CNTEE TRANSELECTRICA SA ANNUAL REPORT 2014

Transcription

CNTEE TRANSELECTRICA SA
ANNUAL REPORT
2014
ANNUAL REPORT
On the separate financial statements of the
NPG Co. TRANSELECTRICA SA
Executed in accordance with Order 1286/2012 of the Minister of Public Finance, with later amendments and
additions, and elaborated according to article 227 of Law 297/2004 on the capital market and to
Annex 32 from Regulation 1/2006 issued by the National Securities Commission,
For the financial year ended on 31 December 2014
Date of the report:
25 March 2015
Name of issuer:
National Power Grid Company TRANSELECTRICA SA,
company managed under a two-tier system
Headquarters:
Bucharest 1, Blvd. Gen. Gheorghe Magheru no. 33, postal code
010325
Working locations:
Bucharest 3, Str. Olteni no. 2 - 4, postal code 030786
Phone / fax numbers:
004021 303 5611 / 004021 303 5610
Single (fiscal) registration code:
13328043
Number in the Commercial Register:
J40/8060/2000
Date of Company establishment
31.07.2000 / GEO 627
Share capital:
733,031,420 RON, subscribed and paid
Regulated market where the issued
securities are transacted:
Bucharest Stock Exchange, Premium class
Main characteristics of the issued
securities:
Total market value:
Accounting standard applied:
Auditing:
73,303,142 shares of 10 RON / share nominal value
dematerialised, nominative, ordinary, indivisible shares freely
transacted from 29.08.2006 onward under the symbol TEL
2.145.582.966 RON (29,27 RON/ share on 31.12.2014)
International financial reporting standards
The separate financial statements have been audited
Table of Contents
Message of the Supervisory Board ......................................................................................................... 1
Changes in the Supervisory Board .......................................................................................................... 7
Report of the Supervisory Board ............................................................................................................. 9
Mesage of the Executive Board............................................................................................................. 11
Executive Board .................................................................................................................................... 13
Changes in Transelectrica’s Executive Board: .................................................................................. 14
Key figures ............................................................................................................................................. 16
Key Events............................................................................................................................................. 17
Management Report ............................................................................................................................. 18
1.
Business Model .............................................................................................................................. 19
1.1.
2.
3.
4.
5.
Position on the electricity market ........................................................................................... 19
Group Structure .............................................................................................................................. 24
2.1.
SMART .................................................................................................................................. 25
2.2.
TELETRANS.......................................................................................................................... 25
2.3.
FORMENERG ....................................................................................................................... 25
2.4.
ICEMENERG – SERVICE ..................................................................................................... 25
2.5.
OPCOM ................................................................................................................................. 26
2.6.
ICEMENERG ......................................................................................................................... 26
Transelectrica on the capital market .............................................................................................. 27
3.1.
Structure of Shareholders ...................................................................................................... 27
3.2.
Development of share prices ................................................................................................. 27
3.3.
Bonds ..................................................................................................................................... 29
3.4.
Dividends ............................................................................................................................... 30
3.5.
Rating .................................................................................................................................... 31
Risk management .......................................................................................................................... 32
4.1.
Policy regarding risk management ........................................................................................ 32
4.2.
Main identified risks ............................................................................................................... 33
4.2.1.
Interest rate payment risk .............................................................................................. 33
4.2.2.
Exchange rate risk ......................................................................................................... 33
4.2.3.
Risk regarding the provisions from financing agreements ............................................ 34
4.2.4.
Liquidity risk ................................................................................................................... 35
4.2.5.
Credit risk ....................................................................................................................... 35
4.2.6.
Risk of tariff (price) associated to the regulatory framework ......................................... 35
4.2.7.
Volume risk .................................................................................................................... 36
4.2.8.
Other risks ..................................................................................................................... 36
Human resources ........................................................................................................................... 37
5.1.
Personnel structure ............................................................................................................... 37
5.2.
Professional training .............................................................................................................. 39
5.3.
Organisational efficiency project............................................................................................ 40
5.4.
Trade union representation ................................................................................................... 40
5.5.
Research and development ................................................................................................... 40
Operational Report ................................................................................................................................ 42
6.
Operational figures ......................................................................................................................... 43
6.1.
Network configuration ............................................................................................................ 43
6.2.
Selected operational data ...................................................................................................... 44
7.
6.2.1.
Balance of National Power System ............................................................................... 44
6.2.2.
National generation park ............................................................................................... 44
6.2.3.
Mix of electricity output .................................................................................................. 45
6.2.4.
Net consumption ............................................................................................................ 45
6.2.5.
Commercial electricity exchanges ................................................................................. 46
6.2.6.
Utilisation of total allocated capacity in 2012 – 2014 (%) .............................................. 47
6.2.7.
grid
Development of technological consumption registered in the electricity transmission
48
RET development projects ............................................................................................................. 50
7.1.
RET development plan 2014 – 2023 ..................................................................................... 50
7.1.1.
Projects included in the RET development plan of the 2014 – 2023 period ................. 51
7.1.2.
Investments of 2014 ...................................................................................................... 53
7.1.3.
Main causes of reduction of investment expenses ........................................................ 54
7.1.4.
Investment programme for 2015-2017 .......................................................................... 54
7.2.
Quality of provided services .................................................................................................. 56
7.3.
Maintenance .......................................................................................................................... 57
7.3.1.
8.
Maintenance program for 2015 and the estimate for the 2016-2017 period ................. 57
2014 Separate financial results ...................................................................................................... 61
8.1.
Separate profit and loss account ........................................................................................... 62
8.1.1.
Activities with allowed profit ........................................................................................... 63
8.1.2.
Zero-profit activities ....................................................................................................... 67
8.2.
Balance sheet –financial position .......................................................................................... 69
8.3.
Cash flow ............................................................................................................................... 71
8.4.
Indicators ............................................................................................................................... 72
9.
Regulated tariffs for energy transmission....................................................................................... 73
9.1.
10.
General framework ................................................................................................................ 73
Disputes ..................................................................................................................................... 76
Corporate governance and social responsibility.................................................................................... 79
11.
11.1.
Corporate governance ............................................................................................................... 80
Applicable documents ........................................................................................................... 80
11.1.1.
Corporative governance regulation ............................................................................... 80
11.1.2.
Other applicable documents .......................................................................................... 80
12.
Corporate Responsibility ........................................................................................................... 87
13.
Responsibility to the environment.............................................................................................. 89
13.1.
Describing the RET impact over the environment ................................................................. 89
13.1.1.
Impact indicators............................................................................................................ 89
13.1.2.
Compliance with legal requirements.............................................................................. 92
Annexes ................................................................................................................................................... 8
Annexe 1 - Acts of appointment/ revocation issued in 2014 ................................................................... 1
Annexe 2 – Changes in the Articles of Incorporation - 2014 .................................................................. 3
Annexe 3 – Key contracts signed by the Company in 2014 .................................................................... 4
Annexe 4 - List of Transelectrica subsidiaries ......................................................................................... 6
Annexe 5 - Disputes ................................................................................................................................ 7
Annexe 6 - Ownership right over the tangible assets of Transelectrica ................................................ 16
Annexe 7 – Glossary ............................................................................................................................. 17
Figure 1: Organisational structure ........................................................................................................... 3
Figure 2: Electricity value chain ............................................................................................................. 19
Figure 3: Portfolio of activities ............................................................................................................... 21
Figure 4: Development of share price 2014 .......................................................................................... 28
Figure 5: Development of share price 2006-2014 ................................................................................. 28
Figure 6: Structure of obligees 05.12.2014 ........................................................................................... 29
Figure 7: Fluctuations of interest rates .................................................................................................. 33
Figure 8: EURIBOR evolution................................................................................................................ 33
Figure 9: Exchange rate evolution ......................................................................................................... 34
Figure 10: Net exposure in financial position statement ....................................................................... 34
Figure 11: Personnel structure by age categories................................................................................. 38
Figure 12: Number of employees by seniority ....................................................................................... 38
Figure 13: Distribution of participation by domain ................................................................................. 39
Figure 14: Electricity transmission grid .................................................................................................. 43
Figure 15: Energy Balance (TWh) ......................................................................................................... 44
Figure 16: Installed capacity 2014 (MW) ............................................................................................... 45
Figure 17: Generation mix 2012 – 2014 (TWh) ..................................................................................... 45
Figure 18: Net average consumption (MWh/ h) .................................................................................... 46
Figure 19: Consumption peaks registered at the level of the national electric power system (MWh/h) 46
Figure 20: Commercial flows (TWh) ...................................................................................................... 46
Figure 21: Total allocated capacity (%) ................................................................................................. 47
Figure 22: Development of technological consumption (2012 – 2014) ................................................. 48
Figure 23: Monthly development of technological consumption 2014 .................................................. 49
Figure 24: Value of CAPEX additions to book value (net of VAT, mill. RON) ...................................... 53
Figure 25: Summary of results 2012 – 2014 ......................................................................................... 62
Figure 26: Sourcing mix by quantities procured from the markets (MWh) ............................................ 65
Figure 27: Physical losses of procured energy (GWh) .......................................................................... 66
Figure 28: Average unit cost of procured energy for technological losses (RON) ................................ 66
Figure 29: Summary of costs from activities with allowed profit 2012 - 2014 ....................................... 67
Figure 30: Summary of results from zero-profit activities 2012 - 2014 ................................................. 68
Figure 31: Financial results 2012 - 2014 ............................................................................................... 69
Figure 32: CSR Policy – Stakeholders .................................................................................................. 87
Figure 33: Actions undertaken in 2014 .................................................................................................. 87
Figure 34: Expenses for environmental protection ................................................................................ 91
Table 1: Changes in the supervisory board ............................................................................................. 7
Table 2: Stock exchange information at 31.12.2014 ............................................................................. 28
Table 3: The main characteristics of the bonds issued by Transelectrica SA ....................................... 29
Table 4: Distribution of profit.................................................................................................................. 30
Table 5: Situation of dividend payments 2011-2013 ............................................................................. 30
Table 6: Transelectrica’s rating ............................................................................................................. 31
Table 7: Net exposure in financial position statement ........................................................................... 34
Table 8: Average number of employees with individual labour contract for undetermined term .......... 37
Table 9: Personnel structure by level of studies.................................................................................... 37
Table 10: Employee structure by age categories .................................................................................. 37
Table 11: Personnel structure by seniority ............................................................................................ 38
Table 12: Personnel structure by seniority within the Company ........................................................... 38
Table 13: Personnel structure by employee categories 2014 ............................................................... 39
Table 14: External professional training courses and the expenses with the training provider ............ 39
Table 15: The volume of energy capacity ............................................................................................. 43
Table 16: Energy Balance ..................................................................................................................... 44
Table 17: Installed capacity (gross values) ........................................................................................... 45
Table 18: Mix of net electricity output .................................................................................................... 45
Table 19: Maximum consumption 2012 - 2014 .................................................................................... 46
Table 20: Cross-border interconnections (use of the total allocated capacity, %) ................................ 47
Table 21: Development of technological consumption 2012 - 2014 .................................................... 48
Table 22: Purchase of tangible and intangible assets ........................................................................... 54
Table 23: Performance indicators for the RET management/operation activity.................................... 56
Table 24: Continuity indicators of transport services............................................................................. 56
Table 25: Separate profit and loss account ........................................................................................... 62
Table 26: Revenue from activities with allowed profit ........................................................................... 63
Table 27: Summary of revenue from activities with allowed profit 2012 - 2014 .................................... 64
Table 28: Costs from activities with allowed profit................................................................................. 65
Table 29: Revenue from activities with zero-profit 2012 - 2014 ........................................................... 67
Table 30: Expenses from activities with zero-profit 2012 - 2014 2012 - 2014 .................................... 67
Table 31: Development of exchange rate ............................................................................................. 69
Table 32: Balance sheet –financial position .......................................................................................... 69
Table 33: Cash flow ............................................................................................................................... 71
Table 34: Profitability indicators............................................................................................................. 72
Table 35: Indicators of profitability, liquidity, risk and activity ................................................................ 72
Table 36: Tariffs valid in 2013-2014 ...................................................................................................... 74
Table 37: The main parameters of this period are given below ............................................................ 75
Table 38: The land taken by electrical lines and substations ................................................................ 89
Table 39: Waste management .............................................................................................................. 90
REPORT OF THE
SUPERVISORY
BOARD
2014
REPORT OF THE SUPERVISORY BOARD 2014
Message of the Supervisory Board
Fifteen years from its founding, Transelectrica
is
already
recognized
nationally
and
internationally as a strong company with a
strategic role in the Romanian electricity
market, an important player on the regional
electricity market and a reliable partner for its
collaborators.
The main Company objective has remained,
throughout all these years, and will continue to
be the same: to ensure the operation of the
National Power System with maximum safety
and stability, meeting quality standards, thus
ensuring the national electricity infrastructure
and, at the same time, regulated access to the
electricity
transmission
network
under
conditions of transparency, non-discrimination
and fairness for all market participants.
The ambitious objectives, set by the
Management Plan, were achieved through
hard work and the reconfirmed commitment of
a team oriented towards success. From the
beginning, the Company aimed to meet market
requirements through an efficiently organised
activity in a most efficient and enhanced
through
continuous
upgrading
of
the
transmission network .
Transelectrica’s activity has always reflected a
high level of quality and professionalism,
adapting to a changing market and sustained
contact with trusted business partners, evident
through the positive financial results achieved
by the market operator.
Transelectrica’s
activity
has
always reflected a high level of
quality
and
professionalism,
adapting to a changing market
and sustaining relationships with
reliable business partners
After all these years, during which experience
turned into expertise, the Company is now
recognized as a prestigious emblem of the
energy sector, a reputation that we enjoy and
that equally obliges us.
The Company’s main asset on the market
stems from the organisation concept that
combines technical rigor and creative
dynamism of available human resources,
within a long-term development vision,
addressing the present with optimism and
building the future boldly.
The work we perform must demonstrate that
we are a socially responsible company,
Page | 1
concerned about the community in which it
operates and involved in its sustainable
development.
Transparency
and
accountability
to
shareholders and employees represent an
established practice within the Company. Ever
since being appointed, in May 2013, the
Supervisory Board has devoted increasing
attention to the Company’s development
strategy. A transparent decision-making
process based on clear and objective rules, is
a prerequisite to have confidence in the
Company.
We proudly reiterate that all of Transelectrica’s
achievements bring added value to the
community through significant contributions to
the consolidated state budget. We are an
example of good practices recognized by
awards granted each year in major rankings.
We are honoured all the more by the annual
reconfirmation of the place Transelectrica
holds in the top Romanian energy sector
companies and recognition in the business
community as one of the local organizations
implementing a set of corporate governance
principles.
The national energy transmitter is administered
in a two-tier system and has an increased
focus on decision-making transparency and
corporate governance, that led to the decision
of belonging to AmCham, and subsequently
Transelectrica became the first national
company member on the Board of the
Chamber of Romanian-American Trade.
Energy means civilization and progress, it
means socio-economic development, but only
in the framework of a strategy balanced by a
constant concern for the environment.
Carmen Georgeta Neagu
Chairman of the Supervisory Board,Transelectrica
Page | 2
The Supervisory Board
The National Power Grid Company Transelectrica SA (‘NPG Co. Transelectrica SA’, ‘Transelectrica’ or
the ‘Company’) is a joint stock company organised and operating in accordance with Romanian laws,
being managed under two-tier system based on the decision of 18 July 2012 of the Shareholders’
General Extraordinary Assembly by the Directorate (5 members) under surveillance of the Supervisory
Board (7 members).
Figure 1: Organisational structure
Shareholders'
General
Assembly
Ovidiu Petrisor
ARTOPOLESCU
Radu
BUGICA
Radu Stefan
CERNOV
Carmen
Georgeta
NEAGU
Catalin Lucian
CHIMIREL
Octavian
LOHAN
Ion-Toni
TEAU
Constantin
VADUVA
Daniel – Cristian
PIRVULESCU
Supervisory Board
On the report date, membership in the Supervisory Board of Transelectrica, with a mandate duration
of 4 years, up to 30.05.2017, is as follows:
Carmen Georgeta Neagu – Chairwoman of the Supervisory Board,
with more than 32 years’ professional experience. Besides her capacity
of Supervisory Board Chairwoman in Transelectrica Mrs Neagu is also
Partner and CEO of Peria Capital Ltd (as of January 2014).
Previously she was Executive Director, Regional SEE (September 2010
– December 2012) with General Electric, GE Energy and Executive
Director Romania, Bulgaria & Moldova (September 2005 / September
2010) with Electric General / GE Infrastructure Energy. Until 2005 she
was involved in the strategic development of the Romanian power
system working with ELCEN, Termoelectrica and the National Electricity
Company. She held various top management positions in the
international strategy and business domain during the restructuring of
the Romanian power sector.
Carmen Neagu graduated in 1982 the Energy Faculty of the Polytechnic
University Bucharest, thermal power section.
Page | 3
Ovidiu Petrişor Artopolescu - Supervisory Board Member, with
more than 31 years’ professional experience. Such professional
experience includes the positions of Complex Projects Director with
Microsoft Central & Eastern Europe (May 2007 – Feb. 2009), General
Manager, Acting General Manager, Enterprise & Partners Group
Manager, Business Development Manager with Microsoft Romania,
Project Manager and Quality Assurance Manager with IBM Romania
and researcher with the Institute of Computation Technique.
Previously he was State Secretary with the Ministry of Communications
and Informational Society (May-September 2012);
Mr Ovidiu Artopolescu graduated the Polytechnic University Bucharest,
Automation and Computers Faculty (1981).
Radu Bugică - Supervisory Board Member, with more than 25 years’
professional experience. Besides his membership in the Supervisory
Board of Transelectrica he currently is member in the Board of
Administration of Conpet SA (as of October 2013) and BA Chairman /
representative of the BA Chairman of Covalact SA and Lactate Harghita
SA, companies controlled by the investment fund SigmaBleyzer
SouthEast Europe Fund IV (as of June 2007, respectively June 2008);
In 1997-2005 he worked with Global Securities, broker and regional
investment bank, where he became CEO of the Romanian subsidiary,
Global Securities. Among others he led the team that listed SNP Petrom
with the Stock Exchange, and was part of the team that mediated the
first ADR/GDR emission of a Romanian company. Before 2005 he
worked with Bancpost as Chief Dealer.
Mr Radu Bugica graduated the Polytechnic University Bucharest,
Faculty of Machine Building Technologies (1990) and the Academy of
Economic Studies from Bucharest, Finance, Banks and Stock Exchange
Faculty (1997).
Radu Ştefan Cernov - Supervisory Board Member, with more than 14
years’ professional experience.
Mr Radu Stefan CERNOV is a lawyer member in the Bucharest Bar and
in the National Bars Union of Romania. He has specialised in energy
and infrastructure, public - private partnership, public procurement,
concessions, project finance, private equity, banks and financing,
communication, IT and audio-visual, mergers and procurements,
privatisation and international contracts.
His professional experience includes positions of administrator with
Transgaz and Romtelecom, senior partner coordinator of the Financing,
Energy and Infrastructure Department, SCA Enescu Panait Pop &
Associates, Secretary of state, respectively general director in the
Ministry of Communication and Information Technology.
Mr Radu Stefan CERNOV graduated the University of Bucharest, Law
Faculty in 2000.
Page | 4
Cătălin Lucian Chimirel - Supervisory Board Member with more than
28 years’ professional experience in the energy sector.
From 2005 until August 2014 he was Director of program with Co.
ECRO Ltd providing consultancy on the feasibility of projects in the
electric power domain as well as consulting & design activities with
respect to- high voltage substations; network connection; systems
stability; conventional power plants; power plants using renewable
sources; specific regulations.
Currently Mr Catalin Lucian CHIMIREL is Independent Consultant in the
Electricity domain (Consultancy and design) and Energy Auditor for
buildings.
In the energy sector he held many positions in RENEL, CONEL and
Transelectrica such as- dispatcher engineer shift head of power plant
(1987-1989), Shift head dispatcher with DET Bucharest (1990-1996),
Deputy Director of Transmission and Distribution (1996-2000), Director
of program for the Metering system on the wholesale market and EMSSCADA extension (2001-2004), Director of the Metering subsidiary
OMEPA .
Mr Catalin Lucian CHIMIREL graduated the Polytechnic Institute
Bucharest, Energy Faculty in 1986.
Daniel-Cristian Pȋrvulescu - Supervisory Board Member, with eight
years’ experience in the energy domain, currently in the position of CEO
in Co. ENEVO GROUP Ltd.
Previously he worked with Co. ROMELECTRO SA as Director of
Business Development and International Cooperation. As such he
coordinated the development of energy projects, rehabilitations and new
projects in the hydropower, thermal power, cogeneration and renewable
energy domains. He was also BA Chairman of Co. ENTREX Ltd, a
company specialising in electricity supply.
Mr Daniel-Cristian PIRVULESCU graduated the Polytechnic University
Bucharest, Energy Faculty (2006) and is a founding member of
Electrical Engineering Students’ Association Bucharest (2002), nongovernmental non-profit organisation dedicated to the students from
electric universities and schools of Europe.
Supervisory Board members are elected in the Shareholders’ General Assembly according to legal
requirements by quorum and vote majority. On the issuance date of this Report, Transelectrica is not
aware of any agreements, understandings or family ties of Supervisory Board members and other
persons preventing their appointment as administrators.
On the issuance date of this Report, Transelectrica is not aware of any litigation or administrative
proceedings against the Supervisory Board in relation to their activity in the Company or concerning
that person's ability to perform their duties within the Company.
Transelectrica is not aware of any member of the Supervisory Board having held TEL shares at
31.12.2014.
Page | 5
There are five consultative committees in the Supervisory Board: a nomination and remuneration
committee, audit committee, financial and development committee, energy security committee and
one committee for the relationship with regulatory and strategic authorities.
Consultative committees of the Supervisory Board
Audit committee
Members in this committee are Radu Bugica
and Radu Stefan Cernov.
The Audit committee has among other
attributions the efficiency monitoring of internal
control systems and risk management within
Transelectrica; checking and monitoring the
independence of external auditors, the
statutory audit activities on the annual financial
statements and on the approaches proposed
by external auditors, while also coordinating
their interaction with the internal audit.
The Audit committee is monitoring the financial
reporting and management processes as well
as the financial plan and the elaboration of the
consolidated annual financial statements.
The Audit committee plays an important role in
checking the efficiency of the monitoring
system, the compliance with the laws and
regulations applicable to Company activities
and the results of managerial investigations in
case of non-compliance.
Nomination and remuneration committee
Members in this committee are Radu Stefan
Cernov, Carmen Georgeta Neagu, Catalin
Lucian
Chimirel
and
Ovidiu
Petrisor
Artopolescu.
As regards the nomination area the
Nomination and remuneration committee
coordinates the appointment of Directorate
members and makes recommendations both
for Directorate member positions as well as in
order to fill the vacancies in the Supervisory
Board.
The Nomination and remuneration committee
determines the requirements for someone’s
acquiring a certain position in Company
administration and permanently updates the
professional competencies of Directorate
members. The Nomination and remuneration
committee
validates
organisational chart.
the
Company’s
As far as the remuneration domain is
concerned the Nomination and remuneration
committee elaborates the remuneration policy
for Directorate and Supervisory Board
members and submits it for approval of the
Shareholders’ General Assembly.
The Nomination and remuneration committee
provides in the annual report the total sum of
direct and indirect remunerations of Directorate
and Supervisory Board members, while
observing the proportionality principle with their
responsibility and time dedicated to the
exercise of their positions.
Financial and development committee
Members in this committee are Radu Bugica,
Daniel Cristian Pirvulescu and CarmenGeorgeta Neagu.
The Financial and development committee
provides assistance to the Supervisory Board
in achieving its surveillance responsibilities and
its supervising for the elaboration and update
of the Company’s general development
strategy; it reviews the opportunities identified
for Company development and issues
recommendations to the Supervisory Board of
potential
impact
in
the
Company’s
Administration and Management Plans.
The Financial and development committee
together with the Audit committee makes
recommendations to the Supervisory Board
with respect to the accounting policies to be
applied in the Company. Also the Financial and
development
committee
makes
recommendations to the Supervisory Board in
relation to the financing structure and the
gathering mode of Company resources, of
financial reports while monitoring the
achievement of performance indicators of the
transmission system and the economic-
Page | 6
financial performance of Company activities,
as well as the financial reporting and the
Company’s management and financial plans
Energy security committee
Members in this committee are Catalin Lucian
Chimirel, Daniel Cristian Pirvulescu and Ovidiu
Petrisor Artopolescu.
The Energy security committee monitors and
advises the Supervisory Board, the Directorate
and the specific compartments of the Company
about the implementation of the administration
strategy and of the Management Plan in the
domain of strategic objective for system
operator and energy security in the entire
Romanian Power System (‘SEN’), energy
security at the level of the transmission grid as
well as energy security and protection of the
critical infrastructure.
Committee for the relationship
regulatory and strategic authorities
with
Members in this committee are Carmen
Georgeta Neagu, Radu Stefan Cernov, Catalin
Lucian
Chimirel,
and
Daniel
Cristian
Pirvulescu.
The Committee for the relationship with
regulatory and strategic authorities sustains
the Company in its negotiations with the
National Regulatory Authority in the Energy
domain (‘ANRE’) regarding the tariffs for
Transelectrica’s activities and the approval of
the Company’s 10 years’ Development plan
and the Investment programme for 2014 –
2017. Also the Committee for the relationship
with regulatory and strategic authorities
advises the Directorate when it updates the
Management Plan.
Changes in the Supervisory Board
Table 1: Changes in the supervisory board
31.12.2014
21.07.2014
11.05.2014
09.05.2014
14.02.2014
31.12.2013
Carmen
Georgeta
Neagu
Carmen
Georgeta
Neagu
Carmen
Georgeta
Neagu
Ion-Toni
Teau
Ion-Toni
Teau
Ion-Toni
Teau
Ovidiu Petrişor
Artopolescu
Ovidiu Petrişor
Artopolescu
Ovidiu Petrişor
Artopolescu
Ovidiu Petrişor
Artopolescu
Ovidiu Petrişor
Artopolescu
Ovidiu Petrişor
Artopolescu
Radu
Bugică
Radu
Bugică
Radu
Bugică
Radu
Bugică
Radu
Bugică
Radu
Bugică
Radu Ştefan
Cernov
Radu Ştefan
Cernov
Radu Ştefan
Cernov
Radu Ştefan
Cernov
Dragoș
Andrei
Dragoș
Andrei
Cătălin Lucian
Chimirel
Cătălin Lucian
Chimirel
Remus
Vulpescu
Dănuţ-Leonard
Sandu
Daniel-Cristian
Pîrvulescu
Daniel-Cristian
Pîrvulescu
Carmen
Georgeta
Neagu
Carmen
Georgeta
Neagu
Carmen
Georgeta
Neagu
Andrei-Mihai
Pogonaru
Andrei-Mihai
Pogonaru
Andrei-Mihai
Pogonaru
Andrei-Mihai
Pogonaru
Andrei-Mihai
Pogonaru
Andrei-Mihai
Pogonaru
Page | 7

14 February 2014 – Mr Dumitru-Remus
Vulpescu was appointed member in the
Supervisory Board. Mr Remus Vulpescu
took up the vacancy after Mr Danut
Leonard Sandu gave up his capacity of SB
member.

29 April 2014 – in the AGA assembly after
the shareholders’ vote Messrs Remus
Vulpescu and Dragos Andrei were not
acknowledged as Supervisory Board
members.

