st of December 2013 in amount of 2 744 thousand LEI (2012: 3 074 thousand LEI) are mainly formed of: debts to personnel representing salaries, other debts to personnel and assimilated debts in amount of 2 575 thousand LEI (2 655 thousand LEI on the 31st of December 2012), and debts to the state budget, to the local budgets and other fees in amount of 156 thousand LEI (2012: 4 thousand LEI)

The amounts owed to credit institutions in sum of 12 thousand LEI represent an overdraft on the current accont (618 thousand LEI on December 31st, 2012, and are afferent to the credit facilities associated to the cash-pooling agreements and to the bank accounts in foreign currency).



Money available is in the form of cash amounts in Romanian and foreign currency in petty cash or in bank or in the form of other values (fiscal and post stamps), and their balance on the 31st of December 2013 is of 94 335 thousand LEI as compared to 69 074 thousand LEI at the end of the year 2012. The value of deposits made on December 31st, 2013 is of 24 806 thousand LEI, compared to 15 622 thousand LEI on the 31st of December, 2012.

On the 31st of December 2013, the Company has provisions in total amount of 5 540 thousand LEI, of which:

Provisions for pensions and other similar obligations 889 thousand LEIProvisions for performance bonuses 3 767 thousand LEIProvisions for litigations 878 thousand LEIOther provisions for risks and expenses 6 thousand LEI

The provisions for pensions and for other similar obligations were determined considering the stipulations from the collective employment agreement concluded at Company level, Which provides for the payment of a number of salaries and other benefits to each employee, at retirement time. The provision was determined by an independent expert in this field.

The provision for the performance bonus is made for the amounts estimated to be paid in the first half of the year 2014, the management having decided to pay these amounts to the employees based on accomplishment of performance indicators (KPIs).

Of the profit not distributed at the end of the year 2012, the amount of 3 393 thousand LEI was meant to be distributed as dividends in compliance with the Decision of the General Assembly of Shareholders from 29.05.2013.

Net turnover of the Company in 2013 is 142 333 thousand LEI, and the revenues from running contracts in which the Company acts as a trustee are offset with related expenses, the offset value being of 69 000 thousand LEI.

To the turnover, other operations revenues are added, in amount of 127 thousand LEI, and financial revenues in amount of 9 922 thousand LEI, and the total value of revenues in 2013 is 152 383 thousand LEI.

Operating expenses recorded by the Company in 2013 are in amount of 146 234 thousand LEI, and they consist of: operations expenses in amount of 136 314 thousand LEI, and financial expenses in amount of 9 920 thousand LEI.

The operating expenses are formed of: expenses with materials, energy, and water, amounting to 3 103 thousand LEI, personnel expenses amounting to 38 415 thousand LEI, expenses with value adjustment of fixed and current assets in amount of 2 137 thousand LEI, expenses with external services carried out in amount of 90 884 thousand LEI, expenses with taxes, fees, and other assimilated payments in amount of 516 thousand LEI, other operating expenses in amount of 325 thousand LEI, and adjustments related to provisions in amount of 936 thousand LEI.

At the end of the year 2013, the Company registered a gross profit of 6 148 thousand LEI, and a net result of 3 455 thousand LEI, the tax on profit being in amount of 2 693 thousand LEI.

CEZ România’s Board of Directors proposed that the non-distributed result from the end of 2013, in amount of 10 484 thousand LEI, would be distributed as dividends to the Company’s shareholders.

The legal reserve is created in compliance with the Commercial Companies’ Law, based on which 5% of the annual accounting profit before taxation is transferred to the legal reserve up to the time when it reaches 20% of the Company’s share capital. On the 31st of December 2013, the Company had legal reserves in amount of 527 thousand LEI.


SC Tomis Team SRl (“The Company”) is a limited liability company with 100% private capital, set up in 2006, being registered and functioning as per the Romanian legislation in force, with its headquarters in Bucharest, sector 1, 2B ion ionescu de la Brad Street, 2nd floor, room no. 2, registered at the Trade Register at no. J40/3251/26.03.2010 and having the unique code of registration 18874690.

The Company’s core activity is: Electricity generation, CAEN code 3511.

The shareholder structure on 31.12.2007 was the following:

Associate No. of shares Value of shares

(thousand lEi)

%

CWP CYPRUS LIMITED 19 0.190 95

MUNTMARK EMANUEL 1 0.010 5

TOTAl 20 0.20 100

On August 2008, the Resolution of the Shareholders’ Assembly amended the modification of shareholding structure, by transfer of the ownership of the 19 shares representing 95% of the equity owned by CWP Cyprus Limited to CEZ, a.s., and the transfer of one share representing 5% of the capital owned by Muntmark Emanuel to CEZ Poland Distribution B.V.

On December 2008, following the decision of the General Shareholders’ Assembly, equity is increased by 467 771 thousand LEI, the equivalent of EUR 119 941 thousand, by conversion of the certain, liquid and eligible debt that CEZ, a.s. had to the Company, also including the afferent interest.

Following these transfers, the structure of shareholding is modified as follows:

Associate No. of shares Value of shares

(thousand lEi)

%

CEZ, a.s. 46 777 102 467 771 99.999998

CPD 1 0.010 0.000002

TOTAl 46 777 103 467 771 100

CEZ, a.s., the majority shareholder, is a commercial company registered and functioning as per the Czech legislation in force, having its main office in Prague, Duhova 2/1444, post code 140 53, registered at the Register of Commerce of Prague with no. 45274649, fiscal code CZ45274649 (“CEZ”).

CEZ Poland Distribution B.V. is a company established in Holland, with offices in Hogehilweg 5D, 1101 CA Amsterdam, Holland, registered at the Chamber of Commerce of Holland with no. 24301380 (“CPD”).

The financial statements of the Tomis Team SRL Company are drawn in compliance with:

�� The Accountancy Law no. 82/1991, republished;

�� The provisions of the Order of the Public Finances Minister no. 3055/2009 („OMF 3055/2009”), with the subsequent modifications.



The financial situations were audited by an independent auditor.

According to the auditor’s opinion, the financial statements faithfully present , in all significant respects, the financial position of the Company as of December 31st, 2013, as well as the results of treasury operations and cash flows for the year ended on that date, in compliance with the Order of Public Finances Ministry no. 3055/2009, with is subsequent modifications and completions, and with the accounting policies described in the notes to the financial statements.

The accounting value of tangible assets at the end of 2013 is 1 884 521 thousand LEI (2012: 1 931 542 thousand LEI), and it includes intangibles in amount of 4 480 thousand LEI (2012: 1 546 thousand LEI), tangibles in amount of 1 754 735 thousand LEI (2012: 1 842 253 thousand LEI), and financial tangibles in amount of 125 306 thousand LEI (2012: 87 743 thousand LEI).

The intangible assets are formed of: development expenses in amount of 145 thousand LEI (2012: 241 thousand LEI), other intangibles in amount of 1 096 thousand LEI (2012: 1 305 thousand LEI), and amounts in advance and intangibles in progress in amount of 3 239 thousand LEI (2012: the Company had no intangibles in progress).

The tangibles at the end of 2013 include: land plots and constructions in amount of 552 053 thousand LEI (2012: 564 791 thousand LEI); technical installations and machines in amount of 1 189 557 thousand LEI (2012: 1 266 092 thousand LEI); other tangibles in amount of 1 146 thousand LEI (2012: 89 thousand LEI); and advance payments and assets in progress in amount of 11 979 thousand LEI (2012: 11 281 thousand LEI).

The financial assets include: shares owned by the Company in the affiliated entities MW Team Invest SRL in amount of 87 495 thousand LEI, (2012: 87 495 thousand LEI) and Taidana Limited in amount of 134 thousand LEI (2012: 248 thousand LEI), and green certificates deferred from sale in conformity with the Government Emergency Ordinance no. 57/2013 regarding the modification and completion of Law no. 220/2008 establishing the system for the promotion of energy generation from renewable sources and the Order of Public Finances Ministry no. 2 067/2013, in amount of 37 677 thousand LEI (2012: the Company had no green certificate deferred for sale).

The current assets owned by the Company on the 31st of December 2013 are in amount of 437 575 thousand LEI (2012: 685 078 thousand LEI) and they include: stocks in amount of 2 309 thousand LEI (2012: 2 342 thousand LEI), total receivables in amount of 337 460 thousand LEI (2012: 532 941 thousand LEI), and short-term investments in amount of 97 804 thousand LEI (2012: 149 479 thousand LEI).

Total receivables consist of: commercial receivables derived from the sale of electric power generated from renewable sources in amount of 20 693 thousand LEI (2012: 25 221 thousand LEI), amounts to be cashed from affiliated entities/other connected parties in amount of 279 709 thousand LEI (2012: 343 206 thousand LEI), and other receivables in amount of 37 058 thousand LEI (2012: 164 514 thousand LEI).

The receivables related to affiliated entities and related parts in balance on the 31st of December 2013 include receivables afferent to the loan given to the company MW Team Invest SRL (including subsequent interests) in which Tomis Team SRL owns 100% of the share capital, in amount of 258 343 thousand LEI (2012: 272 889 thousand LEI), and amounts to be cashed from the performance of cash - pooling operations, in amount of 21 366 thousand LEI (2012: 70 317 thousand LEI).

The short-term investments comprise green certificates admitted for trading, in stock on 2013, December 31st, which are to be sold in the upcoming period. They were evaluated at the end of the year in compliance with Order no. 2 067/2013, at the trading price published by the energy market operator for the last trading session, respectively 200 LEI/certificate (2012: 244.65 LEI/certificate).

The money available is represented by amounts in cash, accounts in banks and short-term bank deposits, their balance as of December 31st, 2013 being of 2 thousand LEI (2012: 315 thousand LEI).


Together with the other companies from CEZ Group in Romania, this Company, starting from 2010, has implemented the cash-pooling service for the administration of liquidities, in order to prevent the risk of liquidity by physical transfer of funds from accounts belonging to the companies that form CEZ Group in Romania.

