SOCIETATEA SERVICII ENERGETICE OLTENIA S.A. · SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY...

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON DECEMBER 31, 2017

(All amounts in RON, unless otherwise specified)

1

SOCIETATEA SERVICII ENERGETICE OLTENIA S.A.

FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH ORDER OF THE

MINISTER OF PUBLIC FINANCE NO. 1802/2014 AS AMENDMENTS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017



2

Contents Page

Financial statements

Balance sheet 3 - 6

Profit and loss account 7 - 9

Cash Flow Statement 10

Statement of changes in equity 11 - 12

Notes to the financial statements 13 - 40



3

Description

Row

No.

Balance at:

1 January

2017

31 December

2017

A B 1 2

A. NON-CURRENT ASSETS

I. INTANGIBLE ASSETS

1. Set-up costs 01 141 -

2. Development costs 02 - - 3. Concession rights, patents, licenses, trademarks and other

similar rights and other intangible assets 03

- -

4. Goodwill 04 - - 5. Intangible assets exploration and evaluation of mineral

resources 05

- -

6. Advances and intangible assets in progress 06 - - TOTAL (row 01 to 05) 07 141 -

II. PROPERTY, PLANT AND EQUIPMENT

1. Land and buildings 08 45,229,275 41,966,616

2. Technical equipment and machinery 09 482,171 197,895

3. Other equipment, fixture and fittings 10 6,340 3,979

4. Real estate investments 11 - -

5. Tangible in progress 12 - -

6. Investment property under construction 13 - -

7. Tangible exploration and evaluation of mineral resources 14 - -

8. Bearer biological assets 15 - -

9. Advances 16 - -

TOTAL (row 08 to 16) 17 45,717,786 42,168,490

III. FINANCIAL ASSETS

1. Shares held in subsidiaries 18 - -

2. Loans to subsidiaries 19 - -

3. Investments in associates 20 - -

4. Loans to associates 21 - -

5. Other long term investments 22 - -

6. Other loans * 23 - -

TOTAL (row 18 to 23) 24 - -

NON CURRENT ASSETS – TOTAL (rd 07+17+24) 25 45,717,927 42,168,490

B. CURRENT ASSETS

l. INVENTORIES

1. Raw materials and consumables 26 951,570 2,766,825

2. Work in progress * 27 8,615 5,760

3. Finished goods and goods for resale * 28 640 -

4. Advances 29 109,226 31,830

TOTAL (row 26 to 29) 30 1,070,051 2,804,415

II. TRADE RECEIVABLES

1. Trade receivables 1), * 31 8,535,632 9,097,288

2. Receivables from subsidiaries *, ** 32 - -

3. Receivables from associates 33

4. Other receivables ** 34 323,484 508,268



4

Description

Row

No.

Balance at:

1 January

2017

31 December

2017

A B 1 2

5. Subscribed un-paid share capital * 35 - -

TOTAL (row 31 to 35) 36 8,859,116 9,605,556

III. SHORT TERM INVESTMENTS

1. Shares held in subsidiaries 37 - -

2. Other short term investments 38 - -

TOTAL (row 37 to 38) 39

IV. PETTY CASH AND BANK ACCOUNTS 40 3,416,492 2,544,820

CURRENT ASSETS – TOTAL

(row 30 + 36 + 39 + 40) 41 13,345,659 14,954,791

C. PREPAYMENTS (row 43 + 44) 42 71,144 32,278

Amounts taken over a period of up to one year 43 71,144 32,278

Amounts taken over a period exceeding one year 44 - -

D. LIABILITIES: AMOUNTS PAYABLE IN A PERIOD

BELOW ONE YEAR

1. Debenture loans, separate disclosure of convertible debenture

loans 45 - -

2. Bank loans 46 - -

3. Advance payments received from customers 47 65,587 27,747

4. Trade payables 48 2,519,899 2,339,235

5. Trade notes payable 49 - -

6. Amounts due to subsidiaries *** 50 - -

7. Amounts due to associates *** 51 - -

8. Other payables including payables to the state budget and

social security payables *** 52 27,593,334 39,162,577

TOTAL (row 45 to 52) 53 30,178,820 41,529,559

E. NET CURRENT ASSETS/NET CURRENT LIABILITIES

(rd. 35 + 36 - 45 - 63) 54 -16,762,017 -26,542,490

F. TOTAL ASSETS LESS CURRENT LIABILITIES

(row 19 + 46) 55 28,955,910 15,626,000

G. LIABILITIES: AMOUNTS PAYABLE IN A PERIOD

ABOVE ONE YEAR

1. Debenture loans, separate disclosure of convertible debenture

loans 56 - -

2. Bank loans 57 - -

3. Advance payments from customers 58 - -

4. Trade payables 59 816,490

5. Trade notes payable 60 - -

6. Amounts due to subsidiaries *** 61 - -

7. Amounts due to associates *** 62 - -

8. Other payables including payables to the state budget and

social security payables *** 63 15,885,267 -

TOTAL (row 56 to 63) 64 16,701,757 -



5

Description

Row

No.