09 May 2014 – SB members proposed
appointing a new administrator, namely Mr
Radu Stefan Cernov.

11 May 2014 – Mrs Carmen-Georgeta
NEAGU was elected SB chairwoman, thus
taking up the vacancy occurred when Mr
Ion-Toni Teau was appointed Directorate
Chairman.

21 July 2014 – SB members proposed
appointing Messrs Catalin Lucian Chimirel
and
Daniel-Cristian
Pirvulescu
as
provisional administrators.

06 November 2014 – the General Meeting
of Shareholders (‘GMS’) voted the
Supervisory
Board
membership
by
cumulative vote, and Messrs Radu Stefan
Cernov, Catalin Lucian Chimirel, DanielCristian Pirvulescu were confirmed as
Supervisory Board members while Mrs.
Carmen-Georgeta
Neagu
was
acknowledged
Supervisory
Board
chairwoman and Messrs Ovidiu-Petrisor
Artopolescu, Radu Bugica and AndreiMihai Pogonaru as SB members.

04 February 2015 – Mr Andrei-Mihai
Pogonaru gave up his capacity of
Supervisory Board member.
Page | 8
Report of the Supervisory Board
regarding the separate financial statements drawn up
according to the International Financial Reporting
Standards
The Supervisory Board relies on the corporate governance principles, which regulate a responsible
professional ethical attitude of the Company in relation with the main stakeholders. The Board are
reviewing the Company strategy and the premises of the environment it operates in in order to plan for
the development of Transelectrica and its performance, while providing rigorous expression of
objectives. The Company Directorate provided in the Supervisory Board detailed information about the
2014 separate financial statements, the management plan, the maintenance schedule and the
planned investments. We have assessed the significant transactions of Transelectrica under plenary
meetings based on the Directorate reports.
Co Deloitte Audit Ltd has audited the separate financial statements of 2014 and reviewed the
compliance of the Directorate’s Annual Report with such separate financial statements. Consequently
it has issued an audit opinion without reserves.
The separate financial statements and the audit report were submitted for examination of the
Supervisory Board. Having met in order to approve the 2014 financial statements the Audit Committee
transmitted to the Supervisory Board a report with the review of results from the financial year 2014
and recommended the Supervisory Board to endorse the separate financial statements elaborated in
accordance with Order 1286/2012 of the MFP.
At the same time the Directorate’s Annual Report elaborated in accordance with the requirements of
the capital market legislation was reviewed by the Supervisory Board members. The Directorate
Report provides accurate true image of the Company’s separate results in the financial year 2014.
The Audit Committee provides assistance to the Supervisory Board in the achievement of one’s own
supervisory responsibilities in the financial reporting process, management reporting, internal control
system, audit process and the organisational process of monitoring for the compliance with the laws,
regulations and conduct code.
The separate financial statements of Transelectrica elaborated in accordance with the IFRS were
endorsed on the 24.03.2015 meeting of the Supervisory Board according to the recommendation from
the Audit Committee and they were submitted for approval to the Shareholders’ Ordinary Assembly
convened for the first assembly on 29 April 2015.
Chairman of the Supervisory Board
Carmen Georgeta NEAGU
Page | 9
REPORT OF THE EXECUTIVE BOARD 2014
REPORT OF THE
EXECUTIVE
BOARD
2014
Page | 10
Mesage of the Executive Board
2014 was marked by an outstanding financial
performance, Transelectrica attracted and
retained diverse sources of funding necessary
for the development of the National Power
Network and increased the added value for
shareholders through share and dividend
growth and maximizing return on investment.
Our company was the star of the Bucharest
Stock Exchange with a share price increase of
over 85%, a performance superior to the 9% of
the BET index, established on the basis of the
most liquid companies listed on the Stock
Exchange.
The financial and development strategy
adopted by the Company's executives had a
positive impact in stabilizing the rating outlook.
Consequently, in February 2014, Moody's
Investors Service changed the outlook on
Transelectrica’s rating (Ba2) from "negative" to
"stable".
In 2014 we can be proud to have
consolidated
position
the
Company’s
on the local capital
market, initiated investments with
significant impact on the ”health”
of the national power network
and
enabled
Romania’s
integration on the regional energy
market.
The increase in operating income by 14%
(2.82 billion RON) and net profit by 78% (357.6
million RON) compared to 2013, promotes the
company as an attractive option for investors,
but also gives us a good position to negotiating
with creditors. Access to liquidity is imperative
to continue the ambitious program of
modernization and development of plants and
power lines operated by Transelectrica.
Compared to previous years, 2014 has seen
an increase in the number and value of signed
contracts, respectively 106 contracts with a
total value of 310 million RON. Accelerating
the Annual Investment Plan is one of the
Company’s strategic objectives, together with
the realisation of the Annual Maintenance
Program.
Included among the most important objectives
put into operation this year, are the
rehabilitations of Barboși, Brașov, and Tulcea
Vest (phase I) power stations, connecting
Drăgănești Olt, Grădiște, and Stupărei power
stations to the optic fibre network and
connecting wind power producers from the
Page | 11
southern region of the country to the electricity
transmission grid.
In the same period, we secured contracts and
have commenced work on rehabilitating Turzii
and Bradu power stations, modernizing the
control and protection systems of Tihău and
Vetiş power plants, and increasing the capacity
of power lines between Reșița and Pancevo
(Serbia).
For the 2015-2017 periods, we are focused on
boosting
investment
by
initiating
approximatively 100 major projects aimed at
modernizing the monitoring and management
system EMS-SCADA and the existing metering
platform, the construction of new overhead
lines, modernising several stations to ensure
the safety of energy infrastructure and
increasing interconnection capacity with
neighbouring countries in order to facilitate
exports of electricity.
All these achievements were possible due to
the sustained effort of our colleagues, more
than half of them with over 20 years seniority in
Transelectrica. The Company takes this
opportunity to express its gratitude for the
dedication of its personnel, but also recognises
the importance and necessity to facilitate the
employment of recent graduates. Young
professionals have the opportunity to join a
solid, united Company, and to interact with
experienced colleagues, both in operational
and support activities .
In 2014 we can be proud to have consolidated
the Company’s position on the local capital
market, initiated investments with significant
impact on the ”health” of the national power
network and enabled Romania’s integration on
the regional energy market..
Ion – Toni Teau
Chairman of the Executive Board
Page | 12
Executive Board
On the report date, membership in the Transelectrica Executive Board is as follows:
Ion-Toni Teau – Chief Executive Officer, Executive Board
Chairman, has over 22 years of professional experience. Mr Ion-Toni
TEAU was a member of the Supervisory Board of Transelectrica
starting with 30.05.2013, and held the position of Supervisory Board’s
Chairman between 25.06.2013 - 10.05.2014.
Furthermore, beginning February 2013, Mr. Teau has been the
President of Romania’s Chamber of Fiscal Consultants.
Mr Toni Teau graduated the University of Economic Studies, Faculty of
Finance, Credit and Accounting (1987-1992), and in 2002 he received a
Ph.D. in economics.
Octavian Lohan – Executive Board Member, has over 40 years of
professional experience in the technical field, including the past 15
years in various operational management positions, the most significant
being that of director of the National Dispatching Centre. His experience
has been characterized by extensive national-wide activity in the
Romanian National Power System (“SEN”) and also in collaboration with
transmission system operators (“TSO”) in European countries
interconnected with Romania’s power system to develop a single
European market for electricity.
Mr Octavian Lohan graduated the Electricity and Power Faculty from
“Politehnică” University of Bucharest.
Constantin Văduva – Executive Board Member, has over 33 years of
professional experience. In addition to his membership on the Executive
Board of Transelectrica, he currently holds the position of Secretary
General of the Chamber of Tax Consultants of Romania. Previously, he
served as Member of the Supervisory Board of Oltenia Energy Complex
(September-November 2012) and CEO , Chairman of the Board of
Directors of SN Plafar SA ( September 2012 - March 2013).
Mr Constantin Văduva graduated the Academy of Economic Studies Faculty of Finance and Accounting (1982), and in 2007 graduated from
a Master of Public Management at the Academy of Economic Studies
Bucharest - Faculty of Management.
Page | 13
On the issuance date of this Report, Transelectrica is not aware of any agreements, understandings or
family ties of Executive Board members and others.
On the issuance date of this Report, Transelectrica is not aware of any litigation or administrative
proceedings against members of the Executive in connection with their activities relating to the
Company or that person's ability to perform their duties for the Company.
Mr. Octavian Lohan has holdings in the share capital of the Company purchased under the Initial
Public Offering (2006 ) and SPO (2012 ) for sale of shares. No other member of the Executive Board
held any shares in the share capital of the Company at 31.12.2014 .
Changes in Transelectrica’s Executive Board:

14 February 2014 – Mr Mihăiță Boangiu
was revoked from his position of Executive
Board member.

11 May 2014 – Mr Ion - Toni Teau
replaced Mr Ștefan Doru Bucătaru as
Chairman of the Executive Board.

23 March 2014 – Mr Gabriel Mustea’s
mandate contract ended by mutual
agreement.

17 February 2015 –Mr Ciprian Gheorghe
Diaconu’s mandate contract ended by
mutual agreement.

08 May 2014 – The Supervisory Board has
decided the appointment of Octavian
Lohan and Gheorghe Cristian Vişan as
members of the Executive Board.

18 February 2015 – Mr Gheorghe Cristian
Vișan’s mandate contract ended by mutual
agreement.
Page | 14
Declaration of responsible persons
To our knowledge, the separate financial statements at 31 December 2014, prepared in accordance
with applicable accounting standards (International Financial Reporting Standards as endorsed by the
European Union) provides an accurate image, consistent with the reality of assets, liabilities, financial
position, profit and loss account of CNTEE Transelectrica SA and the Directors' Report includes
accurate and truthful information on the development and performance of the Company, and a
description of the principal risks and uncertainties specific to the Company’s activity.
Executive Board
Ion - Toni TEAU
Octavian LOHAN
Constantin VĂDUVA
CEO
Executive Board Member
Executive Board Member
Executive Board Chairman
Page | 15
Key figures
FINANCIAL
OPERATIONAL
2,187
mill. RON
▲14% y/y
Revenue
2.401
%
▼6.7% y/y
Network losses
774
mill. RON
▲33% y/y
EBITDA
60.7
TWh
▼11.3% y/y
Internal output
440
mill. RON
▲77% y/y
EBIT
51.34
TWh
▼1% y/y
Energy rate2
358
mill. RON
▲78% y/y
Net profit
8.5
TWh
▲80% y/y
Net export
2,8033
RON
▲ 25,8% y/y
Dividend
53.5
TWh
▲2.0% y/y
Net consumption
HUMAN RESOURCES
2,180
1
TEL SHARES
Average
number of
employees
2,145.6
Mill. RON
▲85% y/y
Market Cap
4.88
RON
▲114% y/y
Profit per share
6.00
▲4.16% y/y
Price-Earnings
Ratio
9.58 %
▼32.1% y/y
Dividend yield
Share of own technological consumption in electricity taken from the electricity transmission grid (transported energy)
2
The quantity is defined as the amount of electricity drawn from the public electricity networks (network transmission and
distribution networks) less electricity exports , thus having an area different from amount of energy physical transported through
the network (transported energy)
3
Gross diviendul per share proposed for approval at the General Shareholders Meeting dated 29.04.2015
Page | 16
Key Events
Jan
Apr
Corporate bonds issued
by the Company
(TEL18) received a
positive opinion from
the BSE in order to be
traded.
Feb
Signature of the
execution contract in
view of refurbishing
the 220/110/20 kV
substation Câmpia
Turzii.
May
ANRE approved the 10
years’ Development
plan of the electricity
transmission grid (2014
- 2023) and the
elements of the 3rd
regulatory period.
Aug
Inauguration of the
400/110 kV substation
Brasov and the 220/110
kV substation Barboși
after completion of the
refurbishment
operations.
Mrs CarmenGeorgeta NEAGU
was appointed
Chairwoman of the
Supervisory Board.
Jun
Transelectrica was
certified as
Transmission and
System Operator of
the National Power
System.
Transelectrica became
member of AmCham
Romania.
The European
Commission notified the
Company its decision after
the investigation initiated
on the commercial
practice of subsidiary
OPCOM SA.
Signature of the execution
contract in order to
achieve the investment
objective of the 400 kV
interconnection OHL
Resita (Romania) –
Pancevo (Serbia).
The Supervisory Board
approved the
Management plan
submitted by the
Company’s Directorate.
Sep
Signature of the
execution contract to
refurbish the
400/220/110/ 20 kV
electric substation
Bradu.
The Ownership Fund
sold the entire stock
package (9,895,212
shares) held in TEL by
means of private
placement.
Oct
Mar
Mr Ion-Toni TEAU
was appointed
Directorate
Chairman.
AGA approved the
Financial Statements
of 2013 as well as the
2014 Revenue and
Expense Budget.
Jul
Moody’s Investors
Service has changed
the rating outlook
(Ba2) of Transelectrica
from ’negative’
to ’stable’.
Nov
Successful launch of
the CZ-SK-HU-RO
markets coupling
project, which
integrates the
electricity markets
from the Czech
Republic, Slovakia,
Hungary and Romania
and replaces the CZSK-HU markets
coupling.
Dec
Page | 17
Management Report
1. Business Model
1.1. Position on the electricity market
Transelectrica was established as Romanian
legal person under GD 627/13 July 2000 on
the reorganisation of the National Electricity
Company CONEL SA, published in Romania’s
Official Gazette no. 357/31.07.2000. This
decision was issued in accordance with GD
138/2000 on the restructuring programme in
the energy domain, by which the electricity
transmission and dispatch activities were fully
separated from the electric power generation,
distribution and supply.
Transelectrica, and constitutes return goods
according to concession agreement and the
law.
Upon establishment the Company had share
capital of 4,959,822.000 thousand former
RON, fully paid upon establishment and
divided into 49,598,220 nominative shares of
100,000 former RON.
Concession of Electricity Transmission Grid
and the land on which it is located has been
granted for a period of 49 years by concession
contract no. 1/29.06.2004, between MECMA
as concession authority and Transelectrica, as
concessionaire.
In accordance with the Electricity and Natural
Gas Law no. 123/2012, amended and
supplemented (Law 127/2014), the electricity
transmission activity is a public service of
national interest. Electricity transmission is
achieved by transmission system operators,
legal persons certified by the competent
authority
under
law.
The
Electricity
Transmission Grid (RET), existing in Romania,
is under the ownership of the Romanian state
with regards to the assets transferred to
In the value chain of electricity activities
Transelectrica takes up the central place of
transmission and system operator, which
activities constitute natural monopoly and
situate between generators and suppliers that
are the main players of the competitive
electricity markets. Transelectrica is not the
only natural monopoly in the value chain of
electricity, since distribution as network
activities also constitute natural monopoly.
As the transmission system operator,
Transelectrica operates under the license no.
161/2000 for the service of electricity
transmission, dispatching service management
and balancing market, as amended by ANRE
Order no. 105/2014 and ANRE Decision no.
270/2015.
Figure 2: Electricity value chain
Production
Transport
Distribution
Consumption
Page | 19
Transelectrica has got the mission to provide
public electricity transmission services while
also maintaining the safe operation of the
national
power
system
under
nondiscriminating access conditions for all users;
to actively participate into the sustainable
development of the national power system by
developing
the
electricity
network
infrastructure, and to support and facilitate the
operation and integration of energy markets.
The key part of Transelectrica is the
transmission and system operator (TSO) which
is added the part of balancing market operator,
metering operator and the operator allocating
capacities along interconnection lines.
Basic activities are associated to strategic
infrastructures for the energy and these
comprise multiple elements of critical
infrastructure. Thus transmission services have
got the electricity transmission network as
support, while dispatch activities including
balancing rely on the dispatch and metering
infrastructure.
The activities of Transelectrica are regulated
through the primary legislation (Law 123/ 2012
constitutes the national framework and the
European one comes from Directive CE/ 72/
2009 and Regulation 714/ 2009) and the
secondary legislation issued by ANRE,
substantiated into licences, establishment
permits, tariff setting methodologies (revenue
cap type for transmission and cost plus for
system operation, tariffs, framework contracts,
procedures and others).
Business profitability comes from the returns
on the regulated asset base, which depends
on the regulated rate of return and the
regulated asset base (RAB).
The business model corresponds to the
standard profile of the TSO, which is uniformly
devised at European level through the
European strategy and legislation applied in all
community countries and transposed as such
in the national legal framework.
TSO companies are subjected to certification
at European level, which includes mainly three
possible models- ownership unbundling, OU;
independent system operator, ISO, namely
independent transmission operator, ITO.
Transelectrica
has
been
certified
as
transmission and system operator of the
national power system and operates according
to the ISO model.
Given the legislative progress made by Law
117/2014, Law 127/2014, OUG 86/2014 and
GD 41/2015, it is considered that the
conditions for Transelectrica to be certified as
a transmission and system operator of the
national power system, according to the model
of ownership unbundling.
1.2. Portfolio of activities and the tariff model
The portfolio of Transelectrica includes activities with allowed profit (transmission services plus
functional system services) and zero profit activities (technological system services, balancing service,
and support schemes), all activities being subject to ANRE regulations.
Page | 20
Figure 3: Portfolio of activities
Internal transmission
Transmission
(cap revenue)
Allowed profit
Functional system services
(cost plus)
Electricity
TSO
Management of
interconnections
Technological system
services
(zero profit)
Zero profit
Balancing market
(administration)
Support schemes
(administration)
The activities provided in the zero profit
categories in the above diagram are designed
using neutral basis against the Company
profile, according to the applicable regulatory
framework.
Revenues associated to technological system
services are estimated by their related tariff in
order to fully cover the costs of activities.
Similarly,
the
cash
flows
from
the
administration of the support scheme
promoting high efficiency cogeneration rely on
the contribution set by ANRE estimated with a
Cogeneration
(simultaneous generation
of electricity and heat)
view to fully cover the administrative costs of
the support scheme.
In case annual results are non-null,
respectively they are positive or negative from
the technological system service activities
determined by differences between the
forecasted values included in tariff calculations
and the actual values, the neutrality of such
activities to the Company’s profit is restored
within
multi-annual
time
horizon
by
incorporating proper tariff adjustments.
Page | 21
Activities with allowed profit
Domestic transmission




Transmission

Activity regulated by ANRE;
Tariff yearly reviewed and updated;
Transmission tariffs are established using pre-set values for multi-annual
periods (usually 5 years) according to a stimulative model of revenue cap
type;
The revenue cap model allows recovering the operational and investment
costs as well as obtaining some financial return dedicated to the proper
remuneration of financiers in accordance with the general risk of regulated
activities performed by Transelectrica;
Certain cost components included in the tariff calculation are capped to
ANRE pre-set levels (according to operational efficiency requirements), the
superior efficiency obtained by Transelectrica is partially retained by the
Company by means of a mechanism sharing the additional profit with the
users of transmission services;
Management of interconnections





Allocation of available capacities of cross-border elecricity transfer along
interconnection lines with the electric power systems of neighbouring countries;
The allocation mechanism relies on a competitive system based on the price
offered by the participants on the energy market for the available cross-border
transmission capacity, which is applicable in case the capacity demand
exceeds the available level offered on the market;
Dispatch activities of the national power system (SEN) in order to maintain
the safety operational level of this system (keeping the system under stable
generation-consumption balance; maintaining system parametrs within preset ranges meant to provide safe stable operation of the SEN; operational
scheduling in order to cover consumption) using the operational technical
management infrastructure of the SEN represented by the EMS-SCADA
system and by the telecommunication, tele-management, protection and
control systems;
The functional system services tariff is established annually in advance by
ANRE based on the cost-plus model which allows recovering the operational
and investment costs as well as getting some financial return meant to
properly remunerate the financiers in agreement with the general risk of
regulated activities carried out by Transelectrica;

Page | 22
Balancing market
Technological system
services
Activities with zero profit






Planning and procurement of power reserves necessary for permanent
provision of generation-consumption balance in view of the safe operation of
the SEN from the generators or consumers that can be disconnected;
ANRE sets annually in advance the tariff of technological system services
based on the zero-profit model (pass-through) designed for the full recovery of
costs necessary to procure system reserves, with possible withholding of likely
savings obtained when power reserves are procured in competitive manner;
Market administration activities providing the real time balancing of output with
consumption;
Procurement of control energy from dispatchable generating units and full
integration of balancing costs from balancing responsible entities;
Costs are recovered on zero-profit basis;
Support scheme
Cogeneration




Adminstration of the support scheme to promote high efficiency cogeneration;
the target of such support scheme is to promote electricity generation by
means of highly efficient cogeneration with the benefit of reduced pollutant
emissions;
The part ofTranselectrica in the support scheme is to collect the contributions
from electricity consumer suppliers and to pay the bonus to the qualified
electricity and heat producers under cogeneration;
Costs are recovered on zero-profit basis;
Page | 23
2. Group Structure

Dissolved by HG 925/2010
and reestablished under the
coordination of the Ministry of
Education during 2014


SMART
Icemenerg


Registered: 2003
CAEN: Production of
equipment for electricity
distribution and control
Registered: 2001
CAEN: Repair of electrical
equipment
Teletrans


Registered: 2002
CAEN: Telecommunication
services
TEL
Icemenerg
Service
OPCOM


Registered: 2000
CAEN: Administration
of financial markets
Formenerg


Registered: 2002
CAEN: Other forms of
training
On the issuance date of this report,
Transelectrica has four subsidiaries, Romanian
legal entities organized as limited liability
companies in which the Company is the sole
4
4
shareholder: OPCOM , Formenerg , Teletrans,
and Icemenerg Service.
In the case of SMART, following the capital
increase carried out on 23.12.2014, by the
Board of Directors of SMART with the value of
the lands for which a certification was
previously obtained attesting to ownership, the
Company became a majority shareholder with
70% of share capital.
4
According to GEO 86/2014 the Ministry of
Economy, Trade and Tourism is authorised to
initiate and aprove all necessary steps for moving
operations and shares held by Transelectrica in the
"Electricity and Gas Market Operator OPCOM " - SA
and The „Romanian Energy Personnel Training
Company – Formenerg” SA into State ownership,
administered by the Ministry of Economy, Trade and
Tourism, under applicable law.
Based on GD. 925/2010 and other related acts
(GD no. 185/2013) the National Trade Register
Office - Trade Register of Bucharest Tribunal,
through resolution no. 41515/07.04.2014,
granted the application for dissolution of
Subsidiary ,,Institute for Energy Research and
Modernization - Icemenerg" SA and through
resolution no. 41923/07.04.2014 granted the
application and authorized the Ministry of
Education to register the "National Institute of
Research and Development for Energy Icemenerg Bucharest" (J40/ 4323/ 2014).
Out of all the subsidiaries of the Company,
only SMART and Teletrans are included in the
consolidation of the Group’s financial
statements.
Icemenerg-Service
and
Formenerg are not consolidated since, under
applicable accounting legislation, the volume of
their activity is considered insignificant for
consolidation purposes. OPCOM is subject to
ANRE regulation and has an independent
position in the energy market, as a result
Transelectrica has no control over it.
Page | 24
Communications
("ANCOM")
dated
27.09.2010, obeying the rules of this public
institution under the law (GEO no.
79/2002).
2.1. SMART



The main activities of SC SMART SA
subsidiary are inspections and repairs to
electrical equipment, transformers and
autotransformers, incident remediation and
micro-production of electrical equipment.
The company has 8 unincorporated
branches, located on the same premises
as Transelectrica’s branches.
SMART’s share capital on 01.12.2014 was
38,529 thousand RON, Transelectrica
participating as sole shareholder. SMART
is one of the subsidiaries whose results
are consolidated with the Company’s
financial statements.

2.3. FORMENERG

SC Formenerg SA is a subsidiary whose
main activity is training energy personnel.
Energy Romania, GDF SUEZ Energy
Romania, Hidroelectrica, Nuclearelectrica,
Romgaz, Transelectrica and Transgaz
Mediaş are some of its clients. The
company offers a wide range of short
courses (for a week or two) in public
procurement, human resources, finance
and
accounting,
marketing
and
communication, operations, maintenance,
energy
strategy,
natural
gas,
IT,
legislation, electrician certificates, etc.

Share capital is 1,948 thousand RON, fully
paid, represented by 194,842 shares with
nominal value of 10 RON each.
Following the address no. 165/13.01.2015
(registered at Transelectrica under no.
1552/14.01.2015)
submitted
by the
subsidiary, ownership structure as of
30.12.2014, following the capital increase
by contribution in kind with value of lands
for which ownership certificate has been
obtained, is as follows:
–
o
CNTEE Transelectrica SA
70.005% - 3,852,860 shares
o
Romanian State through the
Government General Secretariat –
29.994% - 1,650,770 shares
Share capital at 31.12.2014 is 6,874
thousand RON, Transelectrica being the
sole shareholder. Teletrans is part of the
subsidiaries
whose
results
are
consolidated with the Company’s financial
statements.
2.2. TELETRANS
2.4. ICEMENERG – SERVICE


Icemenerg Service SA subsidiary is
focused on the design, production and
distribution of measurement , management
and control equipment for power systems,
certified ISO 9001 and IQ NET by SRAC
ROMANIA, ANRE certified.

Share capital is 493 thousand RON, fully
paid dated 22.08.2013, represented by
49,300 shares with nominal value of 10
RON each.

By order of Ministry of Economy and Trade
no. 855/10.12.2004 (regarding special
administration and financial supervision)
starting with 23.12.2004, the special
administration and financial supervision
SC Teletrans SA was established by
General
Shareholder
Meeting
of
Transelectrica,
Resolution
no.
13/04.12.2002, pursuant to Law no.
31/1990 and Ministry of Industry and Trade
Orders no. 3098 and no. 3101 dated
23.10.2002.

Teletrans shares are 100% owned by
Transelectrica.

Under the applicable Statute and laws,
Teletrans performs telecommunication
services, having the relevant certificate no.
29056 issued by the National Authority for
Management
and
Regulation
in
Page | 25
procedure
was
established
in
ICEMENERG – SERVICE SA during the
privatisation of the subsidiary, in order to
establish management procedure and
necessary measures aimed at accelerating
the privatisation of the company.
electric and thermal energy, innovation,
studies, strategy development, design,
planning, engineering and other technical
services, research and consulting services.

GD no. 1065/ 2003, on the reorganisation
of Transelectrica and Icemenerg SA
through merger by acquisition, the
reorganisation
was
approved
with
Icemenerg as a wholly owned subsidiary of
Transelectrica.

Trough GD no. 185/2013, on the
organization and functioning of the Ministry
of National Education, Icemenerg, along
with
other
national
research
and
development institutes, was transferred
under the coordination of the Minister
Delegate for research.

The National Trade Register Office - Trade
Register of Bucharest Tribunal, through
resolution no. 41515/07.04.2014, granted
the application for dissolution of Subsidiary
,,Institute for Energy Research and
Modernization - Icemenerg" SA and
through resolution no. 41923/07.04.2014
granted the application and ordered the
registration of "National Institute of
Research and Development for Energy Icemenerg Bucharest" (J40/ 4323/ 2014)
on the basis of GD no. 925/2010 and other
related legislation (GD no. 185/2013).

The Appeal Court of Bucharest posted on
12.02.2015, the outcome of case no.
15483/3/2014, namely Decision no.
173/2015 which dismissed Transelectrica’s
appeal as unfounded, the final decision in
the lawsuit contesting National Trade
Register Office’s resolution.
2.5. OPCOM

OPCOM was established under GD no.
627/2000 on the reorganization of the
National Electricity Company SA, as a
subsidiary whose sole shareholder is
Transelectrica.