On the 31st of December 2013 the Company’s total debts amounted to 1 864 014 thousand LEI (2012: 2 194 120 thousand LEI) and they were formed of: commercial debts in amount of 55 394 thousand LEI (2012: 67 011 thousand LEI); amounts owed to credit institutions representing loans contracted by the Company so as to accomplish investments in amount of 870 467 thousand LEI (2012: 1 212 159 thousand LEI); loans from affiliated entities and connected parties in amount of 937 095 thousand LEI (2012: 849 946 thousand LEI), and other debts in amount of 1 059 thousand LEI (2012:64 983 thousand LEI).

The value of the guarantees, commissions and insurances for the loan agreements registered as per the Public Finances Ministry Order no. 3055/2009, as decrease of the loan on December 31st, 2013, are in amount of 166 thousand EUR. These costs are spread on a period of time between the date when the loan is given and the final reimbursement date, so as it is completely depreciated, but at a date that is not later than the reimbursement date.

Loans from affiliated entities and other connected parties on the 31st of December 2013 include: the loan received from CEZ International Finance BV (including interests), in amount of 845 483 thousand LEI (2012: 849 946 thousand LEI), and the loan received from CEZ, a.s. (including subsequent interests) in amount of 91 612 thousand LEI (2012: the Company had no loan from CEZ, a.s.).

The provisions for risks and expenses have, on the 31st of December 2013, a value of 32 900 thousand LEI and consist of: provision for dismantling in amount of 32 547 thousand LEI, provision for bonuses to be paid to the employees in amount of 152 thousand LEI, and provision for litigations in amount of 201 thousand LEI.

The provision for dismantling fixed assets was set based on the contractual provisions included in the contracts for land rental concluded by the Company with the owners of the rented land plots which have a stipulation regarding the obligation of the Company to return the land at the time when the Wind Farm is dismantled in the same condition as at the beginning.

The Company’s turnover is of 524 262 thousand LEI and derives from the sale of generated energy and appended services in amount of 168 355 thousand LEI, revenues from subsidies for operations subsequent to the turnover, in amount of 355 229 thousand LEI, and revenues from rental and services in amount of 678 thousand LEI.

The revenues from operations subsidies subsequent to the turnover represent the value of green certificates received as a result of generation of electricity from renewable sources, admitted to trading and recognized in compliance with the Public Finances Ministry Order no. 2067/2013 in the turnover and are formed of: revenues from green certificates sold during the year 2013, in amount of 265 039 thousand LEI, revenues from green certificates received as subsidy, in balance at the end of the year 2013, in amount of 87 239 thousand LEI, and revenues obtained from green certificates allocated as subsidy, but not received up to the end of the year 2013, in amount of 2 951 thousand LEI.

To these, financial revenues in amount of 59 680 thousand LEI will be added, thus total revenues for the year 2013 being in amount of 583 942 thousand LEI.

In 2013, the Company obtained revenues from dividends received from MW Team Invest SRL in amount of 19 997 thousand LEI.

Company’s total expenses during the year 2013 were in amount of 448 199 thousand LEI, of which: operations expenses in amount of 300 019 thousand LEI, and financial expenses in amount of 148 180 thousand LEI.

The operations expenses include: 47 685 thousand LEI expenses with raw materials and other materials, with energy and water; 2 006 thousand LEI personnel expenses; 104 898 thousand LEI expenses with amortization and depreciation of tangibles and intangibles; 138 481 thousand LEI expenses with external services; 6 063 thousand LEI other operations expenses; 936 thousand LEI expenses with other taxes, fees and assimilated payments, and expenses with provisions in amount of (50) thousand LEI.



On the 31st of December 2013, the Company registered a net profit of 135 743 thousand LEI comprising: profit from operations in amount of 224 243 thousand LEI and losses from financial activities in amount of 88 500 thousand LEI.

Of the profit registered at the end of the year 2013, the Company distributed the amount of 5 787 thousand LEI to the reserve fund, the amount of 129 956 thousand LEI in balance being meant to reduce the loss from the previous years, so that on December 31st, 2013 the Company had cumulated a loss in amount of 77 724 thousand LEI that will be covered from the future profits.

The legally formed reserve is in compliance with the legislation based on which 5% of the annual accounting profit is transferred to the legal reserves until the time the balance reaches 20% of the Company’s share capital. If this reserve is fully or partially used in order to cover losses or is distributed otherwise, it becomes taxable.

SC MW TEAM iNVEST SRl (“The Company”) is a limited liability company, registered at the Trade Register of Bucharest, at no. J40/3253/ 26.03.2010, having its head office in Bucharest, 2B ion ionescu de la Brad Street, floor 2, room 3.

The core activity is „Electric power generation” –CAEN code 3511, and the secondary object of activity is rental or sub - rental of its own or of leased assets – CAEN code 6820.

Upon incorporation, the Company had the following partners: Muntmark Emanuel – 1 share (5% of the share capital) and Muntmark Maria – 19 shares (95% of the share capital).

On 24.01.2008, the General Assembly of Shareholders decided to change the share capital as follows: Maria Muntmark and Emanuel Muntmark assign their 20 shares to TOMIS TEAM SRL. Thus TOMIS TEAM SRL becomes the sole owner, with 20 shares (100% of share capital).

On the 18th of December 2008, the sole owner, Tomis Team S.R.L., decided to increase the capital with the amount of EUR 22 434, the equivalent of 87 494 LEI (exchange rate 1 EUR = 3.9 LEI), by conversion of the liquid, eligible and certain debt that it had toward the Company under the loan contract from November 28th, 2008.

The financial statements of MW TEAM INVEST SRL are drawn up in compliance with:


�� The provisions of the Order of the Public Finances Minister no. 3055/2009 (“OMF 3055/2009”), with subsequent modifications.


According to the auditor, the financial statements fully reflect the Company’s financial status on December 31st, 2013 and its financial performance and cash flows for the financial year closed on that date, in conformity with the Order of the Public Finances Ministry no. 3055/2009 with the subsequent modifications and completions, and in compliance with the accounting policies described by the notes to the financial statements.

The Company owns 34 wind turbines with an 85 MW installed capacity. The net book value of the fixed assets is 549 353 thousand LEI (2012: 578 776 thousand LEI) and includes: constructions in amount of 176 204 thousand LEI (2012: 181 493 thousand LEI), technical installations and machinery in amount of 373 149 thousand LEI (2012: 397 282 thousand LEI).

On the 31st of December 2013, the Company has registered as advances and tangible assets under work in amount of 5 001 thousand LEI, consisting of costs of infrastructure and power networks in amount of 4 543 thousand LEI, and consultancy costs and other general expenses in amount of 458 thousand LEI.

At the end of 2013, the Company revised calculations of provision with dismantling and as per the new discount rates a supplementary provision being capitalized in amount of 2 975 thousand LEI. The costs with dismantling registered in 2013 as expenses are in amount of 593 thousand LEI.


The receivables on the 31st of December 2013 are in amount of 8 581 thousand LEI, lower than in 2012: 49 135 thousand LEI, and mainly consist of debts from affiliated entities or connected parties in amount of 8 448 thousand LEI (2012: 47 767 thousand LEI), and other debts to the state budget in amount of 133 thousand LEI (2012: 1 368 thousand LEI).

Generally debts with affiliates have a 30 days due date and a 90 days period of grace.

The Company’s payables on the 31st of December 2013 are in amount of 451 645 thousand LEI (2012: 518 196 thousand LEI) and are formed of: commercial payables in amount of 3 588 thousand LEI (2012: 9 861 thousand LEI), of which affiliated entities / connected parties in amount of 517 thousand LEI (2012: 6 902 thousand LEI); loan from the sole shareholder and subsequent interest in amount of 258 343 thousand LEI (2012: 272 889 thousand LEI), loan from connected parties in amount of 184 390 thousand LEI, other debts including fiscal ones and social insurance and debts to affiliated entities in amount of 1 438 thousand LEI (2012: 42 817 thousand LEI), of which amounts due to affiliated parties / connected parties in amount of 3 thousand LEI (2012: 36 440 thousand LEI).

In 2013, the Company paid dividends in amount of 19 997 thousand LEI from the financial result of the year 2012 in compliance with the Decision of the General Assembly of Shareholders taken on 29.05.2013.

The Company’s turnover in 2013 is 86 167 thousand LEI, the value resulting from the rental of turbines to Tomis Team SRL.

The financial revenues for the year 2013 are in amount of 2 471 thousand LEI. Total revenues registered for the year 2013 are 89 198 thousand LEI.

The operations expenses are in amount of 45 075 thousand LEI and consist of: expenses with raw materials and other materials in amount of 460 thousand LEI, personnel expenses in amount of 13 thousand LEI, expenses with depreciation of tangibles in amount of 32 398 thousand LEI, expenses with external services in amount of 11 463 LEI, expenses with other taxes and fees in amount of 128 thousand LEI, and other expenses in amount of 613 thousand LEI.

The Company’s financial expenses during the year 2013 are in amount of 24 517 thousand LEI, and total expenses for the year 2013 are 69 593 thousand LEI.

At the end of 2013, the Company registered a net profit in amount of 14 224 thousand LEI, of which it distributed 980 thousand LEI in order to establish the legal reserve, in compliance with the rules in force, while the amount in balance, of 13 244 thousand LEI, was transferred to the year 2014, so that the Company has undistributed results in amount of 13 256 thousand LEI.

The management of the Company proposes that the undistributed result in amount of 13 256 thousand LEI would be distributed as dividends to the sole shareholder, Tomis Team SRL.

OViDiU DEVElOpMENT SRl (“The Company”) is a limited liability company, registered at the Trade Register of Bucharest at no. J40/3252/26.03.2010 and having its registered office in Bucharest, 2B ion ionescu de la Brad Street, floor 2, room 1, Sector 1, Romania.

At the time of establishment, the Company had the following associates: Muntmark Emanuel – 1 share (5% of the share capital) and Muntmark Maria – 19 shares (95% of the share capital). The main object of activity was, at the time of incorporation, the Generation of electric power and has remained unchanged until now.