Balance at:

1 January

2017

31 December

2017

A B 1 2

H. PROVISIONS

1. Provisions for employee benefits 65 - -

2. Provisions for taxes 66 - -

3. Other provisions 67 267,049 -

TOTAL (row 65 to 67) 68 267,049 -

I. DEFERRED INCOME

1. Investment subsidies ( row 70 to 71) 69 2,777 2,777

Amounts taken over a period of up to one year 70 - -

Amounts taken over a period exceeding one year 71 2,777 2,777

2. Deferred income – total (row 73 + 74) 72 - -

Amounts to be transferred to income in a period below one year

* 73 - -

Amounts to be transferred to income in a period above one year

* 74 - -

3. Deferred income corresponding to assets received by transfer

from clients ( row 76 to 77 ) 75 - -

Amounts taken over a period of up to one year 76 - -

Amounts taken over a period exceeding one year 77 - -

Negative goodwill 78 - -

TOTAL (row 69 + 72 + 75 +78 ) 79 2,777 2,777

J. CAPITAL AND RESERVES

I. CAPITAL

1. Subscribed paid in capital 80 70,241,800 70,241,800

2. Subscribed unpaid capital 81 - -

3. Patrimony 82 - -

4. Patrimony of research institutes 83 - -

5. Other elements of own equity 84 - -

TOTAL (row 80 to 84) 85 70,241,800 70,241,800

II. SHARE PREMIUM 86 - -

III. REVALUATION RESERVE 87 61,359,717 57,623,579

IV. RESERVES

1. Legal reserves 88 - -

2. Statutory or contractual reserves 89 - -

3. Other reserves 90 405,927 405,927

TOTAL (row 88 to 90) 91 405,927 405,927

Own shares 92 - -

Gains in respect of own shares instruments 93 - -

Losses in respect of own shares instruments 94 - -

V. PROFIT OR LOSS CARRIED

FORWARD

C BALANCE

95 - -

D BALANCE 96 109,853,744 116.523.260



6

Description

Row

No.

Balance at:

1 January

2017

31 December

2017

A B 1 2

VI. PROFIT OR LOSS FOR THE YEAR C BALANCE 97 - 3.875.177

D BALANCE 98 10,169,373 -

Profit appropriation 99

EQUITY – TOTAL (row 85+86+87+91-92+93-94+95-

96+97-98-99) 100 11,984,327 15,623,223

Public patrimony 101 - -

Privat patrimony 102 - -

EQUITY – TOTAL (row 100+101+102) (row 25+41+42-53-

64-68-79) 103 11,984,327 15,623,223

Special Administrator Legal Administrator Prepared by,

MUSTAFA SINAN MUSAT SI ASOCIATII IORDACHE DORINA

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY STATEMENT OF PROFIT OR LOSS FOR THE PERIOD ENDED ON 31 DECEMBER 2017


7

Item description

Row

no.

Financial year

2016 2017

A B 1 2

1. Turnover (row 02 +03-04+ 05+06) 01 17,508,937 19,150,979

Production sold 02 17,443,417 19,131,103

Income from sale of goods for resale 03 65,520 19,876

Trade discounts granted 04 - -

Interest Income recorded by the entities erased from the

General Register, still having lease contracts in progress *

05 - -

Income from subsidies related to income 06 - -

2. Income related to the cost of production of C Balance 07 - -

work in progress D Balance 08 30,224 2.855

3. Incomes from the production of tangible and intangible

assets

09 - -

4. Income from revaluation of tangible assets 10 - -

5. Income from real estate investment production 11 - -

6. Income from subsidies 12 - -

7. Other operating income 13 6,455,255 2,701,516

- out of which, income from negative goodwill 14 - -

- out of which, income from investment subsidies 15 1,356 -

OPERATING INCOME – TOTAL (row 01 + 07 - 08 + 09 +

10 +11+12+13 )

16 23,933,968 21,849,640

8. a) Raw materials and consumables expenses 17 3,994,010 3,846,426

Other material expenses 18 112,369 119,143

b) Other external expenses (with energy and water) 19 359,829 356,280

c) Goods for resale expenses 20 68,062 10,149

Trade discounts received 21 - -

9. Personnel expenses (row 23 + 24), out of which: 22 9,967,598 9,322,964

a) Salaries and wages 1) 23 8,099,224 7,521,165

b) Social security expenses 24 1,868,374 1,801,799

10. a) Value adjustment to tangible and intangible assets (row 26

- 27)

25 6,698,173 538,895

a.1) Expenses 26 6,722,414 4,653,820

a.2) Income 27 24,241 4,114,925

b) Value Adjustment to current assets (row 29 - 30) 28 1,228,926 -2,059,843

b.1) Expenses 29 2,820,276 760,433

b.2) Income 30 1,591,350 2,820,276

11. Other operating expenses (row 32 la 38) 31 12,737,171 6,108,838

11.1. Third party services expenses 32 2,935,515 1,787,575

11.2. Expenses with other taxes, duties and similar payments 33 809,605 658,460

11.3. Environmental protection costs 34 13 11

11.4. Expenses from revaluation of tangible assets 35

11.5. Expenses related calamities and other similar events 36

11.6. Other expenses 37 8,992,038 3,662,792

Refinancing interest expenses of the entities erased from the

General Register, still having lease contracts in progress *

38 - -

Adjustments for provisions (row 40 -41) 39 (1,062,061) (267,049)

- Expenses 40 267,049 -

- Income 41 1,329,110 267,049

OPERATING EXPENSES – TOTAL (row 17 to 20-

21+22+25+28+31+39) 42 34,104,077 17,975,803

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY STATEMENT OF PROFIT OR LOSS FOR THE PERIOD ENDED ON 31 DECEMBER 2017


8

Item description

Row

no.

