Translation from Romanian Please note that this is a translation from Romanian, and, in case of discrepancies, the Romanian version of the document prevails ELECTRONIC TRANSMISSION DISCLAIMER

STRICTLY NOT TO BE FORWARDED TO ANY OTHER PERSONS

THIS DOCUMENT IS AVAILABLE ONLY TO INVESTORS WHO ARE (1) QUALIFIED INSTITUTIONAL BUYERS (“QIBS”) AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR (2) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT (“REGULATION S”). IMPORTANT: You must read the following disclaimer before continuing. This electronic transmission applies to the attached document received via email, accessed from an internet page or otherwise received as a result of electronic communication and you are therefore advised to read this disclaimer carefully before reading, accessing or making any other use of the attached simplified prospectus (the “Prospectus”) relating to Societatea Energetică Electrica S.A. (the “Issuer” or “Electrica”). In accessing the attached document, you agree to be bound by the following terms and conditions, including any amendments to them from time to time, each time you receive any information from us as a result of such access. You acknowledge that this electronic transmission and the delivery of the attached document are confidential and intended for you only and you agree you will not forward, reproduce or publish this electronic transmission or the attached document to any other person. This electronic transmission and the attached document have been prepared solely in connection with the offering of new shares (the “New Shares”), to be represented by ordinary, nominative and dematerialised shares (the “Shares”, each New Share representing one Share), including New Shares to be represented by global depositary receipts, (the “GDRs”, each GDR representing 4 (four) New Shares) following the exercise of preference rights under the share capital increase of the Issuer (the “Offering”). The Offering is structured as an offering of Shares and/or GDRs, which is addressed only to entitled shareholders (the “Entitled Shareholders”) and, respectively, entitled GDRs holders (the “Entitled Holders of GDRs”), according to the preference rights they hold at the registration date of 24 October 2019 (the “Registration Date”), during the subscription period 1 November 2019, inclusively, – 3 December 2019, inclusively, (the “Subscription Period for Shares”), respectively until 22 november 2019 in the case of the Entitled Holders of GDRs (the “Date of Expiry of GDR Subscription”) (the Subscription Period for Shares, which also includes the time interval within which the Entitled Holders of GDRs can subscribe, until the Date of Expiry of GDR Subscription, are hereinafter referred to as the “Subscription Period”), according to art. 14 of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Prospectus Regulation”) and, respectively, art. 4 of the Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No 809/2004 (the “Delegated Regulation 2019/980”). Read the Prospectus before subscription. The Prospectus herein was approved by the Romanian Financial Supervisory Authority (in Romanian, Autoritatea de Supraveghere Financiară) (the “FSA”) for the purposes of the Offering, by Decision no. 1311 dated 30 October 2019. The FSA will assume no responsibility as to the economic and financial soundness of the transaction or the quality or solvency of the Issuer. The FSA will provide a notification of the approval together with a copy of the approved Prospectus to the United Kingdom Financial Conduct Authority (the “FCA”), in its capacity as competent authority under the United Kingdom Financial Services and Markets Act 2000 (“FSMA”), for the GDRs to be admitted to listing on the official list of the United Kingdom FCA (the “Official List”), in accordance with article 25 of the Prospectus Regulation, as well as to the European Securities Markets Authority, such in accordance with article 18 of the FSA Regulation 5/2018 on issuers of financial instruments and market operations (“Regulation 5/2018”) and article 20 of the Prospectus Regulation. The Prospectus will be published in due course and following publication, will be available in hard copy at the Issuer’s registered office and the BRD - Groupe Société Générale S.A.’s headquarters, as well as at the BRD - Groupe Société Générale S.A.’s branches assigned for subscriptions, as mentioned in Appendix 1 “BRD network for subscriptions within the share capital increase” to the Prospectus (upon subscribers request), and electronically on the Issuer’s website at www.electrica.ro, on the website of the Bucharest Stock Exchange at www.bvb.ro and on the website of BRD - Groupe Société Générale S.A. at www.brd.ro, as well as on the website of the national storage mechanism appointed by the FCA for the United Kingdom at http://www.morningstar.co.uk/uk/NSM. Any related disclosures in connection with the Offering are expected to be published on these websites. Prospective investors are advised to access such information prior to making an investment decision. NOTHING IN THIS ELECTRONIC TRANSMISSION OR THE PROSPECTUS CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES REFERRED TO IN THE PROSPECTUS HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), OR

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THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION AND SUCH SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS (AS DEFINED IN REGULATION S (‘‘REGULATION S’’) UNDER THE US SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. NEITHER THE PROSPECTUS NOR ANY PART OF IT MAY BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON, REPRODUCED IN ANY MANNER WHATSOEVER AND, IN PARTICULAR, FORWARDED TO ANY US PERSON OR TO A US ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE PROSPECTUS IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR APPLICABLE LAWS OF OTHER JURISDICTIONS. THIS ELECTRONIC TRANSMISSION, THE PROSPECTUS AND THE OFFERING ARE AVAILABLE ONLY TO INVESTORS WHO ARE EITHER: (1) ‘‘QUALIFIED INSTITUTIONAL BUYERS’’ (‘‘QIBs’’) WITHIN THE MEANING OF RULE 144A (‘‘RULE 144A’’) UNDER THE SECURITIES ACT OR (2) NON-US PERSONS (AS DEFINED IN REGULATION S) OUTSIDE OF THE UNITED STATES. Confirmation of Your Representation: This electronic transmission and the attached document are delivered to you on the basis that you are deemed to have represented to the Issuer and BRD - Groupe Société Générale S.A. (the “Manager”) that (i) you are in Romania; or (ii) you are a QIB; or (iii) you and the electronic mail address that you have provided are located outside United States (as defined in Regulation S); or (iv) if you are acting as financial intermediary (as that term is used in Article 5(1) of the Prospectus Regulation, the securities acquired by you as a financial intermediary in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, any person in circumstances which are not permitted. In addition, by accessing the attached document you have confirmed to the Manager and the Issuer, that (i) you have understood and agree to the terms set out herein, (ii) you consent to delivery by electronic transmission, (iii) you acknowledge that you will make your own assessment regarding any legal, taxation or other economic considerations with respect to your decision to purchase New Shares subject to the Offering under the attached document. You are reminded that you have received this electronic transmission and the attached document on the basis that you are a person into whose possession this document may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not nor are you authorised to deliver this document, electronically or otherwise, to any other person. If you receive this electronic transmission and the attached document by e-mail, you should not reply by e- mail. Any reply to e-mail communications, including those you generate by using the “reply” function on your e-mail software, will be ignored or rejected. If you receive the attached document in electronic format by e-mail, your use of such document in electronic format and such e-mail is at your own risk and it is your responsibility to take precautions to ensure that each is free from viruses and other items of a destructive nature. The electronic transmission and the attached documents do not constitute, and may not be used in connection with, an offer or solicitation in any place where such offers or solicitations are not permitted by law. If a jurisdiction requires that the Offering to be made by an authorized broker or dealer and the underwriters or any affiliate of the underwriters is an authorised broker or dealer in that jurisdiction, it shall be deemed to be made by the underwriters or such affiliate on behalf of the Issuer in such jurisdiction. This document has been made available to you in an electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither the Issuer, the Manager nor any of their respective affiliates accepts any liability or responsibility whatsoever in respect of any difference between the document distributed to you in electronic format and the hard copy version. By accessing the linked document, you consent to receiving it in electronic form. Neither the Manager nor any of its respective affiliates accepts any responsibility whatsoever for the contents of this document or for any statement made or purported to be made by it, or on its behalf, in connection with the Issuer or the New Shares. The Issuer and each of its respective affiliates, each accordingly disclaims all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of such document or any such statement. No representation or warranty express or implied, is made by the Manager or any of its respective affiliates as to the accuracy, completeness or sufficiency of the information set out in this document. The Manager is acting exclusively for the Issuer and no one else in connection with the Offering. It will not regard any other person (whether or not a recipient of this document) as their client in relation to the Offering and will not be responsible to anyone other than the Issuer for providing the protections afforded to its clients nor for giving advice in relation to the Offering or any transaction or arrangement referred to herein. The approval stamp applied on the Prospectus herein does not represent a warranty or other form of measurement by FSA of the opportunity, advantages or disadvantages, the profit or the risks that the acquiring of any New Shares object to the approval Decision mentioned above might imply. The approval decision certifies only the compliance of the Prospectus with the requirements of the law and of the applicable implementing norms.

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SOCIETATEA ENERGETICĂ ELECTRICA S.A. (the “Issuer” or “Electrica”) (a joint stock company (societate pe acțiuni) incorporated under the laws of Romania) Simplified prospectus regarding the issue of up to 309,869 new shares (the “New Shares”) in the form of ordinary, nominative and dematerialised shares (the “Shares”, each New Share representing one Share), including New Shares to be represented by global depositary receipts (“GDRs”, each GDR representing 4 (four) New Shares), by Electrica, with a nominal value of RON 10 per Share following the exercise of preference rights under the share capital increase of Electrica

The price for the exercise of the preference rights is: RON 10 per New Share in the form of one Share and the USD equivalent as of or about 25 November 2019 of RON 40 (plus certain costs, fees and expenses) per GDR (“Subscription Price”) In accordance with the provisions of art. 4 and art. 13, corroborated with the provisions of Annex 3 and Annex 12 of the Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No 809/2004 (the “Delegated Regulation 2019/980”), the Issuer declares as follows: (a) This simplified Prospectus (the “Prospectus”) has been approved by the Romanian Financial Supervisory Authority (the “FSA”), which is the Romanian competent authority for the purpose of the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Prospectus Regulation”); (b) The FSA has approved this Prospectus only from the standpoint of compliance with the standards regarding the exhaustive, intelligible and coherent character imposed by the Prospectus Regulation; (c) Such an approval should not be considered as an approval of the quality of the securities covered by this Prospect; (d) Investors should evaluate themselves to what extent the investment in the securities covered by this Prospectus is appropriate; (e) The Prospectus has been prepared as part of a simplified prospectus in accordance with Article 14 of the Prospectus Regulation. This Prospectus concerns an offering initiated by Societatea Energetică Electrica S.A., a joint stock company operating under the laws of Romania, with registered office at 9 Grigore Alexandrescu Street, 1st District, 010621, Bucharest, Romania, registered with the Bucharest Trade Registry under no. J40/7425/2000, having sole registration code 13267221 (referred to as the “Issuer” or “Electrica”) regarding the subscription of up to 309,869 new shares (the “Offering”), as well as the admission to trading of up to 604,983 new shares (the “New Shares”), in the form of ordinary, nominative and dematerialised shares with a nominal value of RON 10 per share (the “Shares”, each New Share representing one Share), including New Shares to be represented by global depositary receipts (“GDRs”, each GDR representing 4 (four) New Shares), corresponding to a share capital increase by contribution in kind and in cash approved by the Issuer’s extraordinary general meeting of shareholders held on 25 April 2019 and by resolution of the Issuer’s board of directors (the “Board of Directors”) dated 4 October 2019 (the “Share Capital Increase”), as follows: - 295,114 New Shares to be represented by the in-kind contribution of the Romanian State represented by the Ministry of Energy based on the ownership rights certificates issued by the Ministry of Economy, according to the valuation report 151/2019 as of 30 September 2019 issued by the independent expert Mapps Master Appraisal S.R.L., corporate member of ANEVAR with the registration number 0464, appointed by the resolution no. 61670/ 09.05.2019 of the National Office of the Trade Registry – Bucharest Trade Registry, within the file no. 230529/ 08.05.2019; and - up to 309,869 New Shares to be offered for subscription to the other existing shareholders (i.e. excepting the Romanian State) by cash contributions, following exercising of their preference rights. By way of this Offering, existing shareholders registered in the Issuer’s shareholders’ registry held by Depozitarul Central S.A. (“Entitled Shareholders”) and, respectively, GDRs holders (the “Entitled Holders of GDRs”) through The Bank of New York Mellon, in its capacity as GDR facility depositary (the “GDR Depositary”) at the registration date of 24 October

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2019 (the “Registration Date”) are given the opportunity to subscribe the New Shares issued for the purpose of the Share Capital Increase, based on their preference right (the “Preference Right”). The total number of Preference Rights issued in connection with the Share Capital Increase will be equal to the number of shares issued by the Issuer and held by the other shareholders excepting the Romanian State, registered in the Issuer’s shareholders’ registry held by Depozitarul Central S.A. at the Registration Date, i.e., 177,188,744 Preference Rights, including Preference Rights for shares which constitute underlying securities for GDRs, each GDR thus entitling to 4 (four) Preference Rights (the “GDR Preference Rights”). An Entitled Shareholder may purchase a maximum number of New Shares calculated by dividing the number of Preference Rights held by the number of Preference Rights needed to subscribe one New Share in the form of Shares. Therefore, for the subscription of one New Share in the form of a Share, a number of 571.8182328661470 Preference Rights is required (the “Share Subscription Rate”). An Entitled Holder of GDRs may purchase a maximum number of New Shares calculated by dividing the number of GDR Preference Rights held by the number of GDR Preference Rights needed to subscribe New Shares in the form of GDRs. Therefore, for the subscription of one GDR, a number of 571.8182328661470 GDR Preference Rights is required (the “GDR Subscription Rate”). In case that the maximum number of New Shares that can be subscribed during the Subscription Period (resulting from the above calculation) is not a natural number, the maximum number of New Shares that can actually be subscribed will be rounded down to the next lower natural number. The New Shares remaining unsubscribed after the period for exercising the Preference Rights, will be canceled by decision of the Board of Directors acknowledging the final results of the Share Capital Increase. The subscription price for the New Shares will be equal to RON 10 per one Share (equal to their nominal value) and, as calculated in accordance with the procedure described in Part 13 “Subscription and Sale - Subscription Procedure of New Shares by the Entitled Holders of GDRs”, the USD equivalent as of or about 25 November 2019 (the “Subscription Price Conversion Date”) of RON 40 per one GDR plus certain costs, fees and expenses, for their subscription within the Preference Rights (the “Subscription Price”). The Issuer’s shares are admitted to trading on the Regulated Spot Market of the Bucharest Stock Exchange (the “BSE”) under the market symbol “EL”, ISIN code ROELECACNOR5. The Issuer’s GDRs are admitted to trading on the main market operated by the London Stock Exchange (the “LSE”) under the market symbol “ELSA”. The New Shares issued in the form of GDRs pursuant to Regulation S will be identified by a temporary ISIN US83367Y4052, will not be fungible with outstanding Regulation S GDRs and will be subject to restrictions on resale in the United States until 40 days after the date of issuance. Following the lapse of the 40 days after the date of issuance, the New Shares issued in the form of GDRs pursuant to Regulation S will be identified with the ISIN code US83367Y2072. The ISIN code for the New Shares issued in the form of GDRs pursuant to Rule 114A is US83367Y1082 (being the same as the one for existing GDRs issued pursuant to Rule 114A). After the closing of the Offering and the registration of the Share Capital Increase with the Trade Registry Office attached to the Bucharest Tribunal, the FSA and Depozitarul Central, the Shares issued within the Share Capital Increase will be traded on the Regulated Spot Market of the BSE and the GDRs issued within the Share Capital Increase will be traded on the Main Market of the LSE (the “Admission”). Both the BSE and the LSE are regulated markets for the purpose of the Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as amended. The Preference Rights will not be admitted to trading and, respectively, traded. The FSA approval certifies only the conformity of this Prospectus with the legal requirements and the rules adopted for the application thereof in connection with the the Offering and will assume no responsibility as to the economic and financial soundness of the transaction or the quality or solvency of the Issuer. This Prospectus has been approved by the FSA but has not been, and will not be, approved by the United Kingdom Financial Conduct Authority (the “FCA”’), in its capacity as competent authority under the United Kingdom Financial Services and Markets Act 2000 (the “FSMA”). The Issuer has requested that the FSA to notify the FCA by providing a certificate of approval attesting that this Prospectus has been drawn up in accordance with the Prospectus Regulation (the “Notification”). The FSA will also provide a notification of the approval decision together with a copy of the approved Prospectus to the European Securities Markets Authority in accordance with article 18 of the FSA Regulation 5/2018 on issuers of financial instruments and market operations (“Regulation 5/2018”) and according to art. 20 from the Prospectus Regulation. This Prospectus does not contain an offer to sell, or solicitation of an offer to buy, securities in any jurisdiction in which such offer or solicitation would be unlawful. THE APPROVAL VISA APPLIED ON THIS PROSPECTUS DOES NOT CONSTITUTE A GUARANTEE OR ANY KIND OF ASSESSMENT BY THE FSA OF THE OPPORTUNITY, ADVANTAGES OR DISADVANTAGES, PROFIT OR RISKS INVOLVED BY THE TRANSACTIONS TO BE CONCLUDED FOLLOWING THE ACCEPTANCE OF THE OFFERING SUBJECT OF THE APPROVAL DECISION; THE APPROVAL DECISION CERTIFIES ONLY THAT THE PROSPECTUS COMPLIES WITH THE REQUIREMENTS OF THE LAW AND OF THE NORMS ADOPTED IN ITS APPLICATION. Approved by FSA by Decision no. 1311 of 30 October 2019

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Manager

BRD - GROUPE SOCIÉTÉ GÉNÉRALE S.A.

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IMPORTANT INFORMATION ABOUT THIS PROSPECTUS

This document comprises a simplified prospectus related to the Offering and Admission for the purposes of the Prospectus Regulation and complies with Law 24/2017 on issuers of financial instruments and market operations, as further amended and supplemented (“Law 24/2017”) and FSA Regulation 5/2018. RESPONSIBILITY STATEMENT The Issuer, Societatea Energetică Electrica S.A., declares that it is a joint stock company (in Romanian, societate pe acțiuni) duly incorporated and validly existing under the laws of the Romania, with its registered office at 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania, registered with the Bucharest Trade Registry under no. J40/7425/2000, having sole registration code 13267221 and accepts responsibility for the information contained in this Prospectus. To the best of the knowledge of the Issuer (who has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to significantly affect such information. The Issuer also confirms that the “Summary” included in this Prospectus accurately reflects the information included in the Prospectus and is not contradictory to other parts of the Prospectus. The Manager of the Offering is BRD - Groupe Société Générale S.A., organised and functioning according to the laws of Romania, registered in the FSA Register under no. PJR01INCR/400008 of 13 June 2006, having FSA Certificate no. 255 of 8 June 2008, registered in the Trade Registry under no. J40/608/1991, having sole registration code 361579, with registered office in 1-7 Ion Mihalache Blvd., 1st District, 011171 Bucharest (“BRD” or the “Manager”). The Manager does not accept any responsibility for the accuracy and truthfulness of the information contained in this Prospectus or for any other statements made or purported to be made by them or on their behalf in connection with the Issuer or the New Shares, except for the information included in the sections included/reviewed by the Manager in the Prospectus i.e., Part 13 “Subscription and Sale” (without the paragraphs related to GDRs holders), Annex 1 and the subscription form and revocation form and except for the responsibility for the subscription process performed in Romania through the Manager’s branches, as mentioned in Part 13 “Subscription and Sale” of the Prospectus. No person is authorised to disclose any information or to make any representation in connection with the Offering or the subscription of New Shares other than as contained in this Prospectus, and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer or the Manager or their respective affiliates. If any person provides any investor with different or inconsistent information compared to what is included in this Prospectus, such investor should not rely on such information. This Prospectus is being supplied by the Issuer for the purpose to allow the potential subscribers to assess the possibility of subscribing for New Shares. This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by the Issuer, or the Manager that any recipient of this Prospectus should subscribe for or purchase the New Shares. No representation or warranty, express or implied, is made by the Manager or any of its affiliates or advisors as to the accuracy or completeness of any information contained in this Prospectus or the corporate, financial or commercial standing of the Issuer, and nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation by the Manager as to the past or the future. Any reproduction or distribution of this Prospectus, in whole or in part, any disclosure of its contents, except to the extent that such contents are otherwise publicly available, and any use of any information herein for any purpose other than the purpose of its drafting, is prohibited. The delivery of this Prospectus shall not, under any circumstances, create any implication that there has been no change in the Issuer’s affairs since the date hereof, or that the information contained herein is correct at any time subsequent to such date. Each potential subscriber of New Shares, by accepting delivery of this Prospectus, agrees to the foregoing. The Manager makes no representation, express or implied, with respect to the accuracy or completeness of any of the information in this Prospectus. Each potential subscriber of New Shares should determine for itself the relevance of the information contained in this Prospectus, and any subscription of New Shares should be based upon such independent investigation, as it deems necessary, including the assessment of risks involved and its own determination of the suitability of any such investment, with particular reference to its own investment objectives and experience and any other factors that may be relevant to such investor in connection with the subscription of New Shares. Without prejudice to any obligation of the Issuer (in relation to which the Manager undertakes no responsibility whatsoever) to publish current and periodical reports pursuant to Law 24/2017, Regulation 5/2018 and Regulation (EU) No. 596/2014 of the European Parlament and of the Council on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, as well as any other applicable laws or regulations, neither the delivery of this Prospectus nor any subscription made in connection therewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since, or that information contained herein is correct as at any time subsequent to, the date of this Prospectus. The present Prospectus is addressed exclusively to the Entitled Shareholders and Entitled Holders of GDRs for the exercise of their Preference Rights by subscribing New Shares, in the form of Shares and in the form of GDRs, during the Subscription Period.

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The potential subscriber should not consider any information in this Prospectus to be investment, legal or tax advice. Each potential subscriber should consult its own legal counsel, financial adviser, accountant and other advisors for legal, tax, business, financial and related advice regarding the investment in the New Shares. None of the Issuer or the Manager makes any representation regarding the legality of an investment in the New Shares by a potential subscriber under appropriate investment or similar laws. Any potential subscriber who decides to subscribe the New Shares is required to know and comply with the restrictions and limitations ancillary to an investment in the New Shares referred to in this Prospectus. By subscribing New Shares, the potential subscribers assume any liability arising in the event that such subscription or purchase is deemed unlawful under their country of residence. With the exception set forth herein, the information on the Issuer’s website, any website mentioned in this Prospectus or any website directly or indirectly linked to the Issuer’s website is not incorporated by reference into this Prospectus and any decision to subscribe New Shares should not be made in reliance on such information. This Prospectus does not constitute or form part of any offer or invitation regarding the sale or issuance, or any solicitation of any offer to purchase, any securities other than the securities to which it relates and/or any offer or invitation to sell or issue, or any solicitation of any offer to purchase, such securities by any person in any circumstances in which such offer or solicitation is unlawful. The distribution of this may be restricted by law (including by way of required or necessary authorization, approval or notification) in certain jurisdictions. The potential subscriber must inform themself about and observe any such restrictions. No action has been taken by the Issuer or the Manager that would permit, otherwise than in Romania under the Offering, an offer of New Shares, or possession or distribution of this Prospectus or any other offering material or application form relating to the New Shares in any jurisdiction where action for that purpose is required. This Prospectus may not be used for, or in connection with, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer or solicitation is not authorised or is unlawful. The Manager acts exclusivly for the Issuer and, therefore, it does not act for any other person in connection with the Offering, and will not be held liabile to any other person for protecting its client or for providing advisory services as regards the Offering. This Prospectus will be available on the Issuer’s website at www.electrica.ro, on the website of the Bucharest Stock Exchange at www.bvb.ro, on the website of the Manager at www.brd.ro, as well as on the website of the national storage mechanism appointed by the FCA for the United Kingdom at http://www.morningstar.co.uk/uk/NSM and hard copies thereof will be provided free of charge upon request during normal business hours at the headquarters of the Issuer at 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania and at the Manager’s headquarter at 1-7 Ion Mihalache Blvd., 1st District, Bucharest, Romania, as well as at the Manager’s branches assigned for subscriptions, as mentioned in Appendix 1 “BRD network for subscriptions within the share capital increase” to the Prospectus. The information set forth in this Prospectus is only accurate as of the date on the front cover of this Prospectus, respectively as of the date of approval of this Prospectus. The Issuer’s business and financial position may have changed since that date. PRESENTATION OF FINANCIAL INFORMATION Financial information Unless otherwise indicated, the financial information in this Prospectus relating to the Issuer is extracted from the audited consolidated financial statements prepared in accordance with International Financial Reporting Standards as adopted by the European Union, as at and for the financial year ended 31 31 December 2018, accompanied by the independent auditor's report dated March 5, 2019 and the audited separate financial statements prepared in accordance with Ministry of Public Finance Order no. 2844/2016 for the approval of the Accounting Regulations in accordance with International Financial Reporting Standards, accompanied by the independent auditor's report dated 5 March 2019 (the “Annual Financial Statements”) and from the Issuer’s reviewed consolidated interim financial statements as at and for the six month period ended 30 June 2019, accompanied by the independent auditor's review report dated 13 August 2019 (the “Interim Financial Statements” and together with the Annual Financial Statements, the “Financial Statements”). The Issuer’s financial year ends on 31 December and references in this Prospectus to any specific year are to the 12-month period ended 31 December of such year. The Issuer’s presentation and functional currency is RON. Accordingly, the Financial Statements are presented in RON, unless otherwise indicated.

Auditors Deloitte Audit S.R.L., an independent audit company, audited the financial statements of the Issuer, both separate and consolidated as at and for the year ended 31 December 2018 and reviewed the consolidated interim financial statements of the Issuer as at and for the six month period ended 30 June 30 2019. Deloitte Audit S.R.L. has its headquarters located at 84-98 and 100-102 Calea Grivitei, The Mark building, floors 8-9, 1st District, Bucharest, Romania, registered with the Trade Registry under no. J40/6775/1995, having sole registration code 7756924, is member of the Chamber of Financial Auditors of Romania, registered in the Public Registry of Financial Page 7

Auditors under number 25/2001 and is registered in the Electronic Publice Register of the Authority for Public Supervision of the Statutory Audit Activity (“ASPAAS”) with no. FA25, based on the temporary visa for exercising the activity of financial auditor with series FA19 Temp no. 02 issued on 31 January 2019 by ASPAAS. Currency presentation Unless otherwise indicated, all references in this document to “RON”, “Romanian Leu”, “Leu” (singular) or “Lei” (plural) are to the lawful currency of Romania. All references to euro, “euro” “EUR” “Eurocents” or “€” are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended. All references to “U.S. dollars” or “US$” “dollars” are to the lawful currency of the United States. No representation is made that any specific currency amount in this Prospectus could have been converted into any of the other currencies presented in this Prospectus at any particular rate or at all. There are limited markets for the Romanian Leu outside Romania. The limited availability of such currencies may lead to volatility of exchange rates. The following table sets out the period end, high, average and low exchange rates, for the periods and dates indicated, of the Romanian Leu against the euro and the U.S. dollar, in each case as published by the National Bank of Romania for the relevant periods. Year Euro High Low Average Period End 2017 ...... 4.6597 4.4888 4.5681 4.6597 2018 ...... 4.6695 4.6206 4.6535 4.6639

Source: The National Bank of Romania.

Semester 1 Euro High Low Average Period End 2019 ...... 4.7648 4.6634 4.7414 4.7351 2018 ...... 4.6695 4.6225 4.6537 4.6611

Source: The National Bank of Romania.

Year U.S. dollar High Low Average Period End 2017 ...... 4.3408 3.8116 4.0525 3.8915 2018 ...... 4.1469 3.7170 3.9416 4.0736

Source: The National Bank of Romania.

Semester 1 U.S. dollar High Low Average Period End 2019 ...... 4.2755 4.0573 4.1955 4.1587 2018 ...... 4.0518 3.7170 3.8441 4.0033

Source: The National Bank of Romania.