On 27.09.2006 the General Assembly of Shareholders decided to change the shareholding structure as follows: Maria Muntmark assigns the 19 shares held in the Company to GHIBLI SA (Addendum no. 4783/27.09.2006). Thus, GHIBLI SA becomes majority shareholder with 19 shares (95% of the share capital) and Muntmark Emanuel – 1 share (5% of the share capital).

From the date of 10.12.2007 GHIBLI SA withdraws from the Company by transferring the 19 shares to CWP CYPRUS LIMITED, a company from Cyprus. The structure of the share capital thus becomes: Muntmark Emanuel – 1 share (5% of the share capital) and CWP CYPRUS LIMITED – 19 shares (95% of the share capital).



On 29.08.2008, CEZ, a.s., a company registered in the Czech Republic, becomes majority shareholder with 19 shares (95% of the share capital), and CEZ Poland Distribution BV, a company registered in Holland, becomes the minority shareholder with 1 share (5% of the share capital).

On the 31st of December 2013, the structure of shareholding is the following:

Shareholder Value of the shares

(thousand lEi)

%

CEZ, a. s. 0.19 95

CEZ Poland Distribution B.V. 0.01 5

TOTAl 0.20 100

The financial statements of OVIDIU DEVELOPMENT SRL are drawn up in compliance with:

�� Accountancy Law no. 82/ 1991(republished);

�� he provisions of the Order of Public Finances Minister no. 3055/2009 (“OMF 3055/2009”), with subsequent modifications.


According to the auditor, the financial statements fully reflect the Company’s financial status on December 31st, 2013 and its financial performance and cash flows for the financial year closed on that date, in conformity with the Order of the Public Finances Ministry no. 3055/2009 with the subsequent modifications and completions, and in compliance with the accounting policies described by the notes to the financial statements.

On December 31st, 2013, the Company has intangibles in progress in amount of 301 thousand LEI (2012: the Company had no intangibles in progress on December 31st, 2012).

At the end of 2013, the net book value of tangible assets is in amount of 1 742 397 thousand LEI (2012: 1 807 024 thousand LEI) and includes land plots and buildings in amount of 483 218 thousand LEI (2012: 494 320 thousand LEI), technical installations and machinery in amount of 1 170 691 thousand LEI (2012:1 239 549 thousand LEI), advance payments and assets in amount of 88 489 thousand LEI (2012: 73 155 thousand LEI).

On December 31st, 2013 the Company had investments in the form of financial assets for the total amount of 37 516 thousand LEI representing 199 846 green certificates deferred from trading in conformity with the Order of the Public Finances Ministry no. 2067/2013 and GEO no. 57/2013 regarding the modification and the completion of Law no. 220/2008 settling the system for the promotion of energy from renewable sources.

The stocks in amount of 2 542 thousand LEI are formed of spare parts necessary for maintenance and repairs.

Total receivables in balance on the 31st of December 2013, in amount of 196 955 thousand LEI (2012: 186 104 thousand LEI) are formed of third party commercial receivables in amount of 27 thousand LEI (2012: 76 thousand LEI), amounts to be collected from running cash-pooling transactions in amount of 71 648 thousand LEI (2012: 65 870 thousand LEI), receivables in relation with other connected parties in amount of 14 441 thousand LEI (2012: 23 717 thousand LEI), and other receivables in amount of 110 839 thousand LEI (2012: 96 441 thousand LEI), mainly consisting of debts related to the state budget in amount of 101 563 thousand LEI (2012: 94 707 thousand LEI).


The receivables in relation with other affiliated entities / connected parties do not carry penalties and are generally due after 30 days and have a period of grace of 90 days.

The Company has implemented the cash-pooling system for the administration of liquidities, the system consisting in the prevention of the risks for liquidities based on physical transfer of funds from accounts belonging to the Group’s companies through a Pool Leader, with the participation of the other companies forming CEZ Group in Romania.

The Company’s debts on the 31st of December 2013 are 1 946 834 thousand LEI (2012: 2 017 554 thousand LEI) and consist of: commercial debts in amount of 24 611 thousand LEI (2012: 106 367 thousand LEI), of which with other connected parties 12 324 thousand LEI (2012: 27 096 thousand LEI), and other debts in amount of 1 922 223 thousand LEI (2012: 1 911 188 thousand LEI), of which loans from affiliated entities and other connected parties in amount of 1 911 520 thousand LEI (2012: 1 902 222 thousand LEI), the long-term part of these loans being in amount of 523 360 thousand LEI (2012: 464 122 thousand LEI).

At the end of the year 2013, the Company made a provision for dismantling its assets in compliance with the rental agreements for the amount of 31 307 thousand LEI, of which 29 086 thousand LEI capitalized in assets value.

At the end of the year 2013, the Company has a provision for litigations in amount of 55 thousand LEI for fines received from the local authorities that the Company has challenged in court.

The total revenues of the Company in 2013 are in amount of 333 158 thousand LEI and are mainly derived from revenues from the sale of energy and from connected services in amount of 119 519 thousand LEI, revenues from the sale of green certificates in amount of 199 969 thousand LEI, and other operations revenues in amount of 365 thousand LEI, revenues from the exchange rate in amount of 12 590 thousand LEI, and revenues from interests in amount of 714 thousand LEI.

The Company’s total expenses on the 31st of December 2013 are in amount of 281 513 thousand LEI and are formed of: personnel expenses in amount of 14 thousand LEI, other material expenses in amount of 35 273 thousand LEI, expenses with tangibles depreciation in amount of 90 664 thousand LEI, expenses with external services in amount of 31 851 thousand LEI, expenses with taxes and fees in amount of 382 thousand LEI, expenses with payment of damages, donations and assigned assets in amount of 2 653 thousand LEI, adjustments related to provisions in amount of (55) thousand LEI, and financial expenses in amount of 120 731 thousand LEI.

During the year 2013, the Company registered expenses with the tax on profit in amount of 15 564 thousand LEI (2012: in the year 2012 there were no expenses with the tax on profit).

During the year 2013, the Company registered a net profit of 36 081 thousand LEI, to which it adds the profit from adjustment of accounting errors in amount of 1 500 thousand LEI, thus decreasing the loss reported in the previous years; so the total reported loss at the year-end is 3 220 thousand LEI, amount which is to be covered from the future profits.

In 2013, the Company has commitments for the procurement of various tangible assets in total amount of 1 224 thousand LEI (2012: 6 233 thousand LEI).

SC TMK HYDROENERGY pOWER SRl (“The Company”) is a company with 100% private capital, established in 2010, with its main office in the city of Reşiţa, 4B primăverii Street, offices located on the first floor, Caraş - Severin County. The Company is registered at the Trade Register with no. J11/309/2010, fiscal code registration number RO 27189093.

The core activity of the Company is the generation of electric power out of renewable sources, CAEN code 3511. Other activities are: transport of electric power, distribution of electric power and trading of electric power.



The Company was set up in 2010, having as its sole associate the company TMK Reşiţa SA, a Romanian commercial company, with its main office in Reşiţa, 36 Traian Lalescu Street, Caraş - Severin County, registered at the Trade Register at no. J11/59/1991, fiscal code no. RO1064207.

In May 2011, it was finalized the Company’s acquisition by CEZ România SA, a share - holding company with 100% private capital, administered in a two - tier system, established in 2005, with its head - quarters in Bucharest, 2B Ion Ionescu de la Brad Street, sector1, Romania, registered at the Trade Register at no. J40/20570/07.12.2005.

The Company’s share capital is of 36 400 thousand LEI and was fully paid on the 31st of December 2013.

The financial statements of the Company TMK Hydroenergy Power SRL are drawn up in compliance with:


�� Provisions of the Order of Public Finances Minister no. 3055/2009 („OMF 3055/2009”) with subsequent adjustments.

On the 31st of December 2013, the net book value of expenses with the company establishment is of 118 thousand LEI (2012: 188 thousand LEI), with a 5-year period of depreciation.

The net book value of other intangibles in amount of 2 147 thousand LEI (2012: 5 thousand LEI) consists of: connection to the distribution network in amount of 2 073 thousand LEI (2012: there was no connection to the distribution network), with a 25 years’ period of depreciation, and software licenses in amount of 75 thousand LEI (2012: 5 thousand LEI) with a 3 years’ period of depreciation.

In 2013, on November 30th, the re-evaluation of land plots, buildings and equipment belonging to the Company was done. This re-evaluation was done by an expert in compliance with ANEVAR national standards. The re-evaluation was meant to lead to the adjustment of net book values of the elements included in these categories at their fair value, considering their wear and market value.

The net value of tangibles on December 31st, 2013 is in amount of 194 336 thousand LEI (2012: 125 823 thousand LEI). The entry value in 2013 was represented by amounts in advance and tangibles of 54 076 thousand LEI (2012: 70 113 thousand LEI).

The value of capitalized interests for the year 2013 was 6 485 thousand LEI, so that on the 31st of December 2013 the cumulated value of interests capitalized in tangibles is of 11 594 thousand LEI.

The Company has no completely depreciated tangibles in its assets on the 31st of December 2013 (2012: 48 thousand LEI).

The commercial receivables in balance on the 31st of December 2013 have the net value of 607 thousand LEI (2012: 105 thousand LEI) and are mainly generated by the sale of electric power; the commercial receivables carry penalties and their general payment term is between 30 and 90 days.

The receivables with affiliated entities/connected parties on the 31st of December 2013 are in amount of 466 thousand LEI (2012: 588 thousand LEI) and mainly derive from the rental of office space to CEZ România and operations performed on the balancing market, CEZ Vânzare being the company responsible with the balancing.

The Company’s total debts are in amount of 161 927 thousand LEI (2012: 94 827 thousand LEI) and mainly derive from payables to the affiliated entities / connected parties in relation with the short-term loan received from CEZ Distribuţie SA in amount of 138 719 thousand LEI (2012: 94 076 thousand LEI), and afferent to the cash - pooling service, in amount of 6 207 thousand LEI (2012: it had no debts from cash - pooling) in its relation with CEZ România.

The commercial debts on the 31st of December 2013 are in amount of 3 161 thousand LEI (2012: 631 thousand LEI).


Payables to personnel, representing salaries, other payables to the personnel and debts assimilated to these, in balance on the 31st of December 2013, are in amount of 131 thousand LEI (2012: 119 thousand LEI).