The main activities of OPCOM are:
organization,
administration
and
supervision of centralized electric energy
and natural gas markets.

Transelectrica does not exercise direct
control over the actual decision-making
mechanism
of
OPCOM,
whose
administration is conducted according to
regulations established by ANRE. In line
with those mentioned above, according to
GEO no. 86/2014, OPCOM is to be
transferred under the administration of the
Ministry of Economy, Trade and Tourism.
2.6. ICEMENERG

Icemenerg provides services in power
plants, substations and electrical networks
and is engaged in research and
development in physical and natural
sciences and engineering in processes
and equipment for the generation,
transmission, distribution and use of
Page | 26
3. Transelectrica on the capital market
3.1. Structure of Shareholders
The development of shareholders’ structure in 2014 is detailed below:
Romanian State
Proprietatea Fund
01.01.2014
SIF Oltenia
Legal Entities
Persons
31.12.2014
6.56%
6.92%
13.99%
28.41%
7.26%
58.69%
58.69%
13.50%
5.98%
14 Feb – Publication of GEO no. 14/2014 transfers the Romanian State’s
shareholder rights and obligations from the Ministry of Finance to the
Government General Secretariat.
09 Jul – Proprietatea Fund sold its stake in Transelectrica through public
offering. Following this transaction the company's free-float increased from
27.8% to 41.3%.
17 dec – Publication of GEO no. 86/2014 transfers the Romanian state’s
shareholder rights and obligations from the General Secretariat of the
Government to the Ministry of Economy , Trade and Tourism .
3.2. Development of share prices
In 2014 Romania’s market continued its
positive development that began in 2013, so
many of the listed shares recorded price
growth. The BET index (calculated using the
most important ten shares listed on the BSE
regulated market) ended 2014 with a 9.2%
increase, the best efficiency since 2009.
Transelectrica is included in the local stock
exchange indexes (BET, BET-XT, BET-NG,
BET Plus, BET-TR, BET-BK, ROTX) and in the
international ones DowJones Wilshire Global
Indexes (Dow Jones Wilshire Global Total
Market Index SM, Dow Jones Wilshire
Romania Index SM, Dow Jones Wilshire
Electricity Index SM).
The share of Transelectrica continued its
growing trend of 2013 and exceeded in 2014
the BET index with share growth of 85.5%
during the year, compared to the BET index
growth of 9.2%. The total shareholder return
(TSR) was 99%, Transelectrica share being
one of the best appreciated by investors.
The 85.5% increase on the Bucharest Stock
Exchange (BSE) of the Company share prices
Page | 27
was pointed out when the 2013 annual results
were published in the second quarter, which
registered some positive result (record) for the
Company and a
dividend of 2.228 RON/share offered to
shareholders. The positive results registered in
each quarter of 2014 rendered the TEL share
more attractive to investors.
2014 began with 15.78 RON/share as
transaction price, stock exchange capitalisation
being 1,157 mill RON; the end of the year
found the share at 29.27 RON, stock exchange
capitalisation of 2,146 mill RON The minimum
transaction price of 14.84 RON/share was
recorded on 31.01.2014, and the maximum of
29.97 RON/share being reached towards the
end of the year, on 5.12.2014. In the light of
such a development in 2014, the share price
recovered a great part of the reduction
recorded after the beginning of the economic
crises, reaching to the value registered at the
beginning of 2008.
Figure 4: Development of share price 2014
29.97
30 RON
20.0 mil
+86%
17.5 mil
25 RON
15.0 mil
12.5 mil
20 RON
10.0 mil
7.5 mil
15 RON
5.0 mil
14.84
2.5 mil
10 RON
0.0 mil
TEL
BET rebased
Trading value
Figure 5: Development of share price 20062014
50 lei
TEL
40 lei
30 lei
29,27 lei
20 lei
10 lei
0 lei
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Table 2: Stock exchange information at 31.12.2014
Indicator
2014
2013
2012
73,303,142
73,303,142
73,303,142
Stock exchange capitalisation (mill. RON)
2,145.6
1,157.5
930.2
Stock exchange capitalisation (mill. EUR)
478.7
258.1
210.0
Maximum price (RON)
29.97
15.79
19.00
Minimum price (RON)
14.84
12.32
10.84
Price at the beginning of the year (RON)
15.78
13.53
17.65
Price at the end of the year (RON)
29.27
15.79
12.69
Profit per share (RON)
4,88
2.74
0.47
PER
6,00
5.76
27.00
2,8033
2.228
0.404
Dividend return %
9,58
14.11
3.18
Free Float %
41.3
41.3
41.3
Number of shares
Dividend per share (RON)
Share identifiers: ISIN ROTSELACNOR9; Bloomberg TEL RO, Reuters ROTEL.BX
Page | 28
3.3. Bonds
In 2014 the first interest rate coupon was paid
under the inaugural bond emission launched in
2013, this representing the first major financing
transaction on the capital market by means of
credit instruments (emission of unsecured
bonds of 200 million RON with fixed interest
rate and five years’ maturity).
Introducing the bonds in the financing mix
induced beneficial effects that will be
capitalised in the mid- and long-term, thus
diversifying the financial options and reducing
the risk of credit restriction by traditional
channels (for instance by touching the
maximum credit allocations in case of relation
banks).
After the endorsement obtained from the
Council of the Bucharest Stock Exchange,
beginning with 16.01.2014 the corporate TEL
bonds have been transacted on the Bucharest
Stock Exchange (BSE) in the Credit Titles
section, 3rd category Corporative bonds under
the symbol TEL18.
Table 3: The main characteristics of the bonds issued by Transelectrica SA
Symbol:
TEL18
Type:
nominative, dematerialised unsecured bonds
Number of bonds:
20,000
Nominal value:
10,000 RON
Total emission value:
200,000,000 RON
Interest rate:
6.1%
Interest payment:
annual
Interest pay dates:
19.12.2014; 21.12.2015; 19.12.2016; 19.12.2017;
19.12.2018
Maturity date:
19.12.2018
The structure of obligees on 05.12.2014 reference date for coupon payment is as
follows:
Figure 6: Structure of obligees 05.12.2014
6.25%
6.25%
9.38%
18.75%
59.38%
Investment Fund
Persons
Pension Fund
Insurance Companies
Banking Institutions
Page | 29
payment on 19 December 2014 to the holders
of Transelectrica bonds recorded in the
Register of bond holders kept by the Central
Depositary SA on the reference date
05.12.2014.
In the first year of accumulation the interest
rate associated to the bonds was paid in
accordance with the Offer Prospectus. In its
capacity of pay agent it was the Banca
Comerciala Romana SA that made the
3.4. Dividends
The Company’s accounting profit remaining after deduction of the profit tax is distributed in
accordance with the following:


GEO 64/ 2001 on profit distribution to
national societies, national companies
and trading companies with full or
majority state capital;
The
Company's
Expense Budget;
Revenue
and
The table below provides the distribution as dividends of the Company’s accounting profit for 2011 2014:
Table 4: Distribution of profit
Indicator
Net profit
mill. RON
Dividend distributed
mill. RON
Actual distribution rate
Gross dividend per share
2014
2013
2012
2011
357.6
201.0
34.5
91.0
163.3
29.6
80.6
81.0*
85.0
87.0
2.228
0.404
1.100
%
RON
* The actual distribution rate takes also into account the sums allocated to legal reserves.
On 31.12.2014 the situation of dividend payments in 2011-2013 was as follows:
Table 5: Situation of dividend payments 2011-2013
Indicator
Dividend paid by
RON
2013
2012
2011
156,955,619.11
28,384,437.68
77,258,652.80
31.12.2014
TOTAL dividend 2011-2013 paid by 31.12.2014
Transelectrica pays dividends from the net
profit of the previous financial year only when
the annual financial statements have been
approved by AGA.
Dividends are paid to shareholders to their
value net of tax in accordance with the
provisions of the Fiscal Code of Romania. It is
Transelectrica that withholds, that states and
pays the tax to the state budget.
262,598,709.59 RON
Transelectrica ceased paying the dividends
due but uncollected from the financial years
2006-2010 because the 3 years’ write-off term
was reached and it approved by AGA their
accounting registration in the ‘Other revenues’
account.
20 August 2015 is the 3 years write-off term
associated to the payment of due uncollected
dividends of 2011.
Page | 30
3.5. Rating
In February 2014 Moody’s Investors Service
changed the outlook of Transelectrica’s rating
(Ba2) from ‘negative’ to ‘stable’.
The criteria that were used in the assessment
of the international rating agency took into
account the diversified sources of financing,
the improvement of Company liquidity, but also
the improved financial performance during
2013.
The rating of Transelectrica granted in
February 2014 was two notches inferior to
Romania’s sovereign one (reconfirmed by
Moody’s Investors Service at Baa3 with
negative outlook at the beginning of 2014).
On 02 February 2015 the credit rating agency
Moody’s Investors Service published its
updated credit opinion whereby the rating
agency assessed the current and future
capability of Transelectrica to meet its payment
liabilities to creditors. The credit opinion was
issued one year after the last update (05
February 2014).
The current credit opinion does not change the
credit rating of Transelectrica. Both the rating
and the rating outlook remain unchanged from
the last assessment.
Table 6: Transelectrica’s rating
Moody’s Investors Service
2015
2014
2013
Ba2 stable
Ba2 stable
Ba2 negative
Page | 31
4. Risk management
4.1. Policy regarding risk management
The strategic requirements regarding the
operational safety and continuity determine the
Company to approach risk management in a
proactive manner in order to detect and treat
potential losses before occurrence of
generating events, thus preparing in advance
technical, operational and financial solutions
appropriate to prevent such possible losses.
The Company takes into account managing
risks using an integrated management system
that applies the management / internal audit
standards of public entities, the regulatory
requirements of the capital market and of
rating agencies.

Setting up safe working environment for
employees;

Operating the equipment and installations
under safe conditions without generating
any danger for third parties or impacting
the environment;

Implementing the optimum risk control and
financing solutions.
The risks of Transelectrica SA are managed by
setting two kinds of risk treatment solutions
and determining their optimum structure:

Organisational solutions that diminish risks
by means of organising / designing /
planning / structuring the activities, the
communicational plans, the measures for
business continuity after some risk
occurrence, as well as by managing risks
using procedures and enhancing labour
security and safety measures;

Financial solutions that include insurance,
share offers, bond emissions and other
instruments provided by the capital,
insurance and other markets.
The governance team of the Company
established the following main objectives for
risk management:



Improving the Company's risk profile
by managing
the
overall risk
identification,
assessment
and
monitoring process and implementing
the control required in order to
maintain risk exposure to acceptable
levels;
Eliminating or reducing to minimum the
conditions and practices that can lead
to the failure to achieve the general
objectives,
the
discontinuity
or
limitation of Company activities;
Reducing the total risk cost in the
Company with a view to reduce the
costs of services provided by the
Company and provide financial
resources for operational costs,
payment of debts and strategic
investments;
Company risks are managed by optimising the
ratio between the organisational and financial
solutions in order to keep risks under control at
acceptable levels and reasonable costs.
Company activities are sensitive to the general
economic conditions that can influence the
quantity of transmitted electricity and implicitly
the operational revenues and results.
Moreover, the demand for electricity and its
price depend on various factors the Company
has no control over, namely:

And strategic objectives:

Understanding the risks the Company is
exposed to, their causes and costs and the
possible impact on the general and specific
objectives;




Global and regional economic and political
developments;
The demand of industrial consumers;
Climatic conditions;
The tariffs regulated by ANRE for
transmission and system services;
Existing laws and regulations;
Page | 32
4.2. Main identified risks
The Company’s overall management focuses on the unpredictability of the economic and financial
environment, attempting to minimise the potential adverse effects of financial performance. The main
risks that the Company can be faced with during its activities are provided below in a summary.
4.2.1. Interest rate payment risk
Figure 7: Fluctuations of interest rates
The Company has concluded credit contracts
(in the long and short run) in order to finance
its investment programmes and to sustain
operational activities.
The variable structure of the interest rate of the
credits taken by the Company can influence
both cash flows from operational activities and
the profitability, in case the values of
international indexes used in the interest rate
calculation change significantly.
2014
51%
49%
2013
53%
47%
Variable
Fix
The significant increase of interest rates
charged by the international inter-bank markets
can influence the financing cost in the mid and
long run, with negative impact over the
operational results.
In terms of interest rates from the credit
portfolio of the Company, there is quite
balanced distribution between the credits with
fixed rates and those with variable rates.
During 2014 EURIBOR (6 months) registered
decreasing trend from 0.371 % at the end of
2013 and ended with 0.177% p.a. interest rate.
Figure 8: EURIBOR evolution
0.45
0.430
0.396
0.40
0.35
0.407
0.417
0.387
0.371
0.333
0.305
0.30
0.292
0.25
0.20
0.15
dec.-13 jan.-2014 feb.-14 mar.-14
0.200
apr.-14
may-14
jun.-14
jul.-14
aug.-14
sep.-14
0.184
oct.-14
0.182
0.177
nov.-14 dec.-14
EURIBOR 6M (monthly averages)
4.2.2. Exchange rate risk
The functional currency of the Company is the
Romanian Leu. The Company is exposed to
the fluctuations of exchange rates from the
revaluation of assets / liabilities denominated in
Page | 33
other currency but also the payments of
interest and principal under the credits
contracted in other currencies.
EUR, while recording 13.3% depreciation
against the USD and 0.4% appreciation
against the JPY.
During 2014 volatility was relatively low. The
national currency appreciated 0.1% against the
Figure 9: Exchange rate evolution
EUR 2014
JPY 2014
USD 2014
0.0335
0.0330
0.0325
0.0320
0.0315
0.0310
0.0305
0.0300
0.0295
0.0290
0.0285
0.0280
3.80
3.70
3.60
3.50
3.40
3.30
3.20
3.10
3.00
2.90
4.60
4.55
4.50
4.45
4.40
4.35
4.30
Consequently, in 2014 revenues from the differences of exchange rates amounted to 27.5 million RON
while expenses were 28.8 million RON. The general impact of such exchange rate differences is loss
amounting 1.3 million RON.
Table 7: Net exposure in financial position statement
Total
RON
EUR
USD
JPY
31 December 2014
985
213
734
23
16
31 December 2013
1,159
227
881
26
24
Mill. RON
Figure 10: Net exposure in financial position
statement
-15.8%
1,158
2.1%
2.2%
19.6%
975
1.6%
2.4%
21.8%
4.2.3. Risk regarding the provisions from
financing agreements
76.1%
74.2%
2013
JPY
2014
USD
RON
In 2014, the bank debt decreased from 1,159
million RON to 985 million RON against the
background of the Company’s diminished
indebtedness and the principal payments
under the contracted credits. Credits
denominated in EUR are still maintained at
high level of 74% from all credits while credits
in RON amount to 22%. In 2014, the Company
no longer contracted other credits in hard
currency.
EUR
The Company has got financing contracts
concluded
with
international
financial
institutions (EBRD and EIB) and commercial
banks in order to finance its investment
projects and sustain other operational
activities, as part of its business. There clauses
in
the
financing
contracts
regarding-
Page | 34
compliance with certain financial indicators,
control changes over the Company, pari passu
type clauses etc.
Violating such clauses can entail the
anticipated payment of the credit, based on
preliminary notification and a reasonable time
interval, some credit having penalty clauses for
early repayment. To date the Company has
received no notification of anticipated
reimbursement for failure to comply with the
obligations assumed.
4.2.4. Liquidity risk
The liquidity risk means the Company can
encounter difficulties in complying with its
obligations associated to financial debts which
are settled in cash or by transfer of other
financial asset. The provisions of the
Company’s financing agreements can limit its
financial and operational flexibility.
Prudential policy in managing the liquidity risk
means maintaining sufficient liquid resources
in order to cover the obligations as long as
they reach due date, as well as to make
available financing by means of proper credit
facilities.
The liquidity risk is diminished by introducing
unsecured instruments in the Company’s
financing mix (corporative bonds, unsecured
loans provided by international financial
institutions), which significantly reduce the
dependence on the limitations and constraints
of the banking environment and the need to
secure commercial credits with decreasing
commercial liabilities.
Another component of the liquidity risk is the
opportunity cost of financial investments for the
excess of liquidities the Company might have
at a certain moment. In this respect the
Company management was permanently
concerned with investing the excess liquidity
into low risk instruments but satisfactory
returns. The average return obtained in 2014
was 3.32%.
4.2.5. Credit risk
Credit risk is the risk of financial loss to the
Company if a customer or counterparty to a
financial instrument fails to meet its contractual
obligations. This risk arises principally from the
Company’s receivables from customers and
cash and cash equivalents.
The treatment of counterparty risk is based on
internal and external success factors of the
Company. External factors of success that are
systematically reducing the risk are: decentralization of the energy sector where
production, transmission, distribution and
supply are distinct activities, and the interface
for the customer is the supplier, the trading of
energy on the Romanian market on two market
segments: regulated market and competitive
market. Internal factors of success in the
treatment of counterparty risk include the
diversification of customer portfolio and
diversification of the number of services
provided on the electricity market.
Financial assets, which potentially subject the
Company to collection risk, consist principally
of trade receivables and cash and cash
equivalents. The Company applied a series of
policies to make sure that the services are
rendered to customers that can provide a
proper collection, by including in the
commercial contracts their obligation to
establish financial guarantees. The carrying
amount of accounts receivable, net of
impairment
allowances,
represents
the
maximum amount exposed to collection risk.
The collection risk related to these receivables
is limited, as these amounts are primarily due
by State-owned companies..
4.2.6. Risk of tariff (price) associated to the
regulatory framework
Taking into account the position of regulated
natural monopoly the price risk associated to
the regulatory framework is an important factor
that can impact Company activities, with
negative impact over the operational results,
financial situation and Company prospects.
The price risk has some structural component
of the manner in which the tariff is set and a
Page | 35
component depending on the transparency of
the regulatory act of the past pricing decisions.
The structural composition comes from:

The rigidity of the tariff mechanism in the
full prompt recovery of operational costs, of
the recognised technical losses (both in
terms of quantity and of price);

It is not possible to adjust the cost of
capital during the regulatory period
depending on the development of financial
markets;

Costs of capital are not recovered in the
period from capital engagement and RAB
recognition of the resulting asset etc. and
the faulty running of the actual regulatory
act exercised by ANRE as some decisions
by an insufficient level of transparency
when tariffs were set in the past, both
components contributing thus to reduced
predictability of financial results.
Implementing the binomial tariff system in the
following interval (with power component and
energy component) could protect revenues by
means of the stability provided by the fixed
component (power).
4.2.8. Other risks
Other risks identified that can influence the
Company’s activities, operational results and
financial situation are as follows:

Non execution or delayed execution of
investment projects of the Company;

The Company could be compelled to
spend important amounts in order to
maintain its infrastructure;

The discontinuities in the operation of the
electricity transmission system;

Deterioration of Company rating;

It is impossible to hire, train or retain
sufficient number of employees with high
qualification;

Occurrence of disputes, uncertain results;

Strikes or
interruption;

There is limited control over one's own
subsidiaries, which makes it difficult to
implement uniform corporative policies;

The uncertain juridical regime of the
shares issued by OPCOM and Formenerg
owned by the Company.
4.2.7. Volume risk
The reduction in the volume of tariffed energy
might have negative influence over the
Company’s financial situation and prospects.
Taking into account the costs structure is
significantly dominated by costs that do not
vary depending on the volume / activity of the
Company such disturbances can propagate
into profits as well. The tariff adjustment
mechanism can provide a solution but in the
financial year impacted by decreased volumes
the Company’s financial performance remains
disturbed.
other
forms
of
activity
Page | 36
5. Human resources
5.1. Personnel structure
In the last two years personnel structure
maintained relatively constant in terms of
average number of employees, only slight
(0.8%) decrease being registered compared to
2012. In accordance with its operational
licence does not usually hire temporary
employees. The operation of electric
substations from the RET and dispatch
services in the SEN are provided using
operational
personnel
organised
under
permanent shift regimes.
During 2014 a number of 121 persons were
hired while employees left the Company,
mainly by mutual agreement and retirement..
Table 8: Average number of employees with
individual labour contract for undetermined
term
Year / indicator
2014
2013
2012
Average number
of employees
2,180
2,180
2,198
Table 9: Personnel structure by level of
studies
Level of studies
2014
2013
2012
Academic
1,257
1,245
1,244
919
928
947
4
7
7
2,180
2,180
2,198
Elementary
TOTAL
These last three years, 46 has been the
average age in the Company. Even if the
personnel above 40 still represent more than
half of total employees, the share dropped
from 55.5% in 2012 and 2013 to 53.6% in
2014.
Also, during the same time interval, the
percentage of employees aged 18 to 35 grew
10.8% compared to the previous year, in line
with the strategic objective to recruit
prevailingly young graduates.
Table 10: Employee structure by age
categories
Age [years]
The number of employees with university
studies slightly increased 1.1% compared to
2012 and 0.9% compared to 2013. This current
year the share of employees with university
studies is 57.7% from the total number of
personnel and 42.2% are employees with high
school level studies, in general electric power
profile.
High school
employees are men. 92 out of the 572 women
working in Translelectrica on 31.12.2014 are in
middle management positions (department
heads, managers) and 12 at executive level
(directors), together representing 18% of the
female gender personnel..
2014
2013
2012
18-35
575
519
511
36-40
437
452
467
41-50
551
563
585
51-60
548
565
580
69
81
55
2,180
2,180
2,198
>60
TOTAL
Taking into calculation the retirement age of
current employees 55 are going to retire in
2015 and another 260 in 2016 - 2020.
Examining the structure of employees by
genders one can find out three quarters of all
Page | 37
Figure 11: Personnel structure by age
categories
Table 11: Personnel structure by seniority
Seniority
[years]
3%
26%
25%
2014
2013
2012
18-35
0-10
499
482
470
36-40
11-20
453
446
465
21-30
631
635
637
31-40
514
526
538
83
91
88
2,180
2,180
2,198
41-50
51-60
>60
>40
TOTAL
20%
25%
There is a similarity of experience development
(seniority) when compared to staff seniority
accrued in the Company: percentages are very
close, thus showing employee loyalty. The
largest seniority segment in the company is 21
to 30 years, a segment that also remained
constant over the 2012 -2014 period.
Figure 12: Number of employees by seniority
As regards the activity in the Company in 2014
more than half of the employees recorded over
20 years of work, those having worked over 30
years being 28%
Table 12: Personnel structure by seniority
within the Company
Seniority in
2014
2013
2012
0-10
487
467
456
11-20
468
459
478
21-30
619
622
624
31-40
535
547
559
71
77
62
2,180
2,180
2,198
Transelectrica
[years]
Seniority in the Company
487
(22%)
468
(21%)
619
(28%)
535
71
(25%) (3%)
499
(23%)
453
(21%)
631
(29%)
514
83
(24%) (4%)
>40
TOTAL
Labour Seniority
0-10
11-20
21-30
31-40
>40
The operative and operational domain covers
the greatest share of personnel categories,
namely 80.1%. The greatest share among
them is represented by operational employees,
namely 56.2%. In comparison with last year,
the number of personnel for support activities
and executive management diminished 2%.
Page | 38
Table 13: Personnel structure by employee categories 2014
Personnel structure
Number of employees
Operative and operational personnel (rated labour), of whom:
1,747
DEN
190
Operational personnel from transformer substations, tele-management
centres and operational centres
982
Admission-reception personnel
119
OMEPA personnel directly involved in productive activities – operational
centres, settlement of non-conformities, tele-metering systems, liaising
with market participants
38
Personnel directly involved in organising and monitoring the substation
operations
418
Personnel for support activities and executive management
433
TOTAL
2,180
5.2. Professional training
Professional training activities performed in
2014 focused mainly on achieving the ‘Annual
programme of professional maintenance,
training and improvement for Company
employees’, a complex programme elaborated
after a wide scale process that identified and
prioritised the training needs of Company
personnel.
The major objective of such programme was
maintaining and developing new competences
for Company personnel while also acquiring
the necessary abilities to improve work quality
and productivity.
The table below provides the costs associated
to employees’ participations into training
courses with trainers from outside the
Company and their number.
Particular attention was paid to training
programmes dedicated to operative and
operational personnel, as their permanent
training and qualification is targeted in the
domains requiring uninterrupted adaptation to
economic
and
technological
changes,
improved professional performance on the job
and acquiring new abilities in the operation of
new power equipment and systems.
In terms of participations to programmes
organised with external training providers the
greatest share was recorded in the technical
domain, namely 54% of total participations at
Company level.
Figure 13: Distribution of participation by
domain
Table 14: External professional training
courses and the expenses with the training
provider
Indicator / Year
Number of
participants
2014
878
2013
1,114
2012
1,769
Technical
4.7% 4.6%
1.3%
4.8%
0.67
0.66
1.34
FinanceAccounting
4.8%
Communication and
Public relations
5.6%
Investment
54.0%
5.8%
Expenses (mill.
RON)
IT
Management
Other
Procurement
7.2%
7.4%
Legislation for
Energy sector
Human resources
Page | 39

5.3. Organisational efficiency project
In April 2014 the Company together with
service consultant launched the project meant
to ‘increase the organisational efficiency of the
NPG Co. Transelectrica SA’. The purpose of
this project is optimising the organisational
model,
restructuring
branch
activities,
increasing personnel motivation and achieving
some remuneration system that should take
into consideration one variable component
besides the fixed one based on performance
indicators. The main project results comply
with the achievement requirements of the
Company’s strategic objectives from the
Administration and Management Plan.
The activities performed to date refer to
elaborating activity standards, re-devising the
organisational structure and structural norms,
as well as submitting proposals for the
remuneration
system.
The
estimated
completion date of this project is the end of the
first quarter.
5.4. Trade union representation
Company employees are affiliated to the
Transelectrica Trade Union, which belongs in
the National Federation of Electricity Trade
Unions UNIVERS. At present, over 90% of the
total number of employees pay their monthly
fee to the union.
A collective labour contract has been
concluded between Transelectrica and its
employees, which is valid until 3 January 2017;
it regulates the individual and collective labour
relations, as well as the parties’ rights and
obligations with respect to:







Concluding, executing, amending,
suspending and ending the contract;
Working time and resting time;
Salary levels;
Labour health and security, working
conditions;
Professional training;
Social protection of employees and
other rights;
Rights and obligations ensuing from
working relationships;
Mutual recognition, employer's rights
and obligations and the trade union's;
The parties agreed to meet any time they need
under the joint Employer – Union Commission
in order to solve the problems that might occur
under the Collective labour contract (“CLC”) in
force, to avoid labour conflicts and to establish
an organisational framework that enables
permanent contact in order to prepare the
negotiations for the CLC. The joint commission
carry out its activities in accordance with its
own regulation.
5.5. Research and development
In order to ensure the operation of SEN under
maximum safety and stability conditions,
according to the quality standards included in
the transmission licence, the Company needs
research projects, support studies and
consultancy in order to ground its decisions
and implement new technologies that can be
found worldwide and/or specific to the
Romanian power system.
Transelectrica annually finances its own study
and research programmes for 2014. The funds
allocated in this respect are ranging between
0.1 - 0.2% of the Company’s turnover (much
below the about 2-5% level practiced by similar
companies worldwide).
The studies were selected taking into account
the Technical Code of RET, the licences
granted to the Company, ANRE regulations, as
well as the chapters contained in the Annual
Study and Research Programme:






Studies regarding strategies in the
electricity domain
Studies regarding reduction of technical
losses and the Company's consumption of
electricity
Support studies for the Company's
electricity consumption
Studies regarding renewable sources and
the implementation of "smart grid"
Studies on the evaluation of new
equipment and technologies;
Studies with respect to stimulating the
efficient consumption of electricity
Page | 40
The work carried out for the 2014 Annual
Studies and Research Programme, for which
expenses amounting to 493 thousand RON
were made, are yearly reported to ANRE and
mainly refer to the following objectives:





Post-calculation of technical losses and
the energy balance in RET; forecast of
energy losses in the RET by branches and
in the entire SEN for 2012-2014;
Analysis of electricity quality within the
RET in 2010 - 2013;
Analysis on the condition of the paper-oil
insulation in the 110 - 750 kV transformers
and shunt reactors, including the bushings
as well used in the RET based on
registrations made during maintenance
and operation;
Assessing the impact of installations from
electric substations over the personnel's
health;
Analysis of the steady state and transient
stability conditions and the short-circuit




strains within the RET (The 2014 - 2018 2023 development and prospects by
2030);
Analysis of operational regimes under the
synchronous interconnection with the
Republic of Moldova;
Impact of the binomial tariff system
implemented
for
the
electricity
transmission services;
Improving the maintenance management
to installations, equipment, buildings and
special constructions;
Reviewing the energy regulations and
guidelines with respect to limiting the nonsymmetric deforming regime in electric
networks.
In accordance with the Revenue and
Expenditure Budget for 2015, approved by the
General Meeting of Shareholders dated
03.23.2015, expenses for research and
development worth 4.687 thousand RON were
budgeted.
Page | 41
Operational
Report
REPORT OF
THE EXECUTIVE BOARD 2014
Operational Report
Page | 42
6. Operational figures
6.1. Network configuration
The electricity transmission grid (”RET”) is the
transmission network of national and strategic
interest with nominal line voltage higher than
110 kV and is formed by assembly lines, power
stations and other power equipment connected
with each other, supporting elements, control
and protection.
RET makes the connection
between
producers,
distribution
networks,
large
consumers and neighbouring power systems.
Figure 14: Electricity transmission grid
Most overhead power lines ("OPL") and
electricity transformation stations that make up
the RET, were built in 1960-1970 at the
technological level of those years. Under
license of the transmission system operator,
Transelectrica conducts extensive investment
and maintenance programs so that safe
operation of facilities to be provided .
The volume of energy capacity , the license for
the service of electricity transmission , delivery
service management system and balancing
market is presented below:
Table 15: The volume of energy capacity
Voltage
(nr.)
Power
(MVA)
OPL
(kV)
750
1
2,500
3.108
400
38
21,185
4,855.990
220
42
14,093
3,875.644
110
-
-
40.418
81
37,778
8,775.160
Total
Stations
(km)
RET planning aims to maintain, in terms of
economic
efficiency,
a
high
quality
Page | 43
transmission service and safe operation if the
national power system in accordance with
applicable regulations and standards jointly
undertaken at European level, the TSO
associates the ENTSO-E.
Figure 15: Energy Balance (TWh)
2014
53.5
60.7
Investments made so far have allowed the
Company to maintain an appropriate level of
dispatching infrastructure necessary for the
operation of electricity markets: national
network of optic fibre, EMS - SCADA
monitoring and management system for
measuring the quantities of electricity traded
on the wholesale market, trading and
settlement IT platforms. There is an ongoing
modernization program for the entire network,
at the highest European standards, involving
the restoration of the most important power
stations in RET, as well as the development of
transmission capacity for interconnector lines
2013
52.5
2012
8.5
1.4
4.7
54.5
2.7
54.6
4.3
54.3
4.6
Net internal consumption
Export
Net internal output
Import
6.2. Selected operational data
6.2.1. Balance of National Power System
Table 16: Energy Balance
TWh
2014
2013
2012
Net output
60.7
54.5
54.3
Import
1.4
2.7
4.6
Export
8.5
4.7
4.3
53.5
52.5
54.6
Net
consumption*
* values do not include the consumption of afferent
auxiliary services from electricity generating power plants;
the net consumption value includes the losses from
transmission and distribution networks, as well as the
energy consumption of pumps from hydro-power plants;
The net energy output of 2014 continued the
growing trend occurred in 2013 compared to
2012, which deepened and exceeded 10%
(11.4% compared to the previous year).
The balance of cross-border physical
exchanges was of export in 2014 amounting to
about 7 TWh, increasing compared to 2013
when
Romania
registered
export
of
approximately 2 TWh. This was due to the high
hydraulic level maintained during the year and
output sensibly bigger in the power plants
using renewable sources, against the
background of favourable conditions for the
energy output from wind and photovoltaic
power parks.
6.2.2. National generation park
2014 registered increase of the gross installed
capacity of 3.4% (797 MW) as compared to
2013, which was significantly obtained
(approximately 90% of the total) from
renewable sources. Thus the installed capacity
in wind power parks reached 2,953 MW, with
346 MW growth compared to 2013. Particular
development was registered by photovoltaic
power parks with 1,223 MW installed capacity
Page | 44
compared to 860 MW in 2013 and 29 MW in
2012.
Table 18: Mix of net electricity output
TWh
2014
2013
2012
Thermal
23.0
23.6
28.6
Nuclear
10.7
10.7
10.5
Hydro
18.6
14.9
12.2
8.3
5.3
3.0
60.7
54.5
54.3
Table 17: Installed capacity (gross values)
MW
7
2014*
2013
2012
Thermal
12,102
12,079
12,454
Nuclear
1,413
1,413
1,413
Hydro
6,709
6,648
6,563
Renewable
4,276
3,563
2,008
Total
24,500
23,703
22,438
5
Renewable
6
Total
8
* Values recorded on 01.01.2015
Figure 17: Generation mix 2012 – 2014 (TWh)
The 2014 dynamics of installed capacity is
provided below:
Figure 16: Installed capacity 2014 (MW)
2014
27,4%
Hydro
12,1%
Wind
2014
23,0
(38%)
10,7
(18%)
2013
23,6
(43%)
10,7
(20%)
28,6
(53%)
2012
18,6
(31%)
14,9
(27%)
8,3
60,7
(14%)
5,3
54,5
(10%)
10,5
(19%)
12,2
(22%)
Hidro
Regenerabile
3,0
54,3
(5%)
5,8%
Nuclear
Termo
Nuclear
0,4%
Biomass
6.2.4. Net consumption
49,4%
Termal
5,0%
Photovoltaic
Termo
Nuclear
Hidro
Eolian
Biomasa
Fotovoltaic
6.2.3. Mix of electricity output
The net average electricity consumption of
every month recorded in 2014 a growing trend
compared to 2013.
The installed capacity growth in wind and
photovoltaic power parks implicitly led also to
their increased share in the generation mix.
Thus in 2014 the share of wind parks in the net
output mix reached to 10.1% (6,138 MWh),
while photovoltaic parks reached to 2.7% of
the total. Mention should be made the net
output generated by photovoltaic parks
increased from 410 MWh in 2013 to 1,616
MWh in 2014.
As far as hydropower generation is concerned,
the hydropower output represented 30.7%
taking into account the average flow of Danube
River maintained high, namely 6.024 m3/s,
registering 3.4% growth compared to 2013.
5
6
Hydrocarbons and coal
7
Hydrocarbons and coal
Wind, biomass, photovoltaic
8
Wind, biomass, photovoltaic
Page | 45
6,566
6,893
6,166
5,899
5,567
5,544
5,793
5,597
5,767
6,227
6,438
6,601
Figure 18: Net average consumption (MWh/ h)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Table 19: Maximum consumption 2012 - 2014
The net maximum hourly consumption of 2014
was registered in December with the same
trend of these last years, when maximum
values were recorded in the winter months.
Value (MWh/ h)
Year
Month
2014
Dec
8,464
2013
Jan
8,312
2012
Feb
8,627
8,075
8,059
7,527
7,150
6,770
6,412
6,597
6,966
6,898
7,949
8,170
8,464
Figure 19: Consumption peaks registered at the level of the national electric power system (MWh/h)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec

Own services of power plants are not included
6.2.5. Commercial electricity exchanges
The development of commercial exchanges
with neighbouring countries is mainly
influenced by the trends of prices on Europe’s
electricity markets, but also by the availability
of generation capacities and by the value of
the net cross-border exchange capacities.
2014 was net exporting year against the
background of high hydraulic level and
increased output of photovoltaic parks.
Moreover, an important contribution to the
commercial increase of export was the
exemption of exported energy from the
contribution for high efficiency cogeneration,
enforced on 1 July 2014 (OG 494/ 2014).
markets, against the background of increased
output from wind power parks (introduced at
minimum prices on the market) and hydraulic
level restored to its normal values.
In 2012, Romania registered net electricity
import which circumstances were mainly
determined by the meteorological regime,
characterised by long drought that provided
low hydraulic level.
Figure 20: Commercial flows (TWh)
1.1
2014
0.5
In 2013 Romania registered net exports of
electricity as a result of decreased priced for
the electricity transacted on Romania’s
1.4
Import
8.2
2.5
2013
2012
1.1
Export
Page | 46
Table 20: Cross-border interconnections (use
of the total allocated capacity, %)
Border
Hungary
Bulgaria
Serbia
Ukraine
Moldova
Direction
2014
[%]
2013
[%]
2012
[%]
export
75.50
30.28
18.02
import
16.02
17.28
22.20
export
51.20
45.46
8.63
import
18.04
25.88
44.10
export
78.88
25.39
50.69
import
7.26
17.16
2.67
export
0.00
0.00
0.00
import
14.61
7.55
41.38
export
0.00
0.00
0.00
import
0.00
7.43
44.86

In November 2014 day-ahead market coupling
was introduced in Romania, Hungary, Czech
Republic and Slovakia, thus changing from
explicit daily allocation to the implicit one on
the Romanian - Hungarian border. Introducing
the coupling mechanism did not impact the
manner in which available capacity for borders
is determined, harmonised and offered.
Given the high interest of electricity suppliers
for the use of the cross-border export
capacities to Hungary gained after annual and
monthly bids, available capacities provide
reduced values for the daily export allocation to
Hungary. Although reduced amounts are
offered upon daily allocation for export to
Hungary, the total volume of energy exported
to Hungary was not impacted by the coupling
mechanism that was introduced and it
maintained at high values.
The values provided in the table represent annual means
calculated simple arithmetical mediums of the average
monthly values
6.2.6. Utilisation of total allocated capacity
in 2012 – 2014 (%)
During 2014 the capacity allocated to the
borders (as result of annual, monthly, daily and
intra-daily allocations) was mainly used for
export, the utilisation degree recording 75%
average export values to Hungary, 79% export
to Serbia and around 50% export to Bulgaria.
The following developments were registered
compared to previous years:

while on the Bulgarian border the value
stayed at the same value like last year;
In terms of import drops were registered
on all borders, except for the border with
Ukraine.
In 2012, 2013, and 2014 there was no export
under passive island diagram into the Republic
of Moldova. Beginning with March 2013, there
was no more import from the Republic of
Moldova under passive island diagram into the
SEN.
In terms of export growth was registered
on the borders with Hungary and Serbia,
Figure 21: Total allocated capacity (%)
79
75
18
30
Hungary
export
2012
45 51
22 17 16
Hungary
import
2013
9
Bulgaria
export
51
44
26 18
17
3
Bulgaria
import
45
41
25
Serbia
export
Serbia
import
7
0
0
0
Ukraine
export
8
15
Ukraine
import
0
0
0
Moldavia
export
7
0
Moldavia
import
2014
Page | 47
6.2.7. Development
of
technological
consumption
registered
in
the
electricity transmission grid
The development of technical losses
(technological consumption) in the RET is
influenced by several factors, which are
independent from Transelectrica’s activities,
such as- meteorological conditions; structure of
output vs. location of consumption; physical
import / export flows on the borders of SEN.
The smallest values (compared with the
energy injected into the grid outline) are
registered during arid years (low hydraulic level
determines favourable output distribution, and
corona losses are small).
Table 21: Development of technological
consumption 2012 - 2014
2014
Energy input
in the grid
2013
Technological
consumption
Figure 22: Development of technological
consumption (2012 – 2014)
50
2.33
2.52
3.0
2.40
40
2.0
30
2012
20
43.6
40.9
42.9
2013
2014
1.0
10
GWh
42,851
40,899
43,628
GWh
1,026
1,032
1,018
%
2.40%
2.52%
2.33%
Factors that determined the development of
technological consumption (%) in 2014
compared to the previous year

Increase of consumption and of export 
higher volume of energy circulated within
the RET  the percentage of technological
consumption decreases as determined by
idle run losses (corona and iron losses in
case of big transformer units), increased
component determined by load losses.
0
0.0
2012
Losses


More unfavourable power flows ' growth of
Joule losses
o Generation centres located far
from consumption points
o
High output from renewable
sources focused within an excess
region (S-E)
o
Unfavourable cross-border transits
along south-north.
Slightly bad meteorological conditions 
corona losses (high humidity, great
amounts of precipitation, fog, frost);
Technological
consumption
Energy input
in the grid
Monthly development of technological
consumption 2014
The maximum value of technological
consumption [%] was registered in December,
against the background of bad meteorological
conditions that contributed to increasing the
corona
component
of
losses
and
disadvantageous output structure, especially
as a result of very high amount of wind power
(about 15% in the annual output, the highest
monthly value) and decreased output of
hydrocarbons generation in the power plants
directly connected to the RET.
The
minimum
value
of
technological
consumption [%] was registered in July when
corona were reduced as a result of low
humidity, and the drop of Joule losses was
determined by a better structure of output and
of physical flows on the borders.
Page | 48
Figure 23: Monthly development of technological consumption 2014
5
2.45
2.52
2.35
2.43
2.76
2.55
2.27
4
2.10
2.22
2.31
2.37
2.41
4.1
3.9
4.0
Oct
Nov
Dec
3.0
3
1.5
2
3.7
3.3
3.5
3.2
Feb
Mar
Apr
3.2
3.3
3.5
3.6
3.5
May
Jun
Jul
Aug
Sep
1
0.0
0
Jan
Technological consumption
Energy input in the grid
Perspectives for technological consumption
The most likely development scenario for the
level of losses in the transmission network,
based on estimations regarding certain
determining factors, is as follows:


The high capacity installed in wind
resources at present will still lead to high
technological consumption in absolute
value, as a result of transmitting the
respective amount of energy prevailingly
generated in south-eastern Romania
(Dobrogea region) to the deficit areas from
the SEN and to the interconnection lines
from north-west Romania;
The increased output of photovoltaic parks
connected to the distribution network near
the consumers will determined the volume
of energy circulated in the transmission
grid, with the effect of increased
percentage of technological consumption

(the reduced amount of energy transmitted
through the transmission grid will
determine only the reduction of loadproduced losses, the component of the idle
run- corona losses and idle run losses
from transformer units- staying relatively
constant regardless of the volume
circulated in the grid);
The development of the single energy
market at European level will determine
additional energy flows in the SEN, which
will make technological consumption vary
in the ETG. Taking into account the
northern part of the country provides deficit
in terms of electricity generation, the
technological consumption will increase
when physical flows on the northern and
western borders are going to export and it
will decrease when energy is imported on
these borders.
Page | 49
7. RET development projects
The Administration Plan of the NPG Co.
Transelectrica provides accelerating the
investment projects in view of modernising and
enhancing the Electricity transmission grid,
while also increasing the interconnection
capacity with neighbouring countries of the
ENTSO-E as well as those outside the EU in
order to increase the operational safety of the
SEN and export capacities and also improve
the Company’s operational and financial
results.
The financial performance and level of
investments are inter-dependent and directly
influence the Company results. Expediting
investments is zero priority for Supervisory
Board and Directorate members, being
motivated by the very financial circuit
determining
financial
performance,
corresponding to the tariff-setting methodology
approved by ANRE applicable to the
Company, which determines insured financial
sources for the operational and investment
activities.
Any increase in the value of investments
completed with commissioning determines
growth in the regulated asset base and
increased return and amortisement, thus
enabling premises for higher financial results
and
determining
positive
results
for
shareholders in terms of shares productivity
(dividends + stock exchange capitalisation),
and also providing the financing sources for
the Company.
7.1. RET development plan 2014 –
2023
The “RET development plan in 2014 – 2023”
(RET Plan) approved by ANRE relied on
analysis of the forecasted the RET operational
regimes, based on scenarios regarding
consumption development, generation park
and exchanges with neighbouring systems in
the mid and long term.
The the RET infrastructure projects require by
their specificity longer periods of preparation
and achievement so that results become
visible after a certain number of years.
The usual full cycle of an investment project
(beginning with the initial design stage,
feasibility study, terms of reference, technical
project up to project execution and
commissioning) is 5 years in the average to
build / refurbish one electrical substation, and 9
years to build a new electrical line.
The needs to consolidate the network for the
time horizon of the RET Development plan
took into account the real balancing
possibilities of the output - consumption
balance and the assumption that regulations
will provide correlation of the promotion system
with national strategic objectives so as to bring
the total installed capacity in wind and
photovoltaic parks to a level that provides
efficient sustainable development.
The output park in Dobrogea region is
developing rapidly. Many wind power parks
were built and still appear, with photovoltaic
ones more recently. Also two new nuclear units
are planned for the NPP Cenavoda. The
section should be consolidated of the internal
network transmitting the power to consumption
and storage centres from the western and
northern parts of this region. From an output
exceeding 3000 MW in Dobrogea (regardless
of the primary source used- wind, PV, NPP
Cernavoda, CHPP Braila, CHPP Galati) the
network capacity to discharge such power
should be strengthened. Depending on the
exact location of power plant projects that will
be built and the load distribution of power
plants in the rest of the SEN, such need can
occur from 2500 MW / 3500 MW up.
Grid development should take into account
solutions that enable the elimination of
congestions on the main directions of power
flows, between the generation centres in the
east of the country and the consumption &
storage centres in the west, corresponding to
the following transmission corridors:
Page | 50
1. N-S corridor interconnecting Dobrogea and
Moldova;
2. E-V/S corridor connecting Dobrogea and
Bucharest + border area / south of the
continent;
3. E-V corridor inter-connecting Moldova and
the SEN to the west.
Developing the output capacities relying on
renewable sources leads to intensified
exchanges between systems and increased
variability of power flows across large regions.
The experience of last years and the forecast
of the next period shows a great demand on
the Romanian network at the borders with
Serbia and Hungary, both in terms of
exchanges between SEN and these systems
and in terms of transits crossing the SEN
network. Exchange capacities need increasing
at the western interface of the system in order
to provide the required infrastructure for
electricity exchanges in the region.
Projects to increase the interconnection
capacity with the Republic of Moldova are
under study, so that the volume of power
exchanges
currently
achieved
under
consumption / output islands connected
radially with very small values can grow to
significantly higher values.
Enhancing Romania’s interconnection capacity
will facilitate exporting the energy generated by
the wind and photovoltaic parks of the SEN
during certain time intervals, in excess to the
domestic demand. Also market participants will
be offered additional transmission capacity in
order to export the available output in
competitive thermal power plants on the
energy market or to import cheaper energy
available on the market during certain hourly
intervals.
The steady-state regime and static stability
studies showed the monitored sections S4
(segment supplying N-V Transylvania) and S5
(segment supplying Moldova region) provide
high risk of operating near the maximum
admissible power in the section both in the mid
and in the long term; the need was pointed out
to enhance each one of these grid sections. To
this effect it is beneficial to consolidate the
electricity transmission network by completing
the 400 kV ring between the north-eastern and
north-western regions of the SEN in terms of
increased static stability reserves in both S4
and S5, as well as in S3 (common
transmission segment between Dobrogea +
Moldova and the rest of the SEN). Several
areas were also detected where local problems
were estimated in the safe consumption supply
and additional injection capacities should be
installed from the 400 kV grid to the lower
voltage network (Iernut, Sibiu).
7.1.1. Projects included in the RET
development plan of the 2014 – 2023
period
The Plan includes projects necessary in order
to maintain network adequacy so as to have it
properly
dimensioned
for
electricity
transmission forecasted to be generated,
imported, exported and transited while
observing the applicable technical norms. Two
categories of investments are provided:
4. Extending the RET by building new lines
(approximately 1000 km), increasing the
transmission capacity of existing lines,
extending the substations and increasing
the transformer capacity in substations;
5. Refurbishment of existing substations.
The main objectives targeted in the RET
planning are as follows:
a. Increasing the interconnection capacity
of SEN
To increase the exchange capacity through the
western and south-western interface of
Romania network enhancements are planned
in the area, which will enable removing
congestions both E - V to the border with
Hungary and Serbia, as well as along the
transit direction N - S by consolidating the Iron
Gates – Resita – Timisoara – Arad corridor.
Taking into account the contribution to
implementing the strategic priories of the
European Union in terms of the transEuropean energy infrastructure, such projects
were included by the European Commission in
the first list of Projects of Common Interest
(PCI), jointly constituting the ‘Romania-Serbia
Page | 51
Group between Resita and Pancevo’, which
includes the following projects of common
interest:

400 kV dc OHL Reșița (RO) - Pancevo
(Serbia);

400 kV OHL Iron Gates - Reșița and
extending the 220/110 kV substation
Reșița by building the new 400 kV one;

Converting the 220 kV dc OHL Reșița Timișoara - Săcălaz - Arad to 400 kV,
including construction of the 400 kV
substations Timișoara and Săcălaz.
To increase the exchange capacity through the
eastern interface with the Republic of Moldova
asynchronous interconnection is under study
by means of back-to-back conversion
substations.
The following network developments are
planned, which will add to the exchange
capacity provided by the 400 kV OHL Isaccea
(RO) - Vulcănesti (MD) and four 110 kV OHLs:



The 400 kV OHL Suceava (RO) - Bălți
(Republic of Moldova).
The use of such project to maximum
capacity depends on the construction of
the 400 kV OHL Suceava - Gadalin, which
is included in the Plan.
When the Plan has been completed other
projects are studied to increase the
exchange capacity with the Republic of
Moldova by building the third 400 kV
interconnection line in the Iași - Ungheni
area and by enhancing the domestic grid,
which should connect the line to the
existing transmission network. The final
solution will be agreed together with the
representatives of the TSO from the
Republic of Moldova.
projects significantly contribute, by increasing
the interconnection capacity with Bulgaria and
by enhancing the infrastructure that will sustain
the power flows transmission between the
Black Sea coast and the North Sea / Atlantic
Ocean coast, to the implementation of the
European Union’s strategic priorities regarding
the trans-European energy infrastructure,
compulsory prerequisite to achieve the policy
objectives in the energy and climate domains.
This is the reason why such projects were
included by the European Commission in the
first list of Projects of Common Interest (PCI),
jointly constituting the “Bulgaria-Romania
Group, capacity increase” together with three
line and substation projects from Bulgaria.
PCI „Bulgaria-România
increase”
capacity

400 kV dc OHL Smârdan – Gutinaș;

400 kV dc OHL Cernavoda - Stâlpu with
one input/output circuit in Gura Ialomiței, to
be continued in the future with the 400 kV
OHL Stâlpu - Brașov;

400 kV sc OHL Suceava - Gadalin;
c. Consumption supply safety in deficit
areas
Taking into account the estimated consumption
increase by areas and the plans to dismantle
certain units, the need was identified to
enhance the transmission and the injection
capacities towards the distribution network in
areas where they are or soon will reach their
limit in the following 10 years:

Installing the second 400/110 kV
transformer in Sibiu Sud substation in
order to secure the only injection in Sibiu
area;

Installing the second 400/220 kV, 400 MVA
autotransformer in Iernut substation in
order to cover consumption in the N-V area
of the country in the absence of sufficient
installed capacity in the power plants of the
region;

Building the 400 kV dc OHL Medgidia S (Constanta S) - Constanta N;

Replacing the active conductors of the 220
kV dc OHL Bucharest S - Fundeni in order
b. Increasing the transmission capacity
between the eastern region (especially
Dobrogea) and the remaining part of the
interconnected electric power system
Several projects to enhance the transmission
network were planned in order to increase the
transmission capacity from Dobrogea to the
rest of the system, of which several major
Group,
Page | 52
to increase transmissible power towards
the northern part of Bucharest City;

Replacing the 110/10 kV, 25 MVA T3 & T4
with 110/(20)10 kV 40 MVA transformers in
Fundeni substation.
d. Refurbishment and modernisation of
existent substations
7.1.2. Investments of 2014
A number of 106 contracts for investment
objectives were signed during 2014, amounting
in total to 310,367 thousand RON in
comparison with 92 contracts in sum total of
74,278 thousand RON in 2013 and with 73
contracts of 178,007 thousand RON total value
in 2012.
The main work execution contracts initiated in
2014 address the following categories of the
RET investments:
a. Modernising the electric substations

Refurbishing substation Bradu - 29.4 mill.
EUR

Refurbishing substation Câmpia Turzii 9.5 mill. EUR

Increasing installations safety in the
400/220/110/10 kV substation Bucharest
South; replacing the 10 kV equipment - Lot
II - 3.3 mill. EUR

Replacing the shunt reactors of Cernavodă
- 2.3 mill. EUR
e. Safety of consumption supply

Installing the T3 & T4
substation - 5.9 mill. RON

Replacing transformer 2 in Gheorgheni
substation - 0.3 mill. EUR
in
Fundeni
The value of fixed assets registered in the
accounting books in 2014 was 261.4 mill. RON
(VAT free), the most important being:






Refurbishing the 220/110 kV substation
Barboși;
Refurbishing the 400 kV substation Tulcea
Vest, stage I;
Refurbishing the 400/110 kV substation
Brașov;
Connecting substations Drăganesti Olt,
Grădiște, and Stupărei to the optical fibre
network;
Replacing the 110/20 kV, 25 MVA
transformer 2 in Gheorgheni;
Projects to connect to the RET the wind
power producers (WPP Făcăieni into the
Gura Ialomiței substation, WPP Filipești
Săucești into Bacău Sud substation), OHL
relocations in order to provide co-existence
conditions).
Figure 24: Value of CAPEX additions to book
value (net of VAT, mill. RON)
-31.7%
34.9%
b. Modernising the command-controlprotection systems


382.7
Modernising the control-protection system
from Vetiș substation - 6.5 mill. RON
Modernising the control-protection system
from Tihău substation - 3.5 mill. RON
283.7
2012
261.4
2013
2014
9
c. Increasing the interconnection capacity