Roundings Certain data in this document, including financial, statistical, and operating information has been rounded. As a result of the rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to 100%. The calculations, variations and other percentages may differ slightly from their actual calculations due to roundings of underlying financial, statistical and operating information. Market, economic and industry data Information regarding macroeconomic trends, market position and other industry data pertaining to the Issuer’s business contained in this Prospectus has been extracted from official and industry sources, data compiled by professional organizations and analysts, data from other external sources (such as ANRE, Eurostat, the National Prognosis Commission, IMF, the Romanian National Institute of Statistics, the National Bank of Romania) and the Issuer’s knowledge of its market. Sources of such information, data and statistics include independent industry publications, market research, internal surveys, reports and estimates, and other publicly available information. These data are subject to change and cannot be verified with complete certainty due to limits on the availability and certainty of the raw data and other limitations and uncertainties inherent in any statistical survey.

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Whilst the Issuer believes the third-party information included herein is reliable, it has not independently verified such third- party information, and neither the Issuer, nor the Manager make any representation or warranty as to the accuracy or completeness of such information as set forth in this Prospectus. The Issuer confirms that all third-party data contained in this Prospectus has been accurately reproduced and, so far as it is aware and able to ascertain from information published by that third-party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where third-party information has been used in this Prospectus, the source of such information has been identified. Service of process and enforcement of civil liabilities The Issuer has been incorporated under and is subject to Romanian law. The members of the Issuer’s Board of Directors and management are residents of Romania, and entities referred to herein are organised under the laws of Romania. All or a substantial portion of the assets of such persons and entities are located in Romania. Although the Issuer concluded a registered agent agreement valid until 9 June 2020, whereby the respective agent accepts, on behalf of the Issuer, service of process initiated on the territory of England and Wales and on the territory of the United States of America, it may not be possible for investors to:  effect service of process within other countries (except for those served by the process agent) upon any of the members of the Board of Directors and managers named in this Prospectus; or  enforce, in the United States or countries other than Romania, court judgments obtained in courts of the United States or such other countries against the Issuer or the members of the Board of Directors and managers named in this Prospectus in any action. The laws of Romania permit an action to be brought before a court of competent jurisdiction in Romania for the recognition and enforcement of a final and conclusive judgment in personam rendered by a court from an EU member state, provided that the relevant conditions set forth in EU Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters are met. However, other conditions may be applicable with respect to specific matters, under special Romanian legislation or international conventions. Similar rules on the recognition and enforcement of foreign court judgments apply to judgments issued in non-EU member states which are parties to the 2007 Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. Judgments rendered by courts in non-EU member states and which are not parties to the 2007 Lugano Convention are subject to different requirements and may be more difficult to enforce. Subject to special internal legislation (including ratified international conventions) regulating the recognition and enforcement of foreign judgments on specific matters, Romanian law allows an action to be brought before a court of competent jurisdiction in Romania for the recognition of a judgment in personam rendered by a court of a non-EU member state, provided that the relevant conditions in respect of recognition of foreign judgments set out under the Romanian Civil Procedure Code are met. Furthermore, the recognition and enforcement of foreign judgments in administrative, customs, criminal or other public law related matters is subject to special legislation and certain conditions may need to be fulfilled. Definitions and glossary Unless the context otherwise requires, references in this Prospectus to we, our and us refer to the Issuer. Certain terms used in this document, including all capitalized terms and certain technical and other items, are defined and explained in Part 15 “Definitions and Glossary.” Information not contained in this document No person has been authorized to give any information or make any representation other than those contained in this document and, if given or made, such information or representation must not be relied upon as having been so authorized. Neither the delivery of this document nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date of this document or that the information in this document is correct as of any time subsequent to the date hereof. Information regarding forward-looking statements This document includes certain forecasts, predictions and forward-looking statements - that is, statements related to future, not to past events (within the general meaning of the term and within the meaning of applicable securities laws) – with respect to the financial performance, operational results and businesses of Electrica Group and certain goals and objectives of Electrica with respect to the Group regarding these items. Certain statements, including such as those regarding: plans to enhance the overall financial performance of the Group, the expected levels of investments, prospects for future value creation arising from Electrica Group’s new investments, the Group’s outlook, including intentions of inorganic growth, plans to explore future opportunities for growth, expectations regarding the impact of various regulations upon Electrica Group’s business, upon future capital expenditures, taxation, gearing and, Electrica Group’s intention to maintain financial stability, are all forward looking in nature. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Issuer’s control and all of which are based on the Issuer’s current beliefs and expectations about future events. Forward-looking

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statements are sometimes identified by the use of forward-looking terminology such as “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”, “continues”, “assumes”, “positioned” or “anticipates” or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or expectations of the Issuer concerning, among other things, the operational results, financial position, liquidity, prospects, growth, strategies and dividend policy of the Issuer and the industry in which it operates. In particular, the statements under the headings “Summary”, “Risk Factors” and “Description of the Issuer” regarding the Issuer’s strategy and other future events or prospects are forward-looking statements. These forward-looking statements and other statements contained in this document regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Issuer. Actual results may differ materially from those expressed in such statements, depending on a variety of factors, such as: the receipt of relevant third party and/or regulatory approvals; operational matters; economic and financial market conditions; political stability and economic growth; changes in laws and governmental regulations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners, creditors, rating agencies and others; natural disasters; wars and acts of terrorism, cyber-attacks or sabotage. In addition to factors set forth elsewhere in this document, those set out above are important factors, although not exhaustive, that may cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. New risks can emerge from time to time, and it is not possible for us to predict all such risks. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this document speak only as of the date of this document. The Issuer expressly disclaims any obligation or undertaking to update these forward-looking statements contained in the document to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Regulation or the disclosure and transparency rules of the Romanian legislation or of the Regulated Spot Market of the BSE. NOTICE TO OVERSEAS INVESTORS The New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or with any securities regulatory authority of any state or other jurisdiction in the United States for offer or sale as part of their distribution and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable United States state securities laws. Investors must ensure that their offers and sales of the New Shares within the United States and other countries comply with any applicable securities laws. The Issuer has not been recommended by any U.S. federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Prospectus. Any representation to the contrary is a criminal offense in the United States. Subject to certain exceptions, the New Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen of any jurisdiction. This Prospectus does not constitute an offer of, or the solicitation of an offer to purchase any of the New Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. The distribution of this Prospectus and sale of the New Shares in certain jurisdictions may be restricted by law. No action has been or will be taken by the Issuer or the Manager to permit a public offering of the New Shares under the applicable securities laws of any jurisdiction and, no action has been taken or will be taken to permit the possession or distribution of this Prospectus (or any other offering or publicity materials relating to the New Shares) in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this Prospectus, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

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TABLE OF CONTENTS

PART PAGE

SUMMARY ...... 12 PART 1 RISK FACTORS ...... 20 PART 2 DESCRIPTION OF THE ISSUER ...... 33 PART 3 BOARD AND MANAGEMENT ...... 45 PART 4 PRINCIPAL SHAREHOLDERS ...... 54 PART 5 RELATED PARTIES TRANSACTIONS ...... 55 PART 6 MATERIAL AGREEMENTS ...... 56 PART 7 CERTAIN REGULATORY DISCLOSURES ...... 57 PART 8 REASONS FOR THE OFFER AND USE OF PROCEEDS...... 59 PART 9 SELECTED FINANCIAL INFORMATION ...... 60 PART 10 TAXATION ...... 82 PART 11 DETAILS OF THE OFFERING ...... 83 PART 12 TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECEIPTS ...... 90 PART 13 SUBSCRIPTION AND SALE ...... 101 PART 14 SELLING AND TRANSFER RESTRICTIONS ...... 113 PART 15 DEFINITIONS AND GLOSSARY ...... 114 PART 16 GENERAL INFORMATION...... 120 APPENDIX 1 BRD NETWORK FOR SUBSCRIPTIONS WITHIN THE SHARE CAPITAL INCREASE ...... 123

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SUMMARY This summary contains all the information required to be included in a summary for this type of security and issuer. This summary should be read as an introduction to the Prospectus. Any decision to subscribe New Shares should be based on consideration of the Prospectus as a whole by the Entitled Shareholders and Entitled Holders of GDRs. An Entitled Shareholder, respectively, an Entitled Holder of GDRs subscribing New Shares could lose all or part of the invested capital. The Issuer assumes civil liability in respect of this summary only if its is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or if it does not provide, when read together with the other parts of the Prospectus, key information in order to aid the Entitled Shareholders and Entitled Holders of GDRs when considering whether to subscribe the New Shares issued by the Issuer. Summaries are made up of disclosure requirements known as “Elements.” These Elements are numbered in Sections A-D (A.1 – D.4). Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding that Element. In this case a short description of the Element is included in the summary with the mention of “not applicable.”

Section A - Introduction and warnings

Element

A.1 This summary should be read as an introduction to the Prospectus. Any decision to invest in the New Shares, including Shares to be represented by new GDRs, should be based on a consideration of this Prospectus as a whole by the investor. The investor could lose all or part of the invested capital. Where a claim relating to information contained in the prospectus is brought before a court, the plaintiff might, under national law, have to bear the costs of translating the Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent, when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 The name and international The Issuer increases its share capital with a number of maximum 604,983 securities identification number New Shares (ISIN) of the securities ISIN Code for the New Shares issued in the form of the Shares: ROELECACNOR5 ISIN Code for the New Shares issued in the form of GDRs pursuant to Regulation S: the New Shares issued in the form of GDRs pursuant to Regulation S will be identified by a temporary ISIN US83367Y4052, will not be fungible with outstanding Regulation S GDRs and will be subject to restrictions on resale in the United States until 40 days after the date of issuance. Following the lapse of the 40 days after the date of issuance, the New Shares issued in the form of GDRs pursuant to Regulation S will be identified with the ISIN code US83367Y2072 ISIN Code for the New Shares issued in the form of GDRs pursuant to Rule 144A: US83367Y1082

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A.3 The identity and contact details of The Issuer is a joint-stock company incorporated and functioning under the issuer, including its legal Romanian laws, with its registered office located at 9 Grigore Alexandrescu entity identifier (LEI) Street, 1st District, Bucharest, Romania, registered under the Trade Registry number J40/7425/2000, sole registration code 13267221. The LEI Code of the Issuer is: 213800P4SUNUM5AUDX61. The Issuer’s telephone number of its registered office is +4021.208.5999 and the Issuer’s website is www.electrica.ro.

A.4 The identity and contact details of The Romanian Financial Supervisory Authority (the “FSA”), having its the competent authority approving headquarters located at 15 Splaiul Independenţei, 5th District, postal code the prospectus and, where 050092, Bucharest, Romania. different, the competent authority Fax: +4021.659.60.51 that approved the registration document or the universal Phone: +4021.659.64.36 registration document

A.5 The date of approval of the 30 October 2019 Prospectus

Section B - Issuer

Element

Who is the issuer of the securities?

B.1 Domicile and legal form, LEI The Issuer is a joint-stock company incorporated and functioning under code, the law under which it Romanian laws, with its registered office located at 9 Grigore Alexandrescu operates and its country of Street, 1st District, Bucharest, Romania, registered under the Trade Registry no. incorporation J40/7425/2000, sole registration code 13267221. The LEI Code of the Issuer is: 213800P4SUNUM5AUDX61.

B.2 Principal activities According to its Articles of Association, the Issuer has as main object of activity business and other management consultancy activities (NACE code 7022).

B.3 Major shareholders, including The main shareholder of the Issuer is the Romanian State, through the Ministry whether it is directly or of Energy, holding a number of 168,751,185 shares of the Issuer, representing indirectly owned or controlled 48.7805% of the Issuer’s share capital, and 49.7719% of its voting rights, and by whom respectively. The Issuer is not owned, directly and indirectly, by a majority shareholder.

B.4 The identity of its key The Issuer’s board of directors is composed of the following members: Valentin managing directors Radu, Gicu Iorga, Bogdan George Iliescu, Ramona Ungur, Dragos Andrei, Niculae Havrileț and Radu Mircea Florescu. The Issuer’s executive management is composed of: Georgeta Corina Popescu, Mihai Darie, Livioara Sujdea, Anamaria Dana Acristini-Georgescu, Catalina Popa, Bibiana Constantin, Mircea-Toma Modran.

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B.5 The identity of its statutory Deloitte Audit S.R.L., has its headquarters located at 84-98 Calea Grivitei, The auditors Mark building, floors 8-9, 1st District, Bucharest, Romania, is registered with the Trade Registry under no. J40/6775/1995, having sole registration code 7756924, and is member of the Chamber of Financial Auditors of Romania, registered in the Public Registry of Financial Auditors under number 25/2001, registered in the Electronic Publice Register of the Authority for Public Supervision of the Statutory Audit Activity (“ASPAAS”) with no. FA25, based on the temporary visa for exercising the activity of financial auditor with series FA19 Temp no. 02 issued on 31 January 2019 by ASPAAS.

What is the key financial information regarding the issuer?

B.6 Selected financial information

Consolidated Statements of Profit or Loss The consolidated statement of profit or loss for the financial years ended 31 December 2018 and respectively, 31 December 2017, as well as for the 6-month period ended at 30 June 2019 and, respectively, 30 June 2018, as extracted from the Financial Statements: For the financial year ended For the 6 (six)-month period ended 31 December 31 December 30 June 30 June 2018 2017 2019 2018 (audited) (audited) (reviewed) (reviewed) (thousand RON) Total revenues 5,612,784 5,603,235 3,101,205 2,653,549 Operating profit 260,976 197,034 123,765 261,382 Profit attributable to: - owners of the Issuer 230,395 127,730 108,786 209,624 - non-controlling interests - 43,829 - - Net profit for the year/ 6 month 230,395 171,559 108,786 209,624 period Basic and diluted earnings per 0.32 0.62 0.68 0.38 share (RON) Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the financial year ended 31 December 2018, as well as from the consolidated interim financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the six-month period ended 30 June 2019. Consolidated Statement of Financial Position The consolidated statement of financial position as at 31 December 2018 and respectively, as at 31 December 2017, as well as at 30 June 2019, as extracted from the Financial Statements:

31 December 2018 31 December 2017 30 June 2019 (audited) (audited) (reviewed) (thousand RON) Total assets 7,529,072 7,617,335 7,465,037 Total equity 5,628,441 5,655,556 5,489,721 Total liabilities 1,900,631 1,961,779 1,975,316 Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the financial year ended 31 December 2018, as well as from

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the consolidated interim financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the six-month period ended at 30 June 2019. Since 31 December 2018 until the date of approval of the Prospectus, there has been no material adverse change of the Group’s perspectives, financial or commercial position, except for the legislative and regulation changes relevant for the Group’s activities, presented in the Prospect.

Consolidated Statement of Cash Flows For the financial year ended For the 6 (six)-month period ended 31 December 31 December 30 June 30 June 2018 2017 2019 2018 (audited) (audited) (reviewed) (reviewed) (thousand RON) Net cash from operating activities 696,404 389,427 281,518 505,764 Net cash used in investing activities (187,135) (577,179) (464,024) (125,547) Net cash used in financing activities (277,100) (243,874) (272,914) (261,285)

Net increase/(decrease) in cash and cash equivalents 232,169 (431,626) (455,420) 118,932 Cash and cash equivalents at 1 January 314,589 746,215 546,758 314,589 Cash and cash equivalents at the end of the period 546,758 314,589 91,338 433,521 Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the financial year ended 31 December 2018, as well as from the consolidated interim financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the 6 month period ended at 30 June 2019.

What are the key risks that are specific to the issuer?

B.7  The Group’s supply segment is subject to increased competition on the electricity supply market The ongoing electricity market liberalisation and reforms could have an adverse effect on the operational results from, and management’s strategy relating to the Group’s supply segment. As a result, the Group’s financial performance could be adversely affected by competition from other suppliers who may offer better terms for electricity supply to the Group’s existing or potential consumers than those offered by the Group. Increased competition may force the Group to lower prices or may lead to a decrease in its supplied volumes of electricity. This could have an adverse effect on the Group’s business, operational results, financial position and prospects.  The Group’s financial performance could be adversely affected by changes in electricity prices and legislative and regulatory amendments. Evolution in the wholesale electricity price (including in the case of amendments of GEO 114/2018) are likely to impact the Group’s future revenues, profitability, cash flows and business’ growth rate and any change in wholesale electricity prices could result in a reduction in the Group’s net income or increase in the Group’s net losses. Any of these develelopments could adversely affect the Group’s business, operational results, financial position and prospects.  The Group’s supply subsidiary could lose its status of last resort supplier. There is a risk that Electrica Furnizare may lose its status as a last resort supplier, which could have negative effects on the Group's activity, operating results, financial position and outlook.  Particularly in the distribution segment, the Group's financial performance could be adversely affected by changes in regulated distribution tariffs. Any adverse change in the parameters based on

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which the regulated tariffs were established, as well as deviations from the operating targets set by ANRE could have an adverse effect on the Group’s business, operational results , financial position and prospects.  The Group’s distribution segment could suffer losses in case ANRE changes the regulated rate of return (RRR) on an annual basis. Should the RRR decrease, the Group could not have the necessary sources to continue its investment program at the ex-ante approved level. However, since according to the legislation in force, fines are to be applied by ANRE in case the investment plan is not met at a rate of 95%, the execution of investment plans could have a material adverse effect on the Group’s cash flow, distribution margins, and operational results.

Section C – Securities

What are the main features of the securities?

C.1 Type, class and ISIN The New Shares will be ordinary, nominative and dematerialised. ISIN Code for the New Shares issued in the form of Shares: ROELECACNOR5 ISIN Code for the New Shares issued in the form of GDRs pursuant to Regulation S: the New Shares issued in the form of GDRs pursuant to Regulation S will be identified by a temporary ISIN US83367Y4052, will not be fungible with outstanding Regulation S GDRs and will be subject to restrictions on resale in the United States until 40 days after the date of issuance. Following the lapse of the 40 days after the date of issuance, the New Shares issued in the form of GDRs pursuant to Regulation S will be identified with the ISIN code US83367Y2072 ISIN Code for the New Shares issued in the form of GDRs pursuant to Rule 144A: US83367Y1082

C.2 Their currency, The Issuer issues within the Share Capital Increase a number of up to 604,983 New denomination, par value, Shares, as follows: the number of securities  295,114 New Shares representing the in-kind contribution of the Romanian issued and the term of the State represented by the Ministry of Energy; and securities  up to 309,869 New Shares to be offered for subscription by cash contributions, following the exercise of the preference right, to the other shareholders (excepting the Romanian State). The New Shares in the form of Shares are issued at a Subscription Price equal to the nominal value of RON 10 per Share. The GDRs do not have a nominal value and will be issued at a Subscription Price calculated in accordance with the procedure described in Part 13 “Subscription and Sale - Subscription Procedure of New Shares by the Entitled Holders of GDRs”), the USD equivalent of RON 40 per one GDR as of the Subscription Price Conversion Date, plus certain costs, fees and expenses. Rights attached to the Shares: C.3 The rights attached to the  Right to participate and to vote within the general meeting of shareholders; securities  Right to dividends, namely to participate in the distribution of the Issuer's net profit;  Preference right;  Right to information;  Right to elect, and be elected to, the management bodies;  Right of withdrawal in certain cases and conditions provided by law;  Right to participate in the distribution of assets in case of liquidation;  The right to challenge the decisions of the general meeting of shareholders;

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 The right to secure registration and confirmation of the ownership of shares issued by the Issuer;  Other shareholders rights;  Obligation to report an important shareholding;  Obligation to make a mandatory takeover offer; and  Provisions regarding shareholders’ squeeze-out from Electrica. The rights attached to GDRs are described within this Prospectus according to the terms and conditions of the Deposit Agreement.

C.4 The relative seniority of the Not applicable. securities in the issuer’s capital structure in the event of insolvency

C.5 Any restrictions on the free The New Shares in the form of Shares will be freely transferable, in compliance transferability of the with the Romanian applicable laws and regulations. The New Shares in the form securities of GDRs will be transferable in accordance with the laws and regulations applicable thereto as per the constitutive deeds, respectively as per the applicable regulations based on the trading on the LSE. Certain transfer restrictions may be applicable depending on the Entitled Shareholder/ Entitled Holder of GDRs’ jurisdiction.

C.6 The dividend or payout According to the policy in force, the dividend distribution that the Board of policy Directors will consider in formulating the proposal to the Issuer’s OGMS will be between 65% and 100% of its distributable net profit obtained obtained by the Issuer at individual level. In case there are deviations outside this range, they will be substantiated and explained to shareholders in the periods in which they occur. The Issuer will pay all dividends in RON. In selecting a certain dividend pay-out ratio according to the Issuer’s dividend policy, the Board of Directors shall take into consideration the following:  reducing the fluctuations in dividend yield from one period to the next, as well as the absolute dividend per share value;  the Issuer's investment needs and opportunities;  any contributions of non-monetary items to net reported profit;  cash resources available for dividend distribution as well as the Issuer’s indebtedness;  dividend yield comparable to other listed companies in the industry or related sectors.

Where will the securities be traded?

C.7 Indication as to whether the Following the completion of the Offer, the Shares will be listed on the Regulated securities are or will be Spot Market of the BSE and the GDRs will be listed on Main Market of the LSE. subject to an application for admission to trading on a regulated market or for trading on an MTF and the identity of all the markets where the securities are or are to be traded;

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Is there a guarantee attached to the securities? - Not applicable

What are the key risks that are specific to the securities?

C.8  The New Shares may not be a suitable investment for all investors. Each potential subscriber in the New Shares must determine the suitability of that investment in light of its own circumstances. The investment activities are subject to applicable investment laws and regulations and/or review or regulation by certain authorities and each potential subscriber should consult its legal advisers or the appropriate regulators.  The New Shares may not become, or remain, listed. Should the admission/listing conditions change, there can be no assurance that all such listing and/or trading conditions will be met, in which case the Shares may not be admitted to trading on the Regulated Spot Market of the BSE or the GDRs may not be admitted to listing on the Official List or to trading on the Main Market of the LSE.  Trading on the BSE and/or on the LSE may be suspended. The FSA is authorized to suspend securities from trading or to request the BSE to suspend the trading of securities of a company listed on the BSE if such continuation of trading would negatively affect investors’ interests, which could affect the securities’ trading price and would impair their transfer. If the trading of the shares is suspended, this could also affect the trading of the GDRs, by notification of this suspension by the FSA.  Fluctuations of the price of the Shares or lack of lliquidity may impact the performance of an investment in the New Shares. The trading price of the shares may be extremely volatile, considering the current low liquidity. Thus, the market price for the Shares may not reflect the Issuer’s real market value, and external factors could have an adverse impact on the trading price of the Shares, which may trigger losses for investors, regardless of the Issuer’s activity.  Additional share capital increases resulting from Romanian State’s land contributions may result in the Romanian State holding more than 50% of Issuer's shares. In the case of share capital increases by in-kind contributions from the Romanian State, the other shareholders will have a preference right to purchase a number of shares that would allow them to maintain their initial quota in the share capital. If this preference right is not exercised, their quota will be diluted, so that the State might increase its stake to over 50% of the share capital.

Section D – Offer and admission to trading

Under which conditions and timetable can I invest in this security?

D.1 Terms and conditions of The Offering consists of up to 309,869 ordinary, nominative and dematerialised the offer New Shares, with a face value of RON 10/ per share, including New Shares represented by GDRs, each GDR representing 4 (four) New Shares, within the Share Capital Increase, to be offered for subscription to the Entitled Shareholders/ Entitled Holders of GDRs. For subscribing one New Share in the form of a Share, 571.8182328661470 Preference Rights are necessary (the “Share Subscription Rate”), and for subscribing New Shares in the form of one GDR, 571.8182328661470 GDR Preference Rights are necessary (the “GDR Subscription Rate”). If fractions of Shares and/or GDRs that may be subscribed result from the mathematical calculation, the maximum number of Shares and/or GDRs will be rounded down to the lower integer. Preference Rights will not be traded. The Offering is addressed exclusively to the Entitled Shareholders, respectively to the Entitled Holders of GDRs as of the Registration Date.

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The New Shares subscribed and allocated in the Offering will be admitted to trading on the Regulated Spot Market managed by the BSE in the form of Shares, on the Main segment, Premium category, under the symbol EL, and the New Shares in the form of GDRs will be admitted to trading on the Main Market of the LSE under the symbol “ELSA”.

Why is this prospectus being produced?

D.2 Use and estimated net The proceeds obtained by the Issuer following the Share Capital Increase shall be amount of proceeds used for the Issuer’s current activity funding. The total net proceeds obtained by the Issuer following the Share Capital Increase, after deduction of fees, rates and charges incurred with the Offering, will be of approximately RON 2.2 million (assuming that all the New Shares will be subscribed).

D.3 Indication of whether the Not applicable. offer is subject to an underwriting agreement on a firm commitment basis, stating any portion not covered

D.4 Interests having an On the date of this Prospectus, the Issuer is not aware of any interest, including impact on the Offering. conflict of interest, which is relevant for the Offering.

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PART 1

RISK FACTORS

Any investment in securities involves a high degree of risks. Before deciding whether to subscribe New Shares, prospective investors should carefully consider the risk factors associated with the New Shares, the Issuer’s business and the industry in which it operates, together with all other information contained in this Prospectus including, in particular, the risk factors described below. Prospective investors should note that the risks relating to the Issuer, to its industry and to the New Shares, as summarized in the section of this Prospectus headed “Summary” are the risks that the Issuer believes to be the most essential to an assessment by a prospective investor of whether to consider an investment in the New Shares. However, as the risks which the Issuer faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarized in the section of this Prospectus headed “Summary” but also, among other things, the risks and uncertainties described below. The occurrence of any of the following events could have an adverse effect on the Issuer’s business, prospects, operational results and financial position. The risk factors described below are not an exhaustive list or explanation of all risks which investors may face when making an investment in the New Shares and should be used as guidance only. Additional risks and uncertainties relating to the New Shares that are not currently known to the Issuer, or that the Issuer currently deems immaterial, may individually or cumulatively also have an adverse effect on the Issuer’s business, operational results and/or financial position and, if any such risk should occur, the price of the New Shares may decline and investors could lose all or part of their investment. An investment in the New Shares involves complex financial risks and is suitable only for investors who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. Investors should consider carefully whether an investment in the New Shares is suitable for them, in the light of the information in this Prospectus and their personal circumstances.

RISKS RELATING TO THE ISSUER’S BUSINESS AND INDUSTRY The Group’s supply segment is subject to increased competition on the electricity supply market The Group’s supply business has been facing increasing competition, both from new and existing market participants due to the liberalisation of the Romanian electricity supply market. The Romanian regulated electricity market for household consumers was fully liberalized starting 1 January 2018, followed by a return to the regulated tariffs starting with 1 March 2019, as an effect of GEO 114/2018. Price liberalisation led to an increase of competition and it is possible that this may result in customers to continue changing their electricity supplier from the Group to other competitors. These competitors, as well as other competitors that may enter the market in the future, may enjoy certain competitive advantages that the Group may not benefit from, such as achieving greater economies of scale, access to certain new technologies, more comprehensive product offerings, greater staff resources, a wider recognition of the name and even more experience, acquired on other markets (i.e., outside Romania), such as the competitors that are part of international groups. The Group's position in the electricity supply market will also depend on efficient marketing initiatives and its ability to anticipate and respond to various competitive factors affecting the industry, including new services, competitors' pricing strategies, changes of customers’ preferences and of the economic, political and social conditions. The ongoing energy market liberalisation and reforms could have an adverse effect on the operational results from, and management’s strategy relating to the Group’s supply segment. As a result, the Group’s financial performance could be adversely affected by competition from other suppliers who may offer better terms to the Group’s existing or potential consumers than those offered by the Group. Increased competition may force the Group to lower prices or may lead to a decrease in the supplied volume of electricity. These evolutions could have an adverse effect on the Group’s business, operational results, financial position and prospects.

