"Electrica Transilvania Sud" - S.A. •One of the eight regional companies in Romania, functioning since March 2002, according to GD 1342/2001•Distribution license: no. 465/29.04.2002, •Supply license: no. 466/29.04.2002, •Registered office: 25 Pictor Luchian Street, 500193-Brasov•Branches in: Alba, Braşov, Covasna, Harghita, Mureş, Sibiu• SC Electrica SA holds 88% shares and the Property Fund 12%

Electrica

Electrica

Electrica

Electrica

Enel Electrica

E.ON

CEZ ElectricaEnel Electrica

Distribution area: 34 100 km2

Network length: 34.595 kmDistributed energy: 5.267 GWhNumber of customers: 1.039.383Subscribed capital: 389.667.090 RON, 111.333.454 € at 31.12.2006Turnover 2006: 1.207.592.961 RON, 345.026.560 €

AVAS- THE AUTHORITY FOR STATE ASSETS

RECOVERY

AVAS- THE AUTHORITY FOR STATE ASSETS

RECOVERY

S.C. ELECTRICA S.A.S.C. ELECTRICA S.A.

S.C. FDFEE ELECTRICA TRANSILVANIA SUD S.A.

GENERAL MANAGER

S.C. FDFEE ELECTRICA TRANSILVANIA SUD S.A.

GENERAL MANAGER

DISTRIBUTION AND DEVELOPMENT

DISTRIBUTION AND DEVELOPMENT

ECONOMICS AND OPERATIONSECONOMICS AND OPERATIONS

SDFEE ALBA

SDFEE ALBA

SDFEE BRAŞOVSDFEE

BRAŞOV

SDFEE MIERCUREA CIUC

SDFEE MIERCUREA CIUC

SDFEE SFÂNTU GHEORGHE

SDFEE SFÂNTU GHEORGHE

SDFEE SIBIU

SDFEE SIBIU

SDFEE TÂRGU MUREŞ

SDFEE TÂRGU MUREŞ

THE GENERAL ASSEMBLY OF THE SHAREHOLDERS

THE GENERAL ASSEMBLY OF THE SHAREHOLDERS

THE ADMINISTRATION BOARD

THE ADMINISTRATION BOARD

SUPPLYSUPPLY

Mission

Vision

Values

MissionWe distribute electric energy at superior standards of supplying quality and continuity to all our customers residing in South Transylvania area, in conditions of safety, efficiency and respect for the environment.We supply electric energy accompanied by modern services of high performance, extremely beneficial and valuable to our actual customers. We also represent, from an economic point of view, a competitive and efficient supplier for the potential customers.

VisionWe shall be the most innovating electricity company in Romania, by offering our customers the advantage of valuable knowledge in the field and of the highest standard services.

Values

Results and efficiencyPeople, society are changing. The new rules of the social economic context we are living and working in as an organization, oblige us to build the activity we carry on in terms of efficiency, by being motivated by the results.Efficiency means profit for the investors, and the results/efficiency regarded to as values, are translated into responsible behaviours when using resources, while establishing priorities or making appropriate decisions, while founding new modalities of income-gain, all of these done in co-operation and with professionalism and targeting the cost/quality ratio improvement.Active involvement and team workThe company gives a special importance to its employees, considering that their work, imagination and energy are the resources that shall help it achieve its mission. By interaction and reciprocal stimulation of the ideas, in every task, the result obtained by the team is superior to the sum of the individual results of the members of that team if they were supposed to work separately. Instead, the company wishes them to work together. Therefore, we think that every effort, made by each employee, is useful in the goal of promoting the team spirit. The force of the team consists in the serious survey of the commune objective. This aim is accomplished by continuous implication in every activity, by promoting an open, honest communication – this demands listening and reaction/response in communication, by reciprocal support and by the uninterested way they are able to join together their competences, abilities, information, in other words the experience that each of them has.