Financial year

2016 2017

A B 1 2

OPERATING PROFIT/LOSS:

- Profit (row 16 - 42) 43 - 3,873,837

- Loss (row 42 - 16) 44 10,170,109 -

- -

12. Income from participating interests 45 - -

- out of which, income from affiliates 46 - -

13. Interest income * 47 736 1,279


14. Income from subsidies for interest due 49 - -

15. Other financial income 50 - -


FINANCIAL INCOME – TOTAL (row 45+47+49+50) 52 736 1,340

16. Value adjustments to financial assets and financial investments

held as current assets (row 54 - 55)

53 - -

- Expenses 54 - -

- Income 55 - -

17. Interest expense * 56

- out of which, expenses in relation with affiliates 57 - -

Other financial expenses 58 - -

FINANCIAL EXPENSES – TOTAL (row 53+56+58) 59 - -

FINANCIAL PROFIT/LOSS:

- Profit (row 52 - 59) 60 736 1,340

- Loss (row 59 - 52) 61 - -

TOTAL INCOME (row 16+52) 62 23,934,704 21,850,980

TOTAL EXPENSES (row 42+59) 63 34,104,077 17,975,803

18. GROSS PROFIT OR LOSS:

- Profit (row 62 - 63) 64 - 3,875,177

- Loss (row 63 - 62) 65 10,169,373

19. Income tax 66 - -

20. Other taxes not disclosed among the above items 67 - -

21. FINANCIAL YEAR NET PROFIT OR LOSS :

- Profit (rd. 64 - 65 - 66 - 67) 68 - 3,875,177

- Loss (row 65 + 66 + 67-64) 69 10,169,373 -

Special Administrator Legal Administrator Prepared by, MUSTAFA SINAN MUSAT SI ASOCIATII IORDACHE DORINA

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY STATEMENT OF CASH FLOW FOR THE PERIOD ENDED ON 31 DECEMBER 2017


Special Administrator Legal Administrator Prepared by, MUSTAFA SINAN MUSAT SI ASOCIATII IORDACHE DORINA

2016 2017

Cash flows from operating activities

Gross Profit (10,169,373) 3,875,177

Adjustments for :

Amortization/Additional Depreciation 2,607,490 1,580,297

Provisions on trade receivables 267,049 -

Profit/(Loss) on sale or disposal of tangible and intangible assets (1,705,282) (813,505)

Financial income,net 736 1,279

Financial expenses - -

Operating profit before changes in working capital (8,999,380) 4,643,248

Changes in net working capital:

Decrease / (Increase) in trade and other receivables and otherwise 8,535,632 9,097,288

(Increase ) / decrease in inventories (727,366) 132,823

(Decrease) / Increase in trade and other payables 756,782 (910,773)

Deferred income - -

Cash generated from operating activities (434,332) 12,962,586

Cash flows from investing activities

Payments for acquisitions of intangible assets - -

Payments for acquisitions of tangible assets - -

Interest received - -

Net cash from investing activities - -

Cash flows from financing activities - -

Proceeds from short-term borrowings - -

Proceeds from affiliates borrowings - -

Interest paid - -

Dividends paid - -

Net cash from financing activities - -

Net descrese /increase in cash and cash equivalents (434,332) 12,962,586

Cash and cash equivalents at the beginning of the financial year 972,646 3,416,492

Cash and cash equivalents at the end of the financial year 3,416,492 2,544,820

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED ON 31 DECEMBER 2017


10

Element of equity

Balance at

31 December

2016

Increases Decreases

Balance at

31 December

2017

Total, of which Through transfer Total, of which Through transfer

0 1 2 3 4 5 6

Subscribed capital 70,241,800 - - - - 70,241,800

Revaluation reserves 61,359,717 - - 3,736,138 3,736,138 57,623,579

Legal reserves - - - - - -

Other reserves 405,927 - - - - 405,927

Profit / Loss carried forward 109,853,744 10,399,282 10,399,282 3,729,766 3,729,766 116,523,260

Profit / Loss of the year – Profit (10,169,373) 29,052,493 29,052,493 15,007,943 15,007,766 3,875,177

Profit appropriation

Total Equity 11,984,327 39,451,775 39,451,775 22,473,847 22,473,847 15,623,223

The profit recorded for the year 2017 is 3,875,177 RON and will be distributed to cover the losses recorded in previous years.