The amounts available are formed by cash in LEI and foreign currency in banks, their balance on the 31st of December 2013 amounting to 36 thousand LEI (2012: 88 thousand LEI).

The legal reserve is created in compliance with the Law of Commercial Companies, according to which 5% of the annual accounting profit before taxation is transferred to the legal reserve up to the time when its balance is of 20% of the Company’s share capital.

The Company’s legal reserve on December 31st, 2013 is of 42 thousand LEI (2012: 42 thousand LEI)

The Company’s net turnover in 2013 is of 1 728 thousand LEI and consists of: revenues from subsidies representing green certificates in amount of 1 073 thousand LEI, revenues from energy sales in amount of 464 thousand LEI, revenues from services in amount of 59 thousand LEI, and revenues from the sale of goods in amount of 132 thousand LEI.

To these, there will be added the financial revenues in amount of 6 798 thousand LEI so that the total amount of revenues in the year 2013 is of 8 526 thousand LEI.

The operation expenses reported by the Company in 2013 are 9 309 thousand LEI, of which: expenses with materials, energy and water in amount of 259 thousand LEI, expenses with goods in amount of 3 thousand LEI, personnel expenses in amount of 1 235 thousand LEI, expenses with the adjustment in value for tangibles and current assets in amount of 3 023 thousand LEI, expenses with external services in amount of 4 566 thousand LEI, expenses with taxes, fees and assimilated payments in amount of 104 thousand LEI, other operations expenses in amount of 118 thousand LEI. The financial expenses for the year 2013 are in amount of 6 804 thousand LEI, so that the Company reported in 2013 an amount of 16 114 thousand LEI as total expenses.

At the end of the year 2013, the Company reported losses in amount of 7 587 thousand LEI, the net cumulated loss transferred in 2014 being in amount of 9 440 thousand LEI, the loss following to be recovered from the future profits.

On the 31st of December 2013, the Company has commitments for the procurement of tangibles (2012: 37 799 thousand LEI for refurbishment).

In 2013, the Company continued and finalized the refurbishment of its power installations; the 6.3/35/110kV transformer station from Grebla was made and authorized and the modernization of the 6.3 kV and 35 kV networks was accomplished. The integration in SCADA of the hydropower plants from Grebla, Crăinicel 1, Crăinicel 2 and Breazova and of the Pumping Station from Timiş Trei Ape was finalized, the remote operations thus becoming possible. The connection of the system to the distribution network owned by ENEL Distribuţie Banat was also done.

Following the complex tests performed in October – December 2013 in compliance with the technical rules in force, the Company obtained the technical accreditation for long-term operations. Also, the license for commercial operations was updated. Based on the decision of ANRE President no. 4021/20.12.2013, the refurbished hydro-power plants belonging to TMK Hydroenergy Power SRL were qualified for the support scheme with green certificates for a 10 years’ period and based on this, the Company receives 2 green certificates for each MWh of energy generated and delivered to the national system.

All throughout the refurbishment period and afterwards, during its normal activity, the Company had the permanent support from the other companies that form CEZ Group in Romania.

13CapitalExpenditures at CEZ Distribuţie

57Capital Expenditures at CEZ Distribuţie

13CapitalExpenditures at CEZ Distribuţie

In 2013, SC CEZ Distribuţie SA had an investment program for distribution financed from own resources in amount of 200 960 thousand LEI, and a program of commissioning in amount of 198 244 thousand LEI.The main achievements in 2013 regarding investments and commissioning were:

�� CAPEX - 200 960 thousand LEI�� Commissioning - 198 244 thousand LEI

in compliance with the strategy of CEZ Distribuţie SA, the main stated targets are:A. Harmonization of the performance indicators SAiDi/SAiFi with the commitments

assumed before ANRE�� modernization of medium voltage networks for about 57.35 km of networks; �� mounting 10 KTRs

B. Reduction of Own Technological Consumption�� modernization of low voltage networks, 91.4 km long;�� modernization of high voltage networks, 13.2 km long;�� purchase and mounting of 430 transformers replacing the existing ones, whose life span was

exceeded and had high technological losses;�� switching of installations operating at 6 KV to 20 KV – by upgrading 11 transformer posts and by

installing 11.06 km MV cable.

C. improvement of quality parameters for electric power distributed to the customers of CEZ Distribuţie SA

�� building new distribution capacities, such as: 34 new transformer posts, 28.27 km medium voltage networks and of 41.54 km low voltage networks;

�� modernization of 47 transformer posts.

D. integration of the 110/20/6 kV transformer stations to the SCADA system of CEZ Distribuţie SA

�� modernization of 11 transformer stations of 110 kV and their integration into SCADA.

E. Renewal of meters for the customers of CEZ Distribuţie SA, in compliance with the metrological standards in force

�� acquisition and installing of 195 000 new power meters both at new and old customers.

F. Accessing Community Funds based on 50% financing of the eligible part for:�� Modernization of the 110/20 kV Băileşti station;�� Modernization of the 110/20 kV Galicea station;�� Modernization of the 110/20 kV Basarabi station;�� Development of the distribution capacity, transfer to 20 kV and increase of safety in supplying

with energy the consumers from Novaci, in the Rânca area.

The most important investments from a technical point of view, made and commissioned in 2011 at SC CEZ Distribuţie SA, were:

�� Securing the metering units for the consumers of SC CEZ Distribuţie SA – 16 903.778 thousand LEI;

�� Procurement and installation of metering and protection units for public lighting in order to accomplish its separation from RED – 18 071.71 thousand LEI.

�� Electronic single-phase and three-phase meters (195 000 pieces) – 39 444.392 thousand LEI;�� Modernization of LEA 20 KV AREFU-CHE Cumpăniţa, Argeș County – 5 780.698 thousand LEI;�� Modernization of the 110/20 kV Rucăr station – 1 410.746 thousand LEI;

58 Capital Expenditures at CEZ Distribuţie


�� Modernization of the 110/20/6 kV Bârseşti 2 station – 6 372.200 thousand LEI;�� Modernization of the 110/20 kV Roşia Jiu station – 6 768.240 thousand LEI;�� Modernization of LEA DC 110 kV Rogojelu - Motru and of LEA 110 kV Rogojelu - Godineşti –

7 845.813 thousand LEI;�� Modernization of the 110/20/6 kV Bărbăteşti station – 10 235.509 thousand LEI;�� Modernization of the 110/20 kV Craiova Centre station – 16 035.759 thousand LEI;�� Modernization of the 110/20 kV Băileşti station – 10 556.805 thousand LEI, of which

4 384.447 thousand LEI from Community funds;�� Modernization of the 110/20 kV Galicea station – 4 913.217 thousand LEI, of which

2 187.441 thousand LEI from Community funds;�� Modernization of the 110/20 kV Basarabi station – 8 762.247 thousand LEI, of which

2 918.726 thousand LEI from Community funds;�� Development of the distribution capacity, transfer to 20 kV and increase of safety in supplying

with energy the consumers from Rânca area, Novaci – 392.169 thousand LEI, of which 87.579 thousand LEI from Community funds;

�� Systematization of LV power open line and feeding from subscriber-type posts the consumers afferent to PTA Pompe Apă Pojorâta – 341.004 thousand LEI;

�� Improvement of voltage level and modernization of the LV network at Livezi – PT 1, Dolj County – 511.386 thousand LEI;

�� Modernization of the LV network and connections, and improvement of voltage level at PTA Stăneşti 1, Stăneşti village, Stăneşti, Gorj County – 551.666 thousand LEI;

�� Modernization of the LV network and connections, and improvement of voltage level at PTA Stăneşti 2, Stăneşti village, Stăneşti, Gorj County – 461.697 thousand LEI;

�� Extension of the AMM pilot project – 2013 – 3 828.699 thousand LEI.

The evolution of investments (CAPEX) and of commissioning in the power distribution network between 2006 – 2013 looks as follows:

300 000

250 000

Thousand LEI

200 000

150 000

100 000

50 000

2006 2007 2008 2009 2010 2011

177.141

197.280

137.523

124.585

198.966 225.711198.244

251.921

237.610200.960

236.200

196.198

132.000133.213

187.349

181.469

2012 2013

Capex

PIF

CAPEX dynamics - PIF per year

59Capital Expenditures at CEZ Distribuţie

14CEZWind Farms

61CEZ Wind Farms

14CEZWind Farms

CEZ Wind Farms – Fântânele phase

In August 2008, CEZ purchased the two projects forming the largest onshore wind farm in Europe: Fântânele, Cogealac, with a total capacity of 600 MW, 240 turbines 100 m high with a 100 m rotor diameter, based on an investment worth 1.1 billion EUR.

Fântânele and Cogealac are two localities from Dobrogea, north of Constanţa County, 17 km away from the Black Sea and close to the antique city of Histria, in an area with very good wind speed.

Construction works started in October 2008 in Fântânele and by the end of 2012 all 139 turbines were finalized, connected to the power distribution grid and commissioned as per the development program. The first MWh was generated in June 2010.

The farm will contribute both to Romania’s reaching the targets related to the generation of electricity from renewable sources and its accomplishment of mandatory quotas of green certificates, and it will allow CEZ to be an active participant to the generation of electric power from renewable sources on the local market.

2013 Key Moments

�� The certificate of conformity N 51 was obtained from Transelectrica on 30.07.2013 for all 3 farms: Tomis Team, MW Team Invest and Ovidiu Development;

�� Construction works were finalized at the Fântânele wind farm on 19.07.2013. The BOP agreement for the Fântânele wind farm was signed on 19.07.2013;

�� Finalization of expansion works for the Command Centre at CEZ Wind Farms on 29.04.2013;

�� Implementation of the new system WFSM and ASRU;

�� Continuing the approval process of the new meteorological pillars in Fântânele;

�� According to the Government Emergency Ordinance no. 57/2013, the green certificates law was amended; energy producers will receive one green certificate, the rest being postponed until 2017, with the possibility of extending the reimbursement period until 2018;

�� The accreditation for green certificates for Tomis Team ended on the 30th of October 2013 and was not extended.