Ethic behaviourThe activity’s efficiency can not be achieved otherwise but through a favourable, stimulating working climate, where the employees are encouraged to obtain results. We wish that people enjoy working here, this depending mainly on the observance of some rules related to work ethics.Honesty, professionalism, harmonious interpersonal relationships, the pride of the well done work, the respect and collaboration, are the profile we wish to build together.

Innovation and OpeningThe company intends to build and promote the image of a pathfinder. In this purpose, the chosen path is innovation, fact that should be regarded by us all as a challenge. Innovation shall be present in all fields and in all developed activities: technology, work processes, working methods, interpersonal relationships, communication, attitudes, and client approach. This asks that we should treat every customer, action, project or issue individually, with adaptation to demands, context and particularities, in other words to forget about routine. The behaviours we shall encourage from now on, and which force us to learn and adjust continuously, are: flexibility, initiative and responsibility.

SafetyDue to the fact that we work in a field of high risk level, reality which determined the issue of an important amount of regulations referring to the working processes developed in the energetic installations, the safety of the worker and of his team as well as the safe functioning of the energetic system and the safety of our co-citizens when coming in contact with electric/energetic devices, represents one of the most important preoccupation of the branch. Its presence in the every day language, in our concerns, plans and activities, starting at the very first moment of a new employee’s entry inside the company, indicates that safety is an essential value to us all.

Community and environmentThe company’s interactions with the exterior, in general and with the local community in particular, are multiple, complex and bear an important stake: to be an efficient company and to contribute, through our activity, to the improvement of our co-inhabiting living standard. We wish to enjoy a good integration in the business environment, in the local community and to promote programs that shall protect the environment. Our goal is the construction of a winner-winner type relationship with the local community and we shall accomplish this by paying attention to its present and future necessities, by acting with responsibility, civic initiative and dedication to the cause:”A better world for all of us!”

No Installation mu Total

1 110 kV overhead lines km 2.248

2 Medium voltage km 10.221

3 Low voltage km 14.150

4 110 kV underground cables

km 9

5 Medium voltage km 2.716

6 Low voltage km 5.251

7 110 kV/MV substations unit 94

8 MV substations unit 15

9 Feed points and transformer substations

unit 7.275

Voltage levels: 110 kV, 35kV, 20kV, 10 kV, 6kV si 0,4 kV

Captive Big customers 1.392

Small customers 71.555

Residential customers

966.234

TOTAL 1.039.181

HV 22

MV 1.666

LV 1.037.493

TOTAL 1.039.181

Eligible 202

82,51%

1,95%4,05%

11,49%

The RegulatedMarket

The BilateralContracts Market

The Day- AheadMarket

The BalancingMarket

  2004 2005 2006

Contour 5.157 5.175 5.267

Captive consumers 4.027 3.729 3.141

Own eligibes 0 74 582

Eligible of other suppliers

395 650 850

CPT-Technological losses

719 702 705

(GWh)

0 74582395 650 850

4.0273.729

3.141

5.157 5.175 5.267

0

1.000

2.000

3.000

4.000

5.000

6.000

Anul 2004 Anul 2005 Anul 2006

Eligible consumers Eligible of other suppliers

Captive consumers Contour

26,6%

16,5%

22,9%

10,2%

13,6%

10,2%

Big customers Small customers Residential customers Eligibles Other suppliers Azomures + LaFarge

December 2006

code Name TOTAL TOTAL

1 2 3 4

thousand RON thousand €

Objectives of investment- DISTRIBUTION- Total, from which: 109.259 32.135A. Objectives of further investments- from which: 27.116 7.975

B. Objectives of new investments- from which: 82.143 24.160

Alloted on codes 109.259 32.135 A1/B1 - Code 100 110 kV lines and substations 5.818 1.711

A2/B2 - Code 300 Units development and improving work conditions 1.647 485A3/B3 - Code 400 Modernization of 110 kV installations 22.386 6.584A4/B4 - Code 500 Energy supply of new customers 22.965 6.754