Special Administrator Legal Administrator Prepared by,

MUSTAFA SINAN MUSAT SI ASOCIATII IORDACHE DORINA

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED ON 31 DECEMBER 2017


11

PROPERTY, PLANT AND EQUIPMENT as of 31.12.2017

Name of the immobilization element *)

Gross value **) Value adjustments ***)

Amortizations and adjustments for depreciation Net value

Balance at the

beginning of the

financial year

Increases

Cessions,

transfers and

other

discounts

Balance at the

end of the

financial year

Balance at the

beginning of

the financial

year

Adjustments

registered

during the

financial

year

Discounts

or replays

Balance at the

end of the

financial year

Net book

value

0 1 2 3 4 = 1+2-3 5 6 7 8 = 5+6-7 9=4-8

Intangible assets

Setup expenses and development expenses 2,121 - - 2,121 2,121 - - 2,121 -

Other immobilizations - licenses, inf. software 5,090,715 - - 5,090,715 5,090,715 - - 5,090,715 -

Advance payments and intangible assets in

progress

- - - - - - - - -

TOTAL 5,092,835 - - 5,092,836 5,092,836 - - 5,092,836 -

Imobilizari corporale

Lands 17,678,075 - 397,562 17,280,513 708,844 995,474 708,844 995,474 16,285,039

Construction 35,783,562 - 2,730,495 33,053,067 7,523,518 2,078,048 3,383,080 6,218,486 26,834,581

Technical installations and machines 12,826,547 - - 12,826,547 12,344,375 - 23,000 12,321,375 505,172

Other installations, machinery and furniture 157,003 - 33,263 123,740 150,662 - 30,902 119,760 3,980

Advances and tangible assets in progress - - - - - - - - -

TOTAL 66,445,187 - 3,161,320 63,283,867 20,727,399 3,073,522 4,145,826 19,655,095 43,628,772

Financial assets

ADJUSTMENTS FOR DEPRECIATION –

TOTAL

- - - - - - - - -

TOTAL 71,538,022 - 3,161,320 68,376,703 25,820,235 3,073,522 4,145,826 24,747,931 43,628,772

The useful lives used to compute the depreciation of the property, plant and equipment are the legal ones, and the calculation method used is the linear one.

The Company records the property, plant and equipment based on the revaluation method.

Special Administrator

Sinan MUSTAFA

Judicial Administrator

MUSAT&ASOCIATII

Chief Financial Officer,

Dorina IORDACHE

SERVICII ENERGETICE OLTENIA S.A. IN INSOLVENCY NOTES ON THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 31 DECEMBER 2017


12

EXPLANATORY NOTES ON BALANCE SHEET NO.

2

PROVISIONS

Transfers in 2017

Provision’s name*) Balance at

31.12.2016

In account/

non-

deductible

expenses

From account/

non-taxable

incomes

Balance as of 31.12.2017

0 1 2 3 4 = 1+2-3

Adjustments for non-collected clients 549,691 535,016 549,691 535,016

Provisions for disputes 267,049 - 267,049 -

Adjustments for depreciation of

stocks and production in progress

1,864,402 182,610 1,864,402 182,610

Adjustments for disputes, fines and

penalties, compensations, damages

and other uncertain debts

406,183 42,806 406,183 42,806

TOTAL 3,087,325 760,432 3,087,325 760,432

Value adjustments for stocks depreciation are set for stocks that have not moved for more than 365 days.

Adjustments for depreciation of receivables - various debtors in the balance at the end of the exercise amounting to RON 42,806

are related to the amounts included in the Debtors account according to Appendix 2a

Adjustments for depreciation of receivables - balance-sheet clients at the end of the exercise amounting to RON 535,016 include

value adjustments calculated for non-collected invoices from clients according to ANNEX 2b. For uncertain clients who are also

creditors registered at the creditors' statement of assets and liabilities, it will be proposed to approval the compensation of the

debts with the receivables.

In accordance with the procedures applicable within the company, the provisions and adjustments made in the previous exercise

and found in the balance at 31.12.2017 are taken entirely into non-taxable incomes and the new values are registered at non-

deductible tax expenses.



13

EXPLANATORY NOTES ON BALANCE SHEET NO. 3 PROFIT TAX

At the end of the financial year 2017, the Company recorded profit of 3,875,177 RON, as follows:

1. Result from operating: 3,873,836 lei

2. Financial result: 1,341lei

The calculation of the fiscal exercise result complied with the provisions of the Tax Code in force, adjusting the

accounting result with non-taxable deductions and incomes, respectively with non-deductible expenses, as follows:

Calculation’s elements 2016 2017

Gross book value -10,169,373 3,785,177

Deductions / non-taxable incomes 2,944,700 7,202,250

Other items of the nature of taxable incomes 2,124,959 465,198

Legal reserve 405,927 405,927

Non-deductible expenses 8,868,953 4,917,475

Fiscal result -6,776,006 1,073,027

Fiscal losses from previous years 109,853,744 116,523,260

Fiscal loss to recover the next years 116,629,750 115,893,983

where:

Deductions / non-taxable income: 2016 2017

Fiscal amortization 2,124,959 465,198

Incomes from provisions resuming 2,944,400 7,202,250

Incomes from penalties and lack of management

0

Expenses resulting from the diminished value of assets following

revaluation

0

Total: 5,069,359 7,667,448

Other items of the taxable income type are reserves from the revaluation of tangible assets, taxable according

to OUG 34/2009.