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The Group’s financial performance could be adversely affected by changes in electricity prices and legislative and regulatory amendments The supply subsidiary, Electrica Furnizare S.A., has exposure to the Romanian wholesale electricity price as the Group currently purchases the entire amount of electricity it sells to its customers from the wholesale market. Since 2017, the electricity prices have fluctuated significantly, which has also led to a higher volatility in the supply segment’s financial results. This has lead the Group to develop and approve a new hedging strategy, including market risk and credit risk policies. In addition, a protection mechanism for thousehold customers for the electricity supplied under a regulated regime has been provided by GEO 114/2018. Moreover, GEO 114/2018 included also a recovery mechanism for the losses incurred during the 2018 – 2019 period, through which the differences in suppliers’ acquisition costs from 2018 and 2019, which have not been recovered through the applied prices, will be recovered between 1 March 2019 and 30 June 2022. The cancellation or amendment of GEO 114/2018 could have an adverse effect on the financial results of the Group. However, including in the event of the amendment of GEO 114/2018, the change of wholesale market prices for electricity is likely to impact the Group’s future revenues, profitability, cash flows and rate of growth and any change in wholesale electricity prices could result in a reduction of the Group’s net income or increase of the Group’s net losses. Any of these effects could materially and adversely affect the Group’s business, operational results, financial position and prospects. Additionally, the Group’s distribution business also has certain exposure to wholesale electricity prices equivalent to the potential difference between the cost for covering network losses allowed by ANRE and the actual cost for covering network losses of the Group’s distribution business for a given period. Moreover, even if the Group performs in line with the targets set by the regulatory framework in terms of network losses, an increase in electricity prices may lead to a delay in recovering the difference through tariffs that may lead to additional cost for the Group’s working capital needs. Accordingly, there is no assurance that the Group will be able to purchase electricity at current or historic prices. If the price of electricity purchased by the Group varies significantly from the price at which it sells electricity, this could adversely affect the Group’s business, operational results, financial position and prospects. The Group’s supply subsidiary could lose its status of last resort supplier Under regulations of ANRE Order 26/2018, ANRE will re-appoint the last resort suppliers under a competitive tender process for a maximum of three supply areas, for a period of four years. As a result, there is a risk that Electrica Furnizare may lose its status as a last resort supplier, which could have negative effects on the Group's activity, operating results, financial position and outlook. Particularly in the distribution segment, the Group’s financial performance could be adversely affected by changes in regulated distribution tariffs Tariffs for electricity distribution are set by ANRE, based on a Methodology and a set of parameters approved ex- ante. In 2019, a new regulatory period astarted, in which the Methodology and regulation parameters have changed significantly compared to the previous period. In general, the regulator may delay or refuse the approval of the electricity distribution tariffs at the level requested by the distribution operators, or the values approved may not reach levels required to match the expected return on capital expenditure. In particular, during the current regulatory period, the Group may not be able to operate at the level of efficiency established by ANRE. For example, the approved level of operating expensescould be insufficient to cover for actual levels of costs and the targets established for own technological consumption represent a more aggressive approach to the real potential of annual reduction, in conjunction with the other parameters approved ex-ante (for example the level of investments). As these targets are set by ANRE, by diminishing the values requested by the Distribution Operators, there can be no assurance that they will be able to carry out their activity in line with the values approved by ANRE ex-ante. Exceeding any of these targets could affect the Group's financial performance. In addition, a part of the capital expenditure in the Group’s distribution segment to upgrade the distribution network may not ultimately be fully recognised by ANRE as part of the RAB.

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Any adverse change in the parameters based on which the regulated tariffs were established, as well as deviations from the operating targets set by ANRE could have an adverse effect on the Group’s business, operational results, financial position and prospects. The Group’s distribution segment could suffer losses in case ANRE changes the regulated rate of return (RRR) on an annual basis According to the methodology for determining distribution tariffs for the fourth regulatory period, ANRE is entitled to change the RRR each year depending on the evolution of the values of the parameters taken into account when determining it. In case this should happen and the RRR should decrease, the Group could not have the necessary sources to continue its investment program at the level approved ex-ante. However, since according to the legislation in force, fines are to be applied by ANRE in case the investment plan is not met at a rate of 95%, the execution of the investment plan could have a material adverse effect on the Group’s cash flow, distribution margins and operational results. Components of the Group’s distribution network are subject to deterioration over time The components of the Group’s distribution network are adversely impacted by ageing of installations, continual operation and by environmental factors, as there are certain climate changes compared to the period in which such components were designed and executed. The distribution operators may fail to acurrately anticipate the level of expenditure required to maintain their distribution network and incur corrective maintenance expenditures in excess of those budgeted for. Natural processes that are beyond the distribution operators’ control may also result in an unexpected impairment of the certain property, plant or equipment. Furthermore, there may be situations in which the Group may not be able to fully implement the maintenance and investment programmes practices, which could increase the likelihood of failure, increase capital expenditure for the Group’s distribution business and result in an adverse effect on the Group’s business, operational results, financial position and prospects. Interruptions in electricity distribution could lead to fines with an adverse impact on the financial results Through the performance standard for distribution, ANRE establishes a series of technical and commercial indicators for the activity of distribution operators, that are periodically monitored. For non-fulfillment of any targets for the respective indicators, ANRE can impose fines, considering them as individual or even repeated deviations. Regarding the resumption of electricity supply to consumers, in case of interruptions due to defects in the distribution networks, the Standard establishes a certain duration for the resumption of electricity supply, differentiated for urban and rural areas. In accordance with the regulatory requirements, in case of non-compliance with the performance indicators provided in the Standard, starting with 2019, the distribution operator automatically grants compensation to users, without the necessity of a request from them. Demand for electricity in Romania is dependent on various factors over which the Group has no control, such as economic, political, climatic conditions Demand for electricity is subject to a variety of factors over which the Group has no control, including economic and political developments in Romania (and elsewhere), consumer demand (which includes a shift towards renewable energy sources), climatic conditions and the impact of economic and political events. A decrease in demand for electricity could result in lower revenues, in particular for the Group’s supply business, which could have an adverse effect on its business, results from operations, financial position and future prospects. Failure to execute management’s business strategy may lead to lower cost savings and lower revenue increase than the ones predicted for the Group The Group believes that its strategy and investment projects will lead to operational cost savings and additional revenues. The Group has made detailed plans in order to seek to ensure the successful implementation of its strategy and investment programme. Successful implementation of the envisaged transformation projects will require a significand amount of management time and this may affect or impact the ability of management to run the Group’s day-to-day business effectively during the implementation period. In addition, the Group reorganization could involve large investments (e.g. in IT tools) that may not be recognized by ANRE and could have a negative impact in the financial results, failing to achieve the original projected return.

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The Group's level of insurance may not cover all potential losses, liabilities and damages in connection with its activity, some risks being uninsured or uninsurable The Group is substantially self-insured. The business pursued by the Group also carries a number of risks which are not covered by the insurance policies held by the Group. The existing insurance may not be sufficient to cover all losses or liabilities of the potential Group’s liability. Claims arising from insurance may materialize after a long period and, consequently, if insurance from its own sources is used, management must estimate the level of reserves on historical claims in order to guarantee the level of insurance from own sources. To the extent that these estimates were inaccurate, the Group would not hold appropriate levels of insurance for its operations, or the Group would not have coverage for certain risks, so that it could suffer substantial loss of ownership and significant disruption in the provision of services for which it would not be compensated. In addition, depending on the severity of the property damage, the Group may not be able to rebuild the damaged property in good time or not be able to rebuild it at all. The Group does not maintain separate funds or otherwise set aside provisions for these types of events. Any such loss or claim for damages from third parties could have an adverse effect on the Group's activity, outlook, operational results and financial position. Ownership title over certain real estate properties owned by entities of the Group may be deemed uncertain Entities of the Group derive their ownership title over certain real estate assets as successors to CONEL, a predecessor entity of the Issuer. Ownership over these land plots is evidenced by ownership certificates issued pursuant to Law no. 15/1990 and GD no. 834/1991. Such ownership certificates were issued by the public institution involved at the time in the Group’s business (including, for example, the Ministry of Economy and Commerce) following review of the relevant documentation by an appointed commission. The commission takes into consideration the legal regime of the titles over the land plots in question (including, but not limited to, all relevant laws, orders, decisions, agreement, approvals), as well as the topographical documentation, and determines, inter alia, the aria of the land plots, coordinates the cadastral measurements, and reviews the issue of ownership certificates. The Group may face risks associated with restitution claims with regard to certain real estate properties. Ownership certificates can be challenged and voided if it can be proved that either the entity seeking the issuance of an ownership certificate in its name did not require the land for which the ownership certificate was issued in order to perform its activity or the commission establishes that the entity did not undertake all necessary verifications and obtain all mandatory documents and/or approvals before the issuance of the ownership certificate in question. Therefore, in addition to the risk of restitution claims being filed, there is also a risk for actions being initiated for the annulment of such certificates. Furthermore, the surface areas and the boundaries of property registered with the land registry are not always accurately recorded or cross-checked against those of other registered properties. This makes title to property vulnerable to claims with respect to the extent of their boundaries. Given the complexity of the development of the energy market in Romania and the number of the restructurings of State-owned companies involved, the specific circumstance relating to the ownership rights acquired under Law no. 15/1990 and GD no. 834/1991 and the generally complex issue of real estate ownership rights in Romania, there can be no assurance that the ownership rights of the members of the Group over certain real estate or constructions will not be successfully challenged in the future. In the event that a material number of ownership certificates owned by the Group are subsequently challenged, there could be a material and adverse effect on the operations, financial position and prospects of the Group. Entities of the Group may not have valid legal titles for the lands on which the network or the network infrastructure they operate is located The exercise by the distribution operators of the rights of use and ceasements on the state properties and of the administrative-territorial units affected by the energy capacities shall be carried out free of charge, throughout their existence. The ownership by Societatea de Distributie a Energiei Electrice Transilvania Nord S.A. (“SDTN”), Societatea de Distributie a Energiei Electrice Transilvania Sud S.A. (“SDTS”), Societatea de Distributie a Energiei Electrice Muntenia Nord S.A. (‘SDMN”) of the electrical grid infrastructure is generally not evidenced by documentation. Consequently there is a risk that SDTN, SDTS, SDMN do not have a valid title over all real estate where the

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distribution network is located or over the infrastructure pertaining to the electricity grid. In case third parties challenge such title and, if such challenge is successful, this may negatively impact the business of the Group’s distribution companies. The Group’s assets and/or business could be damaged by natural and man-made acts or disasters The Group’s operations may be adversely affected by a number of natural and man-made disasters or acts of terrorism, including human error, acts of theft or vandalism, adverse weather conditions, earthquakes or other natural disasters, terrorist attacks and other phenomena of nature or force majeure or similar. Any of these could lead to failure of its equipment and systems and could disrupt the electricity supply to its consumers or result in personal injury or damage to property. These risks could result in significant capital expenditures or costs of repairs, which could impact on the Group’s reputation and cause a loss of consumers or otherwise have a material adverse effect on its business, operational results, financial position or development prospects. The Group’s IT systems outage may adversely affect the business The Group’s business increasingly relies on a complex structure of different IT systems, and, following the execution of its investment programme, its distribution network will incorporate a complex smart grid that may suffer outages resulting from malfunction, cyber-attack, virus or a technical error of integration and/or communication between systems. In addition, such system failure may result in a potential, partial or total loss of customer data, which the management believes is a key competitive strength of its supply segment. Any such failure or possible partial or total loss of data may have a material adverse effect on the Group’s business, operational results, financial position or prospects. The Group may be confronted with workforce shortages, which may prevent the activity from functioning properly Workforce shortages in Romania might cause potential production losses and overload of the existing workforce, which may lead to macroeconomic imbalances and affect the business environment, thus affecting the financial perspectives of the companies in Romania. Thus, quantitative aspects, such as working age population decrease, activity rate decrease, aggregate qualified workforce demand increase, along with qualitative aspects, such as insufficient professional qualifications in the labour market, especially in the energy sector, the increased need for replacement of aging workforce, educational system that does not meet the needs of the market requirements, would lead to increased competition for workforce between companies. All these determine the attraction of qualified and competent resources, by promoting dual education and partnerships with educational institutions in order to identify, support and attract talents. Therefore, the difficulty of attracting skilled personnel and possible additional pressures from the labour unions may lead to wage cost increases, which may generate a possible decrease of the profitability of the Issuer. A strike or other labour disruption could adversely affect the Group’s business A substantial number of the Group’s employees are represented by labour unions and covered by collective bargaining agreements. The Group’s strategy to reduce costs and improve production efficiencies may also include the reduction of its workforce. In the event that agreements cannot be reached with labour unions for the method in which the workforce reduction occurs, this part of management strategy may fail and the Group could be impaired by strikes, threats of strikes or other resistance or work stoppages, which could have an adverse effect on the Group’s business, operational results, financial position and prospects. In the event members of the Group are the subject of labour related litigation, this could result in liabilities for the Group, which could have an adverse effect on its operational results and financial position. During transformation programs, top management positions may also be affected by restructuring. Depending on the agreement existing between the respective Group entity with the individual, the Group may be liable to pay significant lay-off compensations/compensations upon termination of agreements, or could be involved in related litigations. These could have a adverse effect on its operational results and financial position, as well as on the Group’s reputation.

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The Issuer is exposed to counterparty credit risk that may negatively affect the Issuer, its financial position and performance. In the ordinary course of its business, the Issuer is exposed to the risk that third parties who owe it money, will not perform their obligations due to insolvency, bankruptcy, lack of liquidity, global or local economic issues, operational failure, political developments or other reasons. This exposes the Issuer to the risk of counterparty defaults, which have historically been higher during periods of economic downturn. Currently, the Issuer is exposed to counterparty credit risk from its operating activities (mainly for trade receivables) and from its financial activities, including the deposits with banks and financial institutions, exchange rate transactions and other financial instruments. The Issuer will incur losses if its counterparties default on their obligations. If a higher than expected proportion of the Issuer’s counterparties default, or if the average amount lost as a result of defaults is higher than expected, actual losses due to counterparty defaults will exceed the amount of provisions already taken and operational results will be adversely affected. If losses due to counterparty defaults significantly exceed the amounts of the Issuer’s provisions or require an increase in provisions, there could be an adverse effect on the Issuer's business, financial position and operational results. The Issuer may be subject to the risk that liquidity may not be readily available in order to satisfy significant liquidity requirements and to finance future operations The Issuer relies mainly on financial resources generated by its operational activities to meet a substantial portion of its funding requirements, despite having contracted already certain long-term financing. Because a significant portion of the Issuer’s funding comes from its operational activities, any material decrease in the Issuer’s activity could have a negative impact on the Issuer’s liquidity, unless corresponding actions would be taken to improve its liquidity profile. There is a risk that the Issuer will require additional funding in the future e.g. due to lower sales revenues than expected or higher costs than anticipated, pursuance of new business opportunities or due to unforseen liabilities or investments. No guarantee can be given that the Issuer will be able to raise the required capital, either as equity and/or debt capital, at acceptable terms and within the required time. Any downgrade of Issuer’s credit ratings by reputed rating agencies could have a negative impact on its business The Issuer obtained the Issuer corporate rating of BBB (Investment Grade), with a stable outlook, from the rating agency Fitch. Any adverse revisions to Issuer’s corporate rating by Fitch may materially adversely impact its ability to obtain financing, which could affect the business, prospects, operational results, financial position and the Issuer’s reputation and the shares and GDRs prices. Share capital increases in the companies of the Group from in-kind contributions of real estate may be voided Romanian law requires share capital increases from in-kind contribution of real estate to be made based on an authenticated resolution of a general meeting of shareholders. There is a risk that this requirement applies even in the case where the share capital increase is performed based on the legal obligation of State-owned companies to increase their share capital with the value of plots of land for which ownership certificates are obtained. Most share capital increases of this nature of the Group companies did not comply with the requirement for an authenticated resolution of a general meeting of shareholders. Therefore there is a risk that a substantial number of such share capital increases could be challenged and declared null and void. Any shares issued through the share capital increases that are declared null and void would be subsequently annulled and the share capital reduced accordingly. If the Group does not maintain or improve its reputation for the quality of its service, its ability to attract new customers and retain existing customers may be harmed, which could adversely affect its business, financial position, operational results and prospects The ability to retain customers and to attract new customers depends in part on the Issuer’s brand recognition and its reputation for the quality of service. Negative public opinion towards the Issuer or the Group could result from real or perceived practices in the energy sector in general or even from the way that the Issuer conducts, or is perceived to

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conduct its business. In addition, the Issuer’s reputation is strongly linked to the reputation of the Group, meaning that any objective or perceived negative aspects of the Group’s business, financial position, operational results and prospects could in its turn have an adverse effect on the Issuer’s reputation. Although the Issuer makes all possible efforts to comply with the regulatory instructions in force and to increase the positive perception of its clients and prospective clients regarding its services, and is currently in top 10 Romanian brands, negative publicity and negative public opinion could adversely affect the Issuer’s ability to maintain and attract customers, which could have a material adverse effect on the Issuer’s business, financial position and prospects. RISKS RELATING TO LEGAL AND REGULATORY MATTERS AND LITIGATION The companies of the Group may be subject to fines, awards of damages or other penalties arising from legal proceedings, contractual claims and disputes, as well as negative publicity arising therefrom. In the context of their day-to-day operations, the companies of the Group are exposed to litigation risks. The companies of the Group may be adversely affected by the occurrence of contractual claims, complaints and litigation, including from counterparties with whom it has contractual relationships, customers, competitors or regulatory authorities, as well as any adverse publicity that it may attract. Any such litigation, complaints, contractual claims, or adverse publicity could have an adverse effect on the Issuer’s business, reputation, operational results and financial position. The Group is subject to specific regulatory requirements and is required to maintain licences and permits in force, and may be exposed to significant liabilities if it fails to maintain such licences and permits or comply with regulatory requirements. The Group is subject to various regulatory requirements governing the operation and maintenance of its distribution network, as well the operation of its electricity supply segment. The Group’s licences and permits require periodic renewal or review and place an obligation on the Group to monitor the quality of the electricity distribution and supply services, and to report to ANRE compliance with licence and permit conditions. If the Group is unable to comply with and/or renew such licences or permits, or if material changes to its licences or permits are imposed that require significant expenditure, the Group’s business could be adversely affected. Violations of laws and regulations applicable to the Group, or breaches of any conditions of the Group’s licences or permits, may result in fines or legal proceedings being commenced against members of the Group or other sanctions (such as suspension and/or withdrawal of the relevant licences). The Group may not at all times fully comply with laws and regulations applicable to it and it is possible that its compliance costs may exceed the amount that the Group has budgeted for in respect of its future capital and operating expenditures. This will be particularly true if any of the laws that materially affect the Group’s operations change or become more stringent in the future or if new laws that materially affect the Group’s operations are adopted. The Group’s costs of complying with current and future regulatory requirements and any loss of its material operating licences or permits could have an adverse effect on its business, operational results, financial position and prospects.

RISKS RELATING TO INVESTMENTS IN ROMANIA AS AN EMERGING MARKET The economy of Romania is more vulnerable to fluctuations in the global economy than developed markets. The Romanian economy is vulnerable to major global market downturns or economic slowdowns. The impact of global economic developments is often felt more strongly in emerging markets, such as Romania, than it is in more mature markets. As has happened in the past, financial problems or an increase in the perceived risks associated with investing in emerging economies could dampen foreign investment and the Romanian economy could thus face severe liquidity constraints, causing it to, among other things, raise tax rates or impose new taxes, with a negative impact on the Issuer’s business, reputation, operational results and financial position. Romania has undergone substantial political, economic and social change in recent years. As is typical of emerging markets, they do not possess the full business, legal and regulatory infrastructure that would generally exist in more mature free market economies. In addition, the tax legislation in Romania is subject to varying interpretations and changes, which can occur frequently.

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Moreover, Romania has experienced periods with significant political instability. In particular, for the past several years, the political environment in Romania has been unstable, dominated by political conflict and under significant pressure from massive street protests. Conflicts between the Government, the Parliament and the country’s President may lead to further political and social turmoil, which could hinder policymaking, as well as slow down economic development and institutional reforms. The future economic direction of Romania remains largely dependent upon the effectiveness of economic, financial and monetary measures undertaken by its government, together with tax, legal, regulatory, and political developments. Any potential Issuer’s failure to manage the risks associated with its business in emerging markets could have a material adverse effect on its operations. Any such development may adversely affect the Issuer’s business, reputation, operational results and financial position. The current and upcoming social, political and military conflicts in the region may have consequences, which may adversely affect the Issuer’s business. The ongoing political and military instability in the regions neighbouring Romania (marked by the conflict between Ukraine and the Russian Federation, as well as by the increased political instability in the Republic of Moldova), although without a significant impact on Romania, may cause materially adverse economic conditions, social turmoil or, in a worse case, military confrontation in the region. Effects are to a large extent unpredictable, but may include drop in investments caused by uncertainty in the region, causing also significant currency fluctuations, increases in interest rates, decreases in the availability of credit, trading and capital flows and increases in energy prices. These and other unforeseen negative effects of the crises in the region could have a material adverse effect on the Issuer’s business, prospects, operational results and financial position. Corruption could create a difficult business climate in Romania. Corruption is one of the main risks confronting companies with business operations in Romania. International and local media, as well as international organizations, have issued numerous alerting reports on the level of corruption. For example, the 2018 Transparency International Corruption Perceptions Index, which evaluates data on corruption in countries throughout the world and ranks countries from 0 (least corrupt) to 100 (most corrupt), ranked Romania in the 59th position (2017: 48; 2016: 48). Corruption has been reported to affect the judicial systems and some of the regulatory and administrative bodies in Romania, which may be relevant for the Issuer’s business. Although it is difficult to predict all of the effects of corruption on the Group’s operations, it can, among other things, slow down approvals of regulatory permits and licenses needed to conduct the business. Therefore, corruption could have an adverse effect on the Issuer’s business, prospects, operational results or financial position. Any downgrade of Romania’s credit ratings by an international rating agency could have a negative impact on the Issuer The long-term foreign and domestic currency debt of Romania is currently rated BBB- (stable) by S&P, Baa3 (stable) by Moody’s and BBB- by Fitch. Any adverse revisions to Romania’s credit ratings for domestic or international debt by these or similar international rating agencies may materially adversely impact the Issuer’s credit rating, its ability to raise additional financing and the interest rates and other commercial terms under which such additional financing is available. This could hamper the Issuer’s ability to obtain financing, which could have an adverse effect on our business, prospects, operational results and financial position. The UK referendum resulting in a vote to have the United Kingdom of Great Britain and Northern Ireland leave the European Union could create political and economic uncertainty and risks which may negatively affect the European financial markets and the Issuer’s business The referendum resulting in a vote for the United Kingdom of Great Britain and Northern Ireland to leave the European Union (“Brexit”), has created volatility in the global financial markets and could contribute to prolonged uncertainty around certain aspects of the European and global economies, as well as European companies and consumers. Brexit is currently expected to take place until 31 January 2020 and is likely to adversely affect European and worldwide economic conditions, and could contribute to greater instability, in the global financial markets before and after the

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terms of the United Kingdom’s future relationship with the European Union are set. Brexit could also affect the general political environment in the European Union, as well as the stability and standing of the European Union as a single market. Until more clarity is available around the legal, political and economic realities and requirements for Brexit, political and economic uncertainty, notably in European markets, may occur, which could lead to a downturn in the markets in which the Group operates and a decrease in spending and investment. Also, Brexit could impact the Issuer in terms of the requirements related to the status of company admitted to trading on the LSE through the GDR. Romania’s difficulties related to its post-accession process to the European Union may adversely affect the Issuer. Romania entered the European Union in January 2007 and continues to undergo legislative changes due to its accession to and its continued integration with the EU. As part of the accession process, the European Union has established a series of measures for Romania in order to fulfil basic EU membership requirements. The European Commission was tasked with monitoring Romania’s progress, which it does by issuing annual compliance reports. Although the European Commission’s progress report on the Co-operation and Verification Mechanism with Romania published on 25 January 2017 praised the country’s progress in some areas (e.g., its efforts to combat corruption, increased independence of the judicial system, integrity framework for civil servants, etc.), it also highlighted a number of issues that need to be further addressed. On 15 November 2017, the European Commission has issued its follow-up report concerning the issues previously identified. The report notes that progress has been achieved on a number of previous recommendations, in particular the recommendation to set up a system for checks on conflicts of interest in public procurement has been satisfactorily implemented and progress on other recommendations, subject to practical implementation. At the same time, the European Commission noted that the overall reform momentum in the course of 2017 has stalled, slowing down the fulfilment of the remaining recommendations, and with a risk of re- opening issues which the January 2017 report had considered as closed. The report issued on 13 November 2018, shows that developments since the January 2017 report have reversed the course of progress on issues which the European Commission considered positively in January 2017. This concerns progress on judicial independence and judicial reform and tackling high-level corruption and, as a result, additional recommendations were made. Unless satisfactory actions are taken, Romania could face EU sanctions, which could have a material adverse effect on financial operations, investments and capital flows in the country, and consequently, on the Group’s business, prospects, operational results and financial position, as well as on the trading price of the Shares. Such sanctions may take the form, for example, of a temporary suspension of the application of relevant provisions governing the relations of Romania with any other EU member state or member states or the suspension of member states’ obligations to recognize and enforce, under the conditions laid down in EU law, Romanian judgments and judicial decisions. The Romanian Leu can be subject to high volatility. The Romanian Leu is subject to a managed-variable exchange rate regime, whereby its value against foreign currencies is determined in the interbank foreign exchange market. The monetary policy of the National Bank of Romania (the “NBR”) is inflation-targeting. The managed-variable exchange rate regime is in line with using inflation targets as a nominal anchor for monetary policy and allowing for a flexible policy response to unpredicted shocks likely to affect the economy. The NBR does not target any level or range for the exchange rate. The ability of the NBR to limit volatility of the Romanian Leu is contingent on a number of economic and political factors, including the availability of foreign currency reserves and foreign direct investment inflows, as well as developments in market sentiment and investors’ risk aversion. Any changes to global investors’ perceptions of Romanian or global economic prospects may lead to further depreciation of the Romanian Leu. A significant depreciation of the Romanian Leu could adversely affect the country’s economic and financial position. Any higher than expected inflation resulting from the depreciation of the Leu could lead to a reduction in customer purchasing power and erosion of customer confidence, which may have a material adverse effect on the Issuer’s business, operational results and financial position.