The value of acquisitions of tangible and
intangible assets for the period 2012 - 2014 is
as follows:
Resita-Pancevo OHL – 81.4 mill. RON
d. Integrating the output of new power
plants
9
Includes changes in suppliers with balance at the
beginning of the year.
Page | 53
Table 22: Purchase of tangible and intangible
assets
c. Cancelling certain investment projects
with significant value impact
Mill. RON
2014
2013
2012
Purchase of
tangible and
intangible assets
187.5
250.8
392.6
The audits performed at the end of 2013 and
beginning of 2014, the amendments in the
applicable
legislation,
the technological
development and the problems detected of the
managerial team in the protection area of the
critical
infrastructure
determined
reconsideration
of
investment
objectives,
especially those for critical infrastructure
protection and the IT & communication
projects, giving up some which could not be
justified but with major impact in the
investment value. The value impact over
investment projects from the two entities
determined reduced investment expenses by
about 155.0 mill. RON.
The competitive market conditions and the
economic development determined significant
economies in the cost of investment projects
adjudicated by Transelectrica (between 18%
and 50%, the mean being approximately 35%),
contracts being attributed to significantly
reduced values compared to those estimated
in design documentations. For instance the
Resita – Pancevo OHL project estimated the
value to about 135.7 mill. RON and the
contract was attributed for 81.4 mill. RON and
thus getting 40% saving.
7.1.3. Main causes of reduction
investment expenses
of
a. Impact of the expropriation legislation
over the public utility cause
In July 2013, Law 255/2010 on expropriation
for reasons of public utility was amended; such
law is necessary in order to achieve national,
county and local objectives by including
Transelectrica as well among the beneficiaries
of this law amendments, which facilitated
initiating the expropriation procedures for the
lands required by the new line projects, but
even under such circumstances the great time
interval of legal stages impacted the estimated
schedules of projects implementation.
b. Impact of
legislation
the
public
procurement
The great length of time of public procurement
procedures, encumbered by appeals and / or
cancellations has led to delays in the start of
new projects and consequently to the partial
expenses included in the Investment
programme.
New
investment
projects
represented
67%
of
the
Investment
programme.
d. d. Reducing the number of the RET
connections
of
new
generation
capacities
In addition to its own investment programme
the Company also makes connections of
various
investors
into
new
electricity
generation capacities (new users) to the
electricity transmission grid. Their value has
got strongly decreasing trend because of the
impact of the new legislation on green
certificates, as many investors into renewable
sources of energy gave up their SEN
connections or requested postponing them.
Thus during the impetuous development of
wind parks in 2009-2012 there was a mean of
100.0 mill. RON for such kind of work, but
2014 ended with 33.9 mill. RON, and the total
estimated value of 2015 is 12.5 mill. RON.
7.1.4. Investment programme for 2015-2017
The Company aims at stimulating investments
for the RET modernisation and refurbishment
and for increased interconnection capacities
with neighbouring countries, both in order to
provide safe operation of the Romanian Power
System and to facilitate electricity exports.
In this context the period 2015 - 2017 provides
an ambitious investment programme including
about 100 major projects, of which 76 will be
initiated in 2015. Of these, 17 investment
Page | 54
objectives will start earlier than provided in the
RET Development plan for 2014-2023:
associated bays from substations Mintia and
Gadalin.

b. Projects to increase the interconnection
capacity

Modernising the following substationsUngheni,
Smârdan,
Craiova
Nord,
Timișoara, the 220 and 110 kV substations
Focșani, etc.;
New overhead lines- Stejaru-Fântânele,
Constanța-Medgidia, Banat Axis - stage III,
Converting the Brazi Vest-Teleajen-Stâlpu
OHL to 400 kV.
During the same 2015 - 2017 period will be
also initiated projects that were not included in
the Development plan and will be submitted to
ANRE’s approval, such as- the 400/110 kV
substation Pelicanu, substations Bacau Sud,
Roman Nord (relating to the Moldova axis),
modernising the SCADA system of Constanța
Nord substation, replacing the commandcontrol-protection system in the 400 kV
substation Țânțăreni.
a. National investment objectives
An important investment objective is the 400
kV HVDC submarine cable Romania - Turkey,
which will facilitate energy export in the context
of large generation capacity and decreasing
domestic consumption. To this effect on 3
February 2015 a memorandum was signed
between Transelectrica and companies
Prysmian PowerLink Ltd, UniCredit Tiriac Bank
SA and Tonucci & Partners in order to study
the technical, commercial, financial and legal
implications of the construction and operation
of such a cable.
Building a pumping storage hydropower plant
of 1,000 MW installed capacity in Tarnita Lapustesti, which plays an important part in
balancing the SEN, constitutes another
national investment objective. Connecting this
energy objective to the RET requires building
the 400 kV substation Tarnița and the 400 kV
dc OHL Tarnita - Mintia, the 400 kV dc OHL
Tarnița - Gadalin as well as their connection to
the 400 kV substations Mintia and Gadalin. Co.
Hidro Tarnița SA will inform Transelectrica
about the selection procedure of investors and
the completion of important stages of such an
investment,
condition
necessary
for
Transelectrica to begin the procurement of
design services for the 400 kV lines and their
Along the western Romanian interface the
following grid developments are planned:

400 kV OHL Reșița (RO) - Pancevo (RS);

Banat Axis, stages I & II;

Converting the 220 kV dc OHL Reșița Timișoara - Săcălaz - Arad to 400 kV,
including construction of the 400 kV
substations Timișoara and Săcălaz.
Such projects will eliminate congestions both E
- V to the Hungarian and Serbian borders and
N - S, by enhancing the Iron Gates - Reșita Timișoara - Arad corridor.
The projects will also allow SEN integration of
the output from wind parks planned in the
south-western part of the country (Banat) and
from the existing Iron Gates hydropower
development.
The exchange capacity with the Republic of
Moldova takes into account the following
interconnection projects by means of back to
back substations situated on the territory of the
Republic of Moldova, namely:

400 kV OHL Isaccea (RO) - Vulcănești
(RM);

400 kV OHL Iași (RO) - Ungheni (RM),
which variants are provided for end
substations both in Romania (e.g. Iași/
Munteni) and in the Republic of Moldova
(e.g. Chișinău/ Strășeni); the final solution
will be determined when the joint system
and feasibility study has been conducted;

400 kV OHL Suceava (RO) - Bălți (RM), for
which a Memorandum of Understanding
has been signed and preliminary studies
already performed.
Along the S3 Dobrogea - Moldova axis:
The domestic network uniting interconnection
substations with the rest of the system has got
insufficient transmission capacity, therefore it
requires consolidation. This means building
Page | 55
new 400 kV substation in the Iasi/Vaslui region
and connecting it to the 400 kV network,
located more to the south and west (the 400
kV substations Smârdan, Gutinaș, Bacău,
Roman, and Suceava).
It is also necessary to develop the
transmission network connecting the eastern
part of Romania (Moldova region) to the rest of
the SEN. The 10 years’ the RET Development
plan already includes the new 400 kV lines
Suceava – Gadalin and Smârdan – Gutinaș,
with deadlines in 2021 and 2020.
7.2. Quality of provided services
According to the performance standard of
electricity transport and system services –
approved by ANRE Decision 17/2007, the
main performance indicators for the RET
administration and operation, as well as the
continuity of transport service, are as follows:

transported electricity (GWh) and percent
coefficient percentage of energy losses in
electricity transmission network - CPT
values presented in the appropriate
section (Operational figures);

Average
unavailability
of
facilities,
scheduled
or
unscheduled
events
(accidental), per km for lines (INDLIN) or
MVA transformers and autotransformers
(INDTR):
c. IT projects
Particular attention is also paid to the
information technology projects, which target
process IT- modernising the EMS/SCADA
(complex monitoring and managing system of
the SEN by dispatcher), tele-metering system,
IT system for the balancing market, as well as
the telecommunication area, optical fibre
network and telecommunication equipment.
Table 23: Performance indicators for the RET management/operation activity
Indicator
2014
2013
2012
142.59
114.52
203.30
27.97
11.44
24.72
114.62
103.08
178.58
112.18
171.58
190.35
8.53
3.27
9.00
103.65
168.31
181.35
INDLIN (hours/year)
Total


Unscheduled (accidental)
Scheduled
INDTRA (hours/year)
Total



Unscheduled (accidental)
Scheduled
Energy Not Supplied,
due to
interruptions and Average Interruption
10
Time :
Table 24: Continuity indicators of transport
services
Indicator
2014
2013
2012
Energy Not Supplied
to consumers
82.51
30.89
137.44
0.82
0.35
1.53
(MWh)
Average Interruption
Time (min/year)
10
AIT is equivalent to the average time , in minutes, when
the power supply was interrupted.
Page | 56
7.3. Maintenance
The general principles of the maintenance
strategy applied within Transelectrica are:

the efficient use of funds for maintenance
activities, in accordance with the law;

organization of programs/projects/types of
plants within the Company Maintenance
Program;

correlating the Maintenance Program with
the Investment Program (refurbishment /
modernisation / development) included in
the Company Business Plan and the
Electric
Transmission
Network
Development Plan;

integrating the principles resulting from the
quality assurance and environmental
protection system, from the concept of
safety, including occupational health and
safety, and the emergency response, in
the performance of projects;

considering the role and importance of the
Electric Transmission Network as a critical
infrastructure of the electric power market
in establishing the concept of effective
management of assets and, implicitly,
maintenance.
Based on applying these principles, the Annual
Maintenance Program (AMP) is prepared.
In carrying out the annual maintenance
programs, the works/services that lead to
increased reliability in the operation of plants,
completion of works/contracted services and
those contributing to the smooth operation of
the plants shall be prioritized. Furthermore, the
prospect of implementing remote control and
supervision program for electrical plants,
requiring rehabilitation of the electrical
equipment, should also be taken into account,
which will lead in the future to reducing staff
and operational costs.
For 2014, maintenance costs amounted to 94
mill. RON, which include major maintenance,
minor maintenance and other expenses.
The minor maintenance program of 2014 was
achieved at 88%, program maintenance work
being carried out mainly in the second half of
the year.
The major maintenance program was
performed at 51%. Projects in this program
have been launched since the beginning of
2014 but, mainly due to lengthy procurement
procedures, maintenance in this category also
has the most significant achievements in the
second half of the year.
7.3.1. Maintenance program for 2015 and
the estimate for the 2016-2017 period
The maintenance activity is part of the
Company's asset management concept and is,
according to international practices thereof,
following the coordinates set by the criteria of
"sustainable development".
In the context of sustainable development,
asset management is a set of methods and
procedures which contribute to increasing
profitability, the competitiveness of the services
provided through these assets and the
continuity and quality of their operation.
This approach to the maintenance activity
required the establishment of principles within
a complex strategy leading to the strategic
objectives of this activity, as a support to
Company objectives.
The maintenance program for 2015 includes
planned preventive maintenance services/
works, services/works in the design phase and
services/works in progress, and has been
organised by programs and projects according
to installation type, as follows:

Services/works in substations and power
transformers

Services/works on overhead power lines,
buildings and various power plants

Services/specific maintenance works for
electricity
metering
equipment
(simultaneous
or
remedial
circuits,
Page | 57
communications, equipment repair and
measuring power quality monitoring, etc.).
For the years 2016 and 2017, in order to
estimate the values of Maintenance Programs,
the works required from a technical point of
view, contained in Electric Transmission
Network Development Plan for the period
2014-2023, the provisions of the National
Power Grid Company 'Transelectrica'- S.A.
Management Plan, of the Regulation for
preventive maintenance of plants and
equipment of the Electric Transmission
Network, the Requests of Transmission
Branches, as well as the increasing number of
OHL accidents were mainly taken into account.
CEE market coupling project
by Price (PCR, Price coupling of Regions)
based on ATC (ATC Available Transfer
Capacity).
The target market for the next day based on
the principle of coupling regions by price (PCR
- Price Coupling of Regions) uses a unique
algorithm for correlating offers and pricing.
The characteristics of the solution are the
following:

uses a unique algorithm for correlating
offers and pricing;

provides a single price if interconnections
allow commercial programs established
through market mechanisms;

establishes different price areas whenever
congestion occurs;

establishes an optimal efficient / cost;

the default allocation is done only with the
timeline for Day-ahead (annual allocations,
monthly and intra-day stay explicit
principles in force now.

existing mechanisms are preserved in
national markets (tendering, settlement
and clearing);

does not spare capacity allocation default what remains to be allocated to annual and
monthly allocation (capacity reservation
will review the opportunity after a few
months of operation of markets coupled
and make a decision);

keeps the calculation of NTC / ATC and
capacity allocation is based on ATC
(based flow will be at a later stage in
project development);

an emergency situation that cannot
achieve market coupling, decoupling is
achieved and is explicit allocation
according
mechanisms
currently
implemented in Romania.
European context
As part of the third energy package under
Regulation 714/2009 of the European
Parliament and of the Council on conditions for
access to the network for cross-border
exchanges in electricity and repealing
Regulation (EC) no. 1228/2003 and Directive
72/2009 of the European Parliament and of the
Council are set out clear objectives on the
need to improve cooperation and coordination
between Transmission System Operators and
power exchanges at regional and pan European providing and managing a effective
and transparent access to the transmission
networks across borders, improving safety in
the supply of electricity at regional / community
and implementation of the single market for
electricity.
Council (4 February 2011) and the Transport
Telecommunications and Energy Council (28
February 2011) set tasks for ACER (Agency
for the Cooperation of Energy Regulators),
national regulators and Transmission System
Operators on 2014 deadline for achieving a
fully functioning energy markets to the panEuropean level.
In Europe, commercial launch mode was
achieved in 2014, day-ahead markets were
connected in the North-West and South-West
(NVE and SVE) Europe (80% of the electricity
market in Europe), applying the proper
mechanism, coupling solution of the Regions
4M MC Project
Romanian electricity market integration in the
European internal market is a major objective
of Romania, circumscribed the strategic
objective of creating a European internal
energy market, integrated and operational by
Page | 58
the end of 2014, as set by the European
Council in February 2011, a very ambitious
objective for Europe and requiring further
action consistent and concerted effort from
stakeholders. The target of pan-European
internal market for electricity for the next day
horizon provides coupling these markets
through price based on a single European
solution
coupling
mechanism
implicitly
providing achieve allocation of interconnection
capacity.
On November 19, 2014 was successfully
launched electricity market coupling for the
following day in Romania, Czech Republic,
Slovakia and Hungary ("4M MC"), applying the
coupling mechanism and using the PCR
solution for interconnection capacity calculation
the same method based on ATC. Transmission
system operators - TSOs (CEPS, SEPS, SEPS
and Transelectrica) with power exchanges
(OTE OKTE, HUPX and OPCOM) and
supported by the national energy regulator
(ERU, Urso, Mekhi and ANRE ) collaborated
on the project to develop the framework,
mechanisms and solutions necessary to
ensure a rapid and effective implementation of
this successful project.
The solution implemented within the 4M MC is
in accordance with guidelines framework for
capacity
allocation
and
congestion
management, the relevant network codes and
the mechanism used in the project developed
in NWE region, thus ensuring easiest and
fastest
way
coupling
facilitating
the
implementation of the single European energy
market.
From technically and economically centralized
architecture for many functions is beneficial
because transforms complex and intricate
relations of type nn (many-to-many) between
the parties in a relationship type 1-1 (one-toone) thereby facilitating further expansion of
market coupling to other areas of the market.
In the market coupling project 4M MC, TSOs
are responsible for at least the following
functions:

Network analysis and the calculus
coordinated cross-border transmission
capacity.

providing information on the interconnector
required coupling officials.

scheduling management: receiving crossborder flows, internal and sending
notifications border flows notified.

physical realization and settlement of
cross-border financial flows (through
function Shipper - Transfer Agent).

calculation and distribution of the
congestion income (depending performed
mTMF - platform service provider for TSOs
which also interface with the platform of
power exchanges).

publication of data related to the process in
accordance with national and European
legislation on transparency.
Comparing the periods of development of
similar projects in Europe, we can say that the
project was implemented in record time over
one year being carried out: agreeing coupling
model design, selection of service providers for
energy exchanges that do not members PCR
and transmission system operators, trading
platforms and adaptation of the capacity
allocation and congestion management
(national platforms and service providers),
define / modify the legal framework (in
Romania project required amendment of the
Energy Law and secondary legislation on the
wholesale electricity market, process that
included public consultation sessions), defining
and agreeing contractual and procedural
framework for the processes and the
organization of workshops and training
sessions for market participants.
MC 4M project was recognized during the
development and implementation of an
initiative that in the spirit of continuing efforts
towards the creation of the single market by
bringing the desires and interests of the three
countries in the CEE region which were
already engaged (Czech Republic, Slovakia
and Hungary) and Romania engaged fully and
irreversibly on the road to implementation of
European regulations concerning the creation
of a European market, integrated and fully
functional by the end of 2014.
Page | 59
Financial RaportREPORT OF THE EXECUTIVE BOARD 2014
Financial Report
Page | 60
8. 2014 Separate financial results
2014 recorded major increase of the
operational profitability (EBITDA ▲33%, from
584 million RON in 2013 to 774 million RON).
important reductions was registered during
the procurement of energy used to cover
technological consumption (-14%) and
repairs & maintenance (-12%), while other
operational expenses increased (+25%) mainly determined by the tax on special
constructions, adjustments to depreciate
floating assets, provisions but also
increased personnel costs (the variable
remuneration of the Supervisory Board,
according to mandate contracts).
The factors that determined such improvement
were as follows:


Increase of operational revenues
associated to the activities with allowed
profit, sustained by the increased volumes
of electricity circulated in the electric
networks from Romania’s Power System
(mainly against the background of
substantial increase of electricity exports,
trend mirrored by important growth of
domestic energy consumption). Besides
the revenues obtained from the application
of the transmission tariff to energy injection
(exported) into networks, the superior
export level intensified the competitive
tension on the market allocating the crossborder interconnection capacity (especially
along the borders with Hungary and
Serbia), resulting in significant increase of
revenues
from
the
allocation
of
interconnection capacities. The amount of
energy tariffed upon extraction from
electric networks (for consumption)
registered slight decrease (-1%), which
was not determined by drop in the
domestic consumption but by the tariff
base changed in August 2013 (according
to ANRE regulations, the exported energy,
respectively extracted from Romania’s
electric networks into the electric grids of
neighbouring countries has no longer been
tariffed by Transelectrica by the extraction
tariff; similarly the imported energy,
respectively introduced into the electric
networks of Romania from the electric
networks of neighbouring countries was no
longer tariffed by Transelectrica with the
injection tariff; thus the quantity tariffed
upon extraction included the exported
energy until the fore-mentioned tariff
restrictions occurred in January-August
2013)
Minor increase of operational costs
(+8% excluding amortisement, +7%
including
amortisement).
The
most
Thus EBITDA from activities with allowed profit
increased ▲28% from 593 million RON to 760
million RON.
In addition zero-profit activities (technological
system services) generated profit of 14 million
RON compared to 9 million RON loss
registered in 2013.
During the second semester of 2014 the profit
registered in the first semester was partially
compensated together with the 1 July 2014
adjustment of the tariff for technological system
services (decreasing 5.6% compared to 1
January 2014).
The financial loss was similar to that registered
in the previous year (-8 million RON from -9
million RON in 2013).
The factors that determined such development
were:


Slight reduction of the loss from
exchange rate differences, determined
by the combined effect of the relatively
constant exchange rate of the Leu against
the Euro, on the one hand, and the
reduced hard currency exposure in the
Company’s financial debt by reimbursing
the outstanding instalments of credits in
foreign currency, on the other hand.
Increased interest rate expenses were
compensated by the increased revenues
from interest rates, registered against the
background of strong liquidity position.
EBT increased 80% from 240 million RON to
432 million RON Such increase was sustained
in the first place by the substantial
improvement of the operational profit, the
Page | 61
second contribution being to diminish the
financial loss.
Figure 25: Summary of results 2012 – 2014
2014
2013
47
13
EBT
Income tax
34
Net profit
36
Net financial loss
EBIT
EBITDA
Operational revenue
83
Net profit
Net financial loss
398 315
240 39 201
Income tax
9
EBT
249
EBIT
EBITDA
Operational costs
Operational revenue
Net profit
Income tax
EBT
Net financial loss
EBITDA
Depreciation and
amortization
EBIT
Depreciation and
amortization
584 335
440 8 432 74 358
Operational costs
2,768 2,370
Depreciation and
amortization
774 334
Operational revenue
2012
2,472 1,888
Operational costs
2,817 2,043
8.1. Separate profit and loss account
Table 25: Separate profit and loss account
Mill. RON
2014
2013
2012
14/13
13/12
Volume of tariffed energy (TWh)
51,34
51,85
53,93
▼ 1%
▼ 4%
Operational revenues
1.447
1.275
1.192
▲ 13%
▲ 7%
Transmission
1.309
1.156
1.080
84
64
64
Other revenues
54
55
48
Operational expenses
-687
-682
-779
▲ 1%
▼ 12%
System operational expenses
-238
-267
-311
-94
-108
-138
Personnel
-188
-171
-170
Other costs
-166
-136
-160
760
593
414
▲ 28%
▲ 43%
-334
-335
-315
426
258
99
▲ 65%
▲ 161%
1.371
1.197
1.575
▲ 14%
▼ 24%
Technological system services
667
565
507
Balancing market
703
632
1.068
-1.357
-1.206
-1.591
▲ 12%
▼ 24%
-653
-574
-523
ACTIVITIES WITH ALLOWED PROFIT
Maintenance and repairs
EBITDA
Depreciation and amortization
EBIT
ACTIVITIES WITH ZERO PROFIT
Technological system services
Page | 62
Mill. RON
2014
2013
2012
14/13
13/12
Balancing market
-703
-632
-1.068
14
-9
-16
-
-
2.817
2.472
2.768
▲ 14%
▼ 11%
-2.043
-1.888
-2.370
▲ 8%
▼ 20%
774
584
398
▲ 33%
▲ 47%
-334
-335
-315
440
249
83
▲ 77%
▲ 200%
-8
-9
-36
EBT
432
240
47
▲ 80%
▲ 411%
Profit tax
-74
-39
-13
Net profit
358
201
34
▲ 78%
▲ 483%
Net profit per share
4,88
2,74
0,47
▲ 78%
▲ 483%
EBIT
ALL ACTIVITIES (WITH ALLOWED PROFIT
and ZERO-PROFIT)
EBITDA
Amortisement
EBIT
Financial result
8.1.1. Activities with allowed profit
Revenues from activities with allowed profit are
mainly represented by the electricity
transmission
and
functional
system
services. The regulatory framework applicable
to the two activities provides premises to
obtain financial return of the invested capital
into the assets of the two activities, by
including in the tariffs components dedicated to
remunerating the financiers, calculated by
applying regulated rate of return to the
regulated asset base.
Table 26: Revenue from activities with allowed profit
Mill. RON
2014
2013
2012
14/13
13/12
Operational revenue
1.447
1.275
1.192
▲ 13%
▲ 7%
Transmission
1.309
1.156
1.080
▲ 13%
▲ 7%
1.224
1.128
1.025
▲9%
▲ 10%
78
23
50
▲233%
▼ 53%
7
5
4
▲32%
▲ 28%
0
0
1
▲3%
▼ 64%
84
64
64
▲31%
▲ 0%
81
59
58
▲37%
▲ 2%
3
5
6
▼48%
▼ 19%
54
55
48
▼1%
▲ 13%
Revenues from transmission tariff
Revenues from allocation of
interconnection capacities
Revenues from reactive energy
Revenues from Inter TSO
Compensation (ITC)
Revenues from the tariff of functional
system services
Revenues with unplanned exchanges
on the DAM
Other revenues
Page | 63
The electricity amount delivered to consumers
in 2014 diminished by about 1% compared to
2013, therefore revenues from transmission
services and functional system services
increased by 172 mill. RON (13% more than in
2013), mainly determined by the adjusted
tariffs during 2014, and the increase of
electricity exports.
interconnection lines in accordance with the
provisions of article 22, par (4) of Order 53 /
19.07.2013
of
ANRE
approving
the
Methodology to set tariffs for electricity
transmission services, and the provisions of
article 16, par (6) of the EC Regulation 714/
2009. Thus all revenues resulting from the
allocation of interconnection capacities will be
used to the following purposes:
Thus revenues from transmission tariffs
increased about 9% in 2014, from 1,128 mill.
RON in 2013 to 1,224 mill. RON, together with
adjusted average tariff for transmission
services (+4.7% on 1 January 2014, followed
by +1.5% change on 1 July 2014, at the
beginning of the third regulatory period).


Also, revenues from the allocation of crossborder interconnection capacities significantly
increased to 233%, mainly determined by the
higher exported electricity volumes to the
markets neigbouring the SEN and by applying
coordinated bid procedure / implicit allocation
with neighbouring countries according to the
provisions of EU regulations. Unlike 2013,
when the utilisation of the interconnection
capacity on the borders was below 50%, the
demand for capacity allocation in 2014 was
much beyond that level.
Guaranteeing the real availability of the
allocated capacity;
Maintaining
or
increasing
the
interconnection capacities by means of
grid investments, especially into new
interconnections;
Revenues from functional system services
increased 37% in 2014 from 59 mill. RON in
2013 to 81 mill. RON, against the background
of adjusted average tariffs for functional
system services in 2014 (+52.6% on 1 January
2014 followed by -18.4% on 1 July 2014).
Other revenues related to transmission
services (reactive energy, international transit)
maintained to levels close to what has been
registered the previous year.
The Company will use the revenues achieved
by allocating the transmission capacity along
Table 27: Summary of revenue from activities with allowed profit 2012 - 2014
2014
2013
2012
3 1,393
59
7 1,309
50
23
5 1,080
Total Revenue
Other
Dispatching
Other dispatching
revenue
Transport +
Dispatching
Transport
Cross-border
Total Revenue
Other
Dispatching
Other dispatching
revenue
Transport +
Dispatching
Transport
Cross-border
1,025
Other transport
revenue
Regulated tariff
Total Revenue
Other
Dispatching
Other dispatching
revenue
Transport +
Dispatching
Transport
Cross-border
1,128
Other transport
revenue
Regulated tariff
1,224
6 1,144
5 1,156
Regulated tariff
78
58
5 1,221
Other transport
revenue
81
48 1,192
55 1,275
54 1,447
Page | 64
Table 28: Costs from activities with allowed profit
Mill. RON
2014
2013
2012
14/13
13/12
Operational costs
687
682
779
▲1%
▼ 12%
System operation costs
238
267
311
▼11%
▼ 14%
Expenses regarding technological
consumption
190
222
252
▼15%
▼ 12%
0
3
6
▼84%
▼ 51%
Expenses regarding the electricity
consumption in ETG substations
16
20
17
▼20%
▲ 15%
Expenses regarding functional system
services
11
14
22
▼21%
▼ 35%
ITC expenses (Inter TSO Compensation)
21
9
13
▲134%
▼ 35%
0
0
0
94
108
138
▼13%
▼ 22%
Personnel
188
171
170
▲10%
▲ 1%
Other costs
166
136
160
▲22%
▼ 16%
Amortisement
334
335
315
▲0%
▲ 6%
1.020
1.017
1.094
▲0%
▼ 7%
Expenses with congestions
Administration expenses for OPCOM
Operational costs including amortisement
Although the procured electricity decreased
approximately 1%, overall operational costs
registered slight 1% increase from 682 mill.
RON in 2013 to 687 mill. RON at the end of
2014.
System operation costs
System operational costs dropped significantly
by 11% in 2014 compared to 2013 from 267
mill. RON to 238 mill. RON, mainly due to the
decreased expenses with technological
consumption.
The total cost to procure electricity in order to
cover technological consumption deacreased
14% in 2014 against 2013. The determining
factor in the 2014 total cost reduction was the
decreased average unit cost of energy
procurement transactions on the markets from
215 RON/MWh in 2013 to 184 RON/ MWh.
injected in the grid), mainly against the
background of higher energy share circulated
in the ETG.
The average costs which Transelectrica
procured
energy
at
for
technological
consumption diminished in 2014 compared to
2013 for procurement from the Centralised
Bilateral Contracts Market 21,1%, DAM spot
market 1.6%, and registered slight increase on
the balancing market 1.4%.
Figure 26: Sourcing mix by quantities procured
from the markets (MWh)
2014
55%
36%
9% 1,026
2013
56%
33%
11% 1,032
2012
The quantity of technological losses slightly
decreased (from 1,032 GWh to 1,026 GWh in
absolute magnitude, from 2.52% in 2013 to
2.40% in 2014 compared to the energy
72%
PCCB
13% 15% 1,018
PZU
PE
Page | 65
2012
1,026
1,032
1,081
Figure 27: Physical losses of procured energy
(GWh)
2013
2014
Figure 28: Average unit cost of procured
energy for technological losses (RON)
-7.7%
-14.4%
233
215
184
2012
2013
2014
Congestions
Congestions (network restrictions) represent
operational circumstances when energy
transmission between two system nodes or
areas leads to incompliance with the safe
operation parameters of the SEN, and then
deviation is required from the operational
schedule of generating units resulting after
physical notifications.
Congestion occurrences are managed by
changing the network topology and in the last
resort by re-dispatching the electricity output.
Such output re-dispatching leaves out the merit
order resulting from the Balancing Market and
additional costs are incurred by Transelectrica.
This is a measure used by Transelectrica only
in circumstances required by the operational
safety of the transmission system.
Congestion expenses decreased in 2014
compared to 2013 because of favourable
generation structure in deficit areas when
outfits are taken out of operation and due to
efficient congestion management in the
Electricity Transmission Grid (ETG) in terms of
operational planning and scheduling of such
withdrawals.
Expenses regarding functional system
services
Expenses regarding functional system services
represent
un-contracted
international
exchanges of electricity with neighbouring
countries and the expenses with unplanned
exchanges on the day-ahead market (DAM).
The drop of about 21% in the functional system
services was determined by making smaller
unplanned exchanges compared to the agreed
schedule in the export direction, caused by the
wind power producers.
In 2014, expenditure on maintenance works
decreased by 13% from 108 mil RON in 2013,
to 94 mil RON mainly due to a correlation of
the Annual Maintenance Programme with the
Annual Investment Plan, resulting in the
reclassification of certain projects. In 2014
priority was given to works/ services that have
led to improve safety in the exploitation of
facilities, to complete the work / services
contracted before and those who contribute to
the smooth operation of existing plants.
Personnel expenses
In comparison with 2013 personnel expenses
increased 10% (salary growths according to
legal requirements, and a provision constituted
for the option packages with virtual
Transelectrica shares (OAVT) from the
variable component in the remuneration of
executive and non-executive members of
Transelectrica’s governance team, according
to the mandate contract).
Page | 66
Figure 29: Summary of costs from activities with allowed profit 2012 - 2014
2014
2013
2012
334 1,021
59
46
Costs including
amortization
Depreciation and
amortization
Maintenance
Other system
operation costs
Network losses
Costs including
amortization
Depreciation and
amortization
Costs
Other costs
Personnel
252
Maintenance
Other system
operation costs
Network losses
Costs including
amortization
Costs
Depreciation and
amortization
Other costs
Personnel
222
Maintenance
Other system
operation costs
Network losses
49
779
138
108
94
160
170
171
188
190
682
Costs
136
Other costs
687
315 1,094
Personnel
166
335 1,017
8.1.2. Zero-profit activities
Table 29: Revenue from activities with zero-profit 2012 - 2014
Mill. RON
2014
2013
2012
14/13
13/12
1,371
1,197
1,575
▲ 14%
▼ 24%
Technologic system services
667
565
507
▲ 18%
▲ 11%
Balancing market
703
632
1.068
▲ 11%
▼ 41%
Total revenues registered significant increase
of 14% (1,371 million RON from 1,197 million
RON) determined by the 11% growth of
revenues from balancing market administration
and 18% of the revenues from technological
system services.
In 2014 revenues from technological system
services followed the same route as the
revenues from transmission services, growing
compared to 2013 with 102 million RON,
mainly determined by the adjusted tariffs
applicable in the studied period due to proper
administration of system services under safe
operational conditions of the SEN.
In 2014 revenues from the balancing market
grew 71 million RON compared to 2013,
determined by:



Increased number of generating units from
renewable sources and implicitly their
higher share in the total installed capacity,
with effects on the number of imbalances
on the balancing markets from the failure
to comply with assumed contracts;
Imbalance
notification
from
green
producers because of their specific kind of
generation;
The behaviour of the participants on this
market
by
imbalance
notification,
impacting the size of the balancing market.
Table 30: Expenses from activities with zero-profit 2012 - 2014 2012 - 2014
Mill. RON
2014
2013
2012
14/13
13/12
1,357
1,206
1,591
▲ 12%
▼ 24%
Technologic system services
653
574
523
▲ 14%
▲ 10%
Balancing market
703
632
1068
▲ 11%
▼ 41%
Page | 67
In 2014 expenses with technological system
services increased
with 79 million RON
compared to 2013.
Thus from 15 April 2013 to 1 July 2015
technological system services will be procured
from Co. Energy Complex Hunedoara of at
least 400 MW and from Co. Energy Complex
Oltenia of at least 600 MW (according to ANRE
terms).
In 2014 additional technological system
services
were
also
procured
from
Hidroelectrica SA according to Decisions
3902/20.12.2013 and 1814/06.08.2014 of
ANRE.
The Company procures technological system
services (secondary reserve, fast and slow
tertiary) from generators in order to maintain
the operational safety of the SEN and the
quality of the electricity transmitted at
parameters set in applicable technical norms.
In accordance with Governmental Decision
138/08.04.2013 on taking some measures in
view of safe electricity supply the Company is
obliged to provide priority in the dispatch of
electricity generated by thermal power plants
as per the regulations issued by the National
Regulatory Aughority in Energy (ANRE).
Expenses with the balancing market result
from transactions made on this market, which
are fully covered by the revenues from the
balancing market.
Figure 30: Summary of results from zero-profit activities 2012 - 2014
2014
703
2013
-703
632
-653
667
2012
-632
1,068
-1,068
-574
565
-523
507
EBIT from Zero-profit
activities
Dispatching
Costs
Balance market
Costs
Balance market
Revenue
-16
Dispatching
Revenue
activities
Dispatching
Costs
Balance market
Costs
Balance market
Revenue
-9
Dispatching
Revenue
activities
Dispatching
Costs
Balance market
Costs
Balance market
Revenue
Dispatching
Revenue
14
Financial result
Revenues from interest rates increased with 9
million RON in 2014 compared to 2013, as
determined by the registration of interest rates
for monetary availabilities from current
accounts, bank deposits, including available
funds from the connection fee.
The increase of interest rate expenses was
compensated by the growth of revenues from
interests, registered against of a background of
strong liquidity position determined by the
significant cash flow generated by basic
activities.
The development of the net loss from currency
exchange rate differences was mainly
determined by the evolution of the national
currency’s exchange rate against the foreign
currency Transelectrica contracted bank loans
in order to finance its investment programmes.
Page | 68
Table 31: Development of exchange rate
31-Dec-14
31-Dec-13
31-Dec-12
14/13
13/12
1 EUR
4.4821
4.4847
4.4287
▼0,1%
▲ 1%
1 USD
3.6868
3.2551
3.3575
▲13,3%
▼ 3%
100 JPY
3.0866
3.0997
3.8994
▼0,4%
▼ 21%
Figure 31: Financial results 2012 - 2014
2014
440
2013
-21
249
14
2012
-20
83
432
13
-25
240
-20
10
-1
EBIT
Changes Changes Other
in
in Foreign financial
Interest Exchange income
Rates
47
-2
EBT
EBIT
in
Rates
EBT
EBIT
in
Rates
EBT
8.2. Balance sheet –financial position
Table 32: Balance sheet –financial position
Mill. RON
2014
2013
2012
14/13
13/12
3,388
3,573
3,683
▼ 5%
▼ 3%
Intangible assets
40
45
51
▼ 13%
▼ 11%
Financial assets
57
52
52
▲ 9%
▼ 0%
3,484
3,671
3,787
▼ 5%
▼ 3%
36
37
40
▼ 4%
▼ 8%
1,056
844
823
▲ 25%
▲ 3%
865
601
295
▲ 44%
▲ 103%
0
0
0
Total
1,957
1,482
1,158
▲ 32%
▲ 28%
TOTAL ASSETS
5,441
5,153
4,945
▲ 6%
▲ 4%
792
951
955
▼ 17%
▲ 0%
Fixed assets
Tangible assets
Total
Floating assets
Stocks
Clients and assimilated accounts
Cash flow and equivalents
Recoverable profit tax
Long term debts
Loans
Page | 69
Mill. RON
2014
2013
2012
14/13
13/12
610
596
603
▲ 2%
▼ 1%
1,402
1,547
1,558
▼ 9%
▼ 1%
201
226
199
▼ 11%
▼ 14%
Other debts
1,025
766
758
▲ 34%
▲ 1%
Total
1,226
992
957
▲ 24%
▲ 4%
Total debts
2,628
2,539
2,514
▲ 4%
▲ 1%
Equities
2,813
2,614
2,431
▲ 8%
▲ 8%
EQUITIES and DEBTS
5,441
5,153
4,945
▲ 6%
▲ 4%
Other debts
Total
Short term debts
Loans
Assets
Fixed assets decreased in 2014 against the
background of reduced investment volume
inferior to the annual amortisement of fixed
assets.
Floating assets significantly grew in 2014 in
terms of cash, determined by the substantial
improvement of the cash flow from operational
activities and due to increased trade
receivables (event driven mainly by growth
related transactions support scheme for high
efficiency cogeneration, as a result of the
issuance of the decision of overcompensation
by ANRE of the business of electricity and heat
production in high efficiency cogeneration for
the period 2011-2013).
The Company requested the producers that
did not pay the over-compensation invoices to
agree with compensating the mutual debts at
their minimum level through the Management
and Information Institute (MII) that manages in
uniform manner all information received from
tax payers based on the provisions of GD
685/1999.
Equities increased in 2014 mainly determined
by the significant profit of the financial year,
credited in the result carried forward.
Debts and equities
Long term debts slightly decreased in 2014
from 1,547 mill. RON to 1,402 mill. RON,
mainly determined by reimbursements of
principal portions.
Short term debts increased in 2014 as
determined by the growth of debts to the
suppliers on the electricity market. This was
determined both by the increased volume of
transactions on the balancing market and by
the growth of the cogeneration bonus unpaid to
the producers who have not returned the
overcompensation sums, amounting to 38
million RON (4 mill. RON on 31 December
2013).
Page | 70
8.3. Cash flow
Table 33: Cash flow
Mill. RON
2014
2013
2012
14/13
13/12
822
607
429
▲ 36%
▲ 39%
67
6
69
▲902%
▼ 79%
-116
-69
-44
▲ 67%
▲ 56%
774
544
455
▲ 42%
▲ 20%
-187
-251
-393
▼ 25%
▼ 36%
27
19
16
▲ 42%
▲ 20%
-160
-232
-377
▼ 31
▼ 39%
Drawings from loans
0
11
190
▼ 94%
Proceeds from bond emission
0
200
0
-
Loans reimbursements
-185
-189
-197
▼ 2%
▼ 4%
Dividends paid
-165
-30
-80
▲ 456%
▼ 63%
Net cash from financing activities
-349
-8
-87
▲ 4.470%
▼ 91%
Net increase of cash and equivalents
265
305
-9
▼ 13%
▼
3388%
Cash and equivalents on 1 January
601
295
305
▲ 103%
▼ 3%
Cash and equivalents at the end of the
year
865
601
295
▲ 44%
▲ 103%
Operational activities
Cash flow before changing the floating capital
Changes in the floating capital
Interest rates and taxes paid
Net cash flow from operational activities
Investments
Procurements of tangible and intangible
assets
Proceeds from investments
Net cash from investments
Financing activities
Page | 71
8.4. Indicators
Table 34: Profitability indicators
Profitability
2014
2013
2012
EBITDA
52.55%
46.5%
34.7%
EBIT
29.47%
20.3%
8.3%
RORA (EBIT/ Fixed assets)
12.6%
9.5%
3.0%
ROE (Net profit/ Equity)
12.7%
7.7%
1.4%
Net profit per share (RON)
4.88
2.741
0.470
Dividend per share (RON)
13
2.228
0.404
Margins
Return
11
12
Indicators per share
2.803
Table 35: Indicators of profitability, liquidity, risk and activity
Indicator [RON]
Calculation formula
2014
2013
2012
’14/’13
[%]
Profitability indicators
a) EBITDA in total sales
EBITDA
Turnover
0.28
0.24
0.14
16.7
b) EBITDA in equities
EBITDA
Equities
0.28
0.22
0.16
27.3
c) Rate of gross profit
Gross profit
Turnover
0.15
0.10
0.03
50.0
d) Rate of return of the capital
Net profit
Equities
0.13
0.08
0.01
62.5
a) Indicator of current liquidity
Floating assets
Short term debts
1.60
1.49
1.21
7.4
b) Indicator of immediate liquidity
Floating assets-Stocks
Short term debts
1.57
1.46
1.17
7.5
a) Indicator of indebtedness
Borrowed capital
Equities
0.28
0.36
0.64
-22.2
b) Interest coverage rate
EBIT
Interest expenses
11.72
9.34
2.64
25.5
a) Debits – clients turnover
Mean clients balancex365
Turnover
88.90
123.14
125
-27.8
b) Credits – suppliers turnover
Mean supplier balancex365
Turnover
87.59
102.35
118
14.4
Liquidity indicators
Risk indicators
Activity indicators
11
Margins are calculated exclusively using the results and revenues from activities with allowed profit (by eliminating the
influence of the zero-profit activities)
12
Return indicators are calculated using the year end balances of fixed assets and of the equities and engaged capitals.
13
Proposed for approval by GSM 29.04.2015
Page | 72
9. Regulated tariffs for energy transmission
9.1. General framework
The regulatory model of transmission tariffs
currently applied in Romania is the revenue
cap. This model assumes regulating the total
revenue allowed to the transmission network
operator and includes among its objectivesproviding the premises necessary to efficiently
operate transmission services and to maintain
the operator’s financial viability, in order to
properly remunerate the financiers and
preserve access to financing. Such model
contains mechanism that stimulate operational
efficiency and some financial return based on
control over the operator’s investments
(regulated asset base) and some regulated
rate of return set using the average financing
cost of the operator.
Electricity transmission services are set tariffs
for certain regulatory periods. Such regulatory
intervals represent multi-annual regulatory
cycles of tariffs (currently 5 years), during
which a methodology calculating the tariffs is
applied
including a full range of pre-set
parameters for the time interval of the
respective horizons in order to actually
calculate tariffs. Setting tariff parameters for
multi-annual
horizons
provides
high
predictability and visibility of Transelectrica’s
investments, operational costs and revenues.
Tariffs are reviewed annually during one
regulatory period and stay valid for 12 months
from approval date (tariff years).
Differences between the forecasted parameter
values and the actual ones used in tariff
calculation in one particular tariff year are
compensated by means of ex-post corrections
implemented into the tariff during the
subsequent tariff years or at the beginning of
the immediately following regulatory period. In
case of certain specific components of the
regulated cost base under capping there is no
compensation if the forecasted level of such
costs is exceeded. Also in case of certain cost
components the savings made are partially
retained by Transelectrica.
The set of calculation parameters is approved
by ANRE and includes:

The costs of current operation of the
service- controllable and uncontrollable
operational and maintenance costs;
covering technical losses; internal grid
congestions; costs and revenues of the
financial compensation mechanisms for
electricity flows within the ENTSO-E;

Costs of service development- planned
investments in the transmission network;
amortisement programme during regulated
service periods; profitability of the invested
capital determined using some regulated
rate of return applied to the regulated asset
base

the electricity quantity that is under tariff.
Transmission tariffs are invoiced using the
quantities of active electricity introduced /
taken out from the public electrical networks on
Romania’s territory, except for imports /
exports.
At present both ANRE and Transelectrica are
studying the opportunity to introduce a
binomial type tariff system for electricity
transmission (the current system is monomial
type, namely exclusively grounded on energy
produced / consumed). The binomial tariff
system enables recovering the regulated
revenue by applying two types of tariffs- one
for energy and one for power.
The tariff grid for electricity transmission is
differentiated by zones both for introducing and
for extracting electricity into / from networks,
depending on the impact such electricity
introduction / extraction has got in certain
areas over the technical losses in the
transmission grid.
SSF (functional system service)
In comparison with the tariff applied for the first
six months of 2014 of 1.74 RON/MWh the new
Page | 73
tariff of 1.42 RON/MWh, applicable from 1 July
2014, is based on a totally recognised cost
slightly lower (smaller sums for the following
components- asset amortisement, imbalances
associated
to
unplanned
cross-border
exchanges; higher sums for operational and
maintenance costs). Tariff reduction on 1 July
2014 by 18.4% from 1.74 Euro / MWh to 1.42
RON / MWh had the main determinant the fact
that the tariff 1.74 RON / MWh included a
significant positive correction derived from
previous year (2013) while the price 1.42 euro /
MWh included a positive correction of the
previous period (first semester 2014) but
significantly lower than that included in the rate
1,74 Euro / MWh.
SST (technological system service)
In comparison with the tariff applied until 1July-2014 (13.28 RON/MWh) the new tariff
(12.54 RON/MWh) includes a lower total
forecasted cost to procure the necessary
power reserves for the stable operation of the
SEN but also some negative correction
determined by the positive result obtained in
Jan - Jun 2014 (application of the regulated
mechanism of profit sharing with the service
clients; the profit is divided 80%-20%, 80%
representing the share of the profit going to the
service clients by adjusting the TSO tariff,
while 20% represents the profit share kept by
the TSO).
The opening value of the RAB in the case of
SSF is 76 million RON.
Tariffs valid in 2014
Table 36: Tariffs valid in 2013-2014
Tariff (RON/MWh) –VAT free
The average tariff for electricity transmission
services
Tariff of system services, of which:

tariff of technological system services

tariff of functional system services
01.07.2014
–
31.12.2014
01.01.2014
–
30.06.2014
01.08.2013
–
31.12.2013
01.01.2013
–
01.08.2013
22.50
22.16
21.16
21.16
13.96
15.02
13.42
10.91
12.54
13.28
12.28
9.77
1.42
1.74
1.14
1.14
Tariff (Leu/MWh)
+4%
TRANSMISSION
Revenue model:
 Revenue cap
 WACC x RAB
4.7%
+1.5%
Regulatory period: 5 years
Tariff review: annual
21.16
22.16
22.50
2013
Jan-14
Jul-14
Page | 74
Tariff (Leu/MWh)
DISPATCHING
+16%
52.6%
-18.4%
Revenue model:
 Revenue cap / Cost plus
 WACC x RAB
1.74
1.42
Jan-14
Jul-14
1.14
Regulatory period: 1 year
2013
SYSTEM
SERVICES
Tariff (Leu/MWh)
+18%
35.9%
RESERVE POWER
(BALANCING RESERVES)
Revenue model:
 Pass-through (no profit)
-5.6%
9.77
12.28
13.28
12.54
ian.-13
aug.-13
Jan-14
Jul-14
Current regulatory period
In terms of electricity transmission 1 July 2014
marked the beginning of the 3rd regulatory
period lasting 5 years (1 July 2014 - 30 June
2019). The multi-annual coordinates were
determined for the 5 years (investments, RAB,
WACC, controllable OPEX, X efficiency,
technological losses etc.). The possible
deviations from the forecasted values will be
compensated upon the annual tariff reviews
(e.g. tariffed quantity, price of technological
losses,
uncontrollable
OPEX,
network
congestions) or at the beginning of the 4th
regulatory
period
(investments,
RAB,
controllable OPEX).
The main parameters of this period are given
below:
Table 37: The main parameters of this period are given below
Regulated Asset Base (1 July 2014):
3,006 million RON
Total investments (1 July 2014 – 30 June 2019):
2,041 million RON
Regulated rate of return:
Reference level for controllable operational and
maintenance costs:
Annual efficiency factor applied to the controllable
operational and maintenance costs:
Technological losses in the electricity transmission grid:
Amount of energy that can be tariffed:
7.70%
387 million RON
1.50%
2.50% for the first tariff year with
0.025% annual decrease down to
2.40% for the last tariff year
50 TWh
Page | 75
10. Disputes

SC CONAID COMPANY Ltd
The Company is involved in capacity of
defendant in a dispute of contentious business
in administrative courts initiated by Conaid
Company Ltd. as claimant, a company found
under insolvency procedure. File 5302/2/2013
was on the docket of the Appeal Court
Bucharest and pertains, in the first place, to the
complaint of Conaid Company Ltd regarding
certification of Transelectrica’s unjustified
refusal to conclude addendum to some ETG
connection contract concluded with the
claimant for a power capacity, which contract
actually expired because the claimant had not
complied with conditions precedent. Another
particular case, also denied by the court, was
ascertaining the unjustified refusal of
Transelectrica (after expiry of the first contract)
to conclude a new ETG connection contract
with the claimant company within the validity
term of technical connection permits.
On the term of 20.05.2014 the Appeal Court
Bucharest decided disjoining the case of
claims demand, constituting a new file for the
term of 24.06.2014, the court suspending the
judgment of the disjoint case.
On the term of 11.06.2014 the Appeal Court
Bucharest denied the proceeding and the
claimant’s accessory intervention request as
groundless, with appeal right within 15 days
from judgment.
On 01.10.2014 appeal was stated and the file
reached to the High Court of Cassation and
Justice. No new hearing term was set until the
date of this report.

COURT OF AUDIT
In 2011 a dispute began of contentious
business in administrative courts after a
decision and a closure by the Court of Audit
were contested against. The latter decided
certain measures to be implemented by the
Company in order to remedy some deficiencies
found on the occasion of audits made in the
Company.
The court maintained the obligation instituted
for Transelectrica to implement the measures
proposed by the Court of Audit. The decree of
the administrative contentious business court
was appealed with the High Court of Cassation
and Justice.
After an audit performed in 2013 the Court of
Audit decided certain measures to be
implemented by the Company as a result of
some deficiencies ascertained on the occasion
of such audit. The decision and the closure of
the Court of Audit were contested with the
Appeal Court of Bucharest.
The High Court of Cassation and Justice
denied the request to change into public
session on 20.05.2014, the following term
being 10.02.2015.

ANAF
The Company has got a dispute with ANAF,
which on 20 September 2011 issued a fiscal
audit report for the period September 2005 –
November 2006 for a number of 123 unused
invoices found to be missing, which are special
documents and it estimated thereof a value
added tax amounting to 16,303,174 RON plus
accessories amounting to 27,195,557 RON.
The total value of such obligations is
43,498,731 RON, and such value was retained
from the VAT the Company paid in November
2011. Later on the Company found out the
sums transferred as current VAT were taken
into consideration in order to settle the sums
from the fore-mentioned fiscal audit report.
Thus the Company was compelled to pay
indexations of 944,423 RON for the VAT that
should have been paid in November 2011, in
order to avoid being registered indebted to the
State budget. In total the Company paid
44,442,936 RON in 2011.
Page | 76
The Company submitted complaint with ANAF
against the taxation decision and requested
suspending the taxation execution until such
contestation sent to ANAF is administratively
settled. The court of justice denied the request
to suspend the execution of the fiscal audit
report.
At the public session of 30.04.2014 the Appeal
Court Bucharest denied the claimant’s case as
groundless with appeal right, however to date
no motivation was received for the decision of
the Appeal Court.

ICEMENERG
According to GD 925/2010 and the other
associated normative acts (GD 185/2013) the
National Office of the Commercial Register,
Office of the Register of Commerce (’ORC’)
from Bucharest Tribunal under Resolution
41515/07.04.2014 admitted the cancellation of
Subsidiary Energy Research and Modernising
Institute ICEMENERG SA, and under
Resolution 41923/07.04.2014 admitted the
registration
demand,
authorised
the
establishment and decided registering the
National Institute of Research-Development for
Energy
ICEMENERG
Bucharest
(J40/4323/2014).
Taking into account the Company’s property
interests have been seriously injured
Transelectrica expressed the appeal in order to
defend the interests of its shareholders.
Without taking into consideration the capacity
of Transelectrica as single shareholder of the
subsidiary, which would have undoubtedly
required applying Law 31/1990, the substance
court rejected the Company’s complaint. The
instance motivated mainly that GD 925/2010
has not been cancelled to date so ORC was
right in deciding to cancel Subsidiary
ICEMENERG and permitting the establishment
of Institute ICEMENERG, since the stages
provided in article 1 par 7 and in article 4 par 1
from GD 925/2010 "appear as subsequent not
previous to cancelling Subsidiary ICEMENERG
and establishing Institute ICEMENERG", and
that it cannot retain the violation of
Transelectrica’s rights as single shareholder of
the subsidiary; the tribunal found the
Romanian State is the single shareholder of
the subsidiary.
The Company appealed the court decision on
14.07.2014 and the court date was
05.02.2014. The Appeal Court Bucharest
displayed on 12.02.2015 the settlement
proposed for file 15483/3/2014, namely
Decision 173/2015 rejecting the appeal of the
NPG Co. Transelectrica as groundless and the
judgment is final.

ANRE
The NPG Co. Transelectrica SA expressed
complaint against Order 51/26.06.2014 of
ANRE president registered under no.
47714/04.08.2014 with ANRE and contestation
to the Appeal Court Bucharest requesting
either amendment of the fore-mentioned Order
or issuing a new order recalculating the RRR
value to 9.87% (recalculated with (β)
coefficient
of
1.0359,
according
to
Transelectrica’s specialists) or, to the extent in
which such complaint is denied, using the
same percentage 8.52% set by ANRE for 2013
and the first quarter of 2014.
On 26.06.2014 ANRE issued Order 51,
published in the Official Gazette no.
474/27.06.2014, regarding approval of the
average tariff for transmission services, the
system service tariff and the zone tariffs for
transmission services charged by the National
Power Grid Company Transelectrica SA and
cancelling annex 1 to Order 96/2013 of ANRE
president regarding approval of the average
tariff for transmission services, the system
service tariff and the zone tariffs for
transmission services as well as the tariffs for
reactive electricity charged by economic
operators of the electricity sector.
The values taken into account in order to
14
calculate the regulated rate of return (RRR )
by ANRE according to the Methodology
determining
the
tariffs
of
electricity
transmission services approved by Order
53/2013 of ANRE (‘Methodology’) determined
RRR of 7.7%.
14
RRR- the Regulated rate of return is phrase found in
specific reference titles under the acronym WACC –
Weighted Average Cost of Capital, and the formula of the
two indicators is resembling:
RRR = WACC = CCP + Kp/(1 – T) + CCI x Ki
Page | 77
The NPG Co. Transelectrica SA considers that
applying the provisions of article 51 from the
Methodology by setting the Beta (β) parameter
15
at 0.43
will determine financial prejudice to
the company as it decreases the profitability of
electricity transmission activities with an
16
estimated value of 138.4 mill RON, and
15
16
having significant impact on the Company’s
financial interests, which can lead to financial
instability during the third regulatory period
(01.07.2014 - 30.06.2019), thus prejudicing the
company shareholders and their interests. The
next judgment term was set on 23.04.2015.
Value that determined RRR decrease to 7.7%
Value calculated in comparison with RRR of 8.52%
Page | 78
Corporate governance
and governance
social responsibility
Corporate
and social responsibility
Page | 79
11. Corporate governance
11.1. Applicable documents
11.1.1. Corporative governance regulation
In its capacity of issuer listed with the
Bucharest Stock Exchange the Company
promoted and passed the Corporative
Governance Regulation of Transelectrica
during the Shareholders’ general assembly of
17.12.2009.
This document represents the Company’s
voluntary compliance with the principles of
corporative governance taking into account its
characteristics and specific activities in
accordance with the principles provided in the
Corporative governance code of the Bucharest
stock Exchange.

Commitment to listing on the Bucharest
Stock Exchange by Transelectrica, at the
Initial Public Offering (2006) where the
Company assumed the rights of securities
holders and to ensure equal treatment for
all holders of securities of the same type
and class, posted on the website
www.transelectrica.ro;

Code of Corporate Governance and
Anticorruption set of principles developed
by AmCham Romania, which is the
international reference standards to
establish a healthy business environment.