A5/B5 - Code 1000 Sindicate credits' performed programs 9.975 2.934Code 2000 Connection fee 38.962 11.459

C - Code 600 Independent tool acquisition and other investment expenses 7.506 2.2080Objectives of investment- SUPPLY- Total, from which: 7.280 2.141

A. Objectives of further investments- from which: 7.152 2.104B. Objectives of new investments- from which: 128 38

Alloted on codes 7.280 2.141A3/B3 - Code 400 Modernization of 110 kV installations 7.152 2.104

C - Code 600 Independent tool acquisition and other investment expenses 128 38

TOTAL SUBSIDIARY 116.539 34.276

2003 2004 2005 2006 2007 2008 2009 2010 2011

Credite var 1

0

50.000.000

100.000.000

150.000.000

200.000.000

1 2 3 4 5 6 7 8 9

TOTAL 2, vers.2

TOTAL 2, vers.1

Own sources vers.1;2

Credits, vers. 2

Connection fee (B)

Connection fee (A)

RON

(58.823.529€)

(44.117.647€)

(29.411.764€)

(14.705.882€)

613 641 658

1.565 1.545 1.537

2.178 2.186 2.195

0

500

1.000

1.500

2.000

2.500

University degree Pre-university degree Total

2004 2005 2006

180818581866

370 328 329

2178 2186 2195

0

500

1000

1500

2000

2500

Distribution Supply Total

2004 2005 2006

2004 2005 2006

Assets/Total active

thousand RON 912.930 1.020.318 1.188.692

thousand € 228.233 283.422 351.507

Own stocks/Total capitaluri proprii

thousand RON 488.147 571.293 616.106

thousand € 122.037 158.693 182.188

Turnover/Cifra de afaceri

thousand RON 1.035.086 1.141.167 1.207.357

thousand € 76.109 316.991 345.027

Result Profit net/(Pierdere)

thousand RON -6.206 83.132 20.871

thousand € -456 23.092 6.172

EBIT

thousand RON 7.080 99.070 39.123

thousand € 1.770 27.519 11.569

EBITDA

thousand RON 94.208 179.370 156.892

thousand € 23.552 49.825 46.394

 Indicator 2004 2005 2006

Distributed energy

MWh/customer 4,249 4,264 4,399

MWh/employee 2.046 2.065 2.110

Energy sales

MWh/customer 3,867 3,639 3,582

RON/customer 962 1.043 1.107

€/customer 241 290 327

MWh/employee 1.862 1.762 1.721

RON/employee 433.187 504.170 531.801

€/employee 108.297 140.047 157.258

2002- implementation and certification by SRAC for the conformity of the quality management system according to standard ISO 9001

2004- implementation and certification by SRAC for the conformity of the environmental management system according to standard ISO 14001

2005- design, documentation, implementation of the occupational health and safety system and review the environmental management system 2006- certification by SRAC for the conformity of the integrated quality system according to standards ISO 9001:2000 şi ISO 14001:2004 şi OHSAS 18001:2004.

The unbundling process was launched in order to comply with the requirements of unbundling in electricity imposed by the European Directive 2003/54/EC which has to be implemented in Romania as a member of EU.unbundling = the separation between distribution and supply from a legal, functional and accounting point of viewThe new energy law no. 13/2007 transposed the unbundling obligation into Romanian legislation. Therefore, starting with August 2007 and according to Government Decision 675/2007 there are two entities resulted from Electrica South Transylvania:-Electrica Distribution South Transylvania, which includes 6 Electricity Distribution Subsidiaries, one in each county- Electrica Supply South Transylvania, which includes 6 Electricity Supply Agencies, one in each county

25 Pictor Luchian StreetBrasov500193Phone: 0268 – 305002Fax: 0268 - 305004

e-mail: fdfee@ts.electrica.ro

www.electricats.ro ; www.electrica.ro