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RISKS RELATING TO THE OFFERING AND TO NEW SHARES The New Shares may not be a suitable investment for all investors. Each potential subscriber in the New Shares must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:  have sufficient knowledge and experience to make a meaningful evaluation of the merits and risks of investing in the New Shares;  have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the New Shares and the impact such investment will have on its investment portfolio;  have sufficient financial resources and liquidity to bear all of the risks of an investment in the New Shares;  understand thoroughly the terms of the New Shares and be familiar with the behaviour of any relevant indices and financial markets; and  be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for the factors that may affect its investment and its ability to bear the applicable risks. Potential investors should not invest in the New Shares unless having the expertise (either alone or with the help of a financial adviser) to evaluate how the New Shares will perform under changing conditions, the resulting effects on the value of such New Shares and the impact this investment will have on the potential investor’s overall investment portfolio. The investment activities are subject to applicable investment laws and regulations and/or review or regulation by certain authorities and each potential subscriber should consult its legal advisers or the appropriate regulators. The New Shares may not become, or remain, listed. The Issuer intends to take all necessary steps to ensure that the New Shares in the form of Shares are admitted to trading on the Regulated Spot Market administered by the BSE as soon as possible after the closing of the Offering and that the New Shares in the form of GDRs are admitted to listing on the Official List and to trading on the Main Market of the LSE. There can be no assurance that, should such admission conditions change, all such listing and/or trading conditions will be met, in which case the Shares may not be admitted to trading on the Regulated Spot Market administered by the BSE or the GDRs may not be admitted to listing on the Official List or to trading on Main Market of the LSE. Trading on the BSE and/or on the LSE may be suspended The FSA is authorized to suspend securities from trading or to request the BSE to suspend the trading of securities of a company listed on the BSE if such continuation of trading would negatively affect investors’ interests, based on the measures taken against market manipulation and transactions carried out based on inside information. The BSE must suspend trading in securities that do not meet the requirements of the regulated market, unless such action could materially adversely affect the investors’ interests or the proper functioning of the market. If the BSE does not take such action, the FSA may request the suspension of trading in securities if this serves the proper functioning of the market and does not affect the investors’ interests. Also, the BSE is entitled to suspend securities from trading securities in other circumstances, in accordance with its own regulations. Any suspension could affect the securities’ trading price and would impair their transfer. If the trading of the Shares is suspended, this could also affect the trading of the GDRs. According to Romanian legislation governing GDRs, after the trading of the Shares is suspended, the Romanian FSA will notify the suspension, the causes and the duration of the suspension to the supervisory authority of the regulated market where the GDRs are traded. If the duration of the suspension is not known, the Romanian FSA will notify the relevant supervisory authority that the suspension has been lifted. The operator of the regulated market where the suspended Shares are traded must make a similar notification to the operator of the regulated market where the GDRs are traded. Fluctuations of the market price of the New Shares or illiquidity may impact the performance of an investment in the New Shares

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The trading price of the shares issued by companies admitted to trading may be extremely volatile, considering the current low liquidity. The shares admitted to trading on the markets managed by the BSE and LSE have a limited liquidity and hence their market price is volatile. The trading price of the Shares may be subject to wide fluctuations in response to many factors, whether internal, generated by the Issuer’s activity or strategy, as well as the Issuer’s results, or external, including the evolution of the prices for securities on other European and global markets, changes in the Issuer’s applicable legal framework, changes in the evolution of the energy sector in Romania, political or economic changes and other factors external to the Issuer’s activity. Thus, the market price for the Shares may not reflect the Issuer’s real market value, and the external factors mentioned above could have an adverse impact on the trading price of the Shares, which may trigger losses for investors, regardless of the Issuer’s activity. Additional share capital increases resulting from the Romanian State land contributions may result in the State holding more than 50% of Issuer’s shares Under Romanian privatisation legislation, the share capital of the Issuer shall be automatically increased by operation of law with the value of the relevant plots of land for which the Issuer obtains the relevant ownership certificates after the Offering or, for which it obtained the certificates before the Offering, but for which it did not increase its share capital until the Offering. Such capital increases will be deemed as in-kind contributions of the State, and newly issued shares in the Issuer will be allotted to the Romanian State, represented by the Ministry of Energy. The rest of the Issuer’s shareholders will have a preference right to purchase a number of shares that would allow them to maintain their initial shareholding quota. However, if such shareholders do not exercise their preference rights, they will be diluted and if the value of the real estate contributed in kind is large enough, the State might increase its stake in the Issuer to over 50%. At the moment of the Prospectus, the Issuer owns 6,890,593 of its shares from the stabilization process that was undertaken after the June 2014 Initial Public Offering. The holding represents 1.99% of the total share capital, which does not entitle Electrica the right neither to vote, nor to receive dividends. The risk presented above could also materialize in the case the Issuer decides the annulement of its own shares. As a consequence of the above, the Romanian State could exceed the threshold of 50% of the total voting rights, which could lead to the exercise of the majority control over the Issuer. In this situation, the application of a legislative package specific to state-owned companies, could lead to a significant change in the corporate governance applicable to the Issuer, as well as to other changes in the relationship between the Issuer and its shareholders. At the same time, the potential different interests of the Romanian State and of the other shareholders of the Issuer could generate conflicts and/or prevent the implementation in full, on time and in optimal terms, by the Group, of the business strategy, which could adversely affect the Issuer’s business, operational results, financial position and prospects. Preference Rights of shareholders may not be available in the case of shareholders from certain jurisdictions Issuer’s shareholders and holders of GDRs have, in the case of a share capital increase, preference subscription rights for the New Shares that the Issuer proposes to issue. Nonetheless, holders of New Shares located in certain jurisdictions cannot exercise such rights unless the applicable securities law requirements in such jurisdictions would be adhered to or exemptions from such requirements would be available. As the Issuer is unlikely to adhere to such requirements and as exemptions are likely not to be available, the Issuer cannot exclude that the holders of New Shares located in such jurisdictions may not be able to exercise their Preference Rights and hence may not be able to subscribe New Shares under the share capital increases implemented by the Issuer, including under the Share Capital Increase and, as a result, the shareholdings of such shareholders in the Issuer’s share capital could be diluted. Exchange rate variations may have an adverse impact on the value of non-Romanian holders of New Shares The price of the New Shares and any potential dividends that the Issuer would distribute to the shareholders are denominated in RON. Investments by investors using as reference currency another currency than RON, could expose such investors to foreign currency exchange rate fluctuation risk. Any depreciation of the RON in relation to such foreign currency will reduce the value of the investment in the New Shares or of the dividends payable by the Issuer for those investors.

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The Entitled Shareholders are subject to Romanian tax legislation related to the trading of the Shares and distributions made by the Issuer in connection with them Prospective investors in the New Shares may be required to pay taxes or charges related to the trading of New Shares in accordance with the laws of Romania. Prospective investors should consult their advisors regarding the tax consequences of the acquisition, holding and trading of the New Shares and not rely solely upon the taxation considerations set out in this Prospectus, as other conditions may apply to their particular situation. The Issuer may not pay dividends in the future, and foreign shareholders and GDRs’ holders may also be subject to limitations or delays in repatriating their earnings from distributions made on the underlying shares The payment of dividends, if any, to the Issuer’s shareholders and GDRs’ holders will depend on (in addition to applicable regulatory requirements), among other things, the Issuer’s future profits, financial position and capital requirements, the sufficiency of the Issuer’s distributable reserves, credit terms, general economic conditions and other factors that the management and/or shareholders deem to be important from time to time. The price of the shares may be adversely affected if the Issuer’s shareholders decide against declaring dividends in the future. The Issuer anticipates that any dividends that it may pay in the future in respect of the shares held by its shareholders, including the GDR Depositary or its nominee on behalf of GDR holders, will be declared and paid in RON and, in the case of GDRs, will be paid to the GDR Depositary and will be converted into US dollars by the GDR Depositary and distributed to holders of the GDRs, net of all fees, taxes, duties, charges, cost and expenses which may become or have become payable under the Deposit Agreement or under applicable law in respect of such GDRs. Accordingly, the value of dividends received by foreign shareholders would be subject to fluctuations in the exchange rate between the RON and the US dollar, which could have an adverse effect on the price of the Shares/ GDRs. Furthermore, even though current Romanian legislation permits distributions in RON to be converted into US dollars by the GDR Depositary without restriction, the ability to convert RON into US dollars is subject to the availability of US dollars in Romanian currency markets. Whilst there is an existing, albeit limited, market within Romania for the conversion of RON into US dollars, including the interbank currency exchange and over-the-counter and currency futures markets, further development of this market is uncertain. The NBR could also impose certain restrictions and requirements with respect to foreign currency operations carried out in Romania. Voting rights with respect to GDR’s underlying shares are subject to procedural steps and practical limitations imposed by the terms of the Deposit Agreement and the relevant requirements of Romanian law The GDRs’ holders have no direct voting rights with respect to the shares represented by the GDRs. However, they may exercise their voting rights with respect to the shares represented by the GDRs only in accordance with the provisions of the terms and conditions of the GDRs and the relevant requirements of Romanian law. There are, therefore, practical limitations upon the ability of the GDRs’ holders to exercise their voting rights due to the additional procedural steps involved in communicating with them. Thus, in order to exercise their voting rights, the GDRs’s holders must instruct the GDR Depositary how to vote with respect to the shares represented by the GDRs they hold. Because of this additional procedural step involving the GDR Depositary, the process for exercising voting rights may take longer for GDRs’ holders than for holders of the Shares, and the Issuer cannot assure the GDRs’ holders that they will receive voting materials in time to enable them to return voting instructions to the GDR Depositary in a timely manner. The GDR Depositary will not vote on GDRs if it does not receive complete, legible and clear voting instructions within the time period established by it. Furthermore, whilst Romanian securities regulations expressly permit the GDR Depositary to split the votes with respect to the shares underlying the GDRs in accordance with instructions from GDR holders, there is no court or regulatory guidance on the application of such regulations. The GDRs’ holders may therefore have significant difficulty in exercising voting rights with respect to the shares underlying the GDRs. There can be no assurance that holders and beneficial holders of GDRs will (i) receive notice of shareholders’ meetings to enable the timely return of voting instructions to the GDR Depositary, (ii) receive notice to enable the timely conversion of GDRs or (iii) shall have the right to oppose or the minority shareholders’ rights with respect to an event or action in which the holder or beneficial owner has voted against, abstained from voting or not given voting instructions. The GDR Depositary is only required to execute the voting instructions of the holders of GDRs insofar as practicable and as permitted under applicable law. In practice, holders of GDRs may not be able to instruct the Depositary to: (i) vote on the shares

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represented by their GDRs on a cumulative basis, (ii) introduce proposals for the agenda of shareholders’ meetings or request that a shareholders’ meeting be called or (iii) nominate candidates for the board of directors or for other positions of the Issuer’s governance bodies. If holders of GDRs wish to take such actions, they should request in a timely manner that their GDRs be cancelled and instead take delivery of the shares and thus become the holders of the shares on the Issuer’s share register.

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PART 2 DESCRIPTION OF THE ISSUER

1. General information

Identification details The legal name of the Issuer is Societatea Energetică Electrica S.A. The Issuer is a joint-stock company incorporated and functioning under Romanian laws, with its registered office located at 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania, registered with the Trade Registry under number J40/7425/2000, sole registration code 13267221, LEI code 213800P4SUNUM5AUDX61 and is a tax resident. Its share capital, issued and subscribed, consists in 345,939,929 shares with a nominal value of 10 RON each, sums up to RON 3,459,399,290 and the authorised share capital is RON 3,477,399,290. According to the Articles of Association, the Issuer functions for an indefinite period. The Issuer’s telephone number of its registered office is +4021.208.5999, the e-mail addresses are [email protected] and [email protected] and the Issuer’s website is www.electrica.ro. Note that the information on the Issuer’s website does not form part of the Prospectus. The Issuer’s shares are listed on the BSE Main Market, at the Premium Category and are traded under the symbol EL and ISIN number ROELECACNOR5. The GDRs, each representing 4 (four) shares are listed on the LSE, under the market symbol “ELSA”, ISIN code for the GDRs issued according to Regulation S: US83367Y2072 and for the GDRs issued according to Rule 144A: US83367Y1082. History and development In 1990, the Romanian government created a vertically integrated State-owned enterprise, the National Electricity Autonomous Administration, RENEL, to produce, transport and distribute electricity and thermal energy, to develop the National Electroenergy System and conduct electricity import and export to and from Romania. In 1998, RENEL was subsequently restructured into three companies: the National Electricity Company CONEL, the National Company Nuclearelectrica and the Autonomous Administration for Nuclear Activities. CONEL was responsible for the production, transmission, distribution and supply of electricity and the production and sale of thermal energy, through three wholly owned subsidiaries: Hidroelectrica, a hydro power generator, Termoelectrica, a thermal power producer and Electrica, an electricity distributor and supplier, which was a predecessor company but not the same legal entity as the Issuer. In 2000, CONEL was reorganised into four independent companies: the National Electricity Transmission Company ‘‘Transelectrica’’, the Electricity and Thermal Energy Production Company ‘‘Termoelectrica’’, the Electricity Production Company ‘‘Hidroelectrica’’ and the Electricity Distribution and Supply Company ‘‘Electrica’’. In 2002, as an effect of Government Decision no. 1342/2001 regarding the Issuer’s reorganisation, eight regional distribution and supply companies were incorporated. Between 2004 and 2008, controlling interests in five of these eight regional companies were acquired by theinternational operators ENEL, E.ON and CEZ, with the Issuer retaining minority interests in Enel Distributie Muntenia S.A. (currently named E-Distribuție Muntenia S.A.) (23.57%), Enel Energie Muntenia S.A. (23.57%), Enel Distributie Dobrogea S.A. (currently named E-Distributie Dobrogea) (24.90%), Enel Distributie Banat S.A. (currently named E-Distribuție Banat S.A.) (24.87%), Enel Energie S.A. (36.99%), E.ON Moldova Distributie S.A. (currently named Delgaz Grid) (27%) and E.ON Energie Romania S.A. (3.78%). Each of these companies were formed as part of the privatisation process of the electricity distribution and supply businesses. The Government Decision no. 85/2013, amended and completed by Government Decision no. 477/2014 approved the privatization strategy of Electrica through initial public offer (the “Initial Public Offering”). During this strategy, the spin-off for the benefit of the shareholders was approved, process that lead to the registration of Societatea de Administrare a Participațiilor în Energie (SAPE), fully State-owned. During the spin-off process, the Issuer’s shares in Enel Energie Muntenia S.A., Enel Distributie Muntenia S.A., Enel Distributie Banat S.A., Enel Distributie Dobrogea S.A., Enel Energie S.A., E.ON Moldova Distributie S.A. and E.ON Energie Romania S.A. were transferred to SAPE. This process, initiated in Decembre 2013, was finalised through Court aprroval in April 2014.

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The privatization strategy included the offer for sale of a stake by issuance of new shares representing 105% of the existing share capital as at the date of the Initial Public Offering. The shares were offered to both individual and institutional investors on the Romanian market, as well as to qualified investors on the US market and outside USA, and as Global Depositary Receipts (“GDRs”) on the United Kingdom market. The Initial Public Offering was organised between 11 and 27 June 2014 and entailed to an offering by the Issuer of 177,188,744 ordinary shares in the form of shares and in the form of GDRs, each GDR representing 4 (four) shares. Following the Initial Public Offering, the Issuer sold 142,007,744 shares and 8,795,250 GDRs, at the offer prices of RON 11 per share and USD 13.66 per GDR. The Initial Public Offering was concluded on 27 June 2014 and the transfer of ownership right over the new shares and the collection of cash by the Issuer took place on 2 July 2014. At the same date the increase in share capital was recorded in the Trade Register. Starting with 4 July 2014, the Issuer’s shares are listed on BSE and the GDRs are listed on the LSE. 2. Organisational structure. Overview of the Group The Issuer is the parent company for the Group’s operating subsidiaries, which comprises:  in the distribution segment: o three distribution subsidiaries, Societatea de Distributie a Energiei Electrice Transilvania Nord S.A. (“SDTN”), Societatea de Distributie a Energiei Electrice Transilvania Sud S.A. (“SDTS”), Societatea de Distributie a Energiei Electrice Muntenia Nord S.A. (“SDMN”) and o one energy services subsidiary, Electrica Serv S.A. (“EL SERV”);  in the supply segment, one subsidiary, Electrica Furnizare S.A. (“EFSA”);  in the segment of services related to the external distribution networks, which activates in the energy sector: o Servicii Energetice Muntenia S.A. (“SEM”), which was in insolvency procedure from October 2014, based on the decision of the Board of Directors of SEM, until April 2019, when the Bucharest Court established the closure of the insolvency proceedings; o four other subsidiaries currently in bankruptcy: Servicii Energetice Oltenia S.A., Servicii Energetice Moldova S.A., Servicii Energetice Banat S.A., Servicii Energetice Dobrogea S.A. As at 30 June 2019 and 31 December 2018, the Issuer’s subsidiaries that are being consolidated are the following: Subsidiary Activity Sole Head Office % shareholding as % shareholding as registration at 30 June 2019 at 31 December code 2018

Societatea de Distributie a Electricity distribution 14506181 Ploiesti 99.9999719027621%99.9999696922382% Energiei Electrice Muntenia in the geographical Nord S.A. area of Northern Muntenia Societatea de Distributie a Electricity distribution 14476722 Cluj-Napoca 99.9999731064276%99.9999829770757% Energiei Electrice in the geographical Transilvania Nord S.A. area of Northern Transylvania Societatea de Distributie a Electricity distribution 14493260 Brasov 99.999977569745% 99.999976413243% Energiei Electrice in the geographical Transilvania Sud S.A. area of Southern Transylvania Electrica Furnizare S.A. Electricity Supply 28909028 Bucharest 99.9998390431663%99.9998390431663% Electrica Serv S.A. Services in the energy 17329505 Bucharest 100% 100% sector (maintenance, repairs, construction) Servicii Energetice Muntenia Services in the energy 29384120 Bucharest 100% 100% S.A. sector (maintenance, repairs, construction) Servicii Energetice Oltenia Services in the energy 29389861 Craiova n/a* n/a* S.A.* sector (maintenance, repairs, construction)

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*The Issuer lost the control of Servicii Energetice Oltenia starting with 31 October 2018 when the bankruptcy proceedings of the subsidiary were initiated by the Court. As of this date, the Group ceased to consolidate this company.

Source: Electrica SA, Board of Directors Report for 2018 The Group operates electricity distribution and service activities (included financially in the distribution segment and of the services segment related to the external distribution networks), and activities of electricity and natural gas supply (included financially in the supply segment). Additionally, the Group has a third segment of activity, namely the segment of services related to the external distribution networks, which includes SEM. As the parent company of the Group, the Issuer’s responsibilities mainly refer to the implementation and monitoring of the Group’s strategy for the purpose of supervision of the activities of the Group’s business segments. The Group operates in a highly regulated sector. The Romanian electricity market is governed primarily by the Energy Law (Law no. 123 from 10 July 2012 of electricity and natural gas, as further amended) and detailed secondary legislation including government decisions and regulations issued by the National Authority for Energy Regulation (“ANRE”). On the supply segment, Romanian electricity market liberalisation commenced in 2003 and was enhanced in 2007, following implementation of the EU Second Energy package. Liberalisation principles introduced under the former electricity law no. 13/2007 and further developed by the Energy Law no.123/2012 included the grant of non- discriminatory access to all participants in the electricity market and constituted the underpinning of electricity tariffs, including tariffs paid to the Group for its regulated activities. The Energy Law divides the electricity supply markets in which the Group operates into a regulated market and a competitive market, with each of these two segments having a wholesale and a retail component. Starting with 1 January 2018, the regulated segment of the supply market was entirely liberalized, followed afterwards by a return to the regulated tariffs for the household consumers starting with 1 March 2019, as a consequence of GEO 114/2018. For household customers the electricity prices on the regulated market are regulated by ANRE on the basis of decisions establishing prices and quantities for wholesale transactions between producers and suppliers of household consumers and also the selling prices for final customers. The competitive market is fully liberalised and governs all the other non-regulated transactions.

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3. Business overview

The Issuer is the parent company of Electrica Group. Electrica Group is a key player in the electricity distribution and supply market in Romania, as well as one of the most important players in the energy services sector. Electrica Group provides distribution services to over 3.79 million users (as at 30 June 2019), with electricity distribution subsidiaries in three areas for electricity distribution: Northern Transylvania, Southern Transilvania, Northern Muntenia. The electricity supply and the energy and maintenance services covered b the Group have national coverage. Electrica Furnizare supplies electricity to a number of 3.54 million customers at a national level (as at 30 June 2019). Electrica Group represents a significant employer in Romania, with a total of 8,131 employees at the end of June 2019. Group’s main activity The main activities of the Group are the distribution of electricity (through operation, maintenance and development of electricity distribution networks) and electricity supply to final consumers. Electrica Group is the electricity distribution system operator, operating transformer stations and 0.4 kV to 110 kV power lines and last resort supplier (defined as supplier designated by the regulatory authority to deliver the universal service of electricity supply under specific regulated conditions) in Northern Muntenia (Prahova, Buzau, Dambovita, Braila, Galati and Vrancea counties), Northern Transylvania(Cluj, Maramures, Satu Mare, Salaj, Bihor and Bistrita-Nasaud counties) and Southern Transylvania(Brasov, Alba, Sibiu, Mures, Harghita and Covasna counties), as well as electricity and natural gas supplier on the competitive market in the whole country. The Issuer’s distribution subsidiaries (SDMN, SDTS and SDTN) invoice the electricity distribution service towards the electricity suppliers (mainly towards EFSA subsidiary, the main electricity supplier in Northern Muntenia, Northern Transylvania and Southern Transylvania areas), which further invoice the consumpion of electricity to final customers. According to the regulations issued by ANRE, the last resort suppliers have the obligation to ensure electricity supply to final customers which have not exercised their eligibility right i.e. the right to choose their electricity supplier. The electricity supply in last resort regime is made based on contracts regulated through ANRE Orders. The Issuer is the sole shareholder of two energy services companies, EL SERV and SEM, thereof the most significant is EL SERV. Starting in November 2017, after obtaining all the necessary corporate approvals, some of the activities of Electrica Serv were transferred to the electricity distribution subsidiaries (SDMN, SDTN and SDTS) - maintenance and investments, design, procurement and logistics. This transfer was part of the reorganization plan of the distribution activity, with the aim to implement a new target operating model for the distribution segment, based on redesigned processes (including internalized activities), focusing on the efficiency and quality of customers services, on the achievement of the investments plan and on cost reduction and cost control. In January 2014, the board of directors of Servicii Energetice Oltenia and in October 2014, the board of directors of SEM decided the commencement of the insolvency process with a view to reorganization. On 31 October 2018, the court decided the bankruptcy of Servicii Energetice Oltenia, at the request of the judicial administrator and cancelled its right of management. As of this date, the Group ceased to consolidate this company. In the same time, SEM implemented the reorganization plan by the court’s deadline (November 2018), complied with its payment programme, paying claims in full, so that, in the coming period, the legal procedures for insolvency exit were fulfilled. Thus, considering the positive effects of the measures established by the Reorganization Plan confirmed on 25 November 2015, on 3 April 2019, the Bucharest Court established the closure of insolvency proceedings of the subsidiary and decided that all the necessary measures to be taken for the reinsertion of the company in the business activity, according to court clerk certificate issued on 4 April 2019 by the Bucharest Court. As at the date of this Prospectus, the core business of the Issuer, according to the Articles of Association, is “Activities of business and management consulting”.

4. Distribution segment

Electricity distribution in Romania is fulfilled currently mainly by eight electricity distribution system operators, regulated by ANRE. Each company is responsible for the exclusive distribution of electricity in the region for which it is authorized, under a concession agreement concluded with the Romanian state. Electrica Group and Enel each own

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three distribution companies, while CEZ through Distributie Oltenia and E.ON through Delgaz Grid own the remaining two. The electricity distribution segment is a regulated area of activity in which operations are conducted in a geographically limited area in accordance with the concession agreement, the nature of the services provided, and the specific obligations are stipulated in the license conditions of the concessionary operators. Thus, Electrica Group, through its subsidiaries SDTS, SDTN, SDMN, is the electricity distribution system operator in Northern Muntenia, Northern Transylvania and Southern Transylvania regions. The Group has exclusive electricity distribution licenses for these regions valid for the next eight years, with the possibility to extend for another 25 years. Moreover, the concession agreements of the three distribution companies in the Group are valid until year 2054, with the possibility to extend for another period of 24.5 years. The specific tariffs applicable to distribution services are approved by ANRE based on a “tariff basket-price cap’’ mechanism as established by ANRE Order no. 169/2018 (applicable in the 4th regulatory period 2019-2023), amended and completed by ANRE Order no. 193/2018 and Order no. 60/2019. The “tariff basket-price cap” methodology plans to reduce income fluctuations and avoid significant fluctuations for the electricity tariffs charged to consumers for the distribution of electricity. The tariff model is based on the principle of remuneration through tariffs of justified costs recorded by the distribution system operator, the distribution operator’s main source of profit being the rate of return on capital invested in the distribution activity. The tariffs are adjusted on an annual basis considering the volumes of distributed electricity, the quantities and the acquisition price of electricity to cover the network losses (NL), the controllable and uncontrollable costs, the change of revenues from reactive energy compared to the forecasted ones, depreciation and forecasted capital expenses, change of forecasted gross profit from other activities. The current regulatory period within which the Group operates has started on 1 January 2019 and will end on 31 December 2023. In the same time, ANRE is entitled to adjust the RRR annually, in case the elements that are at the basis of the RRR computation change significantly. ANRE sets up the annual level of distribution tariffs in RON per MWh for each distribution company and for each voltage level (high, medium and low). The tariffs invoiced to users are cumulated depending on their corresponding voltage level (i.e., the tariff for medium voltage also includes the tariff for high voltage, and the tariff for low voltage includes also the tariff for high and medium voltages). ANRE sets up the annual regulated income levels required for each year of the regulatory period, based on projections submitted by the distribution system operators, in line with the methodology requirements, at the beginning of the regulatory period. The Group is a key player in the electricity distribution sector, as concern the area, as well as the number of users served. The Regulated Asset Base estimated at the end of year 2018 is of RON 5,256 million. As at 30 June 2019, the Electrica Group’s distribution segment operated 198,290 km of electric lines, i.e., 7,595 km for high voltage (HV), 45,848 km for medium voltage (MV) and 144,847 km for low voltage (LV), over a total area of 97,196 km² of Romania, which means 40.7% of Romania’s territory. As at 30 June 2019, the Electrica Group had 3.79 million users for the distribution activity and has distributed 8.86 TWh of electricity in the first semester of the year 2019. For the year 2018, the Electrica Group has recorded 17.7 TWh of electricity distributed (a decrease of 0.9% as compared to 2017) and a 39.4% market share for the distribution of electricity to final users in 2018 (based on distributed quantities, according to ANRE report for 2018). EL SERV’s activity is also part of the distribution segment, providing maintenance, repair and various services to group companies (car rental, rental of buildings, etc.) as well as repairs and other related services to third parties. Through the Group’s activities optimization program, in November 2017, the largest part of EL SERV’s personnel (~1,500 FTEs) was transferred to the Group’s distribution operators through a business transfer agreement in order to optimize resource allocation and to allow for execution of the distribution operators’ investment plans. Starting with 2019, EL SERV also provides services to EFSA, being one of its subcontractors providing B2B services launched in September 2019. Electrica Group revenues from the distribution segment increased as at 31 December 2018, by RON 62.8 million, or 2.3%, to RON 2,738.6 million as compared to RON 2,675.7 million in 2017, as a result of both the increase of distributed quantities on medium and low voltages by 6.1% and 1.5% respectively, and of the increase of the investments made in the network, registered as intangible assets, according to IFRIC 12.

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The increase of costs with the energy purchased to cover network losses, the increase in costs with employee benefits and other categories of expenses led as, to a decrease of RON 117.2 million or 18% of EBITDA on the distribution segment as at 31 December 2018. The EBITDA margin for the distribution segment decreased by 19.8% in 2018, from 24.3% in 2017 to 19.5% in 2018. The net profit on the segment was additionally influenced by the increase in depreciation and amortization costs, driven by the investments made in the electricity distribution network.