Non-deductible expenses 2016 2017

Profit tax expense account 691 - -

Expenses with fines of 6581,02; 6581,03 accounts - -

accounting depreciation expense ct 6811 398,661 214,944

fuel and related VAT expenses ct 602 si water 6028 58,878 37,818

other non-deductible expenses (depreciation of unused buildings) 12,997 12,592

other non-deductible expenses (penalties, inactive suppliers) 1,115 611

expenses for depreciation of assets 1,705,282 817,555

expenses resulting from the diminished value of assets following

revaluation

6,692,000 3,833,955

TOTAL 8,868,933 4,917,475


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE



14

EXPLANATORY NOTES ON BALANCE SHEET – No. 4

ANALYSIS OF THE OPERATING RESULT IN 2017

Name of indicators 2016 2017

A 1 2

Net turnover 17,508,937 19,150,979

Sold Production 17,443,417 19,131,103

Income from sale of goods 65,520 19,876

Income related to the cost of production in progress 30,224 2,855

Income from the revaluation of property, plant and equipment - -

Other operating income 6,455,255 2,701,516

OPERATING INCOME 23,933,968 21,849,640

Expenses on raw materials and consumables 3,994,010 3,846,426

Other material expenses 112,369 119,143

Other external expenses (energy and water) 359,829 356,280

Expenses on goods 68,062 10,149

Trade discounts received

Expenses on personnel 9,967,598 9,322,964

Expenses(ct. 6811 + 6813 ) 6,722,414 4,653,820

Value adjustments for current assets 1,228,926 (2,059,843)

Expenses (ct. 654 + 6814) 2,820,276 760,433

Incomes (ct. 754 + 7814) 1,591,350 2,820,276

Other operating expenses 12,737,171 6,108,838

Expenses on external benefits 2,935,515 1,787,575

Expenses with other taxes, taxes and similar payments; expenses representing transfers and contributions due under special

normative acts (ct. 635 + 6586*)

809,605 658,460

Expenses from revaluation of corporeal immobilization (ct. 655)

Other expenses (Ct. 651 + 6581 + 6582 + 6583 + 6588) 8,992,038 3,662,792

OPERATING INCOME - TOTAL 34,104,077 17,975,803

OPERATING PROFIT (10,170,109) 3,873,837


Sinan MUSTAFA


MUSAT&ASOCIATII


Dorina IORDACHE



15

EXPLANATORY NOTE ON BALANCE SHEET NO. 5

LIABILITIES AND RECEIVABLES IN 2017 RON

A. RECEIVABLES Balance at

31.12.2016

Balance at

31.12.2017

term of liquidity

under 1 year over 1 year

A

1=2+3 2 3

I. Long term receivables (acc .267) 76,039 162,435 - -

Suppliers-debtors for suppliers for services and works

(ct.4092)

478 11,665 - -

Customers (accounts 411+413+418) 9,079,690 9,458,204 9,231,574 226,630

Personnel receivables and social security (accounts

425+4282+431+437+4382)

108,092 171,485 - -

Value Added Tax Receivable (ct.4424) - - - -

Other receivables with the state and public institutions

(ct.4428+444+445+446+447+4482)

188,586 29,991 - -

Intercompany recharges (accounts 451+452+456+4582) - - - -

Sundry debtors (ct.461+473+5187) 348,267 349,599 - -

II. TOTAL CURRENT ASSETS (rd.2 la 9) 9,725,113 10,020,944 9,231,574 226,630

III. ADJUSTMENTS FOR DEPRECIATION OF

RECEIVABLES (will be subtract) (ct.49(1+5+6))

620,575 535,016 - -

TOTAL RECEIVABLES (rd.1+10-11) 9,180,577 9,648,363 9,231,574 226,630

Suppliers-debtors, amounting to RON 11,665, represent the advances paid to the service providers, which will be closed at the date of receiving the invoices.

Commercial receivables (customers) represents mainly the value of maintenance and repair services or building, energy sector upgrades provided to third parties and related parties (for

details on transactions and balances with affiliated parties, see paragraph C. of this note). The balance of customers is presented in Appendix 5a.

The detail of the doubtful customers or customers with open litigations is presented in Attachment No. 5b.

Other receivables are the amounts for which have been presented monthly claims for recovery from the Health House of Bucharest the value of the contribution for the incapacity for work

(0.85%) and the postponed VAT amount to the suppliers that apply the VAT system to the collection.



16

The sundry debtors include:

Name of debt 2016 2017

wrongful salary rights - -

refurbishment utilities, fines 10,456 3,479

Other debitors 337,811 346,120

TOTAL 348,267 349,599

For doubtful customers and sundry debtors, the Company recorded depreciation adjustments in compliance with the legal provisions in force and with the accounting policies presented in

Explanatory Note 2.