CEZ Wind Farms – Cogealac phase

Construction works started on July 2010 in Cogealac after the Authorization for construction no. 44 dated 14th of July 2010 was obtained, but the interests of local authorities and of the competitors led to the delay of the project in that area. It was also necessary to change the location of the 37 turbines from the administrative territory of Cogealac to that of Grădina, so that the commissioning of the first turbines was done in May 2012.

In addition to the Fântânele farm, the one in Cogealac contributes to Romania’s reaching the targets related to the generation of electricity from renewable sources and its accomplishment of mandatory quotas of green certificates, and it will allow CEZ to be an active participant to the generation of electric power from renewable sources on the local market.

62 CEZ Wind Farms


2013 Key Moments

�� Finalization of all construction works at Cogealac Wind Farm on 31.08.2013;�� The environment permit for Cogealac Wind Farm was obtained;�� Finalization of works at the weather towers for the Cogealac Wind Farm, including the

installation of equipment on 30.08.2013. The BOP agreement for the Cogealac Wind Farm was concluded on 30.08.2013.

�� On 30.09.2019 the MSA agreement with CWP for the Wind Project from Fântânele, Cogealac – Grădina was concluded;

�� The weather towers were constructed.

Regarding the Operating & Maintenance (O&M) works for the entire CEZ Farm, we herein present some of the 2013 key moments:

�� Finalization of tests and commissioning of the 240 turbines at the entire wind farm;�� Finalization of tests and acceptance of results by Transelectrica for the entire farm;�� Re-organization of the O&M team;�� A production record of 1.25 TWh was obtained. KPI of 500 GWh on 20.04.2013 and 1 TWh

on 18.10.2013 are values that will remain as reference values.�� Installation of new GE controllers;�� The ASRU system is fully operating;�� The O&M team started to operate the wind farm;�� Starting negotiations with GE for the Full Service Agreement;�� Re-negotiation of all agreements that were signed in relation with O&M of the farm;�� Starting negotiations with Energobit for the maintenance of the wind farm.

15HydroProduction

15HydroProduction

64 Hydro Production


Protecţia mediului

The Acquisition and Description of Reşiţa Hydropower System

On December 2010, CEZ România finalized the acquisition of the hydropower system from Caraș - Severin, near Reşiţa. CEZ România SA bought the 100% share package of the company TMK Hydroenergy Power SRL, this new acquisition being in line with CEZ policy of focusing upon its core business in the countries where it already operates and of being positioned in the sector of renewable energy.

The hydropower system has 4 hydropower plants (Grebla, Crăinicel 1, Crăinicel 2 and Breazova) and their subsequent hydro parts, and had an installed capacity of 18 MW. The system was operated until July 2012 when production was interrupted so as to perform the refurbishment works. Only the power networks of the system were kept in function. After finalization of the refurbishment works, the installed power grew to approximately 22 MW.

The 4 lakes of the system (Secu, Gozna, Văliug and Trei Ape) are used to feed the power plants, to make the water course regularization (Semenic, Bârzava and Timiş) and to supply with water the industry and localities of that area. Lake Secu is used only for feeding with water and not for energy generation.

The hydropower system from Caraş - Severin County is a mixture of art, history, nature and engineering technique. Most of the power plants’ buildings are very old, being built at the beginning of the 20th century; some of them, like the buildings of the hydropower plants Grebla and Breazova, are historical monuments. Not only the buildings are very old, the first dam and the first power plant dating since 1907, but also the hydro - mechanical equipment and the hydro - generators, some having been operating for more than 60 years.

The Energy Generation and production / Operations

In 2013, TMK Hydroenergy Power continued the process of integration in the operational concept of CEZ Group in Romania. So, the shared activities were performed based on SLAs with the companies of CEZ Group in Romania and the company’s activity focused upon the refurbishment and modernization of the existing equipment and infrastructure.

In carrying out the activities, the company considered the severe restrictions generated by the long drought that had begun in the summer of 2011 and ended only in the spring of 2012, when the melting snow and heavy rainfalls of that spring pushed energy production to 31.171 GWh, above the 20 GWh forecast.

Here are some other achievements of TMK Hydroenergy Power’s team in the same period: preparation, approval and performance of the plans of investment, maintenance and procurement for the year 2013, authorization and performance of refurbishment works including the obtaining of approvals and authorizations necessary to directly connect the hydropower system to the 110 kV distribution grid of Enel Distribuţie Banat.

The major accomplishment of the year 2013 was represented by the successful and in-time finalization of refurbishment works and the resuming of operations after a 1 year and 4 months interruption.

From a financial point of view, in 2013 the 5Y plan was worked out together with the 2014 annual budget and the periodical forecasting for 2013, and the Ernst&Young company performed the financial audit. The company And Consult SRL re-assessed the company’s assets and an independent financial evaluator made a report on the gross value of the assets existing at each refurbished power plant. TMK Hydroenergy Power is included in the Group’s reporting structure and its assets were insured by the Generali Asigurari Company.

65Hydro Production

Update of producer’s license, Qualification for Green Certificates

On December 2013, by Decision no. 3832/18.12.2013, ANRE updated for TMK Hydroenergy Power the license based on which, in compliance with the legal provisions, the company can commercially operate its refurbished production capacities.

On December 2013, based on Decision no. 402/20.12.2013 and in compliance with the laws in force, ANRE gave to TMK Hydroenergy Power the accreditation to apply the support system with green certificates for energy generation from renewable sources (for refurbished hydropower plants with installed power below 10 MW).

Thus, TMK Hydropower received, in 2013, for the electric power generated by it, a total number of 2 130 green certificates (2 certificates/MW) which it fully sold on the centralized market of green certificates (PCCV) in 2014, based on a SLA concluded with CEZ Trade România.

The certification for fulfilment of conditions in the technical approval for connection no. 24/17.07.2012, issued by ENEL Distribuţie Banat, is made by signing the report RO.00/868/21.10.2013 at the conclusions of works and by commissioning of 110 kV open power line and of the 6.3/35/110kV Grebla transformer station.

The certification for fulfilment of conditions for functioning in national power grid/ power grid (SEN/RED) is confirmed by Transelectrica – National Energy Dispatching (DEN) Bucharest by letter no. 38638/16.12.2013, acknowledged by ANRE Bucharest – the Department of Authorization and Network Access Regulation in the sector of electric power. The technical certification was given as a result of transmission of documents and test reports in compliance with the request of DEN. This was done with a third party, namely with the University Eftimie Murgu, the Centre for Hydraulic Research, Automation and Thermal Processes (CCHAPT).

After finalization of refurbishment works, at the end of 2013, all production capacities of TMK Hydroenergy Power SRL were in operation, the first phase of commercial exploitation being done at the beginning of 2014 when the company was registered as a participant on the PZU and PCCB platforms managed by OPCOM, and PCCB type energy trading contracts were concluded.

Human Resources

1) Employees’ Training (Foreign language Courses, professional Trainings, Courses Required by law etc.)

In 2013, the company TMK Hydroenergy Power SRL organized professional training courses for its personnel and for the company’s integration into the Group. Thus, 6 persons took English language courses for which 2 493 LEI were paid.

2) The Social policy (Benefits for Employees)

A system of social policies meant to protect employees was worked out and implemented at TMK Hydroenergy Power SRL.

So, in compliance with the provisions of the negotiated Collective Employment Agreement, the employees of TMK Hydroenergy Power SRL receive allowances and bonuses paid at the time when the herein below conditions are fulfilled:

�� Compensation for the balance between the base salary and the aid offered for temporary work incapacity due to accident during work hours or in relation to work, or for contracting any professional disease;

�� Compensation for a period of two months for the balance between the allowance received as per the law from the welfare and health insurance fund and the monthly base salary in case the lady employee is on maternity leave;

66 Hydro Production


�� Aids paid when a child is born, at the time of retirement or at the time the employee of a member of the employee’s family dies;

�� Money aid in case the employee gets married;

�� The possibility of offering money aid to the employees whose homes were affected by natural calamities;

�� Allowance in case of redundancy, based on seniority in work;

�� Aid for work accidents resulting in invalidity granted in case the employee suffered an accident with first or second degree invalidity;

�� Individual food allowance given as lunch tickets;

�� Bonuses for Easter, Christmas, the Electrician’s Day based on company’s financial possibilities;

�� Holiday bonus paid to each employee once a year;

�� Reduction in price of tickets for holidays and treatment;

�� Bonuses for participation in projects.

In 2013, the employees of TMK Hydroenergy Power received bonuses and benefits in amount of 142 thousand LEI as follows:

BENEFiTS AND BONUSES VAlUE (thousand lEi)

Holiday bonuses 17

Bonuses paid to employees 50

Easter, Christmas and Energetician’s Day Bonuses 24

Holidays and treatment tickets 1

Presents for the 8th of March 0.5

Lunch tickets for employees 49

TOTAl 142

3) The Relation with Trade Unions

The administration of SC TMK Hydroenergy Power SRL and the Trade Union Energo Craiova recognize each other as permanent partners of social dialogue. The trade union Energo Craiova, with the main office in Craiova, is the organization that is representative at the company level, numbering over 50%+1 of the total number of employees. This is the union with which the Collective Employment Agreement was negotiated for the years 2013 and 2014.

All reorganization and restructuring actions were done with informing and consulting trade union organizations.

TMK Hydroenergy Power was reorganized following the optimization project „TOM - Target Operating Model”. This new operational model was successfully implemented, this being possible due to the permanent social dialogue with the representative trade union.

67Hydro Production

The Collective Employment Agreement signed at TMK Hydroenergy Power SRL for the period 01.01.2013 – 31.12.2014 was recorded in the Single Registry of the Local Labor Inspectorate of Caraș - Severin County under no. 286/10.12.2012.

The Environment

As an operator performing activities of production, exploitation and maintenance, we admit the possible impact of our activities on the environment and we permanently take measures to reduce it. During operations and refurbishment works, we observed the local demands in relation with the environment and the environment permit.

We promote a healthy, safe and sustainable environment.

Our performance standards are oriented toward environmental protection. The total net volume of energy generated by our small power hydropower plants was 4.567 GWh.