5. Supply segment

The Group operates on the supply segment through its subsidiary EFSA, both on the regulated electricity market (last resort supplier in geographical regions where the Group distribution segment operates) as well as on the competitive market, at national level. The Group has an electricity supply license covering the entire Romania’s territory valid until 2021, with the possibility of extension. In addition, EFSA holds a license to carry out its natural gas supply activity, valid until 2022. Starting with 10 May 2018, the Group’s second license held by Electrica ceased at the request of the operator, according to ANRE Decision no. 728/2018 –. The electricity market is divided into regulated market (electricity supplied as last resort supplier) and competitive market. On both markets, electricity may be sold and/or purchased wholesale or retail. Regulated market Currently, EFSA is mandatory last resort supplier for the areas covered by Electrica Group distribution system operators. Starting with 1 March 2019, EFSA is also an optional last resort supplier for the other areas of Romania. The appointment as mandatory last resort supplier is made for a period of 4 years, whilst the appointment as optional last resort supplier is made for one year. Overall, EFSA is supplier for approximately 3.54 million customers. EFSA incurs supply costs that include mainly costs related to conclusion of contracts, invoicing, invoice collection and costs related to database management, IT&C infrastructure. ANRE may supplement the cost of supply with the share of occasional costs incurred by EFSA as a result of special situations (for example: re-contracting, upgrades of information systems to comply with new regulations, bad debt losses, etc.). The new secondary legislation, approved by ANRE at the beginning of 2019, reintroduces the regulated agreements with producers and changes the tariff setting methodology for the regulated segment of customers. These legislative changes can significantly modify the participants’ strategies on the market for the next period. Competitive market Trading on the wholesale competitive electricity market is carried out in a transparent, public, centralized and non- discriminatory manner on market platforms managed by OPCOM. The prices may be freely negotiated by the parties on the retail competitive market. The wholesale market participants can trade electricity based on bilateral contracts concluded on the markets managed by OPCOM or on spot markets managed also by OPCOM. Starting with 19 July 2012, the Energy Law does not allow the conclusion of sale and purchase contracts on the wholesale electricity market outside centralized markets. BRP Electrica - Balance Responsible Party According to the Commercial Code of the wholesale electricity market, the balancing market was introduced and began operating in Romania in July 2005. The purpose of this market is to allow the balance of production and consumption of electricity in real time, using resources provided in a competitive system. Each participant at the wholesale market (producer, supplier, operator, eligible consumer) has the obligation to register at the Operator of the balancing market from CN Transelectrica SA as a Balancing Responsible Party (“BRP”) or to transfer his balancing responsibility to another licence holder registered as BRP. By transferring the responsibility to a Balance Responsible Party there is an advantage for the imbalances aggregation, in order to reduce costs on the balancing market compared to when the producer/supplier/distribution operator would act on its behalf as a Balance Responsible Party. The representation activity on the Balancing Market as Balance Responsible Party was performed by the Issuer from 2005 until March 2018 based on electricity supply license no. 1091/2012, in compliance with market mechanisms

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detailed in the Romanian Commercial Energy Wholesale Code. The Issuer has operated as BRP for 110 license holders as of 31 December 2017. Starting with 1 April 2018, the transfer of the representation activity on the balancing market as BRP was made from the Issuer towards EFSA. Thus, Electrica’s license no. 1091/13.07.2012 was withdrawn at the Issuer’s request by ANRE Decision no. 728 on 10 May 2018. The customer portfolio is diversified, consisting in producers (hydro, thermal, wind, photovoltaic, biogas, biomass), suppliers and distribution operators, providing balancing services for over 24% of the total consumption in the National Energy System. The distribution companies within the Electrica Group have delegated their responsibilities to BRP EFSA. The balancing market, a component of the wholesale electricity market, is mandatory and each license holder must either assume its responsibility for balancing or delegate its responsibility for balancing to a BRP. The Group’s income from the supply activity has been reduced by RON 229.2 million or 5.4%, to RON 3,995.5 million in 2018, from RON 4,224.7 million in 2017. This decrease represents the net effect of electricity supply activity, which had a positive impact, due to increase of selling prices by 6.9%, which covers the impact determined by the decrease of the supplied quantity by 3.4% and the reduction of the income from the BRP activity, mainly as a result of the accounting of BRP starting with 1 January 2018 in accordance with IFRS 15, through which the BRP incomes and the related expense are removed. Regarding EBITDA, EFSA registered in 2018 an increase of RON 127.3 million compared to 2017, mainly because of cost reduction for the acquisition of electricity.

6. Segment of services related to the external distribution networks, which operates in the energy services sector

The Group’s portfolio also includes the energy services segment (equipment maintenance, repairs and other additional services related to the network), performed almost entirely for distribution companies outside the Group. As of the date of this Prospectus, the energy services segment consists of the subsidiary SEM (which has exited the insolvency procedure in April 2019). Its main activity remains the performance of energy services for grid operators.

7. Strengths

The management believes that the Group’s historical success and its potential for future growth are primarily due to its following key strengths. As the only Romanian utility company listed on two stock markets, the Group is transparent in relation with the capital market and its shareholders. The dual listing of Electrica in July 2014 on both the BSE and the LSE was the most successful listing and the sole privatization with a majority stake on the capital market in Romanian history. Electrica is the only listed Romanian company active in both electricity distribution and supply in Romania. Electrica obtained almost RON 2 billion as a result of the Initial Public Offering in 2014, the listing having a significant impact on the capitalization and liquidity of the Bucharest Stock Exchange. The dividends issued by Electrica in the five years from the listing to date, have offered the most stable returns out of all BET companies. In the past five years, Electrica has distributed to its shareholders gross dividends that have accumulated about 1.3 billion RON or 3.777 RON / share, representing a 34.3% gain for the shareholders who bought shares in June 2014 as part of the initial public offer. About 61% of the total number of Electrica shares freely tradable (less Romanian State, Dedeman SRL, NN Group NV Romania, Allianz- Tiriac Pensii Private and Electrica S.A.) on the stock exchanges in Bucharest and London are held by about 6,300 private individuals and 170 legal entities from Romania. From the listing until now, about 260 million Electrica shares were traded, representing 75.1% of the share capital and 76.6% of shares with voting rights. In September 2019, Electrica obtained the issuer corporate rating of BBB (Investment Grade), with a stable outlook, from the rating agency Fitch, as part of its commitment to expand its access to financing sources, to ensure funds for its investment plans, for network expansion, technological development, as well as ambition for regional expansion.

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Leading electricity distribution business operating under long term concession

The Electrica Group is the biggest player on the electricity distribution segment in Romania both in terms of volume of electricity distributed to users and number of users. According to ANRE, in 2018 the Group distributed 17.66 TWh electricity to approximately 3.78 million users, representing 39.4% of the volume of electricity distributed. The distribution segment operates under long-term concession arrangements granted by ANRE until 2054, which have a renewal option for another 24,5 years, and based on licenses granted by ANRE valid until 2027, which have a renewal option for another 25 years. Over the 3rd Regulatory Period, the Group’s investment plan has led to an increase in the Regulated Asset Base (“RAB”) of around 30%. RAB is a key driver of regulated revenue growth for the Group’s electricity distribution activities, and the investment plan for the 4th Regulatory Period is also targeted to ensure RAB increase, leading to an increase in revenues from the regulated rate of return.

Leader on the regulated electricity supply segment Electrica Group is the largest supplier in Romania on the regulated segment both in terms of volume of electricity supplied to consumers and number of consumers. According to ANRE reports, in the first six months of 2019 EFSA supplied on the regulated electricity market 50.82% of the volume of electricity supplied in Romania. Also, the Group is leading the electricity market in terms of customers served. According to ANRE, in 2018 the Group has supplied on the retail market 8.6 TWh of electricity to approximately 3.54 million consumers, representing 17,02% of the volume of electricity supplied in Romania. The management believes that the Group’s brand (part of the top 10 Romanian brands for several years in a row), credit quality and perceived stability provides it with strong customer loyalty as an electricity supplier, serves to reduce churn with existing consumers and supports its electricity sale and procurement activities. Further, Management believes that the Group’s brand strength will also enable it to diversify its service offering to both existing and new consumers in other service regions. Experienced employees and management In the existing labour market, where it is increasingly challenging to recruit qualified employees, the Group has a significant strength: experienced and loyal employees. As of the end of June 2019 the Group had 8,131 employees. The management is working together with the Trade Unions in order to identify the best options for employees’ motivation, and the latest changes in the Collective Labour Agreement reflected the common desire towards identifying and rewarding performance, through the current implementation of a new salary grid, based on market benchmarks, and a new performance management system. In addition, the management has a proven track record in the operation and management of electricity distribution and supply, embarking and driving ambitious transformation programs, aimed at achieving operational efficiency in both distribution and supply, but also at maximizing customer satisfaction through the development of new products and offerings.

8. Strategy

According to Electrica’s strategy for years 2019-2023. The Group remains dedicated to ensuring the balance between generating value for its customers and maximizing profit for shareholders, within a culture of ethics, integrity and sustainability. To this end, the optimal contribution of each company of the Group is essential. Considering the above, in December 2018, the Board of Directors approved the new strategic directions for the electricity distribution and supply business lines for the next five years, and, in the next period, the strategy and the implementation plan for the period 2019-2023 is defined according to these new directions: 1. Expand into adjacent domains and obtain synergies with the domains the Group currently operates in 2. Improve operational performance to continuously increase the quality of services offered to clients 3. Continue investments to improve the reliability of the infrastructure 4. Increase performance and enhance the sustainability of economic results

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Thus, at a Group level, upon having analyzed the Group’s positioning on the energy market, in the context of potentially changing competitive landscape, management believes that the improvement of the existing competitive position could derive mainly from inorganic growth. With a regional player ambition, the Group constantly monitors and analyses potential options for development, in areas that would allow either improved value chain positioning (respectively production – mainly renewables) or synergies with the distribution and supply businesses (e.g. through customer base expansion). Operational performance is tackled differently in the different operational segments:  In the distribution segment, the focus remains on efficiency, by reducing technical and commercial losses and by optimizing internal processes, due to optimal use of resources. Significant steps were taken in this direction over the last two years, through the Distribution system operators Transformation program, for which two pillars driving transformation were the operational improvement and customer orientation. Still, significant potential deriving from streamlining the distribution system operators’ activities still exists, and exploiting it further remains a key factor for optimal allocation of resources, an important requirement during this regulatory period. In this sense, the merger of the distribution system operators is a potential strategic initiative, to be analysed in the following period.  In the supply segment, operational efficiency is in focus from two complementary perspectives: on one hand, risk management was extended to the electricity acquisition area in order to optimize the market position and prices offered to customers; on the other hand, process optimization is envisaged particularly through the use of automation / digitization, with customer satisfaction in mind. The ongoing Sales Transformation Program has a significant component of process improvement, which will be tackled in the following period.  In the energy services, after the internalization of most field employees in the distribution companies in 2017 (targeting improved allocation of employees between investment and maintenance activities and maximized operational and financial results), the companies will undergo retargeting of their operations in two areas – asset portfolio improvement and new services development.  In all segments, the introduction of lean management principles will be continued, leading to a continuous improvement mindset and expected positive operational results – either financially or targeted towards customer satisfaction. Investments will continue in order to modernize the networks (including considering automation and the implementation of smart grid technologies and smart metering), targeting quality of services improvement, with the ultimate positive impact upon the quality of life for the customers. The quality of services is monitored by the regulatory authority, based on specific indicators defined in the performance standards. In addition to network modernization, investments are also required in order to implement IT tools to support business lines and create synergies that bring value added. Processes’ digitization and integration into IT platforms are to be provided to both business lines, in the context of the changes brought by smart grids, prosumers and the trend in streamlining the customers’ consumption - with the IT area becoming a strategic partner for the business in the years to come. Management also envisages investments in innovative technologies for the following period – looking both at internal processes (e.g. through Robotic Process Automation, for which a pilot for grid connection is already functional in SDEE Transilvania Sud) and external opportunities (e.g. intensification of our initiatives in the field of electric mobility, opportunities for business development through alternative technologies). With a view to ensure sustainable economic results, through a mix of operational efficiency measures, correlated with investments, the aim is to optimize the financial contribution of the Group’s distribution companies, targeting to secure the regulated rate of return. Significant management focus is also on the supply area, where there is a higher perceived volatility of results, in the context of market liberalization. In this segment, capitalizing on the existing customer base, the Group maintains and intends to strengthen its positioning as a dual supplier of electricity and natural gas. In order to become a modern and efficient energy supplier with an extensive range of energy services, it is intended to expand the products and services portfolio and to modernize sales and customer interaction channels. At the same time, in order to ensure sustainable development of the products and services portfolio, to cover the entire national territory and to develop the base of household and business customers, a critical requirement is to develop the related competences and capabilities. The human resources (internally or through specific recruitment) needed for all business areas should be attracted and trained, capitalizing on their potential, expertise and aptitudes, in order to

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increase productivity and individual performance. In the context of a labour market expected to be tense also in the next years for the qualified labour force segment, the Group invests in vocational training centers and dual education, and partnerships with educational institutions, in order to identify, support and attract talents, which are very important in order to provide qualified personnel needed to ensure optimal conditions and services to the grid. Safety is also a priority by continuing the awareness programs for the employees, regarding the risks and HSS aspects and the implementation of a near miss (safety) system. The open and transparent dialogue with the Trade Union will continue, the Group and the union representatives acting together to the best interests and motivation of the employees, continuing also the deployment of a modern performance management system. In order to align and optimize results, it is intended to ensure the unitary implementation of the strategy, through coordinated strategic projects and under an extended risk management umbrella. Corporate governance and investor relations remain priorities for the Group, which will continue to constantly improve and implement best practices in these areas. Ethics remains a priority for the organization, as a preliminary requirement for a sustainable development of the Group.

9. Legislative changes with impact on the Issuer’s business

The regulatory framework has undergone major changes, both on a national level, as well as with the aim of aligning the Romanian legislation with the EU legislation. Although important steps have been taken, other major changes are expected to occur in the next decade, particularly following the new framework Strategy for a European Energy Union, which highlights the need for integration and cooperation amongst member states. From 2019, the 4th Regulatory Period (2019 – 2023) started and ANRE approved significant changes in the methodology for regulated distribution tariff (Regulated Rate of Return, Regulated Assets Base, personal technological consume, operating expenses, dynamic distribution tariffs starting from 2020 etc.). Also, for the supply segment important changes are forecasted in the acquisition strategies and the sales to final customers, considering the impact of the proposed methodologies regarding the elimination of regulated contracts with the producers for the household customers, which have been introduced recently through GEO 114/2018. The change of the contribution amount to be paid to ANRE, from 0.1% to 2% of the turnover generated by licensed activities has the potential to lead to restructuring the activities of the electricity market players. During 2018, ANRE issued basic documents for the regulatory framework of the 4th Regulatory Period (2019 – 2023):  Order no. 168/2018 approving the regulated rate of return (RRR) beginning with 1 January 2019; and  Order no. 169/2018 approving the Methodology for establishing distribution tariffs. Thus, in October 2018, according to the evolution of the legislative framework, the strategic package for the 4th Regulatory Period (2019 – 2023), which represented the basis for the regulated revenues in the distribution area for the next five years, was prepared and subject to approval by ANRE. Specific tariffs for electricity distribution for the year 2019 were approved by ANRE through Orders no. 197, 198 and 199/2018, applicable until 28 February 2019, with average values equal to or above those of 2018. On 25 February 2019 were approved by ANRE through Orders No. 24, 25 and 26/2019 the new distribution tariffs, applicable from 1 March 2019. The new tariffs represent an increase of approximately 2.3% compared to the tariffs applied in the first two months of 2019. ANRE has approved the orders to increase the distribution tariffs with 2.3% as of 1 July 2019, Order No 78, 79, 80 with 2.3% for the distribution system operators of Electrica, as a consequence of the application of GEO no. 19/2019, regarding the increase of WACC up to 6.9%, starting with 29 March 2019.

10. Key factors, directions and significant market trends affecting the operational results of the Group

The Issuer analyses the strategic options and aims to implement streamlining measures, through restructuring programs and transformation of the Group’s divisions, training and staff development programs, redesigning business models, or entering new business segments, in order to improve both the quality of the services offered and the financial performance.

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The most important assumptions considered for the 2019-2023 strategy review are the following:  The Romanian energy mix landscape has changed significantly, being heavily disrupted by the advent of renewables, together with the emergence of the prosumers in the following years, and development of new technologies;  Romanian GDP will have a stable evolution in the future;  Different trends in electricity consumption (increasing trend on a medium term, but in stagnation on the long term, considering that the tendency towards electrification and decarbonation may be countered by energy efficiency commitments);  Romania will maintain its commitment towards the accomplishment of the 20-20-20 strategy regarding the climate changes and the implementation of the new framework for the period 2020-2030;  For the next regulatory period (5th), the remuneration mechanism, the tariffs and methodology for applying corrections to the tariff may be subject to changes, which cannot currently be foreseen. The current methodology for establishing the distribution tariffs, as well as the application of corrections (RP4) is part of the key factors underpinning the strategic planning;  The electricity supply segment will experience a short to medium term repositioning following the reintroduction of the regulated contracts and the changes in the tariff calculation methodology for the last resort supplier;  The recent changes in the legislative framework have been taken into consideration, but there is a lack of predictability in the medium and short term;  Competitors’ changes in strategy may lead to a materially different energy market landscape, requiring fast response and strategy adaptation from the Issuer;  No major geopolitical turbulences have been taken into account, which might significantly affect the Romanian electricity market;  Financial markets will allow access to profitable financing sources to support companies’ investment programs and the potential inorganic developments of the Group.

11. Investment Programme

The Group’s consolidated investment plan for 2019 amounts to RON 739 million, compared to 2018’s investment plan of RON 900 million (RON 878 million realized). From the 2019 amount, approximately 96% (RON 710 million) is represented by investments of the distribution operators. The investments at the Electrica Group level have been prioritised considering especially the degree of wear of the assets of the distribution companies, with a particular focus on the improvement of the quality of the distribution service, the safety in operations as well as the increase in efficiency. The Group will continue to modernize and to develop the smart distribution network by installing intelligent network infrastructure systems, such as SCADA, SAD, energy measurement systems, etc., in order to improve the operational efficiency and the energetic efficiency, to reduce the network losses, to improve the network flexibility, the distribution service quality, the continuity and reliability of the network. Within the implementation of the investment program, the compliance with the Group’s Strategy is ensured, and particularly the following criteria:  tracking the inclusion of regulated investments in the RAB;  non-regulated investments of the Group must provide an internal rate of return higher than weighted average cost of capital;  the proposed investment program must follow the Group’s financial strategy of maintaining a solid capital structure. Thus, a priority are those categories of capital expenditures contributing to the development of a profitable and sustainable energy distribution activity and to the creation of access conditions to the electricity distribution network for energy consumers and producers, in line with market requirements, especially based on:  automation of the distribution network through integration in SCADA, SAD, DMS etc.;  modernizing the equipment within the transformer stations and the medium voltage network;  introducing equipment with reduced technological losses, higher operating efficiencies and environmentally friendly;  modernizing the medium and low voltage distribution network and connections;  expanding the modern energy measurement and transmission of power consumption systems.

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At the same time, the Group is considering investments in the upgrade of IT infrastructure and information technology systems, taking into account both the legal requirements regarding data protection and the positive effect on the quality of the provided services. Investment plans approved by ANRE ANRE has approved commissioning plans for the year 2019 for the distribution companies part of the Group with the following values expressed in real terms 2018: (i) SDMN – RON 212,043,469; (ii) SDTN – RON 196,058,864; and (iii) SDTS – RON 200,000,000. In 2019, the Electrica Group distribution system operators will continue to invest in the distribution infrastructure, the investments planned to be commissioned related to 2019, as well as those related to 2018, for the three distribution system operators cumulating RON 670.8 million (nominal terms 2019), but decreasing as compared to the previous years, considering the possibilities of sustainable funding, as well as the regulated rate of return level, under the new regulatory framework. The investment plans (to be commissioned) for 2019 have been prepared in accordance with the requirements set out by the regulatory authority in the specific legislation in force.

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PART 3 BOARD AND MANAGEMENT

BOARD OF DIRECTORS The Issuer is a joint-stock company having a management structure organized in a one-tier system. The Board of Directors of the Issuer (the “Board of Directors”), a one-tier management board, comprises seven (7) non-executive members, of which four are independent within the meaning of the Articles of Association and the Corporate Governance Code of the Bucharest Stock Exchange. The members of the Board of Directors are appointed and revoked by the OGMS of the Issuer. The Board of Directors elects one of its members as chairman of the Board of Directors. The members of the Board of Directors can be appointed for a term that cannot exceed 4 (four) years. The Board of Directors’ remuneration system is determined by the “Remuneration Policy for the Directors and Executive Managers” at the Issuer’s level. Current Composition of the Board of Directors At the date of this prospectus, the Board of Directors is composed of the Directors mentioned below:

Term of office Starting date of the Name Position (until 27 April 2022) first mandate Valentin Radu ...... 4 years Chairman (Independent 27 April 2018 Non-executive Director) Gicu Iorga ...... 4 years Non-executive Director 1 May 2017 Bogdan George Iliescu ...... 4 years Independent Non-executive 14 December 2015 Director Ramona Ungur ...... 4 years Independent Non-executive 27 April 2018 Director Dragos Andrei ...... ~ 3 years, 5 months Non-executive Director 1 December 2018 Niculae Havrilet ...... ~ 3 years, 3 months Non-executive Director 7 February 2019 Radu Mircea Florescu ...... ~ 3 years, 3 months Independent Non-executive 7 February 2019 Director The business address of the directors of the Issuer is at the Issuer’s registered office, which is the main place of business: 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania. Biographical Details of the Directors Valentin Radu Valentin Radu is non-executive independent director of the Issuer since 27 April 2018 and the Chairman of the Board of Directors since 12 December 2018. Consultant by profession, graduated from business administration, has over 15 years’ experience in strategic consultancy and organizational change management, having significant achievements in maximizing company’s value through business development measures and initiatives and by implementing effective strategies to achieve financial and operational excellence. He managed and coordinated a large number of complex strategy and restructuring / reorganization projects for both national and international clients. During 1995-2003 he was Senior Project Manager at Roland Berger Strategy Consultants and was involved in over 40 consulting projects in various industries. Between 2003 and 2007 he was the CEO of Tiriac Holding, being in charge of the strategic and operational management of the holding divisions, as well as being a member of the Board of Directors and / or of the Executive Board of Țiriac Bank, Allianz Țiriac Asigurări, Țiriac Leasing, Premium Leasing, Romcar and Autorom. Starting with 2008, Mr. Valentin Radu is Founder and Managing Partner of Platinum Capital, a consultancy company focused on providing strategy, financial consultancy, recovery and restructuring services, interim management and crisis management.

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Gicu Iorga Gicu Iorga was appointed member of the Board of Directors on 27 April 2018. Gicu Iorga has an experience of over 30 years in the field of economics and public administration, and currently serves as General Secretary in the Ministry of Energy. Most of his professional activity was carried out in institutions such as the National Customs Authority, A.N.A.F. – General Customs Directorate and the General Regional Public Finances Directorate Bucharest, and A.N.S.V.S.A. Bogdan George Iliescu Bogdan George Iliescu has been a non-executive independent director of the Issuer since December 2015, with the last appointment on 27 April 2018. Bogdan George Iliescu has a career of over 20 years in investment banking, as well as a vast experience as independent non-executive director in one of the top ten listed companies in Romania. Between May 2007 and May 2016, he headed the Corporate Finance Department of BRD - Groupe Société Générale in Romania, being involved in various domestic and international M&A projects, public offerings and bond issues. Currently, he is also a member of the board of directors and of its committees within SNTGN Transgaz SA, Mediaş. In the last 5 years, Bogdan George Iliescu held the following management/supervisory positions in other companies: - General Manager BRD Corporate Finance SRL (2007-2015); - Executive Manager BRD - Groupe Société Générale, Corporate Finance (2015-2016); - Independent non-executive director SNTGN Transgaz SA (2013 – present); and - Director of SC Bogdan Iliescu Corporate Finance SRL (2016 – present). Ramona Ungur Ramona Ungur has been a non-executive independent director of the Issuer starting with 27 April 2018. Ramona Ungur holds a vast experience in the banking sector, having over 20 years of experience in various reputable banking companies such as Banca Comerciala Romana SA, Eximbank Romania SA, Credit Europe Bank, National Bank of Romania. Throughout her career, Ramona Ungur has coordinated audit, back office activities, risk and restructuring of non-performing loans departments. Ramona Ungur was between July 2018 - June 2019 a member of the Board of Directors of SNGN Romgaz S.A. Currently, Ramona Ungur is an independent business consultant and board member of Oil Terminal S.A. Constanța (since November 2017). Dragoș Andrei Dragoş Andrei has been a non-executive member of the Board of Directors since December 2018. Dragoș Andrei is a top executive with an impressive financial experience, of over 30 years, but also with a remarkable career in diplomacy and central administration. Currently, Dragoș Andrei is working at the headquarters of The European Bank for Reconstruction and Development (EBRD) and he is an Alternate Executive Director of the Board for the Turkey / Romania / Azerbaijan / Moldova / Kyrgyzstan Constituency. From this position, he assured the representation of Romania in EBRD’s Board of Directors, the approval of the sectoral and country strategies of EBRD, as well as the monitoring of all banking and capital market operations of the financial institution. Between 2013-2015 he held the position of State Counselor within the Chancellery of the Prime Minister, after having previously held the position of Minister Counsellor within the Permanent Representation of Romania to the European Union in Brussels. Also, between 2014-2015, he coordinated the Inter-ministry Committee for the Coordination of State Aid Schemes. Starting with 2003, Dragoş Andrei occupied important positions in the administration of the Romanian state: Secretary of State within the Ministry of Public Administration, Counselor of the Minister within the Ministry of Internal Affairs and Administration, and also Secretary of State within the Ministry of Public Finance.

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Graduate of the Bucharest Academy of Economic Studies, Dragoş Andrei was part of the top management of some important financial-banking institutions in Romania during 1990 - 1999. Niculae Havrilet Niculae Havrilet was appointed non-executive member of the Board of Directors on 7 February 2019. With over 35 years of experience in the field of electricity and natural gas, out of which he spent 20 years in managerial positions, Niculae Havrileţ holds, since February 2018, the position of counsellor to the Minister of Energy. A graduate of the Technical University of Cluj-Napoca, the Faculty of Mechanical Engineering, Niculae Havrileţ has gathered significant experience in the field of central public administration. Between June 2012 and October 2017, he held the position of President of the Romania’s National Energy Regulation Agency (ANRE), a time when he was also a member of the Council of Regulator Authorities within the Agency for the Cooperation of Energy Regulators (ACER), as well as a member of the General Assembly of the Council of European Energy Regulators (CEER). Between 2002 and 2012, he served as General Secretary of the National Professional Association of Natural Gas, and from 2001 to 2012 he was the CEO of Gascop, a natural gas installations company. In 2000, Niculae Havrileţ was decorated with the Order of the “Star of Romania”, in the rank of Knight. Starting with June 2019 until present time, Niculae Havrilet is a member of the Board of Directors of SNGN ROMGAZ S.A. Radu Mircea Florescu Radu Mircea Florescu was appointed independent non-executive member of the Board of Directors on 7 February 2019. Radu Mircea Florescu is currently CEO of Centrade | Cheil, for the South East Europe, the regional communications center for Cheil Worldwide, coordinating 11 markets in the Adriatic and Balkan countries. For more than 25 years, Radu Mircea Florescu has worked with top multinational companies to be found in Fortune 500, working in emerging countries, including within EU funded programs. A graduate in Marketing and Finance at Boston College, Radu Mircea Florescu began his Merrill Lynch commodity trading career at NYMEX, focusing his activity on WTI, fuel oil and gasoline. In 1989, he co-founded Centrade USA and brought pioneering communication services to the Romanian market through the launch of Saatchi & Saatchi, the establishment of Cable Direct and the foundation of Zenith Media. Among the positions he held there are to be mentioned: Founding member of IAA Romania, co-founder of the Union of Advertising Agencies of Romania (UAPR), member of the EACA European Council representing Romania and Eastern Europe in Brussels (2012-2015, 2017 up to present), member of the Council and vice-president of the American Chamber of Commerce in Romania (2013-2015 and 2016 up to present), member of the TAROM Board of Directors (March 2015-June 2017), coordinator and member of Coalition Coordination Group for Romania’s Development – the “umbrella” type leading association representing the business community and trade sections of the embassies in Bucharest. Radu Mircea Florescu is also active in the field of social responsibility, having a long history of contribution brought to the local community. Currently, Radu is a member of the AIESEC Romania Board, member of the JA (Junior Achievement) Council, member of the OvidiuRo Council, member of the Supervisory Board of the Principesa Margareta Foundation, president of the MBA ASEBUSS Program Board, member of Top Business School in Romania and member of the Hospice Casa Sperantei Board. He was also a member of the United Way Romania Council for 12 years and president of the Council. BOARD COMMITTEES The Nomination and Remuneration Committee The Nomination and Remuneration Committee consists of three non-executive members of the Board of Directors, two of them being independent members, while the chair of the Committee is an independent director. The role of the Committee is to propose candidates for the Board of Directors, to develop and propose to the Board of Directors the selection procedure of candidates for the executive managers’ positions and other management positions, to formulate proposals on the managers’ remuneration and other management positions.