B. Debts Balance at

12/31/2016

Balance at

12/31/2017

Payment Term

under 1 year 1 – 5 years

A

1=2+3+4 2 3

I. Total financial liabilities, out of which: - - - -

– long-term and medium-term bank loans (ct.162) - -

-

– short-term loans (ct.512+519+5198) - -

-

– interests on bank loans (ct.168+5186+5198) - -

-

– other loans and financial liabilities

(ct.161+166+167+168+169+269)

- - - -

II.Other debts – total, of which: 33,867,703 41,464,253 41,464,253 -

–suppliers–total(ct.401+403+404+405+408) 3.336.389 2,339,235 2,339,235 -

–creditor clients (ct.419) 65,587 27,747 27,747 -

– debts to the social security budget (ct.431+437+4381+4481) 6,508,159 5,836,960 5,836,960 -

– debts to special fund budgets (ct.447+4481) 42,587 30,023 30,023 -

– debts to the state budget (ct.441+444+4423+4428+446+4481) 8,681,005 4,952,887 4,952,887 -

– debts to local budgets (ct.446+4481) 1,334,710 1,556,678 1,556,678 -

– various creditors (ct.462) 26,282,689 26,254,226 26,254,226 -

– debts to other creditors

(ct.421+423+424+426+427+4281+445+ 466,497 466,497 -

+451+452+455+ 456+457+4581+473+etc.) 374,286 0

III. Incomes recorded in advance (ct.472) 0 0 0 -

TOTAL DEBTS (rd.14+19+28) 33,942,823 41,464,253 41,464,253 -

Other financial liabilities include the performance guarantee from the suppliers, according to Annex 5c.



17

Suppliers - total, amounting to 2.339.235 lei, represent the amounts owed to the suppliers of materials, immobilizations and services as at 31.12.2017, detailed on maturities in Annex

no.5d.

Debts to employees, the State Budget, local budgets and the Social Insurance Budget and Special Funds are made up of current debts, due on 25.01.2018.

C. Affiliated parties Affiliated parties, as well as a brief description of their activities and their relationship with the Company, are as follows:

Affiliated party Activity Main relationships with the Company

FISE ElectricaServ Maintenance and repair services in the field of

electricity distribution

Receivables resulting from scission and sales of

maintenance and repairs, transport and services

Transilvania Sud, group company Maintenance and repair services in the field of

electricity distribution

Sales of maintenance and repairs, transport and

services


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE



18

EXPLANATORY NOTE ON BALANCE SHEET NO. 6

PRINCIPLES, ACCOUNTING POLICIES AND METHODS (INFORMATION FOR THE FISCAL YEAR 2017)

a) Accounting regulations applied to the preparation and presentation of financial statements

Law 31/1990 with subsequent amendments and completions

The accounting policies of SC SERVICII ENERGETICE OLTENIA SA

Law no.227 / 2015 regarding the Tax Code, updated

OMFP 1802/2014, modified and updated

b) There were no deviations from accounting principles and policies, valuation methods, and other provisions in accounting regulations

c) The values presented in the financial statements are comparable


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE



19

EXPLANATORY NOTE - NO. 7

PARTICIPATIONS AND FINANCING SOURCES (INFORMATION ON THE FISCAL YEAR 2017)

a) the existence of any participation certificates, transferable securities, convertible bonds, presenting the information required in Subsection 8.2;

Yes. - No. X

not the case

b) subscribed share capital / assets of the entity in lei

70,24,1800

c) the number and total value of each type of issued shares Number: 7,024,180 Shares value - 1: 10 Shares value - 2: 0

* fully paid YES

* the number of shares for which it was requested, without result, the realization of the

payments

not the case

d) redeemable shares:

* the closest date and the redemption deadline; not the case

* the mandatory or non-binding nature of the redemption; not the case

* the amount of any redemption premium; not the case

e) shares issued during the financial year:

* shares type; not the case

* number of issued shares; not the case

* the total nominal value and the value received at the distribution; not the case

* distribution rights: not the case

* the number, description and value of the corresponding shares; not the case

* period of exercise of rights; not the case

* the price paid for distributed shares; not the case

f) issued bonds:

* type of issued bonds; not the case

* the amount issued and the amount received for each type of bond; not the case



20

* bonds issued by the entity, held by a nominated person or empowered by it not the case

* the nominal value; not the case

* the value recorded at the time of payment. not the case

g) certificates of participation, securities, convertible bonds

* Explanation; not the case

At the beginning of 2017 the subscribed and paid-up share capital of the company was 70,241,800 lei, divided into 7,024,180 nominative shares, with a nominal value of 10 lei

/ share.

SC ENERGY SERVICES OLTENIA SA - does not have participations in shares and shares in other companies, did not buy or issue bonds in the exercise year 2017


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE

S.C. SERVICII ENERGETICE OLTENIA S.A.IN INSOLVENCY

SPECIAL ADMINISTRATOR REPORT DRAWN UP FOR THE FINANCIAL EXERCISE ENDED ON DECEMBER 31, 2017


21

EXPLANATORY NOTE ON BALANCE SHEET NO.8

INFORMATION ABOUT EMPLOYEES AND MEMBERS OF THE BOARD OF DIRECTORS, MANAGEMENT AND

SUPERVISORY BODIES (information for fiscal year 2017)

a) contractual obligations regarding the payment of pensions to former members of the boards of directors, management and

supervisory bodies the total amount of commitments for each category

2016 2017

administration NO NO

management NO NO

supervision NO NO

b) the amount of advances made to members of the boards of directors, management and supervisory bodies

2016 2017

0

c) the amount of credits given to the members of the administrative, management and supervisory bodies during the financial year

2016 2017

principalele clauze ale creditului NO NO

amount repaid by this date NO NO

future obligations such as the warranties assumed NO NO

d) employees:

2016 2017

actual average number with breakdown per category 212 219

TESA 29 28

foremen 8 8

workers 175 183

The Company has no contractual obligations to pay pensions to former administrators and directors, and did not give credits to

administrators and directors during the financial year 2017.