Our efforts to protect the environment are demonstrated by the fulfilment of all conditions imposed by the company’s operations based on the existing environment permit.

investments

In 2013, the main investment was in the refurbishment and modernization of this system from Reşiţa, including the change of hydro - power generators at the 4 hydropower plants, of the pumping units, of the hydro - mechanic equipment controlling the water flow, replacing electric equipment from transformer stations, replacing transformers, connection to the national system for distribution and transport, modernization of power networks and of the water transmission system (channels, pipes, viaducts)

The investments also included the SCADA integration of CHE Grebla, CHE Crăinicel I, CHE Crăinicel II, CHE Breazova and the Pumping Station Timiş Trei Ape, respectively the remote operation of the hydropower plants, the automation of equipment and their unmanned operation. The investments led to growth in efficiency and safety in functioning and the growth of total installed capacity in power plants from 18 MW to approximately 22 MW.

The investment was made based on a turn - key agreement made with the general contractor Hydropol; it started when the company was taken over by the Group (May 2011) and was finalized as per the general graphic of investment, in December 2013. In parallel, there were planned works of refurbishment and for the increase of channels’ transport capacities in the areas where these capacities were low, as well as works for repairing the dams and modernization of the dam equipment.

Works started on July 2012 when the refurbishment works at CHE Grebla, CHE Crăinicel I, CHE Breazova and the water flow channels began, and in August 2012 the works of refurbishment at CHE Crăinicel II started, marking the effective commencement of all refurbishment works, which continued up to the end of the year 2012 and in 2013. In February - March 2013 we obtained the last permits for construction/demolishing necessary for the installation making the connection to SEN/RED.

At the end of 2013, the refurbishment works at the 7 sections of the investment were finalized and commissioned in all hydropower plants (CHE Grebla – 7.968 MW, CHE Crăinicel I – 4.16 MW, CHE Crăinicel II – 9.2 MW, CHE Breazova – 0.656 MW, and the Pumping Station Timiş Trei Ape.

It was also finalized and commissioned, before the finalization of works in power plants, the new installation for the connection with the 110 kV SEN/RED, now the company’s local power network being directly connected to SEN. On this occasion, the Brebu Nou and Gărâna localities were directly connected to SEN/RED and a safe spare feeding system for the Văliug - Semenic area was also done.

16Management of Work Safety



We have proven our commitment to performance and to health and work safety (SSM).

Below are some of the actions upon which we focused in 2013:

�� Working out the applicable SSM documentation; �� Re - evaluation of risks at each work site; �� Working out plans for protection and prevention;�� Making out plans for emergency cases;�� Development of employees’ awareness on SSM;�� Procurement of equipment and objects for individual protection;�� Periodical medical check-ups of employees;�� Procurement and completion of first aid kits;�� First aid training.

In 2013 as well, we are proud to say we had no work accident in CEZ Group in Romania.

2008 2009 2010 2011 2012 2013

Work accidents 4 2 3 0 0 0

Cause

� Fall from height� Electrocution�Burning from electric arc�Car accident�Others

11-

11

-11--

-12--

-----

-----

-----

Types of accident

� fatal�major� over 3 days’ hospitalization

112

-2-

111

---

---

---

Cause of accident

� caused by employees who did not observe rules

� caused by others

2

2

2

-

3

-

-

-

-

-

-

-

17EnvironmentProtection

71Environment Protection

17EnvironmentProtection

Observance of the legislation, maintenance of the implemented System of Environment Management, modernization of the distribution networks, as well as the investments in renewable energy were the first action courses for the companies of CEZ Group in Romania with regard to the environment.

�� To perform our activities, we obtain the necessary permits and approvals from the environment authorities and we take measures to reduce at a minimum the impact in the areas where we operate. We worked out and transmitted to the competent authorities the environment reports in compliance with the legislation in force.

We have also successfully finalized the „Waste Management” project by which we aimed, and succeeded, to standardize this type of activity and have a better coordination with external service providers, to reduce the volume of waste and increase the quantity of recyclable waste.

�� CEZ Companies were re-certified for conformity with the requirements of the international EN ISO 14001 standard – the Environment Management Systems, both for SC CEZ Distribuţie SA and for SC CEZ Vânzare SA, which shows the special attention we give to the protection of environment.

The Environment Management System helps us increase the responsibility of the employees of the companies of CEZ Group in Romania and also increase the efficiency of our actions for the protection of environment.

�� CEZ efforts are also demonstrated by the investments done in this domain.

Programs for the modernization of equipment and installations have been implemented, mainly in order to reduce pollution, increase the recycling rate and reduce the impact on the environment.

In order to limit accidental pollution with oil at the transformer stations, we secure permanent stocks of 100% biodegradable absorbing materials.

Important funds have been allocated to run programs to eliminate or replace the equipment that does not meet the EC requirements regarding the restrictions in using dangerous substances (RoHS) or in installations using SF6 equipment (gas from the Kyoto protocol).

To eliminate accidental pollution and greenhouse gas emissions, these are permanently monitored.

To reduce the consumption of natural resources and the carbon emissions in the atmosphere, we have encouraged the use of video-conference, phone, e-mails or cars in car-pool system.

�� CEZ committed to generate renewable energy by developing the wind farm Fântânele - Cogealac - Grădina and the hydropower system with the investments at the four hydropower plants from Caraș - Severin County. The effects upon the vegetation and the fauna of these areas were considered, being known that the wind farm is at a quite small distance from the Danube Delta Nature Reserve, while the hydropower plants are close to the Gozna, Secu, Văliug, and Timiş Trei Ape lakes.

Increased attention was paid to our installations and activities from the protected areas, thus reducing risks for bio - diversity.

In the area of the wind farm, we monitor the eco - system, especially birds, their migration, feeding, breeding and their behaviour. To do this, CEZ has a contract with a specialized company and data are reported quarterly to the environment authorities. Also, on a quarterly basis we test the quality of used water by taking measurements for underground water, the samples being sent for analysis in specialized labs.

72 Environment Protection


With this project, we have turbines which operate within the admitted noise limits. The level of noise produced by the wind farm turbines is permanently monitored by specialized companies, so as to be sure that the specific standards are observed and the population of the area is not affected.

Our power lines represent a risk for large birds (especially the white stork, a protected species in Europe) but whenever we design our LV and MV lines we consider the measures meant to protect wild birds or we monitor the existing lines by making nests and places where birds may rest.

TMK Hydroenergy Power, part of the CEZ Group in Romania, is also taking permanent measures to protect the environment. So, to keep its dams clean, the company took measures to clean areas around the dams and mobilized important forces from inside the group.

Actions were done to maintain water clean, to protect lakes, generally to preserve and protect water sources. The expected result

is to have a coordinated approach regarding the use of water resources from Reşiţa City, which is supplied with water from the Gozna, Secu, Văliug, and Timiş Trei Ape lakes.

We also take care to implement the best EU practices that are in line with the European and the national legislation.

As an operator with electric power generation, distribution and supply activities we admit the possible impact of our activity upon the environment and we permanently take measures to reduce it. During operations and refurbishment works, we respect the legal regulations related to the environment and those stated in the environment permits.

We promote a healthy, safe and sustainable environment. Our performance standards are directed to the protection of the environment. Our efforts at environmental protection are demonstrated by the fact that we have fulfilled all conditions imposed upon our activities by the legislation in force.

No claims have been registered against the companies of CEZ Group in Romania regarding any breach of the environment legislation or in relation with any kind of accidental pollution.

18AnnualReport regardingHuman Resources

18AnnualReport regardingHuman Resources

74 Annual Report Regarding Human Resources


1) Educational program for Employees

CEZ Group in Romania considers professional training as a continuous process addressed to all employees, irrespective of their position in the organization. Year - by - year, the Group invests to create a motivated work force, able to respond to challenges, competent and ready to reach the company’s short and long - term objectives.

So, in the year 2013, the companies of CEZ Group in Romania organized professional training courses for the following domains:

�� Development of abilities in the energy sector;

�� Obtaining authorizations necessary to perform activities in line with the laws in force;

�� Development of managing and leadership abilities;

�� Getting knowledge in project management;

�� Getting knowledge in business analysis;

�� Getting knowledge in metering and for the optimization of performance indicators;

�� Advanced knowledge on time management and team work;

�� Development of linguistic competence;

�� Development of IT knowledge (Microsoft Office, advertising graphics, archiving solutions);

�� Advanced knowledge in communication and customer relationship;

�� Knowledge of defensive driving;

�� Competence in negotiations;

�� Advanced sale techniques;

�� Knowledge and techniques of networking;

�� Knowledge in public procurement;

�� Advanced skills in audit;

�� Increased abilities in human resources;

�� Knowledge of first aid as per the laws in force;

�� Improvement and update of information regarding legislative changes with participation to various seminars;

�� Developing abilities related to the Integrated Management System – Quality, Environment, Health and Safety at Work.

Annual Report Regarding Human Resources 75Annual Report Regarding Human Resources

Below we present the figures on the number of people who attended various programs of professional training and costs associated to them:

No. The Company fromCEZ Group in Romania

No. of peopleparticipating to the

training*)

Costs with training

(thousand lEi)

1. SC CEZ Distribuţie SA 726 875.66

2. SC CEZ România SA 318 429.22

3. SC CEZ Vânzare SA 38 107.87

4. SC Tomis Team SRL 4 4.98

5. SC TMK Hydroenergy Power SRL 6 2.49

*) Number of participants refers to the number of employees who attended at least one course in 2013.

For the development of linguistic competence, a number of 84 employees from the Group attended weekly training courses in the English language organized with a trainer in-house.

High potential Employees

Started in 2010, the program for the management of talents called Fresh Blood is annually identifying the high potential employees in the Group and supports their professional development with programs of mentorate, participation in strategic projects, and training programs tailored to their individual needs.

The process of New Employee integration

To have an easy and quick integration of new employees within the team and culture of CEZ Group, the Romanian Group has developed an induction program carried out in two phases:

1�The first phase means that the new employee receives relevant information about the Group’s business in Romania, about work conditions, company organization a.s.o., as well as some advice so as to cope in the first work week;

2�The second phase consists of a visit paid to the companies of the Group. The visit is organized for a period of two days.