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The Committee has the following responsibilities concerning nomination matters:  recommending the Board of Directors a nomination policy, including a target Board of Directors profile, process and principles for shareholders to consider when proposing candidates for director positions at the Issuer, and advising the Board of Directors regarding the appointment of interim directors in accordance with the policy;  reviewing the implementation of the nomination policy, preparing a report to the Board of Directors on its implementation, and presenting a summary of this report in the Directors’ Report;  advising the Board of Directors on the appointment and dismissal of the CEO, making recommendations on the appointment and dismissal of the Issuer’s executive management team after considering the views of the CEO, and making proposals on the appointment and dismissal of subsidiary board members in accordance with the group governance Policy;  recommending the Board of Directors policies in the human resources field, including those covering recruitment and dismissal, talent management and development, and succession planning across the Issuer and its subsidiaries (the Group);  overseeing the process for the annual evaluation of the effectiveness of the Board of Directors and its consultative committees;  periodically assessing the size, composition and Committee’s structure and making recommendations to the Board of Directors with regard to any changes;  advising the Board of Directors on continuous skill development programmes for Board members and executive management;  overseeing the nomination process of the CEOs and executive managers in the subsidiaries according to the nomination and remuneration Policy. The Committee has the following duties regarding remuneration:  advising the Board of Directors in relation to the remuneration, incentive and severance compensation policies of the Issuer;  advising the Board of Directors on the structure of the remuneration policy for Board of Directors members;  advising the Board of Directors in relation to the remuneration of the CEO and other executive managers, including the main remuneration components, performance objectives and appraisal methodology;  making recommendations to the Board of Directors on the remuneration of subsidiary board members and the general limits of remuneration for subsidiary management;  monitoring compensation trends within areas relevant to the Group;  overseeing the remuneration process of the CEOs and executive managers in the subsidiaries according to the Nomination and Remuneration Policy. The Audit and Risk Committee The Committee is composed of three non-executive members of the Board of Directors, two of them being independent members, while the chair of the committee is an independent director. The Committee’s composition provided the necessary expertise in finance and risk management, according to legal requirements. The main role of the Committee is to support the Board of Directors in fulfilling its duties of verifying the efficiency of Issuer’s financial reporting, internal control and risk management. The Audit and Risk Committee has, among others, the following duties: (i) monitoring the financial disclosure process; (ii) monitoring the efficiency of the control systems and internal auditing or, if the case, risk management within the Issuer; (iii) monitoring the statutory audit of the annual financial statements and of the annual consolidated financial statements; (iv) verifying and monitoring the independency of the financial auditor and, in particular, the providing of additionally services for the Issuer. The Committee has the following duties in terms of financial reporting:  examining the integrity of annual and interim financial statements or disclosures for the Issuer and its subsidiaries (the Group) at standalone and consolidated levels;  regularly reviewing the adequacy of the Group’s accounting policies;  reviewing and recommending the Issuer’s financial forecast policy to the Board of Directors for approval;

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 advising the Board of Directors on whether the content of the annual report, taken as a whole, represents a fair, balanced and understandable account for shareholders and provides them with the information necessary to assess the Issuer’s performance. Regarding the auditing and internal control matters, the Committee has the following responsibilities:  approving a group-wide, annual plan as well as any material changes to the plan, and receiving regular reports on activities, key findings, and follow up regarding internal audit reports;  making recommendations to the Board on the appointment, removal and remuneration of the Head of internal Audit;  monitoring the adequacy, effectiveness and independence of the internal audit function;  making recommendations to the Board on the appointment, rotation or dismissal of the Company’s external auditor;  reviewing the plan, work and findings of the external auditor;  assessing the independence and objectivity of the external auditor and monitoring compliance with relevant ethical and professional guidance, including the requirements on the rotation of audit partners;  regularly reviewing the adequacy and implementation of key internal control policies, including policies for detecting fraud and the prevention of bribery;  reviewing related party transactions in line with a policy developed by the Committee and approved by the Board;  reviewing annually the report prepared by the Head of internal Audit assessing the effectiveness of the system of internal control across the group. The Committee has the following responsibilities concerning risk management matters:  reviewing regularly the main risks facing the Issuer and Group, recommending to the Board of Directors adequate policies for risks identification, mapping, management and mitigation;  reviewing annually a report from management assessing the effectiveness of the risk management system across the group;  making recommendations to the Board of Directors on equity and debt financing, including proposals for contracting any type of loans and securities associated with these loans;  making recommendations to the Board of Directors regarding major economic transactions within the authority of the general meeting of shareholders, assessing the associated risks regarding such transactions. The Strategy and Corporate Governance Committee The Committee is composed of three non-executive directors, the chair being a non-executive independent director. The Committee has the following duties in terms of strategy:  making proposals to the Board of Directors on the development of the medium-term strategic plan, making recommendations on the strategic direction, priorities and long-term objectives of the Group;  reviewing management proposals on the Group’s consolidated annual budget, subsidiary annual budgets, CAPEX plans for the group and making relevant recommendations to the Board of Directors;  supporting the Board of Directors in monitoring and assessing the Group’s performance in light of the approved strategic plan, budgets, industry trends, local and regional market trends, company’s competitiveness and advances in technology;  periodically reviewing the overall strategic planning process, including the process for developing a medium- term strategic plan;  making recommendations to the Board of Directors regarding proposed acquisitions, divestments, investment projects, joint-ventures, and cooperation projects, particularly assessing their alignment with the group’s strategy;  performing any other activities or assuming responsibilities regarding strategic matters which may be delegated from time to time to the Committee by the Board of Directors. Regarding the tasks of the Committee on restructuring, they mainly relate to:  Reviewing and making recommendations to the Board with respect to the development and implementation of the group’s overall restructuring plans and objectives, including any decision regarding the conducting or rationalization of core businesses;

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 Regularly reviewing the organisational structure and chart of the Company, and making recommendations to the Board in this regard;  Performing any other activities or responsibilities on restructuring matters as may be delegated to the Committee, from time to time, by the Board. At the same time, the Committee has duties in terms of corporate governance:  Overseeing and monitoring the Company’s compliance with legal and contractual obligations on corporate governance, as well as other applicable corporate governance principles, and making recommendations to the Board;  Regularly reviewing the Issuer’s Corporate governance Code, Board Charter and the Company’s Articles of Association, and making recommendations to the Board on relevant amendments to the Company’s corporate governance policy and documentation;  Recommending the group governance Policy to the Board for approval and regularly reviewing it thereafter;  Reviewing the delegations of authorities’ chart for the Issuer in order to ensure that the delegation of authorities to management allows for effective and efficient decision-making process, and making recommendations to the Board;  Reviewing the Company’s policy for corporate social responsibility and stakeholder engagement, and making recommendations to the Board in this regard;  Making recommendations to the Board on improving the quality of information flows to the Board including the adequacy of reports to the Board, key performance indicators presented to the Board, and guidelines for preparing Board papers and presentations.

EXECUTIVE MANAGEMENT In accordance with the provisions of the Articles of Association, the Board of Directors appoints and revokes the chief executive officer, as well as the other executives with mandates and also approves their empowerments. The duties of the Issuer’s executive managers (including those of the CEO) are determined by the mandate contracts on which the managers operate within the Issuer, an internal regulation for the organization and functioning of the Issuer and applicable legal provisions. The executive managers’ remunerations system is determined by the remuneration policy in force at the Issuer’s level. The members of the Issuer’s management, who have powers delegated to them by the Board of Directors, are:

Term of Starting date of the first Name Position office mandate Georgeta Corina Popescu ...... 4 years Chief Executive Officer 1 February 2019 Mihai Darie ...... 4 years Chief Financial Officer 3 January 2018 Livioara Sujdea ...... Chief Distribution 1 February 2017 Officer Anamaria Dana Acristini-Georgescu .. 4 years Chief Strategy & M&A 1 May 2017 Management Officer (starting 1 September 2019, previously Chief Strategy &Performance Management Officer) Catalina Popa ...... 4 years Chief Sales Executive 12 December 2017 Officer Bibiana Constantin ...... 4 years Human Resources 1 February 2019 Director Mircea Modran ...... 4 years Chief Information 1 June 2019 Officer The business address of the members of the executive management of the Issuer is at the Issuer’s registered office and principal place of business: 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania.

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Biographical Details of the executive managers Georgeta Corina Popescu Georgeta Corina Popescu is a top executive with an impressive experience in the field of electricity and natural gas. Appointed CEO of Societatea de Distributie a Energiei Electrice Muntenia Nord, part of Electrica Group, on 1 June 2018, Corina Popescu also took over from 1 November 2018, the position of interim CEO of Electrica SA. Starting with 1 February 2019, Corina Popescu holds the position of CEO of Electrica, for a period of 4 years. Graduate of the Faculty of Power Engineering at the Polytechnic University of Bucharest, Power Engineering Systems department, Georgeta Corina Popescu started her professional career in Sucursala de Distributie si Furnizare a Energiei Electrice Bucuresti. Since 2007, Georgeta Corina Popescu has worked in the private sector, holding important positions in E.ON Romania Group and OMV Group. Between December 2015 and February 2017, Corina Popescu held the position of State Secretary within the Ministry of Energy, during which time she was also a member of the Board of Directors of the Issuer. Starting with 1 May 2017, she was appointed in Transelectrica’s Directorate, and during the period of June 2017 – April 2018 she was Transelectrica’s Directorate Chairperson. Mihai Darie Starting with 3 January 2018, Mihai Darie has taken over the position of Chief Financial Officer, for a period of 4 years. Mihai Darie has 20 years of professional experience in finance, acquired in various fields such as energy, infrastructure, financial advisory, banking, investment funds in executive as well as management positions within SN Nuclearelectrica SA, CN Canale Navigabile SA, Fondul Proprietatea SA, Raiffeisen Bank and BDO Romania. Between February 2014 - December 2017, Mihai held the position of Financial Manager within SN Nuclearelectrica SA. He has a bachelor’s degree in Finance and Banking from the Academy of Economic Studies Bucharest, he is an expert accountant member of CECCAR, he is a graduate of Asebuss Bucharest EMBA program and he is an ACCA member as well as a CFA charterholder. Livioara Sujdea Starting with 1 February 2017, Livioara Şujdea has taken over the position of Chief Distribution Officer, for a period of 4 years. With over 20 years of experience in energy field, Livioara Şujdea started her activity as a Design Engineer at Electrica, subsequently occupying various top management positions, including Deputy CEO and member of the Board of Directors at E.ON Moldova Distribuție, E.ON Gas Distribuție, E.ON Distribuție România, Director of Operation and Maintenance at Delgaz Grid and Deputy CEO and member of the Board of Directors at E.ON Energie. Livioara Şujdea graduated the Technical University “Gheorghe Asachi” of Iaşi – Faculty of Electrical Engineering and Energy, where she also obtained a Master’s degree in Business Management and Commercial Engineering, and she also has an Executive MBA with specialization in General Management at the University of Sheffield U.K. and a Strategic Management and Leadership Degree from the Chartered Management Institute London, U.K. Anamaria Dana Acristini-Georgescu Starting with 1 May 2017, Anamaria Dana Acristini-Georgescu has taken over the position of Chief Strategy & Performance Management Officer, for a period of 4 years. Anamaria Acristini has an experience of over 13 years in the field of energy, in particular from the strategic and financial perspectives, the last position held being that of Head of Strategy within E.ON România. Previously, she has held different positions in leading consulting companies, such as Ernst&Young, Mazars and KPMG– having worked on key projects for different utility companies in Romania and abroad. Anamaria Acristini is a graduate of the Bucharest Academy of Economic Studies – with a bachelor’s degree in International Business, then obtaining a master’s degree in International Project Management from the same

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university. She also holds an Executive MBA with specialization in General Management from the University of Sheffield (U.K.). Moreover, she is a fellow member of the Association of Chartered Certified Accountants – ACCA (U.K.). Catalina Popa On 12 December 2017, Cătălina Popa has taken over the position of Chief Sales Executive Officer, for a period of 4 years. With an experience of more than 28 years in the field of electrical power and natural gases, Cătălina Popa has started her activity as an engineer within Electrica. Subsequently, she occupied several top management positions within E.ON, among which Sales Management Executive Director, Director of Operations, Financial Director and Director of the Management of the performance of power networks. Cătălina Popa is a graduate of the Faculty of Power Engineering of the University Politehnica of Bucharest, holding as well as a diploma in Management & Business Administration from Codecs-Open University, Great Britain. Bibiana Constantin Starting with 1 February 2019, Bibiana Constantin has taken over the position of Human Resources Director, for a period of 4 years. Graduate of the Faculty of Psychology and Sociology – West University of Timisoara and of a master’s degree in Management of Human Resources and Communication, as well as of a master’s degree in Psychology, Bibiana Constantin has experience in consultancy and HR management for various industries, including the energy field. With more than 10 years of experience in managing company restructuring and executive search projects, at national and international level, but also with a solid knowledge of the human resources market, Bibiana has provided, in the recent years, specialized consultancy and occupied positions in the top management of large private companies. In the last 5 years, Ms. Constantin held the following management/supervisory positions in other companies:  Group HR Director, Member of the Board, Chimica Group, Cluj Napoca, February 2018 – January 2019  Group HR Director, SCR Grup, Bucharest, May 2017 – Dec 2017  Managing Partner, Transearch International, Bucharest, July 2014 – May 2017  Senior Consultant / Business Development Associate, Transearch International, Bucharest, July 2013 – June 2014 Mircea Toma Modran Starting with 1 June 2019, Mr. Mircea-Toma Modran has taken over the position of Chief Information Officer within the Issuer, for a period of 4 years. Mircea-Toma Modran has graduated from the Faculty of Electrical Engineering, Department of Automation and Computers (currently the Faculty of Automation) of the University of Craiova, with an Electrical Engineer degree, and the York University, Schulich School of Business, Toronto, with a Master of Business Administration degree. He has also attended postgraduate programs at Humber College and the Niagara Institute from Canada, and the Ashridge- Hult and Edinburgh Universities from UK. With more than 30 years of professional experience, he has served for 20 years in top management positions for Romanian and foreign, private and state owned, listed companies, operating in energy and utilities, oil and gas, chemical, aeronautics and information technology, fulfilling a wide range of responsibilities, from the classic IT and industrial automation to direct coordination of operational divisions with strategic impact on financial results. In the last 5 years, Mr. Modran held the following management/supervisory positions in other companies:  Head of Gas Logistic Business Unit and Program Manager Business Continuity, OMV Petrom, until December 2016  Chairman Supervisory Board Romaero SA between June 2016 and December 2017  Executive Board (Directorate), Transelectrica between December 2016 and March 2018  Manager / Lead Advisor Energy & Utilities, Deloitte Romania, between October 2018 and May 2019

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As of this Prospectus, out of all the members of the Board of Directors and out of the executive managers of the Issuer, only Mr. Niculae Havrilet owns 199 of the Issuer’s shares.

As of this Prospectus, each member of the Board of Directors and the Executive Management of the Issuer mentioned above represents stated that he/she: a) has not been and is not convicted of fraud during the last 5 (five) years preceding the date of this Prospectus; b) acting as a member of the administrative, management or supervisory bodies or as manager or founder of a company or a partnership, has not been associated with any bankruptcy, sequestration or liquidation procedure, nor has he/she been placed under judicial administration, over the last 5 (five) years preceding the date of the Prospectus; c) has not been publicly incriminated and/or sanctioned by statutory or regulatory authorities (including by designated professional bodies) and was not prohibited by the court to act as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer during the last 5 (five) years prior to the date of the Prospectus; d) does not carry out activities outside the Issuer, which is material to the Issuer, other than those presented in the biographical details above; e) does not hold shares in the share capital of the Issuer; f) there is no restriction on the assignment, within a certain period of time, of the shareholding of the Issuer; g) there is no family relationship between them and other members of the administrative, management, supervisory bodies of the Issuer or the Issuer's managers or founders. CONFLICT OF INTERESTS Based on the information available to the Issuer, there is no existing conflict between any duties of the Board of Directors and/or the Executive Management towards the Issuer and their private interests and/or other duties. Some of the members of the management bodies of the Issuer may have, in the future, similar positions within the Group or other affiliated entities, situation which may give rise to potential conflicts of interest, to the extent the Issuer enters into business relations with the respective entities. To the extent such potential conflicts of interests may appear, the relevant persons will fully comply with the applicable legal provisions and internal regulations applicable, dealing with conflicts of interest.

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PART 4 PRINCIPAL SHAREHOLDERS

As at 30 June 2019, the authorized share capital of the Issuer amounts to RON 3,477,399,290 (the “Authorized Share Capital”), as approved by the EGMS dated 25 April 2019. The issued share capital of the Issuer amounts to RON 3,459,399,290 divided into 345,939,929 shares with a nominal value of RON 10 each. Until July 2014, the Romanian state, acting through the Ministry of Energy was the sole shareholder of the Issuer. Starting with 4 July 2014 the Issuer’s Shares are listed on BSE, and the GDRs are listed on LSE. As at the date of 24 October 2019, the shareholders’ structure is the following: Number of shares/ Number of Stake held voting rights (in case they are % from the total (% from the different from the number of voting rights Shareholders share capital) shares) Romanian State through the Ministry of 168,751,185 48.7805% 49.7719% Energy, Bucharest, Romania Dedeman SRL 28,537,200 8.2492% 8.4168% NN Group NV* 23,455,042 6.7801% 6.9179% The European Bank for Reconstruction and 17,355,272 5.0168% 5.1188% Development, London, UK Allianz-Ţiriac Private pension funds 17,033,811 4.9239% 5.0240% SAFPP** Electrica SA (without voting rights) 6,890,593 1.9918% - BNY MELLON DRS, New York, USA 3,823,504 1.1053% 1.1277% Other legal entities 65,077,947 18.8119% 19.1942% Individuals 15,015,375 4.3405% 4.4287% TOTAL number of shares 345,939,929 TOTAL voting rights 339,049,336 Source: The shareholding structure issued by the Central Depository as of 24 October 2019 * NN Group NV holds shares indirectly through four managed entities: Fondul de Pensii Facultative NN ACTIV, Fondul de Pensii Facultative NN OPTIM, Fondul de Pensii Administrat Privat NN and NN Investment Partners B.V. ** Allianz -Ţiriac Pensii Private SAFPP holds shares indirectly through three managed entities: Fondul de Pensii Administrat Privat AZT Viitorul Tău, Fondul de Pensii Facultative AZT Moderato and Fondul de Pensii Facultative AZT Vivace .

Following the stabilization process undertook after the Initial Public Offering, the Issuer owns 6,890,593 of its shares, representing 1.9918% of the total share capital, which does not entitle the Issuer the right neither to vote, nor to receive dividends. However, taking into consideration the own shares held by the Issuer, there is a difference between the weight of the Issuer's share capital held by the other shareholders and, respectively, the weight of voting rights that can be exercised. The shareholders referred to in the table above, except for Electrica have the same voting rights as any other shareholder of the Issuer, the shares issued by Issuer granting equal voting rights to all shareholders of the Issuer. As reflected by the shareholding structure presented above, there is no shareholder that exercises control over the Issuer, as a result of holding the majority of shares and voting rights in the Issuer. According to information held by the Issuer, there is no agreement or understanding that could result in future changes in control of the Issuer.

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PART 5 RELATED PARTIES TRANSACTIONS

For information about significant transactions with related parties as defined in the financial statements as of and for the year ended on 31 December 2018, please refer to Note 34 to the financial statements as of and for the year ended on 31 December 2018. Since the beginning of 2019 to date, the Issuer has concluded the following related-parties transactions: (i) Services agreement concluded with SDTS On 16 January 2019, the Issuer has concluded a services agreement with SDTS (as beneficiary) for rendering services in the AMR system. This agreement has a total value of RON 5,706 thousand and is valid until 31 December 2019. (ii) Services agreement concluded with SDMN On 26 March 2019, the Issuer has concluded a services agreement with SDMN (as beneficiary) for rendering services in the AMR system. This agreement has a total value of RON 5,496 thousand and was valid until 31 August 2019. At the exiry date, the Issuer has extended the term of the services agreement concluded with SDMN for rendering services in the AMR system. The new expiry date of this agreement is 31 October 2019 and its value has remained unchanged. (iii) Services agreement concluded with SDTN On 25 April 2019, the Issuer has concluded a services agreement with SDTN (as beneficiary) for rendering services in the AMR system. This agreement has a total value of RON 3,292 thousand and was valid until 24 September 2019.

(iv) Services agreement concluded with SDTS On 26 July 2019, the Issuer has concluded a services agreement with SDTS (as service provider) for rendering services of metering systems installation. This agreement has a total value of RON 280 thousand and is valid until 25 July 2020. (v) Services agreement concluded with SDTN On 28 August 2019, the Issuer has concluded a services agreement with SDTN (as service provider) for rendering services of metering systems installation. This agreement has a total value of RON 358.4 thousand and is valid until 27 August 2020. (vi) Services agreement concluded with SDTN On 14 October 2019, the Issuer has concluded a services agreement with SDTN (as beneficiary) for rendering services in the AMR system. This agreement has a total value of RON 1,317 thousand and is valid until 13 December 2019.

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PART 6 MATERIAL AGREEMENTS

During the reference period indicated by Annex 3, part 14, point 14.1 of Delegated Regulation 2019/980, i.e. the previous two years until the date of this Prospectus, the Issuer has entered into the following important contracts: The acquisition of Fondul Proprietatea’s minority holdings in the Issuer’s subsidiaries The Issuer and Fondul Proprietatea have executed on 1 November 2017 the sale and purchase agreement for the acquisition of Fondul Proprietatea’s holdings in the Issuer’s subsidiaries (i.e., SDMN, SDTS, SDTN and EFSA). The aggregated purchase price of the transaction was RON 752,031,841 reflecting the following four transactions: a total price of RON 209,744,928 for 21.9999979% of the share capital of SDMN, RON 201,702,667 for 22.00001% of the share capital of SDTN, RON 173,504,365 for 21.9999981% of the share capital of SDTS, RON 167,079,881 for 22.000027% of the share capital of EFSA. Out of the total number of shares held by Fondul Proprietatea in each subsidiary, ten shares of each of the subsidiaries were transferred to other group companies, as follows: 10 shares, representing 0.0000282195174818077% of the share capital, held in SDMN to SDTS for a total price of RON 269.04; 10 shares, representing 0.0000269350068519964% of the share capital, held in SDTN to SDMN for a total price of RON 246.95; 10 shares, representing 0.0000235867191675586% of the share capital, held in SDTS to SDTN for a total price of RON 186.02; 10 shares held in EFSA to EL SERV for a total price of RON 1,222.76. The rest of the shares were acquired by the Issuer. In addition, members of the Group are also parties to a series of agreements concluded in the respective period and which are agreements concluded in the normal course of business.

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PART 7 CERTAIN REGULATORY DISCLOSURES

Over the last 12 months until the date of this Prospectus, the Issuer has published information in accordance with the provisions of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (“MAR”). Except for the disclosures presented in this Prospectus, the Issuer mentions also the following relevant disclosures in accordance with the periodic reporting requirements:  definitive dismissal of the request of suspension of the Competition Council Decision no. 77/20.12.2017, by which the Issuer was fined with the amount of RON 10,800,984.04, until the final resolution of the case no. 3889/2/2018, in which the Issuer requested the cancellation of the sanction as being unlawful and unfounded and, alternatively, the reduction of the fine.  over the last 12 months, several changes in Board of Directors and executive management structure took place, changes which led to the current structure of the Board of Directors and of executive management as described in Part 3 of this Prospectus.

 During the last 12 months until the date of this Prospectus, two OGMSs and one EGMS took place: (a) On 7 February 2019, an OGMS took place, during which the Issuer’s shareholders elected, through the simple voting method, the members of the Board of Directors following the vacancy of the positions of member in the Board of Directors, after the renunciation to the mandate by the directors Arielle Marie Malard de Rothschild, by Willem Jan Antoon Henri Schoeber and by Elena Doina Dascalu. Thus, the three new members elected are Radu Mircea Florescu, Dragoș Andrei and Niculae Havrilet. Their mandate is equal to the period remaining until the expiry of the mandate for the vacant positions, i.e. until 27 April 2022. (b) On 25 April 2019, the Issuer’s OGMS and the Issuer’s EGMS took place. In the OGMS, the Issuer’s shareholders approved mainly the following: . audited annual financial statements for the year 2018 and the 2019 revenue and expenses budget, at Issuer’s individual level as well as at consolidated level;

. profit distribution for the year 2018: total gross dividend value – RON 247.51 million; gross dividend per share – RON 0.73; ex-date – 6 June 2019; payment date – 24 June 2019;

. the discharge of liability of the members of the Board of Directors for the financial year 2018. At the same time, OGMS rejected the remuneration policy and the proposed mandate agreement of the Board of Directors members as well as the remuneration limits of the Issuer’s executive managers. In the EGMS, the shareholders approved the following: . the initiation of the share capital increase operation of the Issuer through contribution in kind, with a number of 9 (nine) plots of land with a total area of 55,524.46 sqm and the request to appoint an expert evaluator by the Trade Register Office of Bucharest Court to evaluate the land plots for the contribution in kind; . the delegation to the Board of Directors, for a period of three years, of the powers to increase the Issuer’s share capital by no more than RON 18,000,000, up to the maximum value of RON 3,477,399,290, representing authorized share capital, as follows: (i) the contribution in kind of the Romanian State, represented by the Ministry of Energy, as a result of obtaining the land ownership certificates of 9 (nine) plots of land and (ii) the cash contribution of the other shareholders, following the exercise of their preference rights, granted as a result of the contribution in kind of the Romanian State through the Ministry of Energy, as well as the approval of mandating the Board of Directors to take all measures in the name and on behalf of the Issuer, for initiating, carrying out and finalizing the share capital increase.

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. On 24 September 2019, the Board of Directors approved the convening of OGMS and EGMS, that will take place on 14 November 2019.

The main items on the agenda submitted for approval of the OGMS refer to amendment of some provisions of the Issuer’s Remuneration Policy for Directors and of Executive managers and to the filing of a civil action in court for attracting the liability of the persons who have held the positions of director and respectively, managers of the Issuer for the obligations not fulfilled and/or improperly fulfilled, according to art. 155 of Company Law, which led to the Issuer incurring the damages ascertained by the Romanian Court of Accounts. There are on the EGMS agenda proposals relating to the amendment of the Articles of Association.

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PART 8

REASONS FOR THE OFFER AND USE OF PROCEEDS

The Offering is conducted as a result of the Issuers obligation to increase its capital share through the contribution in kind of the Romanian State through the Ministry of Energy, as a result of obtaining the land ownership certificates issued by the Ministry of Economy, in accordance with the provisions of art. 12 paragraphs 5 and 5¹ of Law no. 137/2002 on measures to accelerate privatisation and, respectively, the provisions of art. 32 paragraph 1 of the Government Emergency Ordinance no. 88/1997 on privatisation of companies. The maximum net proceeds obtained by the Issuer following the Share Capital Increase will be of approximately RON 3.1 million (assuming that all New Shares will be subscribed). The total net proceeds obtained by the Issuer following the Share Capital Increase, after deduction of fees, rates and charges incurred with the Offering, will be of approximately RON 2.2 million (assuming that all New Shares will be subscribed). The total fees, rates and charges payable by the Issuer in connection with the Share Capital Increase are expected to be in the range of RON 0.9 million (assuming that all the New Shares will be subscribed). The proceeds obtained by the Issuer following the Share Capital Increase shall be used for financing the Issuer’s current activity. No commissions, fees or expenses in connection with the Share Capital Increase will be charged to investors by the Issuer. The Entitled Holders of GDRs will have to pay the fees and commissions imposed by the GDR Depositary, in accordance with the provisions of Part 12 –“ Terms and Conditions of the Global Depositary Receipts “ and Part 13 “Subscription and Sale – Subscription Procedure of New Shares by the Entitled Holders of GDRs”.