Articles of Incorporation of the Company
updated on 11.06.2014 approved by the
Extraordinary
General
Meeting
of
Shareholders no. 6 / 06.11.2014,
www.transelectrica.ro public website. At
the time of this report it has been approved
by the General Meeting of Shareholders
dated 23.03.2015 modification of the
Charter amendment which has not yet
been registered with the Trade Register.
This regulation is a public document and it can
be found on the website www.transelectrica.ro.
11.1.2. Other applicable documents
The Company is complying with the provisions
of the primary legislation applicable on the
capital market, while also observing and
applying all the provisions of the secondary
legislation, namely the regulations of FSA and
of the BSE, as well as other regulations,
internal ones included, which are relevant in
the domain. Mention should be made of these:



The corporative governance code of the
BSE;
The EGO 109/14 December 2011,
document introducing the principles of
corporative governance to independent
authorities and state owned companies;
The Ethical Code, compulsory for all
organisational structures, which provides
the ethical conduct norms determining and
regulating
the
corporative
values,
responsibilities, obligations and conduct in
business and based on which the
organisation has developed, being public
on the website www.transelectrica.ro;
Supervisory Board
The structure of
31.12.2014 was:
Supervisory
Board

Carmen - Georgeta Neagu – Chairman

Ovidiu-Petrişor Artopolescu – Member

Radu Bugică – Member

Radu Ştefan Cernov – Member

Cătălin Lucian Chimirel – Member

Daniel-Cristian Pîrvulescu – Member

Andrei-Mihai Pogonaru – Member
on
According to the Articles of Incorporation
updated the Supervisory Board consists of
seven members appointed for a term of four
years and may be revoked at any time by
AGA.
Page | 80
All members of the Supervisory Board should
be independent. Each member of the
Supervisory Board must formally declare if
independent, and whenever there is a change
in status, showing the reasons it is considered
independently. All members are non-executive.
Members
of
the
Supervisory
Board
Supervisory Board may meet at any time and
in any event at least once every three months.
General Meeting of Shareholders established
the term of office, remuneration and the
amount of liability insurance to members of the
Council and form the contract of agency
concluded therewith.
The Company will bear the cost of liability
insurance to members of the supervisory
board. The value of the sum insured and the
insurance premium was established by
decision of the Ordinary General Meeting of
Shareholders.
In 2014, the Supervisory Board met monthly or
whenever the interests of the Company are
required to debate issues related to income
and
expenditure
budgets,
investment
programs, the study programs and research,
aspects of environmental quality, maintenance,
feasibility studies, etc.
Election of members of the Supervisory Board
by cumulative vote
Upon the demand of the shareholders
representing, individually and collectively, at
least 10% of the subscribed and paid-in share
capital, the Directorate mandatorily convenes
the General Meeting of Shareholders, having
on the agenda the election of the Supervisory
Board’s members by the application of the
cumulative voting method.
Any shareholder who owns less than 10% of
the subscribed and paid-in share capital may
make written proposals which are addressed to
the Directorate for the application of the
cumulative voting method, within 15 days after
the publication in the Official Gazette of
Romania, Part IV, of the convening notice of
the General Meeting of Shareholders which
has on the agenda the election of the
Supervisory Board’s members. In this case,
the application of the cumulative voting method
for the election of the Supervisory Board’s
members is put to the vote within the General
Meeting of Shareholders.
By the cumulative voting method, each
shareholder is entitled to take the cumulative
votes – obtained as a result of multiplying the
votes of any shareholder, according to the
contribution to the share capital, by the number
of members who are to form the Supervisory
Board – one or several persons proposed to be
elected in the Supervisory Board. In exercising
the cumulative vote, the shareholders may
provide all cumulative votes to one candidate
or several candidates. In front of each
candidate, the shareholders shall mention the
number of provided votes.
In case of applying the cumulative voting
method, the Supervisory Board’s members
holding office on the date of the general
meeting shall be registered ex officio on the list
of candidates for the election of the members
of the Supervisory Board together with the
candidates proposed by the shareholders. All
candidates registered on the list of candidates
shall be subject to the shareholders’ vote
within the General Meeting of Shareholders.
The Supervisory Board’s members holding
office on the date of the general meeting, who
are not reconfirmed by the cumulative vote as
the members of the Supervisory Board are
deemed dismissed by the decision of the
general meeting. The duration of the mandate
of the Supervisory Board’s members holding
office on the date of the General Meeting of
Shareholders, within which the cumulative vote
has been applied, shall continue in case of
their reconfirmation by the cumulative voting
method.
If two or more persons proposed to be elected
as members of the Supervisory Board obtain
the same number of cumulated votes, the
person who has been voted by a larger
number of shareholders is declared to be
elected as member.
The criteria for the
election of the Supervisory Board’s members if
two or more proposed persons obtain the
same number of cumulative votes expressed
by the same number of shareholders are set
by the General Meeting of Shareholders and
stated in its minutes.
Page | 9
Responsibilities of the Supervisory Board
may convene the General Meeting of
Shareholders.
The Supervisory Board has, mainly, the
following responsibilities:
The Supervisory Board is also responsible for
the endorsement / approval of operations,
according to the limits of competence provided
for in Annex no. 2 to these Articles of
Incorporation.
a. exercises the control over the way in which
the Directorate manages the Company;
b. approves the income and expense budget
and the investment plan for the financial
year subject to the approval of the General
Meeting of Shareholders;
c.
approves the management plan prepared
by the Directorate;
d. prepares and submits for approval to the
General Meeting of Shareholders the
management plan, which includes the
management strategy during the mandate;
e. determines the structure and number of
Directorate’s members;
f.
appoints and dismisses the Directorate’s
members
and
establishes
their
remuneration;
g. checks if the activity carried out in the
name and on the behalf of the Company is
in accordance with the law, the articles of
incorporation and any relevant decision of
the General Meeting of Shareholders;
h. presents a report on the supervisory
activity to the General Meeting of
Shareholders;
i.
represents the Company in the relations
with the Directorate;
j.
approves the internal regulations of the
Directorate;
k. checks the financial statements of the
Company;
l.
checks the report of the Directorate’s
members;
m. proposes to the General Meeting the
appointment and dismissal of the financial
auditor and the minimum duration of the
audit contract;
n. endorses the establishment or annulment
of
secondary
offices
(branches,
representative offices, agencies or other
such units without legal personality).
Advisory Committees
At the Supervisory Board were established five
committees. On 31.12.2014, the Committees
had the following composition:
The Audit Committee: Radu Bugică, Radu
Ștefan Cernov, Andrei-Mihai Pogonaru.
The Financial and Development Committee:
Radu Bugică, Daniel-Cristian Pîrvulescu,
Carmen Georgeta Neagu, Andrei-Mihai
Pogonaru.
Nomination and Remuneration Committee:
Radu Ștefan Cernov, Carmen Georgeta
Neagu, Cătălin Lucian Chimirel, Ovidiu Petrișor
Artopolescu.
Energy Security Committee: Cătălin Lucian
Chimirel, Daniel - Cristian Pîrvulescu, Ovidiu
Petrișor Artopolescu.
Committee for Relations with regulators and
strategy: Carmen Georgeta Neagu, Radu
Ștefan Cernov, Cătălin Lucian Chimirel, Daniel
- Cristian Pîrvulescu.
Advisory Committees Decisions are taken by
majority vote. In case of a tie, the Chairman
shall have a casting vote.
Any member of an advisory committee may
convene the meeting of the committee to which
it belongs. Convening meetings of the advisory
committees will be sent to each member of the
committee in writing, by fax or e-mail address
and fax number of the member of the
committee.
In exceptional cases, when the interest of the
Company so requires, the Supervisory Board
Page | 10
Executive Board

submits, on an annual basis, to the
General Meeting of Shareholders the
report regarding the Company’s activities,
the financial statements of the previous
year and the budget draft and the
investment plan of the Company for the
current year;

concludes legal documents with third
parties in the name and on behalf of the
Company, by observing the provisions of
the Articles of Incorporation regarding the
joint signature and by observing the
aspects reserved to the competence of the
General Meeting of Shareholders or the
Supervisory Board;

employs and dismisses, establishes the
duties
and
responsibilities
of
the
Company’s personnel, in accordance with
the personnel policy of the Company;

prepares the management plan and
submits it for approval to the Supervisory
Board;

negotiates and signs the collective labour
agreement in the Company and the
addenda thereto, together with the
employees' representatives with a prior
note given to the Supervisory Board;

takes all necessary and useful measures
for the management of the Company,
corresponding to the daily management of
each department or delegated by the
General Meeting or the Supervisory Board,
except those reserved to the General
Meeting
of
Shareholders
or
the
Supervisory Board by the law or by the
Articles of Incorporation;

approves the mandates of the Company’s
representatives in the general meetings of
shareholders of the subsidiaries of
Transelectrica and informs the Supervisory
Board on a quarterly basis of the mandates
provided to them;

approves, with the previous approval of the
Supervisory Board, the establishment or
annulment of secondary offices (branches,
representative offices, agencies or other
such units without legal personality);
The structure of the Directorate at 31.12.2014
was:

Ion Toni Teau – Chairman

Constantin Văduva – Member

Ciprian Gheorghe Diaconu – Member

Gheorghe Cristian Vișan – Member

Octavian Lohan - Member
Executive organization
Directorate members are appointed and
recalled by the supervisory board. The number
of members will be determined by the SB
provided such number is not smaller than three
or greater than seven, as the number of
members should be always odd. A directorate
member will be nominated directorate
chairman (alternatively called also Executive
Director General or Chief Executive Officer –
CEO – of the Company).
Directorate members will be selected in
accordance with the provisions of the
Emergency
Governmental
Ordinance
109/2011 regarding corporative governance of
public enterprises, and their mandate is
granted for a time interval of 4 (four) years.
In case a membership position in the
Directorate becomes vacant the SB will
appoint another member for the remaining
period of the mandate of the member who is
replaced, selected in accordance with the
provisions of the Emergency Governmental
Ordinance 109/2011.
Directorate’s responsibilities
The main duties of the Executive Board,
performed under the supervision of the
Supervisory Board are:

establishes
the
strategy
and
the
development policies of the Company,
including the Company’s flow chart and
establishes the operational departments;
Page | 11


approves the conclusion by the Company
of legal documents such as the company
agreement regulated by the Civil Code
when the outcome is not an entity with
different legal personality and the approval
of the Company’s participation as a
member in various internal or international
organizations.
exercises any authority delegated by
Extraordinary
General
Meeting
Shareholders under the law; fulfils
decisions of the General Meeting
Shareholders and the decisions of
Supervisory Board.
the
of
the
of
the
The directorate has attributions with respect to
endorsing / approving the contracts and
various operations at Company level according
to the competency limits provided in Annex 2
of the Articles of association.
applicable, are in place and checked at each
establishment, during the audit.
Internal audit
In 2014 the public internal audit activities of
Transelectrica were carried out through one’s
own audit structure, subordinated to the
Company Directorate.
The Internal Audit Department carries out its
activities based on an own procedure, updated
as many times as necessary. All stages
performed by the audit mission are provided in
this procedure.
The main objectives of the Internal Audit are:

assisting he Company by means of the
expressed opinions and recommendations,
both overall and in its structures;

providing better risk management;
Internal control

improving the quality of the management,
internal control and audit.
The Company's internal control policies and
procedures are all designed and implemented
by management and staff in order to achieve
overall objectives.
The public internal audit structure keeps track
of all reports, reason for which the efficiency of
the audit quality programme could be
evaluated, respectively:
The main objectives of internal control are
executing systematic, ethical and economical
operations, that are efficient and effective,
carrying out the liability obligations, complying
with applicable legislation and regulations,
protecting resources against losses and
damages by waste, abuse, improper
management, errors, frauds and irregularities,
monitoring, coordinating and methodologically
guiding the implementation and development
of the internal / managerial control system.

evaluating the compliance with internal
audit norms and the code of conduct;

harmonising the internal audit activities to
the internal audit status, objectives,
politicise and related procedures;

the internal audit contribution to improving
risk administration, managerial processes
and the internal control system;

the manner in which internal audit
contributed to improving the activity.
For
specific
activities
are
developed
operational procedures shall be reviewed
whenever necessary. In this way, operations,
processes and activities are reviewed
periodically to ensure that they comply with the
rules, policies, procedures or other existing
requirements.
Operational procedures are available for all
employees of the Company. They establish, by
their structure, separate tasks for each
organizational structure / entity of the
Company.
Operational
procedures
are
Page | 12
12. Corporate Responsibility
Besides
its
economic
performance,
management quality and communication policy
Transelectrica wants to actively participate to
the development of the society it operates in by
means of corporate social responsibility
projects.
In accordance with the Corporate Social
Responsibility Policy of Transelectrica the
Company’s executive management is aware of
the need to get involved in social reality with a
view to provide, besides commercial success,
also the respect of the community where it
performs.
.
Domains
Actions
Art and culture
Donations
Education
Sponsorships
Humanitarian
activities
Society development
activities
Maecena activities
In 2014 Transelectrica focused its CSR
activities on two of these domains, namely
humanitarian actions, which answer to the
needs of certain employees, and society
development
which
went
towards
environmental protection.
Figure 33: Actions undertaken in 2014
Figure 32: CSR Policy – Stakeholders
Sharehol
ders
Employ
ees
CSR
Responsibility to
employees
Responsbility to
the environment
Humanitarian
activities
Society development
activities
Maecena
Sponsorships
Clients
Partners
Transelectrica takes into consideration the
interests of the society and assumes
responsibility
towards
employees,
shareholders, community and environment in
view of providing prosperity, jobs and
sustainability of sound enterprise in financial
terms.
During its 15 years, from the very Company
establishment,
the
corporate
social
responsibility policy focussed on actions
included in long-term strategies:
The Company retains and stimulates the
employees by providing adequate working
environment where they can feel comfortable
and enable their successful development both
professionally and personally, benefitting of:

Job stability and safe working conditions;

Training and development opportunities by
means of the Annual professional training
and qualification of employees;

Opportunities to advance by means of
internal promotions;

Opportunities of personal development;

Campaigns assessing the employees’
health
conditiongeneral
medical
examinations, laboratory tests, flue and
hepatitis shots;

Optionally, because financing involves the
employee’s
contribution
as
well,
Page | 87
employees benefit of voluntary health
insurance;
Also in case of serious health conditions the
Company provides employees with financial
support in order to continue their special
medical treatment. Thus in 2014 the
Company’s executive management decided
granting financial aids amounting to 117,400
RON to 12 employees afflicted by medical
impairments.
To support innovation in the renewable energy
sources domain Transelectrica joined with
pleasure the EfdeN team of the Solar
Decathlon Bucharest team consisting of 70
volunteer students. They represented Romania
in the final ‘Solar Decathlon Europe 2014’, the
most
important
competition
of
solar
architecture and integrated technologies. This
competition means designing, executing and
operating some house prototype that operates
using only smart electricity, which is
sustainable and efficient in energy terms.
The EfdeN group was one of the 20 teams of
16 countries that qualified for the finals, and
they submitted a house prototype for urban
environments that was energy efficient building
integrating spaces for the ‘urban farming’
concept.
By sponsoring this project Transelectrica
managed to sustain innovation devised by
Romanian students as well as the active
participation to developing communities by this
project, the development of sustainable
industrial products and of energy efficiency
while also providing community education in
the spirit of environmental protection.
The values of Transelectrica are all the
stronger as they represent us as people, not
only in our capacity of Company employees.
Thus the Company makes sure it can go up to
the level of social responsibility to society by
means of programmes generating long term
results and positive attitudes.
Page | 88
13. Responsibility to the environment
Environmental protection represents an
important objective for the Company in view of
the
Company’s
lasting
sustainable
development.
Thus
the
environmental
protection policy is an integral part of the
general Company policy, which aims at
maintaining a performing environmental
management system, preventing and reducing
pollution, compliance with legal national and
European requirements as well as sustainable
development.
2014 environmental objectives aimed at
maintaining a performing environmental
management system in order to prevent and
reduce pollution so that the environmental
impact of the electricity transmission grid can
range within the limits of national and
European requirements. Objectives were
achieved by means of preventive and
corrective activities included in the annual
environmental management programme.
To carry out such objectives the Company took
measures to reduce the environmental impact
in the operational and in maintenance activities
as well as in its investments, which meant
construction-installation work, so in 2014 there
were no particular problems of environmental
protection.
13.1. Describing the RET impact
over the environment
High voltage electric installations mainly
constituted by overhead lines and by
transformer and connection substations are
outfits that can have significant impact over the
environment given both the technical
complexity of such installations and the ground
areas taken and lengths of tens or hundreds
km, usually across several counties.
Under normal operational conditions of ETG
installations no pollutants are discharged in the
environment. Certain chemical substances of
pollutant
impact
can
be
accidentally
discharged in the environment because of untight devices, wrong operations, and failures or
upon construction and maintenance activities.
Environmental aspects are identified and
evaluated for technology and construction from
the very first design stage. The environmental
management plan is elaborated using them
(for installations construction, operation and
dismantling), which includes the action
programme to prevent pollution or in order to
reduce the environmental impact, as well as
the monitoring schedule for environmental
factors.
In terms of environmental impact in 2014:

There has been no accidental pollution of
significant impact on the environment;

There have
complaints;

The waste generated were eliminated /
capitalised 95.56%, the remaining waste
being stored.
been
no
environmental
13.1.1. Impact indicators

Occupying the ground
Table 38: The land taken by electrical lines and substations
2
No safety zone [m ]
2
Safety zone [m ]
Entity
Total 2014
Substations
OHL
Substations
OHL
3,939,774
3,373,075
7,049,295
549,555,991
Page | 89

Pollution sources for soil, underground
and terrestrial water
During normal operation of ETG installations
no kind of noxious substances are discharged
on soil or into underground or terrestrial water.
Accidental pollution can occur because of untight / broken equipment containing dangerous
substances or electro insulating oil or owing to
defects occurring in the oil regeneration /
supply / discharge installations into / from
equipment.
There can also occur auto oil / fuel spills
from the means of transport during execution
of construction and maintenance work (the oil
leaked into environment was retained using
absorbent biodegradable earth).

Sources of air pollution
o
consequence of corona discharges occurring
around active conductors, especially during
rainfalls. The additional contribution of such
pollutant substances to the existent fund is not
major and cannot lead to exceeding the
threshold values from legal notifications, level
beyond which there is hazard for human
health.
o
Indirect emissions of greenhouse gas effect in
the atmosphere, determined by one’s own
technologic consumption
in the
ETG
corresponding to the consumed electricity were
about 1,197,563 tons of CO2 in 2014 as
calculated for the electricity generated in
lignite-fired thermal power plants, according to
ANRE regulations.
o
Direct emissions
During construction, maintenance activities
and normal operation of ETG installations no
significant
amounts
of
pollutants
are
discharged in the atmosphere.
During construction, maintenance activities
and normal operation ETG installations can
generate the following atmospheric emissionssuspended powders during construction; flue
gas from motor cars, electric generating sets
and thermal power plants; ozone in negligible
amounts (Corona effect), sulphur hexafluoride
from un-tight equipment or improper gas
handling.
In case of fires or explosions flue gas can
occur (SOx, COx, NOx, VOC, suspended
powders etc.).
Indirect emissions
Sources of used water
Electricity transmission operations do not
generate technological used water. The used
water generated on the locations of ETG
installations is domestic used water from
human activities and rainwater collected in the
tanks of oil-containing equipment and in the
manholes of concreted platforms used in order
to store waste and equipment (it can contain oil
from leaks).
o
Waste generation
Electricity transmission activities do not
generate waste directly. Waste is resulting
from construction and maintenance operations
and from human activities.
The generated waste was eliminated /
capitalised by means of licensed companies.
High voltage OHL generate atmospheric
pollution by ozone and nitrogen oxides as a
Table 39: Waste management
Generated
waste (t)
3,952

Capitalised
waste (t)
Eliminated
waste (t)
Stored
waste (t)
Indicator of waste management:
eliminated, capitalised /
generated waste
139
2,923
890
77.48%
Electromagnetic field generated by
the RET stations
Transformer
/
connection
electric
substations and the 220 kV and 400 kV
overhead lines have got relatively low
impact over their surroundings, existing
only around ETG installations. A great part
of disturbing effects are owed to electric
induction (in the metallic objects or
Page | 90
structures that are not grounded) and
interference
phenomena
(radio
interference). The constructive solutions
used in order to achieve high voltage
electric substations and lines provide
proper protection against the exposure of
living bodies to the electromagnetic field
and they diminish the impact of such
installations over the environment.
In accordance with the research studies
carried out by specific institutions near the
220 kV and 400 kV overhead lines the
intensity of the electric field decreases with
distance, so that the field intensity is zero
at about 25 - 30 m from the line axis.

Acoustic pollution
Noise can be generated during construction
periods because of work execution and the
operation of equipment and motor cars.
Acoustic pollution during operation comes from
the operational noise, the vibration of ETG
installations or the corona discharges in the
space around active conductors.
The noise level produced by the corona effect
25 m away from the active conductor varies
from 53 dB during rainfalls and 33 dB in good
weather.


Constructing or maintaining the drainage
networks for domestic used water and / or
rainfall water;

Installing water-oil separators in the tanks
of oil-containing equipment and on the
storage platforms;

Constructing concreted platforms for the
temporary storage of equipment and
waste;

Maintenance operations to the oil or SF6
containing equipment in order to prevent
spills;

Painting the towers of overhead lines
(OHL) using colours fit to the landscape;

Removing the vegetation / maintaining the
safety corridors of OHL-s;

Re-making / developing the land in order
to bring it back to its initial condition (when
work has been completed);

Monitoring the quality of used water from
the Company substations and offices and
proposing solutions reduce pollution in
accordance with the environmental and
water management permits;

Collecting, sorting out, transporting and
capitalising / disposing of the waste.
Impact over fauna
The impact on the fauna is significant,
especially on birds as they can collide with or
be electrocuted by ETG installations within
migration corridors or protected areas.
Total expenses for environmental protection
were 3.3 mill RON (about 744,360 EUR) and
they were included in the operation,
maintenance and investment expenses.
The main migration corridors of various kinds
of birds were identified in Banat, Dobrogea and
Danube Delta regions.
The specific environmental expenses of 2014
were 0.01792 mill Euro / TWh of transmitted
electricity.

Impact over vegetation
Figure 34: Expenses for environmental protection
The impact on vegetation is determined by the
final or temporary occupation of lands and by
removing the vegetation that exceeds certain
height from the safety area of ETG installations
in order to prevent the occurrence of fires.
Such impact can be significant only within
protected zones.
8
The main measures applied in 2014 in order to
prevent and / or limit the environmental impact
have been as follows:
0
0.05
0.043
0.039
0.04
6
0.03
4
7.5
6.7
2
0.018
0.02
3.3
0.01
0.00
2012
2013
Mil. Euro/TWh
2014
Mil. Lei
Page | 91
13.1.2. Compliance with legal requirements
The objectives under Company management
(264 objectives- transformer and connection
electric substations, overhead lines, offices
etc., authorised or under re-authorisation)
operate in accordance with legal requirements
of environmental protection, licensing degree
being 100% (33 licences). The maintenance
and investment operations performed in 2014
were in line with legal and regulatory
requirements
(endorsements
and/or
environmental
agreements
and
water
management endorsements, as the case may
be).
The generated waste was managed according
to legal requirements and it was disposed of /
capitalised by means of licensed companies
thus taxes were paid to the environmental fund
for the unachieved percentage under the waste
capitalisation objective with wood packaging,
amounting to 47,802 RON and 45 RON for
emissions from stationary sources.
The measures decided by the regulatory and
control authorities in the environmental
protection and water management domain
were fully applied, as the Company monitored
environmental factors (air, water, soil,
electromagnetic field, waste) all round 2014
according to the requirements of regulatory
documents for environment protection and
water management.
In 2014 there were no complaints of
environmental protection and the Company
complied fully with the legislation and
regulatory documents on environmental
protection and water management.
Page | 92
Annexes
.
Annexes
Page | 8
Annexe 1 - Acts of appointment/ revocation issued in 2014
Executive Board

SB Decision no. 10/ 14.02.2014
o

o

th
Approves termination by mutual agreement, beginning 10 of May 2014, of mandate
contract no. C 16/27.01.2014 signed between Transelectrica and mr. Ștefan-Doru
Bucătaru, member and Chairman of the executive Board (alternatively named Chief
Executive Officer - ”CEO”).
o

Approves the termination of mr. Gabriel Mustea’s position as member of Transelectrica’s
Executive Board, beginning 23.03.2014.
o

Mr. Florin-Mihaiță Boangiu is revoked, beginning14.02.2014, from his position as member
of Transelectrica’s Executive Board.
th
Appoints, beginning 8 May 2014, as Transelectrica’s Executive Board members the
following individuals: mr. Octavian Lohan and mr. Gheorghe-Cristian Vișan.
o
Appoints mr. Ion-Toni Teau, beginning 11 May 2014, as Executive Board Chairman
(alternatively named Chief Executive Officer - ”CEO” of the Company).
Decisions taken after the analysed period

o

Approves the termination of mr. Gheorghe-Cristian Vișan’s position as member of
Transelectrica’s Executive Board, beginning 18.02.2015
o
Approves the termination of mr. Ciprian Diaconu’s position as member of Transelectrica’s
Executive Board, beginning 17.02.2015
Page | 1
Supervisory Board


SB Decision no. 5/14.02.2014
o
Takes note of mr. Dănuț-Leonard Sandu’s renouncement from his position as member in
Transelectrica’s Supervisory Board.
o
Names mr. Remus Vulpescu as provisional member in Transelectrica’s Supervisory
Board, until the General Shareholder’s Meeting.
HAGOA no. 2/ 29.04.2014
o

o

Takes note of mr. Ion-Toni Teau’s termination as member and Chairman of the
Supervisory Board and elects mrs. Carmen Georgeta Neagu as Chairman of
Transelectrica’s Supervisory Board.
o

Names mr. Radu Ștefan Cernov as provisional member in Transelectrica’s Supervisory
Board, until the General Shareholder’s Meeting.
o

Votes against the naming of messrs Dragoș Andrei and Dumitru Remus as members in
Transelectrica’s Supervisory Board for a mandate, identical with regards to expiration
date, to the mandate of members elected by HAGOA no. 4/30.05.2013, respectively until
30.05.2017.
Names messrs Cătălin Lucian Chimirel and Daniel-Cristian Pîrvulescu as provisional
members in Transelectrica’s Supervisory Board, until the General Shareholder’s Meeting.
HAGOA no. 5/ 06.11.2014
o
Elects messers Radu Ștefan Cernov, Cătălin Lucian Chimirel and Daniel-Cristian
Pîrvulescu as members of the Supervisory Board.
Decisions taken after the analysed period

o
Takes note of mr. Andrei-Mihai Pogonaru’s renouncement from his position as member in
Transelectrica’s Supervisory Board, beginning 30.01.2015
Page | 2
Annexe 2 – Changes in the Articles of Incorporation - 2014

Articles of Incorporation no. 12 updated on 29.04.2014 by the General Extraordinary Shareholders
Meeting decision no. 3/ 29.04.2014.