2) Work Conditions

CEZ Group in Romania is permanently concerned with the health and safety of its employees. For this, at the time of their employment, all employees receive free medical check-ups and periodically, along their activity, free medical verifications in the form of standard packages are performed for all employees and, optionally, ophthalmological and blood tests are done.

The companies of CEZ Group in Romania permanently act to prevent work accidents and professional illnesses, by establishing and implementing a set of measures for this.



In order to maintain and improve the work conditions, the companies of CEZ Group in Romania take permanently the following measures:

�� Ergonomic arrangements of the work places;

�� Decrease up to gradual elimination of polluting emissions;

�� Provision of work and micro-climate conditions (light, noise, vibrations, temperature, fresh air, humidity);

�� The adequate arrangement of social appended spaces (for instance toilets);

�� The permanent control of materials, equipment and substances used during work time.

Also, the employees of CEZ Group in Romania who work in Pitesti have received since the mid of November 2013 a new, modern and friendly location supplied with new technology and meant to make activities run there more efficiently.

During periods with extreme temperatures, in order to improve the work conditions and maintain the employees’ health, the companies of CEZ Group will take all measures stipulated by the legislation in force.

Based on the legislation in force regarding protection of maternity at work, CEZ Group in Romania makes assessments of risks at work and takes supplementary measures for the protection and safety of female employees who work during pregnancy, adjusting the work place and conditions in case of high risks. There are also taken measures to have water for drinking and washing in all places. The Group also provides to the employees, on a free basis, hygienic and sanitary materials.

3) Motivation of Employees

Employee motivation is an important preoccupation for the companies of CEZ Group in Romania, special attention being paid to the human capital. Of all human resources processes developed by CEZ Group in Romania, employee motivation places at the top, as all the others derive from its good functioning.

With its HR policy, CEZ Group in Romania intends to modernize human resources, to materially incentivize employees so that to determinee high individual and organizational performance.

The managers have at their disposal numerous strategies to motivate the employees, to involve them in the professional activity, the result being the increase of personal satisfaction and of productivity.

In the companies of CEZ Group in Romania, salaries have a fixed part and a motivational one.

The motivational part is represented by a monthly performance bonus payable based on the individual and collective performance and also on the results that are obtained.

In setting the performance indicators, employees receive a clear set of goals whereby the understanding of shareholder’s expectations is improved.

The periodical evaluation of performances results in a higher awareness of employees with regard to competence and the rewarding of their behaviour. Each employee is evaluated both by considering the strategic indicators of CEZ Group in Romania and based on the individual indicators, specific for the employee’s activity.

In 2013, a goal was to put the strategy in line with CEZ Group’s Performance Indicators. In this way, the evaluation system is applied in the same way for all levels of management. Also for the employees from SC TMK Hydroenergy Power SRL a payment system formed of a fixed and a motivational part has been introduced.

To develop a work environment which stimulates performance, a new system of Performance Indicators has been worked out. This is particularly for the sales force from SC CEZ Vânzare SA.


In 2013, SC CEZ Distribuţie SA implemented a succession plan for the key technical positions. By its implementation, the company has employees ready to back - up the key technical positions so as to limit risks in operations in the case when the key technical positions, for any reason, can no longer continue activities.

4) Social policies

CEZ Group in Romania worked out and implemented a system of welfare policies meant to provide real welfare protection of the employees.

So, in compliance with the provisions of the negotiated Collective Employment Agreements, the employees of CEZ Group in Romania benefit of allowances and bonuses paid whenever the following conditions are met:

�� Maternity leave and leave for child - rearing up to the age of 2 years or 3 years in the case of children with disabilities;

�� Payment of expenses for the medical services necessary, as per the laws in force, in case of a work accident or professional illness;

�� The compensation, for one year, of the difference between the pension for invalidity and the base salary in case the employee completely loses his/her work capacity as a result of a work accident or in connection with the work or because of a professional illness;

�� A reduction in the cost of tickets for the employee and the family members when they go to treatment and holiday resorts;

�� Payment of an aid in cash, the equivalent of a gross base salary at company level, at the time of retirement, for those who retire beginning with January 2013;

�� A retirement bonus paid at the time of retirement, based on total uninterrupted seniority in the company, in other companies from CEZ Group in Romania or in the previous entities;

�� Payment of fidelity bonuses and of aids at the time when the employee gets married, has a child, adopts a child or when the employee or a member of the employee’s family dies;

�� Payment of redundancy allowance based on seniority in work;

�� Individual food allowance in the form of lunch tickets;

�� Payment of a supplementary bonus on the occasion of some annual events and offering of gifts for children on Christmas;

�� Aid in cash in case of calamities, paid to the employees whose homes were affected by natural calamities;

�� Grant of a quota of electric power (on average 1 200 kWh per year) for former employees who retired before 31.12.2011 and who have worked in the company for at least 15 years or the last 10 consecutive years before retirement;

�� Bonuses for participation in projects.



In the year 2013, the employees of the companies of CEZ Group in Romania received bonuses and benefits in amount of 9 154 thousand LEI, as follows:

BENEFiTS and BONUSES VAlUE (thousand lEi)

Holiday bonus 17

Marriage and retirement aid 162

Jubiliary bonuses 665

Premiums and bonuses paid to employees 1 733

Relocation premiums 69

Holidays and treatment tickets 327

Aids in case of disease and calamities 134

Gifts to children 139

Gifts for the 8th of March 70

Aids in case of death 91

Aid in case of birth 53

Lunch tickets for the employees 2 519

Electric power for retired employees 2 421

Other amounts regarding social insurance and social protection 171

TOTAl 9 154

The companies of CEZ Group in Romania respect the principles of non-discrimination, stipulated in the Collective Employment Agreement and in the Companies’ Internal Rules.

The internal rules of the companies of CEZ Group in Romania allocate an entire chapter to this aspect, “Rules regarding the observance of the non - discrimination principle and for removal of any form of violating dignity”. This chapter sets on a regulatory basis the observance of notions regarding acts of direct and indirect discrimination according to the definition from Law no. 53/2003 – The Labour Code, republished.

In the internal rules of the companies of CEZ Group in Romania, there also exists a chapter called “Rules regarding protection of maternity at the work place”, which sets on a regulatory basis the measures taken at the place of work for the pregnant female employees or the mothers who gave birth to a child or are breast - feeding.


5) The relation with trade unions

The administrations of the companies from CEZ Group in Romania, the representative trade unions and the representatives of employees recognize each other as legal partners of a permanent social dialogue.

Moreover, except with these Representative Trade Unions, the Administration had a permanent dialogue with the other unions which are not representative according to law but which are legally constituted.

All reorganization and restructuring actions were done after trade unions organizations had been consulted and informed.

During the year 2013, there were organized meetings during which agreements and protocols were concluded. These referred to:

�� Extension/negotiation of a new Collective Employment Agreements;

�� Continuing the implementation of SCADA and of the operation process used in the case of 110/20 kV stations, known as “Start from station”;

�� The optimization of activities in SC CEZ Distribuţie SA in all company divisions;

�� Revising the metering activity in SC CEZ Distribuţie which consisted in the evaluation of existing processes and implementation of improvement measures;

�� Restructuring and reorganization of activities in the Shared Services Division, the ICT Department (outsourcing part of the ICT Department activities);

�� Implementation of a new operational model at SC TMK Hydroenergy Power SRL.

19

Sponsoring

Donations and

81Donations and Sponsoring

19

Sponsoring

Donations and

During 2013, CEZ Group started the implementation of some major corporate social responsibility projects in the operations areas of CEZ Wind Farms (Fântânele, Cogealac, and Grădina). All these projects were accomplished with funds from CEZ and in partnership with the city halls, Local Councils or the targeted local public institutions (school, kindergarten, medical centre). A considerable part of these projects was already finalized by the year - end.

�� At Cogealac, during the year 2013, CEZ Group continued to aid the Medical Centre providing permanent services, this time with part of the monthly expenses necessary to run medical activities for the community;

�� Beginning with the 2013 school year, the children from Grădina have a new kindergarten where the 0 year courses are also organized. The kindergarten construction started from zero and now the building has two classrooms, a caffeteria, office, medical cabinet, toilets and an attic where children can play. The kindergarten was completely equipped with the furniture needed for children to perform their specific activities;

�� In 2013, at Fântânele, a major project for this locality was started. This was the construction of a natural gas system for the village. The project was started in 2013 and will be finalized in 2014.

�� Also at Fântânele works started at a water sewage system. The project was financed from Community funds and is co - financed by CEZ Group.

�� In Grădina, 14 platforms for selective waste collection were built, to help local authorities meet the demands of the European Union.

In the operation area of TMK Hydroenergy Power, CEZ Group in Romania, through its CSR program, had the following projects:

�� The third edition of the International Festival of Poetry called „The Gates of Poetry“ – Reşiţa, May 30th – June 2nd, 2013, organized by the Activity Foundation in partnership with the Ministry of Culture, the Division for Culture, Religion and the National Cultural Patrimony from Caraş - Severin County together with CEZ România. In this third edition, there were participants from: France, England, Spain, Italy, Sweden, Germany, Austria, Switzerland, Hungary, Greece, Cyprus, Bulgaria, and Russia.

�� The International Jazz Festival at Gărâna – in 2013 too, CEZ Group in Romania was one of the partners of the 17th edition of the festival organized on July 11th - 14th in Caraş - Severin County.

�� CEZ Group in Romania continued to support the pupils from Caraş - Severin and their tutors from the County Schools‘Inspectorate and the Inspectorate for Emergency Situations – Semenic, and sponsored several educational activities: the Firemen’s Friends – for fire prevention and extinguishing; With My Life I Protect Life – civil protection; We Learn to Save Ourselves – a competition organized on the International Day for Reduction of Risks Caused by Natural Disasters.

�� The kindergarten in Văliug was sponsored with new furniture and IT equipment.

�� The County Hospital in Reşiţa received medical equipment for its urology section: a flexible ureteroscope for endoscopic explorations, helping the doctors diagnose their patients.