Treasury advances paid to the General Director are given under the Mandate Agreement.

The company's salary expenses in the year 2016 2017

Expenses on personnel salaries 8,099,224 9,521,165

Gift voucher costs 47,550 10,400

Contribution of the company to social security 1,293,447 1,252,014

Contribution of the company to Unemployment Benefit 40,201 38,042

Contribution of the company to health insurance 487,176 466,952

Other salary expenses 124,402 34,914

Total 10,092,000 11,323,487

The company had 8 part-time employees on 31.12.2017 and 33 employees employed for determined period to 31.12.2017.


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE




22

EXPLANATORY NOTE NO.9

CALCULATION AND ANALYSIS OF THE MAIN ECONOMIC AND FINANCIAL INDICATORS FOR THE YEAR 2017

2016 2017

A. Indicators of liquidity Lei Balance indicator Lei Balance indicator

Current liquidity indicator Current assets 13,345,659

0.44 14,954,791

0.36 Short term debts 30,178,820 41,529,559

Quick liquidity Indicator (Current Assets Stocks) 12,275,608

0.41 10,541,244

0.62 Short term debts 30,178,820 16,935,305

B. Risk indicators

Overall indebtedness (%) Debts >1 year*100 816,490

6.81% 0

0.00% Own capitals 11,984,327 15,623,223

C. Activity indicators

Number of storage days (no. days) Average stock *100/ 34,214,100

2 34,337,100

4 Cost of sales) 13,915,909 9,378,457

Customer-to-customer rotation speed (days) Balance customers at 31.12.*365/ 3,285,079,205

41 3,452,244,460

40 Value of invoices issued 21,856,893 23,738,721

Suppliers credit rotation speed (days) Balance suppliers at 31.12.*365/ 1,186,252,920

27 853,820,775

30

Value of invoices issued 9,331,667 7,895,689

Speed of rotation of fixed assets (number of rotations) Turnover/ 17,508,937

0.38 19,150,979

0.45 Fixed assets 45,717,927 42,168,490

Rotation Speed of Total Assets (Times Number) Turnover / 17,508,937

0.30 19,150,979

0.34 Fixed assets 59,063,445.00 57123281

C. Long-term solvency indicators

Overall solvency (%) Total Assets 59,063,445.00 196% 57123281 138%




23

Total debts 30,178,820 41,529,559

From the analysis of the economic and financial indicators achieved in 2017 compared to those realized in 2016, the following are observed:

A. Liquidity indicators reflect the Company's ability to meet its short-term liabilities. The values of the liquidity indicators registered by the Company at the close of the

financial years for 2017 are above the safety level (which is around 1), which shows that there is a guarantee of covering the current debts of the current assets. These indicators

are down compared to the previous year.

B. Risk indicators (Total Liability Ratio) is 0 as compared to the previous year due to the long-term debt of the company.

C. Activity indicators

The number of days of storage is 2 days

The rate of rotation of debts represents the number of days in which customer debts are recovered. This indicator decreased by a percentage from the previous year due to

outstanding claims recovered in the year 2017.

The rotation rate of credit-to-provider is the average number of days of credit that the Company obtained from commercial creditors. This indicator increased by 3% over the

previous year, due to the increase in suppliers' payment scales.

The rotation speed of fixed assets and the rotation speed of total assets are the effectiveness of asset management and total assets by the number of rotations made to achieve

turnover. These indicators show a slight increase over the previous year.

D. The long-term solvency indicators (Total Solvency) are determined as a ratio between the total assets and the total debts and indicate the degree of coverage of the total

debts by the Company's total assets and express the safety they enjoy by long term creditors. At the end of the previous year, this indicator was 196%, and at the end of 2017 it

fell to 138%.


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE




24

EXPLANATORY NOTE NO.10

OTHER INFORMATION CONCERNING THE FISCAL YEAR 2017

a) Information on the presentation of the reporting entity

SC. SERVICII ENERGETICE OLTENIA SA with headquarter in Craiova, Brestei street no. 5 Dolj carries out its activity in accordance with the applicable

Romanian legislation, corroborated with the provisions of the Articles of Incorporation.

The accounting records of the company are kept in Romanian and in the national currency.