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PART 9

SELECTED FINANCIAL INFORMATION

The financial information in the Prospectus consists of the audited consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the year ended 31 December 2018 and, respectively, the audited separate financial statements of the Issuer (the “Annual Financial Statements”) and the consolidated reviewed interim financial statements of the Issuer as at and for the six month period ended 30 June 2019 (the “Interim Financial Statements”) (the Annual Financial Statements and the Interim Financial Statements shall be collectively referred to as the “Financial Statements”). The annual consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“IFRS-EU”). The annual consolidated financial statements were endorsed by the Board of Directors on 5 March 2019 and have been approved by the shareholders in the OGMS held on 25 April 2019. The independent auditor’s report on the consolidated annual financial statements issued by Deloitte Audit S.R.L. is dated 5 March 2019. The annual separate financial statements have been prepared in accordance with the Ministry of Public Finance Order no. 2844/2016 for the approval of the Accounting Regulations in accordance with International Financial Reporting Standards. The annual separate financial statements were endorsed by the Board of Directors on 5 March 2019 and have been approved by the shareholders in the OGMS held on 25 April 2019. The independent auditor’s report on the separate annual financial statements issued by Deloitte Audit S.R.L. is dated 5 March 2019. The Interim Financial Statements have been prepared in accordance with the International Accounting Standard 34 “Interim Financial Reporting” as adopted by the European Union. They do not include all the information required for a complete set of financial statements prepared in accordance with IFRS as endorsed by the European Union IFRS-EU and these should be read together with the Annual Financial Statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2018. The condensed consolidated interim financial statements were authorized for issue by the Board of Directors on 13 August 2019. The Interim Financial Statements presented in this Prospectus are reviewed by the independent auditor, Deloitte Audit S.R.L.. The review report on the condensed consolidated interim financial statements issued by Deloitte Audit S.R.L. is dated 13 August 2019. A review of the Interim Financial Statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less than an audit conducted in accordance with International Standards on Auditing and consequently does not enable the independent auditor to obtain assurance that the independent auditor would become aware of all significant matters that might be identified in an audit. Accordingly, the independent auditor does not express an audit opinion. The independent auditor has not audited nor reviewed the condensed consolidated statements of profit or loss and condensed consolidated statement of comprehensive income for the three od ended 30 June 2019 and 30 June 2018 and accordingly, the independent auditor did not express an opinion nor a conclusion on them. The financial information included in this Prospectus has to be read together with the aforementioned Financial Statements and, where appropriate, together with the accompanying notes to the Financial Statements.

Functional and presentation currency

The Annual Financial Statements are presented in Romanian Lei (RON), unless otherwise specified, which is the functional currency of the Group companies. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

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EXCERPT FROM THE CONSOLIDATED ANNUAL FINANCIAL INFORMATION Consolidated statement of the Group’s financial position (all amounts are in THOUSAND RON, if not otherwise stated) CONSOLIDATED STATEMENT OF FINANCIAL 31 December 2017 31 December 2018 POSITION (restated)

ASSETS Non-current assets

Intangible assets related to concession arrangements 4,810,340 4,330,909 Other intangible assets 13,899 14,053 Property, plant and equipment, net 601,178 701,510 Restricted cash 320,000 320,000 Deferred tax assets 28,895 41,100 Other non-current assets 1,842 1,305 Total non-current assets 5,776,154 5,408,877

Current assets Trade receivables 806,293 804,361 Other receivables 38,461 55,534 Cash and cash equivalents 665,730 562,493 Deposits, treasury bills and government bonds 136,493 746,981 Inventories 63,585 21,620 Prepayments 2,666 3,692 Green Certificates - 12,643 Current income tax receivable 16,481 1,134 Assets held for sale 23,209 - Total current assets 1,752,918 2,208,458

Total assets 7,529,072 7,617,335

EQUITY AND LIABILITIES Equity Share capital 3,459,399 3,459,399 Share premium 103,049 103,049 Treasury shares reserve (75,372) (75,372)

Pre-paid capital contributions in kind from shareholders 5,144 5,144 Revaluation reserve 108,704 123,748 Legal reserves 352,038 326,779 Retained earnings 1,675,479 1,712,809

Total equity attributable to the owners of Electrica 5,628,441 5,655,556 Total equity 5,628,441 5,655,556

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CONSOLIDATED STATEMENT OF THE 31 December 2017 31 December 2018 FINANCIAL POSITION (restated) Liabilities Non-current liabilities Financing for network construction related to concession agreements 981 11,122 Deferred tax liabilities 183,381 200,504 Employee benefits 186,857 165,448 Other payables 41,247 40,440 Long-term bank borrowings 320,000 320,000 Total non-current liabilities 732,466 737,514

Current liabilities Financing for network construction related to concession agreements 11,851 32,709 Bank overdrafts 118,972 247,904 Trade payables 742,200 689,405 Other payables 181,117 134,226 Deferred revenue 5,037 7,364 Employee benefits 77,988 78,918 Provisions 29,106 29,889 Current income tax liability 1,894 3,850 Total current liabilities 1,168,165 1,224,265 Total liabilities 1,900,631 1,961,779

Total equity and liabilities 7,529,072 7,617,335 Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together “the Group”) as at and for the financial year ended 31 December 2018. Consolidated statement of the Group’s profit or loss (all amounts are in THOUSAND RON, if not otherwise stated) CONSOLIDATED STATEMENT OF PROFIT OR 2018 2017 LOSS

Revenues 5,612,784 5,603,235 Other income 164,873 173,487 Electricity purchased (2,718,320) (2,972,793) Green certificates (378,254) (372,878)

Construction costs related to concession agreements (841,478) (745,332) Employee benefits (671,538) (642,418) Repairs, maintenance and materials (86,857) (61,724) Depreciation and amortization (423,296) (395,601) Reversal of impairment/(Impairment) of property, plant and equipment, net 3,563 (8,805) Reversal of impairment/(Impairment) of trade and other receivables, net 25,234 (12,864) Impairment on assets held for sale (147) - Change in provisions, net 521 32,518 Other operating expenses (426,109) (399,791)

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CONSOLIDATED STATEMENT OF PROFIT OR 2018 2017 LOSS

Operating profit 260,976 197,034

Finance income 14,019 20,116 Finance costs (12,268) (10,399) Net finance income 1.751 9,717

Profit before tax 262,727 206,751 Income tax expense (32,332) (35,192) Profit for the year 230,395 171,559

Profit for the year attributable to: - owners of the Issuer 230,395 127,730 - non-controlling interests - 43,829 Profit for the year 230,395 171,559

Earnings per share Basic and diluted earnings per share (RON) 0.68 0.38 Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the financial year ended 31 December 2018 Consolidated statement of the Group’s comprehensive income (all amounts are in THOUSAND RON, if not otherwise stated) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 2018 2017

Profit for the year 230,395 171,559 Other comprehensive income

Items that will not be reclassified to profit or loss

Re-measurements of the defined benefit liability (6,204) 19,173 Tax related to re-measurements of the defined benefit liability 284 (1,300) Revaluation of property, plant and equipment - 55,874 Tax related to revaluation of property, plant and equipment - (8,940)

Other comprehensive income, net of tax (5,920) 64,807

Total comprehensive income 224,475 236,366

Total comprehensive income attributable to: - owners of the Issuer 224,475 192,537 - non-controlling interests - 43,829 Total comprehensive income 224,475 236,366

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Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together “the Group”) as at and for the financial year ended 31 December 2018. Consolidated statement of the Group’s cash flows (all amounts are in THOUSAND RON, if not otherwise stated)

CONSOLIDATED STATEMENT OF CASH FLOWS 2018 2017 (restated)

Cash flows from operating activities Profit for the year 230,395 171,559 Adjustments for: Depreciation 38,340 32,013 Amortisation 384,956 363,588 (Reversal of impairment)/Impairment of property, plant and equipment, net (3,563) 8,805

Loss on disposal of property, plant and equipment 13,081 4,576 (Reversal of impairment)/Impairment of trade and other receivables, net (25,234) 12,864 Impairment on assets held for sale 147 - Change in provisions, net (521) (32,518) Net finance income (1,751) (9,717) Gain on loss of control over subsidiaries in financial distress (301) - Income tax expense 32,332 35,192 667,881 586,362

Changes in: Trade receivables (27,828) (196,138) Other receivables 13,394 (28,487) Prepayments 1,026 1,943 Green certificates 12,643 (12,643) Inventories (41,965) 1,130 Trade payables 39,374 120,741 Other payables 59,248 (16,289) Employee benefits 27,047 (14,698) Deferred revenue (2,327) 2,949 Cash generated from operating activities 748,493 444,870

Interest paid (3,068) (2,237) Income tax paid (49,021) (53,206)

Net cash from operating activities 696,404 389,427

Cash flows from investing activities

Payments for purchases of property, plant and equipment (3,153) (52,949) Payments for network construction related to concession agreements (803,133) (726,729)

Payments for purchase of other intangible assets (9,926) (2,390)

Proceeds from sale of property, plant and equipment 15,581 2,559 Restricted cash - (185,508) Payments for purchase of treasury bills and government bonds (95,339) (543,114)

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CONSOLIDATED STATEMENT OF CASH FLOWS 2018 2017 (restated) Proceeds from maturity of treasury bills and government bonds 550,070 1,838,245 Payments for deposits with maturity of 3 months or longer (654,000) (995,625) Proceeds from deposits with maturity of 3 months or longer 802,242 820,320 Interest received 11,728 20,042

Net cash effect due to loss of control over subsidiaries (1,205) -

Consideration paid to acquire non-controlling interests - (752,030) Net cash used in investing activities (187,135) (577,179)

Cash flows from financing activities Proceeds from long term bank loans - 192,267 Dividends paid (244,678) (349,373)

Repayment of financing for network construction related to concession agreements (32,422) (86,768) Net cash used in financing activities (277,100) (243,874)

Net increase/(decrease) in cash and cash equivalents 232,169 (431,626) Cash and cash equivalents at 1 January 314,589 746,215 Cash and cash equivalents at 31 December 546,758 314,589 Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together “the Group”) as at and for the financial year ended 31 December 2018.

Restatements a) Share capital restatement Until 31 December 2003, the statutory share capital in nominal terms was restated according to IAS 29 “Financial Reporting in Hyperinflationary Economies” with a corresponding adjustment to Retained Earnings. Through the general meeting of shareholders decision no. 1/27.04.2015 was approved the use of the amount known as “Inflation adjustment to share capital” having a value of RON 354,843 thousand to cover the accumulated accounting losses. Therefore, the share capital should have been decreased to reflect the above-mentioned operation. As a consequence, the share capital has been overstated and retained earnings understated with the amount of RON 354,843 thousand. The Group reclassified in the statement of financial position the amount RON 354,843 thousand from share capital to Retained earnings, by restating each of the affected financial statement line items for prior periods, the reclassification having no impact within the equity line. The following tables summarise the impact on the Group’s consolidated financial statements: Consolidated statement of financial position

1 January 2017 as 1 January 2017 1 January 2017 as reported previously reclassifications restated Share capital 3,814,242 (354,843) 3,459,399 Share premium 103,049 - 103,049 Treasury shares reserve (75,372) - (75,372) Pre-paid capital contribution in kind from shareholders 5,144 - 5,144

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1 January 2017 as 1 January 2017 1 January 2017 as reported previously reclassifications restated Revaluation reserve 104,681 - 104,681 Legal reserves 302,236 - 302,236 Retained earnings 1,429,908 354,843 1,784,751 Total equity attributable to the owners of Electrica 5,683,888 - 5,683,888

31 December 2017 as reported 31 December 2017 31 December 2017 as previously reclassifications restated Share capital 3,814,242 (354,843) 3,459,399 Share premium 103,049 - 103,049 Treasury shares reserve (75,372) - (75,372) Pre-paid capital contribution in kind from shareholders 5,144 - 5,144 Revaluation reserve 123,748 - 123,748 Legal reserves 326,779 - 326,779 Retained earnings 1,357,966 354,843 1,712,809 Total equity attributable to the owners of Electrica 5,655,556 - 5,655,556

b) Cash-flow restatement The Group reclassified in the cash flow statement for the year 2017 the changes in restricted cash from operating activities to investing activities, as the restricted cash represents collateral deposits for guaranteeing the long-term bank loans. Consolidated statement of cash flows

2017 as reported 2017 previously reclassifications 2017 as restated Restricted cash (185,508) 185,508 - Other elements included in cash generated from operating activities 444,870 - 444,870 Cash generated from operating activities 259,362 185,508 444,870

Restricted cash - (185,508) (185,508) Other elements included in cash used in investing activities (391,671) - (391,671) Cash used in investing activities (391,671) (185,508) (577,179)

Net decrease in cash and cash equivalents (431,626) - (431,626)

Significant accounting policies

The Group has consistently applied the same accounting policies to all periods presented in the Annual Financial Statements, except for the adoption of two new standards effective as of 1 January 2018.

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Starting with 1 January 2018, the Group has applied for the first time two new standards, IFRS 9 “Financial instruments” and IFRS 15 “Revenues from contracts with customers”. Due to the transition methods chosen by the Group in applying these standards, comparative information throughout the Annual Financial Statements has not been restated to reflect the requirements of the new standards.

Dividend distribution policy

The Issuer’s dividend policy was updated in February 2018. The Issuer’s dividends are distributed from the annual net distributable profit based on the annual separate audited financial statements after their approval by the Issuer’s Ordinary General Shareholders’ Meeting (“OGMS”) and the approval of the dividend proposal by the OGMS. Distributable profit is the portion of the net profit for the financial year that can be distributed as dividends after the statutory and/or legal distributions have been made, such as the distribution to the legal reserves and, where applicable, the use of the net profit for other legal purposes under law (for example, covering accounting losses from previous years, if applicable). The shareholders receive dividends proportionally to their share in the company’s paid-up capital. The Issuer has 345,939,929 ordinary shares issued, all shares conferring equal rights on the net assets of the company. Out of the total number of shares issued, 339,049,336 shares offer the right to dividends and the right to one vote per share in the shareholders’ meetings of the company. The remaining 6,890,593 shares were bought back by the company in July 2014 in order to stabilize the price and do not confer any right to dividends or any voting right. Regarding the GDRs that are traded on the LSE, dividends are paid to the GDRs holders proportionally to their holdings. The proposal for dividend distribution formulated by the Board of Directors will be subject to the OGMS vote, usually at the same meeting where the Issuer’s annual financial statements audited are approved, respectively within 120 days after the closing of the financial year. According to the policy in force, the dividend distribution that the Board of Directors will consider in formulating the proposal to the Issuer’s OGMS will be between 65% and 100% of its distributable net profit. In case there are deviations outside this range, they will be substantiated and explained to shareholders in the periods in which they occur. The Issuer will pay all dividends in RON.

In selecting a certain dividend pay-out ratio according to the dividend policy, the Board of Directors shall take into consideration the following:  Reducing the fluctuations in dividend yield from one period to the next, as well as the absolute dividend per share value;  The issuer's investment needs and opportunities;  Contributions of non-monetary items to net reported profit;  Cash resources available for dividend distribution as well as the Issuer’s indebtedness; and  Dividend yield comparable to other listed companies in the industry or related sectors.

The dividend pay-out ratio from the distributable profit of the Group subsidiaries shall be consistent with the Issuer’s current dividend policy. The dividends paid by the Group’s subsidiaries to the Issuer in year N (related to year N-1 results) are recorded as finance income in the Issuer’s separate financial statements in year N and incorporated into dividends paid by the Issuer to its shareholders in year N+1 (related to the result of year N).

The dividends distributed by the Issuer fluctuated in the period 2014 - 2017, between RON 244.7 million and RON 291.6 million, but the dividend pay-out ratio was 100% each year, except for 2014, when it reached a level of 96%. In 2015, the net dividend distributions included the amount of RON 5.8 million representing the retained earnings from 2014. The yield of the dividend paid in 2018 (for the 2017 results), recorded the highest level in the 2014-2017 period, reaching a level of 7.3%. The gross dividend per share paid in 2018 was RON 0.7237, as compared to RON 0.7415 in 2017. The dividend yield (%) is calculated as gross dividend per share/closing share price on BSE at ex-date.

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Note: Dividend pay-out ratio is calculated as gross dividends/ net profit distributable to dividend, whereas net profit distributable to dividend is net profit according to the separate financial statements of the Issuer less the required distributions to legal reserves.

In July 2014, the Issuer bought back for price stabilization purposes, 5,206,593 ordinary shares and 421,000 GDRs, equivalent of 1,684,000 shares. The total amount paid for acquiring the shares and GDRs was RON 75,372 thousand. There were no changes in the number of the treasury shares until the date of the report.

The dividends declared by the Issuer in 2018 and 2017 (from the statutory profits of previous years) were as follows:

Distribution of dividends 2018 2017 To the owners of the Issuer 245,370 251,405 To non-controlling interests - 97,869 Total 245,370 349,274

Source: The information was extracted from the consolidated financial statements of the Issuer and its subsidiaries (together the “Group”) as at and for the financial year ended 31 December 2018.

On 27 April 2018, the OGMS of the Issuer approved the distribution of dividends in the amount of RON 245.4 million. The value of dividends per share distributed to the shareholders of the Issuer were: RON 0.7237 per share (2017: RON 0.7415 per share).

When calculating the dividend per share, the Issuer’s repurchased own shares (6,890,593 shares) were not considered as outstanding shares and were deducted from the total number of issued ordinary shares.

Out of the dividends declared by the Issuer of RON 245.4 million (2017: RON 251.4 million), the dividends paid were of RON 244.7 million (2017: RON 251 million); the remaining difference represents dividends uncollected by the shareholders from the Depositary.

During 2017, dividends of RON 97.9 million were approved for distribution to non-controlling interests - Fondul Proprietatea S.A., by the OGMS of the following subsidiaries: EFSA, SDMN, SDTN and SDTS. In 2018, Fondul Proprietatea S.A. was no longer a shareholder of the above-mentioned subsidiaries.

On 25 April 2019 the OGMS of the Issuer approved dividend distribution of RON 247.5 million t (2018: RON 245.4 million). The dividend per share distributed is RON 0.73 per share (2018: RON 0.7237 per share).

EXCERPT FROM THE ANNUAL SEPARATE FINANCIAL INFORMATION Separate statement of the Issuer’s financial position (all amounts are in RON, if not otherwise stated) STATEMENT OF THE FINANCIAL POSITION 31 December 2018 31 December 2017 ASSETS Non-current assets Property, plant and equipment 225,875,488 270,667,304 Intangible assets 565,574 557,958 Investments in subsidiaries 2,180,209,868 2,183,950,669 Restricted cash 320,000,000 320,000,000 Loans granted to subsidiaries – long term 968,087,389 246,563,230 Total non-current assets 3,694,738,319 3,021,739,161

Current assets Cash and cash equivalents 169,966,962 125,982,921 Deposits, treasury bills and government bonds 101,493,076 746,980,117

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STATEMENT OF THE FINANCIAL POSITION 31 December 2018 31 December 2017 Trade receivables 9,001,292 79,300,866 Other receivables 17,032,342 54,939,696 Inventories 76,665 174,592 Prepayments 54,106 83,135 Loans granted to subsidiaries – short term 5,202,986 - Total current assets 302,827,429 1,007,461,328

Total assets 3,997,565,748 4,029,200,489

EQUITY AND LIABILITIES

Equity Share capital 3,459,399,290 3,459,399,290 Share premium 103,049,177 103,049,177 Treasury shares (75,372,435) (75,372,435) Pre-paid capital contributions in kind from shareholders 5,144,025 5,144,025 Revaluation reserves 11,837,805 16,295,016 Legal reserves 184,202,070 169,303,590 Retained earnings 288,528,416 246,338,855 Total equity 3,976,788,348 3,924,157,518

Liabilities

Non-current liabilities Employee benefits 1,898,716 1,588,567 Total non-current liabilities 1,898,716 1,588,567

Current liabilities Trade payables 4,014,783 72,395,483 Other payables 4,006,193 12,936,476 Deferred revenue 593,991 771,914 Employee benefits 6,546,940 5,057,651 Provisions 3,716,777 12,292,880 Total current liabilities 18,878,684 103,454,404 Total liabilities 20,777,400 105,042,971

Total equity and liabilities 3,997,565,748 4,029,200,489 Source: The information was extracted from the separate financial statements of the Issuer as at and for the financial year ended 31 December 2018.

Statement of the Issuer’s profit or loss (all amounts are in RON, if not otherwise stated) STATEMENT OF PROFIT OR LOSS 2018 2017

Revenues 16,783,663 481,914,976 Other income 20,317,942 5,454,469 Electricity purchased - (469,697,651) Employee benefits (36,823,886) (25,848,474) Depreciation and amortization (21,745,603) (23,531,857) Reversal of impairment/(Impairment) of trade and other receivables, net 41,186,949 (15,120,206) Reversal of impairment/(Impairment) of property, plant and equipment, net 5,697,528 (1,906,585)

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STATEMENT OF PROFIT OR LOSS 2018 2017 Impairment of equity interests in subsidiaries (19,520,323) - Change in provisions, net 8,576,103 (12,292,881) Other operating expenses (45,856,012) (48,128,627) Operating loss (31,383,639) (109,156,836)

Finance income 329,429,909 364,794,976 Finance costs (76,667) (470,420) Net finance income 329,353,242 364,324,556

Profit before tax 297,969,603 255,167,720 Income tax – benefit 3,752 2,996,195 Profit for the year 297,973,355 258,163,915

Earnings per share Basic and diluted earnings per share 0.88 0.76 Source: The information was extracted from the separate financial statements of the Issuer as at and for the financial year ended 31 December 2018. Statement of the Issuer’s comprehensive income (all amounts are in RON, if not otherwise stated) STATEMENT OF COMPREHENSIVE INCOME 2018 2017

Profit for the year 297,973,355 258,163,915 Other comprehensive income

Items that will not be reclassified to profit or loss Revaluation of property, plant and equipment - 18,624,202

Tax related to revaluation of property, plant and equipment - (2,979,872)

Re-measurements of the defined benefit liability 31,231 55,286 Tax related to re-measurements of the defined benefit liability (3,752) (16,323)

Other comprehensive income, net of tax 27,479 15,683,293

Total comprehensive income 298,000,834 273,847,208 Source: The information was extracted from the separate financial statements of the Issuer as at and for the financial year ended 31 December 2018. Statement of the Issuer’s cash flows (all amounts are in RON, if not otherwise stated) STATEMENT OF CASH FLOWS 2018 2017

Cash flows from operating activities Profit for the year 297,973,355 258,163,915 Adjustments for: Depreciation 21,429,620 22,049,734 Amortisation 315,983 1,482,123

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STATEMENT OF CASH FLOWS 2018 2017 (Reversal of impairment)/Impairment of property, plant and equipment, net (5,697,528) 1,906,585 Impairment of equity interests in subsidiaries 19,520,323 - Loss from the disposal of tangible assets 12,620,924 - (Reversal of impairment)/Impairment of trade and other receivables, net (41,186,949) 15,120,206 Net finance income (329,353,242) (364,324,556) Changes in provisions, net (8,576,103) 12,292,880 Income tax – (benefit) (3,752) (2,996,195) (32,957,369) (56,305,308)

Changes in: Trade receivables 108,040,487 (53,294,164) Other receivables 10,207,036 (3,913,798) Trade payables (64,934,664) 27,764,080 Other payables (9,796,225) 165,715 Employee benefits 1,826,917 2,027,662

Cash generated from/(used in) operating activities 12,386,182 (83,555,813)

Net cash from/(used) in operating activities 12,386,182 (83,555,813)

Cash flows from investing activities

Payments for purchases of property, plant and equipment (249,745) (994,728) Payments for purchase of intangible assets (323,599) (203,371)

Payments for purchase of additional shares in subsidiaries - (752,029,916) Proceeds from the sale of intangible asset 909,023 Restricted cash - (185,508,248) Payments for purchase of treasury bills and government bonds (95,338,879) (543,114,032) Proceeds from maturity of treasury bills and government bonds 550,069,944 1,838,554,275 Payments for deposits with maturity of 3 months or longer (619,000,000) (995,625,000) Proceeds from deposits with maturity of 3 months or longer 802,241,735 820,320,000 Proceeds relating to loans granted to subsidiaries 9,508,739 - Interest received 18,203,049 17,033,022 Dividends received 346,491,712 302,341,425 Loans granted to related parties (736,235,884) (237,654,490) Net cash from investing activities 276,276,095 263,118,937

Cash flows from financing activities Dividends paid (244,678,236) (251,224,221) Net cash used in financing activities (244,678,236) (251,224,221)

Net increase/(decrease) in cash and cash equivalents 43,984,041 (71,661,097) Cash and cash equivalents at 1 January 125,982,921 197,644,018 Cash and cash equivalents at 31 December 169,966,962 125,982,921

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Source: The information was extracted from the separate financial statements of the Issuer as at and for the financial year ended 31 December 2018. EXCERPT FROM THE CONSOLIDATED INTERIM FINANCIAL INFORMATION Consolidated statement of the Group’s financial position (All amounts are in THOUSAND RON, if not otherwise stated) CONSOLIDATED STATEMENT OF THE 30 June 2019 31 December 2018

FINANCIAL POSITION (reviewed) (audited)

ASSETS

Non-current assets

Intangible assets related to concession agreements 4,969,375 4,810,340 Other intangible assets 14,904 13,899 Property, plant and equipment, net 562,942 601,178 Restricted cash 320,000 320,000 Deferred tax assets 23,506 28,895 Other non-current assets 1,869 1,842 Right of use asset 59,105 - Total non-current assets 5,951,701 5,776,154

Current assets Trade receivables 873,913 806,293 Other receivables 30,780 38,461 Cash and cash equivalents 385,356 665,730

Deposits with maturity date more than three months 123,720 136,493 Inventories 68,504 63,585 Prepayments 7,236 2,666 Income tax receivable 7,916 16,481 Assets held for sale 15,911 23,209 Total current assets 1,513,336 1,752,918

Total assets 7,465,037 7,529,072

EQUITY AND LIABILITIES

Equity Share capital 3,459,399 3,459,399 Share premium 103,049 103,049 Treasury shares reserve (75,372) (75,372)

Pre-paid capital contributions in kind from shareholders 5,144 5,144 Revaluation reserve 99,018 108,704 Legal reserves 352,038 352,038 Retained earnings 1,546,445 1,675,479

Total equity attributable to the owners of Electrica 5,489,721 5,628,441 Total equity 5,489,721 5,628,441

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CONSOLIDATED STATEMENT OF THE 30 June 2019 31 December 2018

FINANCIAL POSITION (reviewed) (audited)

Liabilities Non-current liabilities Financing for network construction related to concession agreements 110 981 Finance lease liability – long term 20,978 - Deferred tax liabilities 180,238 183,381 Employee benefits 186,720 186,857 Other payables 39,534 41,247 Long-term bank borrowings 320,000 320,000 Total non-current liabilities 747,580 732,466

Current liabilities Financing for network construction related to concession agreements 5,527 11,851 Finance lease liability – short term 39,263 - Bank overdrafts 294,018 118,972 Trade payables 605,530 742,200 Other payables 199,908 181,117 Deferred revenue 4,984 5,037 Employee benefits 59,152 77,988 Provisions 15,326 29,106 Current income tax liability 4,028 1,894 Total current liabilities 1,227,736 1,168,165 Total liabilities 1,975,316 1,900,631

Total equity and liabilities 7,465,037 7,529,072 Source: The information was extracted from the Interim Financial Statements of the Group on the date of and for the six month period ended 30 June 2019