�� The cinema hall from Reşiţa was equipped with a new sound system and a projection screen.

�� The National Contest Mystic Cup 2013 – a sports dance championship sustained by CEZ Group as a main partner.

82 Donations and Sponsoring


In 2013, CEZ Group in Romania had some local development projects organized through the CSR program in partnership with non-governmental organizations or local public institutions:

�� The fairy - tales caravan – a project organized in partnership with Vasiliada Association. The project was aimed at children from five poor communities in Dolj County with the purpose of developing their interest in reading and generally for school education. Also in this project, the libraries from these localities received books comprising the mandatory pieces of literature from the school program. On the 1st of June – the Children’s Day, the children included in this program received presents, to make them fully feel the charm of childhood.

�� The Pediatric Clinic of the „Filantropia“ Hospital in Craiova was aided by completely replacing its furniture with new furniture specially made for the little patients;

�� The County Hospital from Craiova was equipped with new medical equipment for the cardiology and pediatric wards.

�� Oltenia Marathon – a sports event meant to promote a healthy life through sport. Part of the funds collected from the registration fees was used to equip the sports hall of the General School no. 1 „Take Ionescu“ with: handball, football, volleyball, basketball, oina and medical balls, nets for the handball and football goal posts, rackets, pillars and nets for badminton, nets, balls and rackets for table tennis, and gym mattresses.

�� Via Sport – a sports event organized in two cities: Târgu Jiu and Slatina during a week-end; the purpose was to bring together all members of families and make them practice sports in the middle of the city.

�� Again, in 2013 CEZ Group participated at the project called „The Forest’s Month“ based on which more than 5 000 trees were planted with the help of Group’s employees, thus showing once again the concern for volunteering.

�� Karel Zdenek Liman – the Czech architect of Romania’s Royal House – a monography and an exhibition at the National Art Museum that tried to present the life and the activity of this architect who worked for the Royal House for more than 30 years and who contributed to some well-known constructions: Peleş Castle, Pelişor, Bran Castle, and Cotroceni Palace.

�� In 2013, based on a partnership with the Czech Embassy, CEZ Group contributed to some projects such as: Czech-Romanian Tales in cartoons, Josef Koudelka, Prague 68 Invasion – book and photography exhibition, the Documentary Film Festival dedicated to Vaclav Havel.

�� Sponsoring the Balestra Sports Club so that sports activities can be carried out (fencing) and participation to various competitions;

�� Sponsoring the Washi Karate Club to support practising of this sport and participation to national and international competitions;

�� The event organized by the Chamber of Commerce and Industry in Dolj County, “The National Top of Companies”, was supported by CEZ Group in Romania;

�� CEZ Group was also a Silver Sponsor at the Best National Companies organized by the Romanian Chamber for Commerce and Industry;

�� A partner for local authorities in organizing the city days in the following cities: Târgu Jiu, Râmnicu Vâlcea, Alexandria, Craiova and Piteşti.

20Litigations

20Litigations

84 Litigations


SC CEZ Distribuţie SAIn 2013, litigations continued being diverse in type and number, and part of them basically had the same object (NTL files, receivables recovery, demands for payment of damages to land owners deprived of their right to use the land etc.).

The types of litigations the company was mainly involved in were the following:

�� Property disputes – having as object the demand related to assets property (demands for payment of damages by CEZ Company in case of using a land plot, following the construction of power networks; demands for moving power networks etc.). At this moment, the asset ownership legislation is not correlated with the Energy Law and because of this the policy in this domain is not unitary, having contradictory resolutions;

�� Work litigations related to the inclusion of personnel in work groups I and II, the company being obliged to issue documents regarding the inclusion of personnel in work groups – at the end of the year 2012 court actions had been introduced by former employees who demanded the recognition of the special work conditions they worked in. These files were ruled in favour of CEZ in 2013;

�� Court files for recovery of debts, for other cases than those related to the value of energy delivered and not paid (power poles rental, car accidents etc.);

�� Procedure of insolvency – which are mainly managed by the companies of recovery.

SC CEZ Vânzare SAIn 2013, the situation stayed at a good level, with a small number of cases in comparison to the high number of customers; anyhow this number increased compared to the previous years, most of the litigations being of the following nature:

�� Recovery of debts in relation with energy;

�� Cases of insolvency; their number increased. Unfortunately, this procedure lasts long and the rate of debts recovery is low. Once the insolvency procedure is closed, in compliance with the fiscal provisions, we can recover VAT and consider the respective debt as deductible expense;

�� Files related to invoices, which have a small financial risk;

�� The offense reports made by the Office for the Consumer’s Protection as a result of various petitions made by consumers decreased in number in 2013;

�� Files based on which the company is called in court in order to cancel disconnection/connection invoices, the plaintiffs considering that the company abused in issuing such invoices and invoking various facts;

�� Litigations related to the re-calculation of electric power consumption in case of defects at the meter;

�� Files based on which it is claimed the reconnection to the network and the conclusion of the contract for energy supply – in such cases either there are debts that are not paid or the situation is not clear; anyhow, the number is small and there is no risk for the company.

CEZ Wind FarmIn 2013, the number of litigations generated by the construction of the wind farms from Fântânele - Cogealac - Grădina decreased and in most of such files the case matter was the administrative documents issued by public authorities.

SC CEZ România SA In 2013, CEZ România was seldom, together with CEZ Vânzare or CEZ Distribuţie, part of litigations whose object was to challenge some acts drawn for energy theft or damaged meters, such facts having been noticed in the field by the NTL Department. Their rate is not important in terms of number or value.

21ReceivedAwards

21ReceivedAwards

86 Received Awards


CEZ România�� 4th place in Top Companies Gala, section Services / Activities of consultancy in management -

Large companies, awarded by the Romanian Chamber for Commerce and Industry

CEZ Distribuţie�� Excellence Diploma awarded to CEZ Distribuţie SA for the collaboration with Arges Chamber

for Commerce and Industry;�� 1st place in Top Companies Gala, awarded by the Dolj Chamber for Commerce and Industry;�� The Excellence Trophy at Top Companies Gala, awarded by Dolj Chamber for Commerce and

Industry;�� Diploma for participation in the conference organized by SRI „Cyber-Intelligence: the Impact of

Cyber Threats on Romania’s National Security”;�� 1st place in the fishing competition Electrica Cup;�� Diploma for the contribution to the development of social and economic life of Slatina City;�� 6th place at Top Companies Gala, section Industry / Generation, Transport and Distribution of

Electric Power / very large companies, awarded by Romania’s Chamber for Commerce and Industry.

CEZ Vânzare�� 1st Place in the regional top (South-West) by productivity in the category of large companies;�� 1st Place in the regional top (South-West) by gross profit in the category of large companies;�� 1st Place in the regional top (South-West) by turnover in the category of large companies;�� 1st Place in the regional top (South-West) by global performance in the category of large

companies;�� 1st Place in the Dolj County top by productivity in the category of large companies;�� 1st Place in the Dolj County top by gross profit in the category of large companies;�� 1st Place in the Dolj County top by turnover in the category of large companies;�� 1st Place in the Dolj County top by global performance in the category of large companies;�� 1st Place in the national top based on fields of activity and by gross profit, in the category of

large companies;�� 1st Place in the national top based on fields of activity and by turnover, in the category of large

companies;�� 2nd Place in the national top by global performance, in the category of large companies;�� 2nd Place in the national top by global performance on field of activity, for large companies’

category.

CEZ Trade�� 2nd Place in Top 5 Businesses for Small Companies, locality: SECTOR 1, domain 35:

Generation and supply of electric power, thermal power, gas, hot water and conditioned air;�� 3rd Place in Top 5 Businesses for Small Companies, county: BUCHAREST, domain 35:

Generation and supply of electric power, thermal power, gas, hot water and conditioned air.

CEZ Wind Farms�� BEST WIND PROJECT, section: „Romanian Renewable Energy Awards” at Wind Power

Conference organized by Green Power Conferences.

CEZ ROMÂNiA S.A.�� Bd. Ion Ionescu de la Brad 2B, etaj 1, 013813, Bucureşti, sector 1, România �� Fax: 021 269 25 66 �� E-mail: office @cez.ro

CEZ DiSTRiBUŢiE S.A.�� Str. Brestei, Nr. 2, 200 581, Craiova, Jud. Dolj, România�� Tel.: +40 251 215 002�� Fax: +40 251 215 004�� E-mail: [email protected]

CEZ VÂNZARE S.A.�� Str. Brestei, Nr. 2, 200 581, Craiova, Jud. Dolj, România�� Tel.: +40 251 216 001�� Fax: +40 251 216 002�� E-mail: [email protected]

CEZ TRADE ROMÂNiA S.R.l.�� Bd. Ion Ionescu de la Brad, Nr. 2B, 013 813, Bucureşti, România�� Tel.: +40 722 283 244�� Fax: +40 212 692 566�� E-mail: [email protected]

TMK HYDROENERGY pOWER S.R.l.�� Str. Primăverii, Nr. 4 B, CHE Grebla, et. 1, 320 012, Reşiţa, Jud. Caraş - Severin, România �� Tel.: +40 736 802 001 �� Fax: +40 372 526 553�� E-mail: [email protected]

OViDiU DEVElOpMENT S.R.l.�� Bd. Ion Ionescu de la Brad 2B, 013 813 Bucureşti, România�� Tel.: + 4 0372 523 160�� Fax: + 40 248 523 809 �� E-mail: [email protected]

M.W. TEAM iNVEST S.R.l.�� Bd. Ion Ionescu de la Brad 2B, 013 813 Bucureşti, România�� Tel.: + 4 0372 523 160�� Fax: + 40 248 523 809 �� E-mail: [email protected]

TOMiS TEAM S.R.l.�� Bd. Ion Ionescu de la Brad 2B, 013 813 Bucureşti, România�� Tel.: + 4 0372 523 160�� Fax: + 40 248 523 809 �� E-mail: [email protected]

annual report 2013 - cez · karel kral (*1974) cfo cez group in romania he graduated the faculty of...

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