The company has performed energy service activities, according to the contracts concluded, starting from the beginning of the financial year, and had an average

number of 219 employees.

b) Information on the entity's relationships with subsidiaries, associates, or other companies in which they hold participations

It is explained in explanatory note no. 5

c) Conversion bases used to express in national currency the assets and liabilities, incomes and expenses originally denominated in a foreign currency

The leu / euro exchange rate is 4,6597 lei for 1 euro, according to the BNR mention of 31.12.2017.

d) Turnover: 2016 2017

* on business

segments:

Maintenance auto 15,248,052 17,286,929

258,773 244,898

projection 261,861 235,027

selling goods 65,519 19,875

tenancy 1,222,961 1,537,391

total 17,057,166 19,324,120

e) Events after the balance sheet date that are of importance and whose non-presentation could affect the ability of users of the financial statements to

make valuations and make informed decisions

* the nature of the event:

During the year 2017 there were no financial leasing or operational leasing contracts.

f) fees paid to auditors / censors, or fees paid for other certification services 2016 2017

* the fee paid to financial auditors is in the amount of 25,000

* fees paid to law enforcement officers and lawyers 0 10,750 * fee paid to the legal administrator, MUSAT & ASOCIATII SRL 1,883,006 559,025 *fee paid to UNPIR 0




25

g) expected trade effects not arrived to maturity Not the case

h) commitments in the form of guarantees of any kind 2016 2017

cash management guarantees 47,429 47,429 good execution guarantees given to customers 76,039 162,435 good performance guarantees provided by suppliers 255,165 35,302

During the years 2016 and 2017, no fiscal control was carried out.


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE




26

EXPLANATORY NOTE NO. 11

STOCKS

Total value

12/31/2016

from which

Operat.

stocks

Slow

Movement

Stocks

Stocks with

no moving

Total value

12/31/2017

from which

Operat.

stocks

Slow

Movement

Stocks

Stocks with no

moving

0 5=6+7+8 6 7 8 5=6+7+8 6 7 8

Auxiliary materials 1,262,772 505,797 152,231 604,744 1,258,618 478,031 46,642 733,945

Non-technological fuel 6,458 6,458 0 0 3,559 3,559 0 0

Spare parts 1,485,608 382,252 47,678 1,055,678 1,550,225 423,848 38,397 1,087,980

Other consumables 15,114 6,735 1,423 6,956 8,986 1,499 184 7,303

Inventory items 36,770 24,423 1,152 11,195 120,124 112,067 1,438 6,619

Packing 9,890 1,247 640 8,003 7,923 0 0 7,923

Works and services in

progress

8,615.00

5,760.00

Total 2,825,227.00 926,912.00 203,124.00 1,686,576.00 2,955,195.00 1,019,004.00 86,661.00 1,843,770.00

There is a total increase of 132,823 lei as compared to 31.12.2016, about 1,05% due to:

- removing from the management, based on consumer bills, the materials that were used for the works performed to the beneficiary.

Non-moving stocks are mainly composed of:

- Materials remaining in the Central Warehouse of Energy Services Oltenia Craiova during the separation from SDFE - materials commissioned for various works by SDFE - (Oltenia Energy

Services Company was centralized for SDFEE) - and when the SDFEE was privatized in CEZ, they were not taken over , respectively:

- Current Transformers of Low Voltage SIMEN Ploiesti Type;

- Safety features 24 KV - Eximprod type;

- Current transformers of low voltage Electroputere Craiova Type;

- Car parts for cars that are no longer part of the car fleet.


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE




27

EXPLANATORY NOTE NO. 12

MONEY AVAILABILITY

Name

Balance at Balance at

31.12.2016 31.12.2017

1 Bank accounts 3,410,843 2,540,288

2 Cash at the cash desk 5,650 3,833

3 Cash at the end of the period ( 3=1+2) 3,416,493 2,544,121

4 Checks to be collected 0 5 Cash advances 0 700

6 Assimilated accounts 0 7 Assimilated accounts ( 7 = 4 + 5 + 6 ) 0 8 Cash and Assimilated Assets (8 = 3 + 7) 3,416,493 2,544,821


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE


SPECIAL ADMINISTRATOR REPORT

DRAWN UP FOR THE FINANCIAL EXERCISE ENDED ON DECEMBER

31,2017


NOTE 13

DISTRIBUTION OF PROFIT IN 2017

Lei

DESTINATION VALUE

NET PROFIT TO BE DISTRIBUTED: 3,875,177

- legal reserve

covering accounting losses 3,875,177

- dividends, etc.

NOT DISTRIBUTED PROFIT: 0

In 2017 the company registered a profit of 3,875,177 lei.

Between 01 January 2017 - 31 December 2017, SC Energia Oltenia SA recorded a result of operating

activity of: 3,873,836 lei and a result from the financial activity: 1,341 lei resulting in an accounting

profit of 3,875,177 lei.

For the same period the company recorded:

• Non-taxable incomes of 7,202,250 lei

• Non-deductible expenses of 4,917,475 lei

According to art. 19 of the updated Law 227/2015, SC Energie Servicii Oltenia SA registered on

31.12.2017 a fiscal result in the amount of 629.277 lei.

Taking into account the tax loss from the previous years, of 116,523,260 lei, the tax loss to be recovered

in the following years is 115,893,983 lei.


Sinan MUSTAFA


MUSAT&ASOCIATII

Drafted


Dorina IORDACHE

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