Articles of Incorporation no. 12 updated on 06.11.2014 by the General Extraordinary Shareholders
Meeting decision no. 6/ 06.11.2014.
Page | 3
Annexe 3 – Key contracts signed by the Company in 2014
Contract published through
Current Report at:
Number and date
Signed with:
Energy procurement contracts for technological consumption on PCCB:
C366/ 11.12.2013
SC Hidroelectrică SA
C367/ 11.12.2013
Regia Autonoma pentru Activități
Nucleare
C368/ 11.12.2013
Regia Autonoma pentru Activități
Nucleare
AA1 la C366/ 11.12.13
SC Hidroelectrica SA
AA1 la C183/ 12.08.13
SNGN Romgaz SA
AA1 la C184/ 12.08.13
SNGN Romgaz SA
AA1 la C185 /12.08.13
SNGN Romgaz SA
AA1 la C196/ 26.08.13
CET SA Bacau
AA1 la C197/ 26.08.13
CET SA Bacau
AA1 la C297 25.09.13
SNGN Romgaz SA
21.08.2014
C283/ 21.07.2014
SNGN Romgaz SA
29.08.2014
AA 2 la C297/ 25.09.2013
SNGN Romgaz SA
08.01.2015
C461/ 17.12.2014
20.02.2015
C36/ 16.02.2015
08.01.2014
31.03.2014
Energy transmission contracts (TR):
24.01.2014
31.03.2014
C313/ 10.10.2013
CET Govora
C405/ 19.12.13
Complexul Energetic Oltenia
C398/ 19.12.13
CET Arad SA
C399/ 19.12.13
CET Bacau SA
C400/ 19.12.13
CET Govora SA
C424/ 20.12.13
Electrocentrale Bucuresti SA
C404/ 19.12.13
Complexul Energetic Hunedoara
C426/ 20.12.13
Electrocentrale Galati SA
C470/ 20.12.13
Nuclearelectrica SA
C58/ 13.02.14
Electrificare CFR
C449/ 20.12.13
FDEE Electrica Distributie
Muntenia Nord SA
C450/ 20.12.13
Transilvania Nord SA
C451/ 20.12.13
Transilvania Sud SA
C416/ 20.12.13
Electrica Furnizare SA
C427/ 20.12.13
Electrocentrale Oradea
C456/ 20.12.13
HIDROELECTRICA
C477/ 20.12.13
RAAN Drobeta TR. SEVERIN
C483/ 20.12.13
Romgaz SA
Page | 4
Procurement contracts for technological system services (STS):
31.03.2014
AA8/ 20.12.13 la C3/
05.01.12
Electrocentrale Bucureşti
AA80/ 20.12.13 la C333/
23.12.09
Hidroelectrica SA
AA3/ 20.12.13 la C5/
05.01.12
Electrocentrale Galaţi
AA15/ 20.12.13 la C217/
03.07.12
CE Oltenia
AA13/ 20.12.13 la C536/
18.12.12
AA1/ 20.12.13 la C49/
22.02.13
CE Hunedoara
Romgaz SA
AA nr. 16/ 14.03.2014 la
C536/ 18.12.2012
CE Hunedoara
AA nr. 21/ 18.07.2014 la
C217/ 01.07.2012
CE Oltenia
24.01.2014
C62/ 13.11.2013
SMART SA
12.02.2014
C42/ 03.02.2014
SMART SA
09.04.2014
AA9 la C243/ 30.07.2010
TELETRANS SA
01.07.2014
C256/ 01.07.2014
TELETRANS SA
23.07.2014
C15/ 21.07.2014
SMART SA – Suc. Sibiu
05.09.2014
C63/ 19.08.2014
SMART SA – Suc. Pitesti
18.11.2014
C 30/ 17.11.2014
SMART SA – Suc. Sibiu
05.02.2015
C7/ 04.02.2015
SMART SA – Suc. Timisoara
29.07.2014
Contracts with affiliates:
Page | 5
Annexe 4 - List of Transelectrica subsidiaries

Trading company Electricity Market Operator OPCOM SA – J40/7542/2000 Bucharest 3, Blvd.
Hristo Botev no. 16-18, postal code 030236, www.opcom.ro;

Trading company for Maintenance Services of the Electricity Transmission Grid SMART SA –
J40/8613/2001, Bucharest 1, Blvd. General Gheorghe Magheru no. 33, postal code 010325,
www.smart-sa.ro;

Trading company for Telecommunication and Information Technology Services in Electricity
Transmission Grids TELETRANS SA – J40/12511/2002, Bucharest 3, Blvd. Hristo Botev no. 1618, postal code 030236, www.teletrans.ro;

Trading company of Power Engineers Training in Romania FORMENERG SA – J40/2265/2002,
Bucharest 4, Blvd. Gheorghe Sincai no. 3, postal code 040311, www.formenerg.ro;

Trading company subsidiary ICEMENERG SERVICE SA – J40/11414/2003, Bucharest 3, Blvd.
Energeticienilor no. 8, postal code 032092.
List of persons affiliated to the trading company
1. Company subsidiaries:





OPCOM;
TELETRANS;
SMART;
FORMENERG;
ICEMENERG-SERVICE.
2. All the companies with majority state capital which Company concludes regulated contracts with
on the power market.
All the contracts concluded with the affiliated persons amounting to more than 50,000 euro have been
notified under Current reports according to legal provisions.
Page | 6
Annexe 5 - Disputes
On 31.12.2014, the Company is involved in the following disputes, with a value greater than 100.000 EUR:
No
File number
Disputing parties and their
capacity
File subject
2
11009 /97 /2012
6473/ 111/ 2013
Defendant: Co. Energy
Complex Hunedoara SA
Debtor: Co. Electrocentrale
Oradea
Creditor: Transelectrica
2033/ 111/ 2007
Claimant Defendants: Mester
Lavinia Eugenia, Mester
Traian
2033/ 111/ 2007*
4
5
9045/ 95/ 2013
Claimant: Transelectrica
Debtor: CHPP ENERGO
TERM Resita SA
6
7238/ 120/ 2012
Settlement in brief ADMITS THE ACTION
Document: Judgment 3717/13.06.2013
Term: 19.09.2014
Insolvency
procedure
641,673.13 RON
Term: 25.02.2015
Term:17.02.2015
Appeal
Expropriation
under Law
33/1994
Damages
275,310 EURO
Decision 4622: Admits the appeals of claimant Transelectrica, defendants Mester Traian,
Mester Lavinia Eugenia and Prosecutor’s Office of the Appeal Court Oradea against the civil
decision 223 of 29 November 2011 pronounced by the Appeal Court Oradea, I Civil Section.
Annuls the complained decision and sends the cause for re-judgment to the same appeal
court. Irrevocable.
Claimant: Prosecutor’s Office
of the Appeal Court Oradea
Defendant: Energy Complex
Oltenia
2183/115/ 2010
Claims
5,321,170 RON
Claimant: Transelectrica by
Romanian State +
Transelectrica by Branch Cluj
Defendant-intervenient: Mihes
Cristian Radu, Mihes MariusTudor, Popa Florica Loredana,
Corb Erika, Luca IonutBogdan, Luca Viorica
3
Current stage of the dispute
Admits the request
1
Disputed amount
Debtor: Co. ECO Energy Ltd
Term: 8.10.2014
Substance –
claims
Partially upheld the action, as specified. Ordered the defendant to pay the sum of 448,313.12
RON representing penalties calculated according to the expert report. With call.
Insolvency
procedure
1,516,714.71
RON
Term: 19.02.2015
Insolvency
procedure – joint
24,736,065.84
RON
Term: 9.02.2015
Page | 7
No
File number
capacity
File subject
Disputed amount
stock companies –
at the debtor’s
request
Term: 26.09.2013
Dismissed as unfounded the objection of inadmissibility. Waived prematurity main claim. Give
time to 11.7.2013, summoning the parties. With Call reserved.
22846/ 301/ 2012
Term: 28.11.2013
Claimant: Petprod Ltd
7
Defendant: Transelectrica
Claims –
11,328,252.77
RON
Solution Brief: Dismisses main formulated as premature. Partially upheld the counterclaim.
Orders the applicant to pay the defendant defendant Petprod Transelectrica applicant the sum
of 21,701,281, 92 RON. Orders the applicant to pay the defendant defendant Transelectrica
applicant the sum of 221,128.82 RON costs. The appeal within 15 days of notification.
Term: 6.12.2012
49134/ 3/ 2012
Solution: materials waived jurisdiction of the court. Decline jurisdiction to hear the case in favor
of the Bucharest Tribunal. Irrevocable.
24.02.2015
Term: 18.09.2014
8
4328/ 110/ 2013
Debtor: CHPP SA Bacau
Insolvency
procedure
1,484,636.78
RON
Solution Brief: open bankruptcy proceedings.
Term:30.04.2015
9
873/ 1259/ 2008
Term: 23.09.2014
Debtor: Co. Termoficare 2000
Pitesti SA
Creditor: DGFP,
Transelectrica
Insolvency
procedure
3,903,604.27
RON
Solution Brief: Set within continuation of proceedings on 16.12.2014 in the recovery of debts
and recovery of property of the debtor. The right of appeal with the merits.
Term:24.03.2015
47478/ 3/ 2012
Debtor: PETPROD Ltd
10
Insolvency
procedure
24,013,312.82
RON
170/ 3/ 2014
Written in the creditors’ list of debtor Co. PETPROD Ltd with 24,013,312.82 RON of which
11,595,501.88 RON as ‘amount admitted under condition’, specifying the ‘amount admitted
under condition is disputed in file 49.134/3/2012, on the docket of Bucharest Tribunal’
Term: 24.02.2015
47478/ 3/ 2012*/
a1*
11
8207/ 62/ 2011
Debtor: CHPP SA Brasov
Insolvency
procedure
4,303,741.44
RON
Term: 25.09.2014
Solution Brief: To continue the procedure for recovery of the debtor's property and to summon
the parties to discuss the request for entry of the debtor in bankruptcy filed by the creditor
Page | 8
No
File number
capacity
File subject
Disputed amount
DGRFP Brasov, granted new term 16.04.2015
Term:16.04.2015
12
18499/ 3/ 2013
13
9089/ 101 2013
Claimant: Popescu Mina
Debtor: RAAN
Claims
1,500,000 RON
Term: 31.03.2015
Insolvency
procedure – at the
debtor’s request
2,162,138.86
RON
Term: 26.03.2015
Term: 10.10.2014
14
3616/ 101/ 2014
Debtor: RAAN
Claims
1,090,831.70
RON
Solution Brief: Admit action. Ordered the defendant to pay the sum of 1,090,831.70 RON
representing the invoice nr.1300215 / 31.12.2013 by the applicant. Notes that the applicant has
not requested costs. The right of appeal within 15 days from notification, request that will be
submitted to the Mehedinţi Court.
Term: 25.03.2014
15
4419/ 111/ 2007*
Defendant: Ban Adrian
Appeal;
Expropriation
under Law
33/1994
312,973.50 euro
Admits Adrian Ban appeal. Increase the amount of compensation from 5000 euros to 7209
euros or equivalent in RON at the date of actual payment. Keep the remaining provisions of the
sentence. Dismissed as unfounded the appeal filed by the National Power Grid Transelectrica
Bucharest. The costs of the trial.
Term: 15.10.2014
Dismissed the appeals
16
1867/ 90/ 2010*
Debtor: Total Electric Oltenia
SA
Insolvency
procedure
14,085,415.27
Term: 11.03.2015
Term:7.06.2013
17
5365/ 121/ 2011*
Defendant: Arcelormittal
Galati
Substance claims
Allows the application by the applicant CNTEE "Transelectrica" SA, against ArcelorMittal Galati
SA SC defendant. Ordered the defendant to pay the applicant the sum of 7,184,544.17 RON,
representing consideration for service and consideration electricity transmission delay
penalties. Based on art. 274 Civil Procedure Code requires the defendant to pay the applicant
the sum of 75,961.44 RON, by way of costs. The appeal within 15 days of notification. On
21/06/2013 Arcelor Mittal appealed.
Term:7.04.2014
Solution Brief: December. civ. 44 / A - appeal dismissed as unfounded the defendant SC
ArcelorMittal Galati SA against civil decision no. 547 / 07.06.2013 issued by the Tribunal in
Page | 9
No
File number
capacity
File subject
Disputed amount
Galati.
Term: 30.01.2015 - Reserves
Term:4.02.2015
Term: 04.04.2013; Admits the appeal
Settlement in brief: Civil decision 37. Admits the appeal. Annuls the attacked decision and
sends the cause for re-judgment to the first instance. Final; appeal right within 15 days from
notification.
Document: Judgment 37/2013 04.04.2013
Settlement in brief: Rejects the plea of non-stamping as groundless. Admits the plea of writeoff of the right to action for the amount associated to the following pay orders- 756/18.05.2006;
757/18.05.2006; 803/09.06.2006; 804/09.06.2006. Rejects as written-off the right to action for
the claims associated to such pay orders. Admits partially the action regarding the remaining
claims associated to the pay orders executed beginning with 01.06.2007. Compels the
defendant to pay 17,000 RON as law suit expenses consisting in lawyer’s fee to claimant.
Appeal right within 15 days from notification. Pronounced on 20 December 2013 in public
sitting.
1224/ 88/ 2012
Claimant: Administrative
territorial unit Isaccea
19
Term: 20.12.2013
Claims
4,503,830 RON
1224/ 88/ 2012*
Solution Brief: Allows applications under Civil Procedure Code 281 ^ 1. Civil sentence clarifies
device nr.4643 / 2013 delivered by the Court in the case Tulcea nr.1224 / 88/2012 *, meaning
that the provision in paragraph five on admission rest of the applicant's claim be construed as
meaning that the rest of the applicant's claim 3,427,403.10 RON, on which there was no
limitation period that the court upheld this claim only part of the amount of 13,000 RON. The
appeal within 15 days of notification. Admit 281 applications under Civil Procedure Code.
Diapune material error correction and considerations slipped into the civil judgment nr.4643 /
2013 delivered by the Court in the case Tulcea nr.1224 / 88/2012 * in the part relating to the
court the amount for which the defendant was ordered to pay the applicant as the costs,
meaning that read "requires the defendant to pay the sum of 13,000 RON in respect of the
applicant's costs" as is right instead of "forcing the defendant to pay the sum of 17,000 RON"
with his past wrong. The appeal within 15 days of the communication
Term: 7.07.2014
Solution Brief: Dec.334 dismissed as unfounded calls. (NS-MDC) Appeal
Term: 11.02.2015
Claimant: Conaid Company
20
5302/ 2/ 2013
Defendant:Transelectrica,
ANRE
Administrative
dispute
Ascertains the
Compels payment
of 722,756,000
Euro representing
profit not obtained
Term: 11.06.2014
Solution Brief: Dismisses the action and the application for action accessory as unfounded.
The appeal within 15 days of notification.
Page | 10
No
File number
capacity
File subject
Disputed amount
unjustified refusal
to conclude and
sign ETG
connection
addendum and/or
contract, compels
the signature of
ETG connection
addendum and/or
contract,
according to
business plan and
of 17,419,508.07
RON – actual
expenses
recorded in
accounting books
Appealed to both sides to 10/01/2014
Term: 24.06.2014
21
2177/ 99/ 2012
Debtor: CFPP SA Iasi
Insolvency
procedure
1,935,308.24
RON
Solution Brief: cripple reorganization plan the debtor SC CET SA (CHPs IASI), based in Iaşi,
Chisinau Way # 25, ORC registered under no. J22 / 677/2002 CUI 14718982 Pursuant to
Article 107, paragraph 1, letter disp B of Law. 85/2006 on insolvency proceedings has general
procedure commences bankruptcy debtor SC CET SA (CHPs IASI), based in Iaşi, Chisinau
Way # 25, ORC registered under no. J22 / 677/2002 CUI 14,718,982. Under the provisions of
article 107 para. 2 of the Law on insolvency proceedings, appoint a provisional liquidator in the
receiver IAŞI MANAGEMENT REORGANIZATION LIQUIDATION SPRL based in Iasi,
str.Aleea Nicolina, no.82, jud.Iaşi, Professional Societies registered at no. 0120 / 31.12.2006,
which shall perform the tasks specified in Art. 25 of the Act. Under the provisions of article 107
para. 2 of the Law on insolvency proceedings, the debtor company has dissolution and lifting
the right management of the debtor. Sets the maximum time limit for submission of
management by the liquidator, with the list of documents and transactions carried out after the
opening of the 21/03/2014. Has notified the opening of the bankruptcy debtor, creditors and
Trade Registry Iasi Tribunal, for making the claim, by publication in the Bulletin of insolvency
proceedings. Set deadline for submission of claims arising in the proceedings to 25/04/2014.
Set deadline for verifying claims arising during the procedure, preparation, display and
communication extra table of receivables 26/05/2014. The deadline for filing complaints to
claims arising in the proceedings shall be at least 10 days before the date of 06/24/2014. Set
deadline for resolving complaints to claims arising in the proceedings at 24/06/2014 .. Set
deadline for drawing and displaying the final table at 24/06/2014 consolidated claims. Under
Article 113 of the Law on insolvency proceedings, has sealing property of the debtor, freezing
buildings, the shares and meeting other liquidation operations.
Document: Interim Decision 461/2014 10.15.2014
Term: 17.09.2014
Adjourned the case until 03.31.2015
Term:31.03.2015
Page | 11
No
22
File number
6657/ 2/ 2012
capacity
Defendant: ANAF- General
Division of Large Taxpayers
ANAF – General Division of
Complaints Settlement
File subject
Disputed amount
Administrative and
fiscal dispute
43,487,408 RON
Term: 30.04.2014
Solution Brief: dismissed as unfounded. The appeal within 15 days of notification.
Term: 13.05.2015
23
35455/ 3/ 2013
Defendant: Nuclearelectrica
Substance –
claims
646,270.87 RON
Solution Brief: Partial action. Ordered the defendant to pay the applicant the sum of 10,44 RON
representing late payment calculated on the invoice no. 6108 / 04.10.2010, 15.10.2010 and up
to 31.12.2010. Dismisses the remainder of the applicant's claim as prescribed. Ordered the
defendant to pay the applicant the sum of 1 leu costs. The appeal within 30 days of notification.
The appeal shall be filed with the Bucharest Court Section VI.
Solution Brief: Allows apelul.Anulează apelată.Respinge sentence in part except as
neîntemeiată.Trimite limitation due to re-claim the same court that upheld the objection to
fond.Definitivă prescription.
Document: Decision 1001/2014 /12.11.2014
Term: 02.09.2013
Rejects the appeal as groundless. Appeal right within 15 days from notification.
24
42410/ 3/ 2011
Creditor: Co. Electrocentrale
Bucharest SA
Instituted appeal
Commercial
483,126.83 RON
Debtor: Transelectrica
25
53186/ 3/ 2011
26
24021/ 3/ 2008
Debtor: ALSO ENERG
Debtor: Co. IMOBILIAR
CONSTRUCT
Term: 5.06.2014
Dismissed as unfounded the appeal filed by the defendant COMPANY National Transportation
"Transelectrica" SA against civil decision no. 237/2013 of 2 September 2013 the Court of
Appeal - Civil Division VI. Irrevocable.
Insolvency
procedure
7,177,245.74
RON
Insolvency
procedure
938,299.30 RON
Nullity of juridical
document
21,023,814.86
RON
Term: 19.06.2014
27
30860/ 3/ 2013
Claimant: Eco Energy
Solution Brief: Pursuant to art. 242 of the. 1 NCPC suspend judgment. The right of appeal for
the duration of the suspension to a higher court.
Document: End - Suspension 19/06/2014
Page | 12
No
File number
capacity
File subject
Disputed amount
Term: 13.02.2015
Term: 05.12.2013
28
289/ IB/ 2012
Defendant: Degi Millennium
Administrative
litigation
3372/ 2/ 2014
29
30
despăgubire
DISJUNS DIN
DOS.5302/ 2/
2013
5595/ 120/ 2010
Claimant: Conaid
Debtor: Co. Eco Energy
Finding unjustified
refusal to
conclude and sign
the addendum
and / or contract
ETG connection,
order the
signature
addendum and /
or contract ETG
connection,
Claims
31
41832/ 3/ 204
Defendant: Dagesh Rom
+
Admits partially the arbitral action. Orders defendant to pay 620,938.12 RON as prejudice,
113,943.79 RON interest rates calculated until 30.06.2013 and arbitration expenses 832.30
RON – registration charge, 40,593.7 RON – arbitration fee and 14,742 RON expenses with
experts.
Claims
Claims
Adrian Baicusi
Obligation to pay
EUR 722.756
million euros,
representing
unrealized profit of
the business plan
and
17,419,508.07
RON - actual
expenditure
accounted
16,604,203.24
RON
1,353,963.6 RON
+
323,386.73
interest
T: 24.06.2014
Solution Brief: Pursuant to art. 413 para. 1 pt. 1 of the Code of Civil Procedure, suspended the
proceedings. The appeal for the duration of the suspension. The notice of appeal shall be filed
in the Court of Appeal.
Term: 26.09.2014
Under disappear. art. 36 of Law no. 85/2006, suspend the proceedings.
Regularization term
32
8484/ 105/ 2014
Defendant::
Sparta Security
Claims
418,800.50 RON
Regularization term
Page | 13
No
33
File number
43152/ 3/ 2014
capacity
Debtor: ICPE Elecrocond
File subject
Disputed amount
Insolvency
procedure
Application for
entry in the table
of creditors with
the amount of
2,705,330.98
RON
T: 6.04.2015
Claims
582,086.31 Eur
(2,585,161.72
RON) + 84,867.67
RON interest
Regularization term
Claims
566,773.42 RON
Regularization term
Claims
4,958,587.72
Regularization term
Insolvency
procedure
Application for
entry in the table
of creditors with
the amount of
3,277,527.03
RON
T: 22.03.2015
Articles 208 and
209 of the
Criminal code
816,120.3 RON
File is at judicial executor
1,027,776.38
RON
criminal investigation
established as a
civil party
criminal investigation
Claimant: OPCOM
34
40814/ 3/ 2014
35
44876/ 3/ 2014
Defendant:Transelectrica
Defendant:
ELEN Buc
Defendant:
36
41911/ 3/ 2014
I. Gallup Organization
Romania
II. Stelian Baicuși and others
37
29322/ 3/ 2014
Debtor: ENNET GRUP
Creditor: transelectrica
38
6127/ 256/ 2013
Defendant: Ivan Florin
39
302/ P/ 2012
The injured party:
Transelectrica ST Bucharest
author Unknown
40
113901/
29.08.2011
The injured party:
Transelectrica ST Bucharest
Page | 14
No
File number
capacity
File subject
Disputed amount
Complaint against
the decision
CNSC - public
procurement
981,000 RON
Dismissed the complaint, rejected the appeal, December 2014
Insolvency
procedurebankruptcy
1,144,536 RON,
of which 50.6% of
the debt for ST
Sibiu
Selling goods debtor
In the first
instance. We
require payment
of late interest for
the full unpaid bills
totaling
1,322,168.34
RON.
1,322,168.3 RON
At the hearing dated 10.09.2014 the court upheld the suspension file resolution pending a final
judicial hatărâri in case no. 5365/121/2011 *. Follow submit an application for reinstatement
pending.
author Unknown
41
672/ 57/ 2014
The complainant Electroservice L & D
The respondent ST Sibiu
42
43
1764/ 97/2006
8307/ 121/ 2013
Debtor: Almo Construct Deva
Debtor: ArcellorMittal Galati
Page | 15
Annexe 6 - Ownership right over the tangible assets of
Transelectrica
Specifying the potential problems related to the ownership right over the tangible assets of
Transelectrica

The 820 m2 ground situated in Cluj Napoca stands thus: Hidroelectrica, as majority co-owner of
the building, has obtained the endorsement of the Cluj Local Council, according to Decision
257/24.05.2012 of the Local Council, whereby the topographic & land documentation received
favourable endorsement and vicinity minutes were signed. Topo-cadastral documentation has
been submitted for approval to the Cluj County Council, after which it will require an attestation
certificate of land ownership. The documentation to dismantle the ownership right within the
quotas held by co-owners will be executed when such Certificate of the ownership right for the
entire land has been obtained, and the space where the Cluj Territorial Dispatcher operates falls in
this category.

In case of the Semenic test stand (of 3.132 sqm) belonging to Timisoara Transmission Branch:
the topographic-land documentation was prepared in accordance with GD Nr.834/1991 and
compiled Note nr 948/09.01.2015 on GMS approval documentation. Documentation with the GMS
decision will be sent to the Ministry of Economy, Trade and Tourism to obtain the certificate
attesting the right of land ownership.
Page | 16
Annexe 7 – Glossary
„ANRE”
Regulatory Authority for Electricity
„BAR”
Regulated asset base
„BVB”
BSE, the operator of the regulated market on which shares are
traded
„CCM”
Collective labour agreement concluded in society
„CEE”
European Economic Community
„CEE”
Wind farm
„CEF”
Photovoltaic Power Plant
„CET”
CHPs
„CHEAP”
Pumped storage hydro power plant
„CNE”
Nuclear Power plant
„Company”, „CNTEE”
NPG Transelectrica SA
„CPT”
Technological consumption
„CS”
Supervisory Board
„CSR”
Corporate Responsibility
„d. c.”
Double circuit
„DEN”
National Dispatch Centre
„EBIT”
Earnings before interest and tax
„EBITDA”
Earnings before interest, tax and amortization
„EBT”
Earnings before income taxes
„EMS-SCADA”
The main dispatching infrastructure (Energy Management System Supervisory Collection And Data Acquisition)
„ENTSO-E”
European Network of Transmission System Operators for Electricity
„ENS”
Undelivered energy consumers
„Euribor”, „Libor”, „Robor”
Interbank interest rates
„Formenerg”
Societatea Comercială de Formare a Energeticienilor din România
FORMENERG SA
„Group”
Company and its subsidiaries
„GD 627/ 2000”
Government Decision no. 627/2000 on the reorganization of the
National Electricity Company - SA, published in Official Gazette no.
357 dated 31 July 2000
„GD”
Government Decision
„GMS”
General Meeting of Shareholders
„Icemenerg Service”
Societatea Comercială Filiala “ICEMENERG-SERVICE” București,
Filială a Companiei Naționale de Transport al Energiei Electrice
"Transelectrica" SA
„IFRS”
International Financial Reporting Standards
„ISO”
Independent System Operator
„ITO”
Independent Transport Operator
„JPY”
Japanese Yen, the official currency of Japan
„LEA”
Overhead lines
„Leu” or „Lei” or „RON”
official currency of Romania
Page | 17
„MPF”
Ministerul of the Public Finances
„OG”
Official Gazette
„OG”
Government Ordinance
„OPCOM”
Electricity Market Operator OPCOM SA in Romania
„TSO”
Transport Sistem Operator
„GEO”
Government Emergency Ordinance
„pa”
Per anum
„PCCB”
Centralized Market for Bilateral Contracts
„PCR”
Grouping regions depending on price (Price Coupling of Regions)
agreed model for the future of the Single European Market for
Electricity
„PE”
Balancing Market
„PCI”
Project of common interest
„PZU”
Day Ahead Market
„RET”
Electricity transmission grid of national and strategic interest with
voltage rating greater than 110 kV
„SEN”
National Power System
„Smart”
Societatea Comercială pentru Servicii de Mentenanță a Rețelei
Electrice de Transport SMART SA
„SSF”
„SST”
Ancillary Services
„TEL”
Indices for Transelectrica
„Teletrans”
Societatea Comercială pentru Servicii de Telecomunicații și
Tehnologia Informației în Rețele Electrice de Transport TELETRANS
SA
„TSR”
Total shareholders return
„UE”
European Union
„u.m.”
Unit
„USD” or “dolari US”
the official currency of the United States of America
„WACC”
Weighted Average Cost of Capital
Page | 18

CNTEE TRANSELECTRICA SA ANNUAL REPORT 2014

Transcription

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