Consolidated statement of the Group’s profit or loss (All amounts are in THOUSAND RON, if not otherwise stated) Six month period ended CONSOLIDATED STATEMENT OF PROFIT OR 30 June 2019 (reviewed) 30 June 2018 (reviewed) LOSS Revenue 3,101,205 2,653,549 Other income 78,791 74,879 Electricity purchased (1,682,598) (1,268,728) Green certificates (261,118) (154,670) Construction costs related to concession agreements (351,065) (289,509) Employee benefits (311,141) (297,373) Repairs, maintenance and materials (47,279) (42,326) Depreciation and amortization (240,889) (216,036) Reversal of impairment of property, plant and equipment and intangible assets, net 5,922 187 Reversal of impairment/(Impairment) of trade and other receivables, net 4,203 (2,471) Impairment of assets held for sale (196) - Change in provisions, net 13,780 79 Other operating expenses (185,850) (196,199) Operating profit 123,765 261,382

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Six month period ended CONSOLIDATED STATEMENT OF PROFIT OR 30 June 2019 (reviewed) 30 June 2018 (reviewed) LOSS

Finance income 7,162 5,910 Finance costs (6,211) (3,411) Net finance income 951 2,499

Profit before tax 124,716 263,881 Income tax expense (15,930) (54,257) Profit for the period 108,786 209,624

Profit for the period attributable to: - owners of the Issuer 108,786 209,624 Profit for the period 108,786 209,624

Earnings per share Basic and diluted earnings per share (RON) 0.32 0.62 Source: The information was extracted from the Interim Financial Statements of the Group on the date of and for the six month period ended 30 June 2019

Consolidated statement of the Group’s comprehensive income (All amounts are in THOUSAND RON, if not otherwise stated) Six month period ended CONSOLIDATED STATEMENT OF 30 June 2019 (reviewed) 30 June 2018 (reviewed) COMPREHENSIVE INCOME

Profit for the period 108,786 209,624

Other comprehensive income - -

Total comprehensive income 108,786 209,624

Total comprehensive income attributable to: - owners of the Issuer 108,786 209,624 Total comprehensive income 108,786 209,624 Source: The information was extracted from the Interim Financial Statements of the Group on the date of and for the six month period ended 30 June 2019 Consolidated statement of the Group’s Cash Flows (all amounts are in THOUSAND RON, if not otherwise stated) Six month period ended 30 June 2018 CONSOLIDATED STATEMENT OF CASH FLOWS 30 June 2019 (reviewed) (reviewed)

Cash flows from operating activities Profit for the period 108,786 209,624 Adjustments for: Depreciation 19,107 19,861

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Six month period ended 30 June 2018 CONSOLIDATED STATEMENT OF CASH FLOWS 30 June 2019 (reviewed) (reviewed) Amortisation 221,782 196,175 Reversal of impairment of property, plant and equipment and intangible assets, net (5,922) (187) Loss on disposal of property, plant and equipment and intangible assets 4,241 17 (Reversal of impairment)/Impairment of trade and other receivables, net (4,203) 2,471 Impairment on assets held for sale 196 - Change in provisions, net (13,780) (79) Net finance income (951) (2,499) Expense with corporate income tax 15,930 54,257 345,186 479,640

Changes in: Trade receivables (90,796) 92,997 Other receivables 21,608 45,058 Prepayments (4,570) (5,078) Green certificates - 9,725 Inventories (4,919) (3,084) Trade payables 39,936 (96,344) Other payables 2,017 14,008 Employee benefits (18,973) (17,783) Deferred revenue (53) (1,517) Cash generated from operating activities 289,436 517,622

Interest paid (4,931) (832) Income tax paid (2,987) (11,026)

Net cash from operating activities 281,518 505,764

Cash flows used in investing activities

Payments for purchases of property, plant and equipment (5,667) (1,872) Payments for network construction related to concession agreements (478,005) (385,343) Payments for purchases of intangible assets (4,513) (1,672)

Proceeds from sale of property, plant and equipment 4,781 14,041

Purchase of treasury bills and government bonds - (95,339) Proceeds from maturity of treasury bills and government bonds - 466,722

Increase in deposits with maturity of 3 months or longer (211,286) (451,700)

Proceeds from deposits with maturity of 3 months or longer 224,000 325,000 Interest received 6,666 4,616 Net cash used in investing activities (464,024) (125,547)

Cash flows used in financing activities Payment of finance lease liabilities (19,272) - Dividends paid (246,340) (244,147)

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Six month period ended 30 June 2018 CONSOLIDATED STATEMENT OF CASH FLOWS 30 June 2019 (reviewed) (reviewed) Repayment of financing for network construction related to concession agreements (7,302) (17,138) Net cash used in financing activities (272,914) (261,285)

Net (decrease)/increase in cash and cash equivalents (455,420) 118,932 Cash and cash equivalents at 1 January 546,758 314,589 Cash and cash equivalents at 30 June 91,338 433,521 Source: The information was extracted from the Consolidated Interim Financial Statements of the Group on the date of and for the six month period ended 30 June 2019. Provisions a) Provisions according to the consolidated annual financial statements

Tax related Other Total Balance at 1 January 2018 7,244 22,645 29,889 Provisions recognized 11,387 12,513 23,900 Provisions used (4,670) (15,736) (20,406) Provisions reversed - (4,015) (4,015) Effect of loss of control over subsidiaries - (262) (262) Balance at 31 December 2018 13,961 15,145 29,106

As at 31 December 2018, provisions refer mainly to:

- RON 13,961 thousand representing potential tax charges of the Group (including interest and penalties); - RON 4,892 thousand representing benefits upon the termination of executive directors' mandate contracts in the form of a non-compete clause; - RON 736 thousand referring to work litigations; - RON 9,517 thousand for various claims and litigations involving the Group companies.

The provisions recognized in 2018 refer mainly to:

- RON 11,387 thousand representing tax charges of the distribution subsidiaries (including interest and penalties) for potential changes in accounting policies under statutory accounts; - RON 4,892 thousand representing benefits upon the termination of executive directors' contracts in the form of a non-compete clause; - RON 7,621 thousand for various claims and litigations involving the Group companies.

The provisions used in 2018 refer mainly to:

- the fine from the Competition Council of RON 10,801 thousand that was executed in October 2018 by the National Agency of Fiscal Administration; - the payment obligation of RON 4,670 thousand based on the decision issued and communicated by tax authorities to EFSA following the completion of the fiscal inspections. The amount represents additional fiscal obligations in the form of interest and penalties. - RON 3,439 thousand representing penalties paid by SDMN as a consequence of losing a litigation with Ploiesti Local Public Finance Service; - RON 1,496 thousand representing provision for benefits upon the termination of executive directors' contracts in the form of a non-compete clause.

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The provisions reversed in 2018 refer mainly to provisions for litigations settled during 2018 (for which the sentence has been issued by the Court) amounting to RON 4,015 thousand.

Competition Council

On 4 January 2018, the Issuer received the Competition Council's decision on the investigation commenced in 2017, whereby it was claimed the breach of the provisions of art. 5 par. (1) of the Competition Law no. 21/1996 and art. 101 par. (1) TFEU by several companies which have sold meters and related measuring equipment for electricity in Romania, by the procedures for the award of supply contracts in the period from 27 November 2008 to 30 September 2015 and by the Issuer, as a facilitator, in the period from 27 November 2008 to 30 September 2015.

The sanction applied to the Issuer consists in a fine amounting to RON 10,801 thousand representing 2.98% of the revenues of the Issuer in the financial year 2016. In determining the amount of the fine, it was taken into account that (i) the Issuer cooperated fully and effectively with the Competition Council during the investigation procedure, outside the scope of the leniency policy and beyond the legal duty to cooperate, and (ii) it is for the very first time when the authority retains the role of facilitator for a company organizing public procurement procedures.

As of 31 December 2017, the amount of RON 10,801 thousand was recognized as a provision related to the Competition Council fine. As in October 2018 the fine received from the Competition Council was executed by the National Agency of Fiscal Administration, the Issuer used the provision in the amount of RON 10,801 thousand and recognized the fine as fines and penalties.

As at 31 December 2017, provisions refer mainly to:

- RON 7,244 thousand representing potential tax charges of the Group (including interest and penalties); - RON 22,645 thousand representing mainly the provision for the fine from Competition Council, RON 10,801 thousand, and other provisions for claims for which the Group might have the obligation to pay the amounts subject to litigations and other claims in the future. b) Provisions according to Interim Financial Statements

Fiscal Other Provisions Balance at 1 January 2019 (audited) 13,961 15,145 29,106 Provisions recorded during the period - 529 529 Provisions used - (210) (210) Provisions reversed (11,387) (2,712) (14,099) Balance at 30 June 2019 (reviewed) 2,574 12,752 15,326 As at 30 June 2019, provisions refer mainly to:

- RON 2,574 thousand representing potential tax charges of the Group (including interest and penalties); - RON 3,774 thousand representing estimated payments upon termination of directors' contractual relations to cover non-compete clauses; - RON 306 thousand referring to work litigations; - RON 8,672 thousand for various claims and litigations involving the Group companies.

The provisions recorded during the six month period ended 30 June 2019 refer mainly to various claims and litigations involving the Group companies.

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The provisions reversed and used during the six month period ended 30 June 2019 refer mainly:

- RON 1,747 thousand representing solved litigations (for which the sentence was issued by the instance); - RON 1,175 thousand representing estimated payments upon termination of directors' contractual relations; - RON 11,387 thousand representing potential tax charges of the Group (including interest and penalties). The Issuer has not suffered any significant change in the financial performance of the Group since the end of the last financial period for which financial information has been published to the date of the registration document. The Issuer has not published any profit forecast or any profit estimate (which is still outstanding and valid). There has not been any significant change in the financial position of the Group which has occurred since the end of the last financial period for which either Consolidated Audited Financial Statements or Consolidated Reviewed Interim Financial Statements information have been published. Litigations Tax inspection report for EL SERV In May 2017 a tax inspection at EL SERV was finalized and the tax authorities concluded that additional tax obligations of RON 12,281 thousand. This amount represents VAT (including related interest and penalties) that was considered tax deductible in the period 2012-2013 by the subsidiary in relation with certain invoices issued by a leasing supplier inactive at that time. The Issuer appealed in court the measures imposed by the tax authorities. On 3 July 2019 the Bucharest Court of Appeal partially admitted the appeal for the partial annulment of the fiscal decision for the amount of RON 7,264 thousand representing the VAT and the related interest and penalties, illegally retained as non-deductible. The solution is not final, being susceptible for appeal, after the release of the sentence. As at 30 June 2019 and 31 December 2018, the Group recognised a receivable from the fiscal authorities in amount of RON 12,281 thousand, without a related bad debt allowance, taking into account that management’s best estimate is that Electrica Serv shall be able to obtain a favourable final Court decision in this case. Litigation with National Agency of Fiscal Administration (“NAFA”) In May 2017, after the revision of the Issuer’s tax record, the tax authorities issued an enforcement order for additional interest and penalties of RON 39,249 thousand as a result of certain tax record allocations for prior periods. The Issuer filed an administrative complaint with the tax authorities against the enforcement order and also filed a legal action to suspend the enforced payment until the resolution of the above-mentioned complaint. These additional interest and penalties are related to the prior enforcement orders received by the Issuer in the prior years of RON 72,460 thousand. In February 2018, the Issuer has obtained a favourable ruling from the High Court of Cassation and Justice in one of the litigations with NAFA, which essentially maintains into force a prior decision of the Bucharest Court of Appeal, which is favourable for the Group. Based on this High Court ruling and in conjunction with all other litigations with NAFA on the same historical amounts, for taxes including penalties and interest, as well as based on analysis with internal and external lawyers, the management best estimate is that the Issuer shall be able to obtain favourable Court rulings with the end result of no future cash outflows. Also, in April 2019, the Issuer obtained another favourable decision issued by the Bucharest Court of Appeal in one of the disputes with NAFA, whereby the court obliges NAFA to correct the evidence of the tax receivables so that it reflects the extinction by prescription of the amount of RON 16,916 thousand representing income tax as well as all the related accessories. Litigations with ANRE In October 2018, the Issuer challenged the ANRE Orders no. 169/2018 regarding the Approval of the Tariff Setting Methodology for the Electricity Distribution Service and no. 168/2018 on the Regulatory Rate of Return, requesting the partial and, respectively, the total annulment of these orders. Thus, both preliminary complaints were sent to ANRE and actions in court were filed. Applications are filed under case no. 7591/2/2018 (cancellation of Order no. 168/2018) and no. 7614/2/2018 (partial cancellation of Order no. 169/2018), of the Bucharest Court of Appeal. At the same time, following the rejection by ANRE of the preliminary complaints in December 2018, the actions in administrative litigation were reintroduced, forming the files 8430/2/2018 (annulment of Order no. 168/2018) and 8436/2/2018 (partial annulment of Order no. 169/2018), also pending with the Bucharest Court of Appeal.

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Other litigations and claims The Group is also involved in a series of litigations and claims (i.e. with SAPE, ANRE, NAFA, Court of Accounts, claims for damages, disputes over land titles, labour litigations etc.). The Group set-up provisions for the litigations or disputes for which the management assessed as probable the outflow of resources embodying economic benefits due to their low chances of favourable settlement. The Group does not disclose in the financial statements and did not set-up provisions for litigations and disputes for which the management assessed the outflow of resources as being reduced. The Group discloses below information on the most significant claims for which the Group did not set-up provisions as they relate to possible obligations that arise from past events whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group (e.g. litigations for which different inconsistent sentences were issued by the Courts, or litigations which are in early stages and no preliminary ruling were issued so far):  In 2015, the Issuer was sued by Hidroelectrica S.A., which claimed the payment of RON 5,445 thousand and other damages, representing claims related to acquisition of electricity by the Issuer from Hidroelectrica S.A. at a price alleged to be unfair. The first court dismissed the exception of prescription of the material right for action as unreasonable and the action as unfounded. Both parties have filed an appeal, which were dismissed as unfounded. As of the date of the Interim Financial Statements, both parties filed another appeal, and the term for the court hearing has not yet been set ;  Societatea de Administrare a Participatiilor in Energie S.A. ("SAPE"), a company resulted from the spin-off of the Issuer prior to the Initial Public Offer, filed a complaint (case no. 46365/3/2016) against the Issuer and against of some of the former directors and managers of the Issuer, against the Ministry of Energy and the Ministry of Economy, for the joint payment of the amount of RON 1,569,144 thousand and the amount of EUR 458,381 thousand for the alleged damages suffered by the Romanian State as a result of the inaction regarding the monitoring, coordination and verification of the execution of the privatization contracts of the Issuer subsidiaries in conditions of legality. The Issuer filed a pleading in which it invoked the exception of the lack of passive procedural quality, exception regarding the statute of limitation, as well as other arguments on the merit of the case against SAPE's allegations. On 20 June 2019, the court dismissed SAPE’s action for claims of approx. EUR 800 million, admitting: - the exception of the Issuer’s lack of passive processing quality, for the claim based on contractual civil liability; and - the exception of the prescription of the material right to action, for the claim based on civil tort liability. The solution may be appealed within 30 days from its’ communication. The court decision was not yet communicated to the Issuer. On 12 December 2018, an amount of RON 44.7 million was collected by the Issuer from Oltchim SA, representing amounts distributed to creditors in the insolvency proceedings. Future litigations On 24 September 2019, the Board of Directors convened the OGMS for the approval of filing a civil action for attracting the liability of the persons who have held the positions of directors and respectively, executive managers of the Issuer for obligations not fulfilled and/or improperly fulfilled, pursuant to art. 155 of Company Law, for covering the damages ascertained by the Romanian Court of Accounts, and having as purpose implementing the measures ordered by the Romanian Court of Accounts for remedying the deviation identified according to items 1-5 of the RCA Decision no. 12 / 27.12.2016 issued as a result of the control on the management of the patrimony of the Issuer for the period 1 January 2013-30 June 2014 and the empowerment of the CEO for the representation of Issuer (with the possibility of sub-delegating the representation), for signing and promoting the legal action, according to the note made available to the shareholders, according to the law.

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On 17 October 2019, the OGMS of Societatea de Distributie a Energiei Electrice Transilvania Sud S.A. approved the filing of a civil action in court underscoring the liability of the persons who have held the positions of general managers of the respective company during the period between December 2013 – July 2018 for obligations not fulfilled regarding the implement of the measures ordered by Romanian Court of Accounts for remedying the deviation identified. Capitalisation and indebtedness

During the reference period indicated by Annex 12, part 3, point 3.4 of Delegated Regulation 2019/980, i.e. 90 days prior to this Prospectus, there were no significant changes regarding the capitalisation and the level of indebtedness with respect to the following.

The issued share capital in nominal terms consists in 345,939,929 ordinary shares with a nominal value of RON 10 per share. The ordinary shares confers entitlement to dividends and the right of a vote for each share in the Issuer’s general meetings, except the 6,890,593 shares bought back by the Issuer in July 2014 for with the aim of stabilising the price. All of the shares give equal rights regarding the Issuer’s net assets.

In July 2014, the Issuer bought back 5,206,593 shares and 421,000 GDRs, representing the equivalent of 1,684,000 shares, totalling in this way 6,890,593 shares. The total amount paid for these shares and GDRs was RON 75,372,435.

Long-term bank borrowings

30 June 2019 31 December 2018 (thousand RON) Long term bank borrowings ...... 320,000 320,000

Total ...... 320,000 320,000

Source: Financial Statements

On 17 October 2016 the Issuer’s distribution subsidiaries (Societatea de Distributie a Energiei Electrice Transilvania Sud S.A., Societatea de Distributie a Energiei Electrice Muntenia Nord S.Aand Societatea de Distributie a Energiei Electrice Transilvania Nord S.A) concluded long term loan contracts with BRD - Groupe Société Générale, in which the Issuer has the position of guarantor. These are fully reimbursable at maturity (16 October 2021). Details of the long-term bank borrowings are as follows

Lender Facility type Maturity Loan Balance at Balance at amount 30 June 2019 31 December 2018

BRD term loan, non-revolving facility,until 16 80,000 80,000 80,000 financing the treasury deficit October 2021 generated by the investment activity BRD term loan, non-revolving facility,until 16 114,000 114,000 114,000 financing the treasury deficit October 2021 generated by the investment activity BRD term loan, non-revolving facility,until 16 126,000 126,000 126,000 financing the treasury deficit October 2021 generated by the investment activity Total 320,000 320,000 320,000 Source: Financial Statements

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As at 30 June 2019, Electrica SA has collateral deposits at BRD – Groupe Société Générale set up as guarantees for the long-term borrowings received from BRD by Societatea de Distributie a Energiei Electrice Transilvania Sud, Societatea de Distributie a Energiei Electrice Transilvania Nord and Societatea de Distributie a Energiei Electrice Muntenia Nord. The amount of the collateral deposits as at 30 June 2019 is RON 320,000 thousand (31 December 2018: RON 320,000 thousand) presented in the consolidated statement of financial position as long-term restricted cash.

The Group has overdrafts as follows:

Bank Contract date Facility type Maturity Overdraft Balance at 30 limit June 2019

ING Bank N.V. May 2019 overdraft facility for financing May 2020 60,000 15,477 working capital

BRD - Groupe January 2019 overdraft facility for financing January 2020 180,000 94,898 Société the current activity Générale S.A.

Banca Comerciala March 2019 overdraft facility for financing March 2020 125,000 88,457 Romana the current activity

Banca Comerciala April 2019 multi-product facility for March 2020 125,000 95,186 Romana financing the current activity

BNP Paribas April 2019 credit line for financing general March 2020 160,000 - corporate purposes

Total 650,000 294,018 Source: Financial Statements

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PART 10 TAXATION

Potential purchasers and sellers of the Shares and/or of the GDRs should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Shares and/or the GDRs are transferred or other jurisdictions. Potential investors are advised to ask for their own tax adviser's advice on their individual taxation with respect to the acquisition and sale of the Shares and/or the GDRs. Only these advisers are in a position to duly consider the specific situation of the potential investor.

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PART 11 DETAILS OF THE OFFERING

1. GENERAL INFORMATION ABOUT THE OFFERING Type. Underlying legislation. The Offering consists of the offering by the Issuer of a number of up to 309,869 ordinary, nominative and dematerialised New Shares, including New Shares represented by global depositary receipts (GDR), at a Subscription Price of RON 10 per Share, equal to the nominal value and respectively at a Subscription Price for GDRs calculated in accordance with the procedure described in Part 13 “Subscription and Sale - Subscription Procedure of New Shares by the Entitled Holders of GDRs”), the USD equivalent of RON 40 per one GDR as of the Subscription Price Conversion Date, plus certain costs, fees and expenses, in the context of the Share Capital Increase, exclusively to the Entitled Shareholders and Entitled Holders of GDR, up to the limit of the Preference Rights they hold on the Registration Date. The New Shares subscribed and allocated in the Offering shall be accepted to trading on the Regulated Spot Market managed by the BSE in the form of Shares, on the Main segment, Premium Category, under the symbol EL, having the ISIN code ROELECACNOR5 and the LEI code 213800P4SUNUM5AUDX61 and, respectively on the LSE in the form of GDRs under symbol “ELSA”. The New Shares issued in the form of GDRs pursuant to Regulation S will be identified by a temporary ISIN US83367Y4052, will not be fungible with outstanding Regulation S GDRs and will be subject to restrictions on resale in the United States until 40 days after the date of issuance. Following the lapse of the 40 days after the date of issuance, the New Shares issued in the form of GDRs pursuant to Regulation S will be identified with the ISIN Code US83367Y2072. The ISIN code for New Shares issued in the form of Rule 144A GDRs is US83367Y1082 (being the same as the one for existing GDRs issued pursuant to Rule 114A). The Offering is addressed exclusively to the Entitled Shareholders, namely the persons registered as Issuer’s shareholders in the Issuer’s shareholders register and to the Entitled Holders of GDRs as of the Registration Date 24 October 2019. The New Shares are issued and offered according to relevant Romanian legislation. Any dispute arising out of or in connection with the New Shares will be solved by the competent authorities in Romania. Shareholders register and Holders of GDRs register: The Issuer’s shareholders register, including for the New Shares sold under the Share Capital Increase is kept by Depozitarul Central S.A. (“Depozitarul Central”), with the registered office in 34-36 Boulevard Carol I, 3rd, 8th and 9th floors, District 2ed, postal code 020922, Bucharest, Romania. The register of Holders of GDRs is kept by The Bank of New York Mellon (“GDR Depositary”). Currency: The New Shares in the form of Shares are issued in RON. The New Shares in the form of GDR have no nominal value and are denominated in USD. Manager : BRD - Groupe Société Générale S.A., organised and functioning according to the laws of Romania, registered in the FSA Register under no. PJR01INCR/400008 of 13 June 2006, having FSA Certificate no. 255 of 8 June 2008, registered in the Trade Registry under no. J40/608/1991, having sole registration code 361579, with registered office in 1-7 Ion Mihalache Blvd., 1st District, 011171 Bucharest. Paying agent in connection with the Preference Rights’ holders having their Preference Rights registered in Section II of Depozitarul Central: BRD - Groupe Société Générale S.A., organised and functioning according to the laws of Romania, registered in the FSA Register under no. PJR01INCR/400008 of 13June 2006, having FSA Certificate no. 255 of 8 June 2008, registered in the Trade Registry under no. J40/608/1991, having sole registration code 361579, with registered office in 1-7 Ion Mihalache Blvd., 1st District, 011171 Bucharest. Intermediation method: Best efforts Preference Rights: The number of Preference Rights is equal to the number of shares issued by the Issuer and registered in the Issuer’s shareholders register as of the Registration Date, related to the Share Capital Increase, except the shares owned by the Romanian State, namely 177,188,744 Preference Rights, including Preference Rights for shares which constitute underlying securities for GDRs, each GDR thus entitling to 4 (four) Preference Rights (the “GDR Preference Rights”) and each Entitled Shareholder/ Entitled Holder of GDRs will be allocated a number of Preference Rights/ GDR Preference Rights corresponding to the Shares, respectively GDR held as of the Registration Date. For subscribing one New Share in the form of a Share, it is necessary a number of

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571.8182328661470 Preference Rights (the “Share Subscription Rate”), and for the subscription of New Shares in the form of one GDR a number of 571.8182328661470 GDR Preference Rights are necessary (the “GDR Subscription Rate”). In case that fractions of Shares and/or GDRs that may be subscribed result from the mathematical calculation, the maximum number of Shares and/or GDRs will be rounded down to the lower integer. The Preference Rights shall not be traded. New Shares: Up to 309,869 New Shares, in the form of Shares, as well as in the form of GDR, which shall be issued under the Share Capital Increase through the exercise of the Preference Rights by the Entitled Shareholders, respectively by the Entitled Holders of GDR, approved through EGMS resolution dated 25 April 2019 and, respectively, through the Decision of the Board of Directors no. 19 dated 4 October 2019. Subscription Period for Shares: The period in which New Shares may be subscribed by the Entitled Shareholders by exercising their Preference Rights is of 33 calendar days, starting with the first Business Day following the Business Day when the Prospectus was published, i.e., from 1 November 2019 to 3 December 2019. Withdrawal of subscriptions Subscriptions made within the Offering are irrevocable. If the Prospectus is subject to an amendment, subscriptions may be withdrawn within a maximum of 2 (two) Business Days from the date when the respective amendment to the Prospectus was published. The Preference Right’s holders may withdraw a subscription by filling in a Revocation Form at the same Participant used for making the subscription, or with the Manager if they subscribed through the Manager. Within maximum 5 (five) Business Days following the closing of the Subscription Period, the Board of Directors will publish on the BSE’s website (www.bvb.ro) and on the Issuer's website (www.electrica.ro) a report on the results of subscriptions made during the Subscription Period. The Board of Directors will determine by decision the actual results of the Issuer's share capital increase, according to the exercise of the Preference Rights during the Subscription Period, respectively the cancelled New Shares, as the case may be. Based on the results of the Issuer’s share capital increase ascertained by decision of the Board of Directors, the Manager shall notify FSA of the results of the Offer within maximum 5 (five) Business Days from the last Business Day of the Subscription Period. The Issuer shall take all necessary steps to complete the Share Capital Increase, respectively the registration of the Share Capital Increase with the Trade Registry, in order to issue the incumbency certificate for the new share capital, the request for issuance by the FSA of the securities’ registration certificate and the request for registration of the subscribed and allocated New Shares within the Offer in the Shareholders Register kept by Depozitarul Central. Following the registration of the New Shares with Depozitarul Central, the Shares will be traded on the Regulated Spot Market operated by BSE and the GDRs will be traded on the Main Market of the LSE. The New Shares may be traded after the registration of the Share Capital Increase with Depozitarul Central. 2. RIGHTS RELATED TO THE NEW SHARES Each New Share grants equal rights and obligations and confers to its holder all rights stipulated by the Companies Law, regulations applicable to capital markets and the provisions of the Articles of Association. In accordance with the Companies Law, shareholders must exercise their rights in good faith, observing the legitimate interests and rights of the Issuer and of the other shareholders. Below are presented the main rights attached to the existing shares of the Issuer and which will be attached to the New Shares that will be issued within the Share Capital Increase, as follows: i. Right to participate and to vote within the general meeting of shareholders The right to participate and vote at the general meetings of shareholders are fundamental rights of the shareholders. The shareholders have, inter alia, the right to have access to sufficient information about matters proposed for debate at general meetings. Any holder of shares issued by the Issuer registered in the register of shareholders held by Depozitarul Central on the reference date established by the Board of Directors may attend the general shareholders' meetings, each subscribed and paid share giving the right to vote (unless voting right is suspended), the right to elect and to be elected in the Issuer's governing bodies, the right to participate in the distribution of dividends and share in the event of liquidation of the Issuer. Shareholders may attend and vote in the meeting, individually or by

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representation, on the basis of a general power of attorney or a special power of attorney granted for that meeting or by correspondence. The formalities to be fulfilled for the participation in the Issuer’s general meetings, including the ways of obtaining and the deadline for submission of the new items on the agenda, the draft decisions, the general and special proxies and the ballot papers by correspondence shall be mentioned in the convening notice of the meeting. The shareholder who, in a particular operation, has, either personally or as an agent of another person, an interest contrary to that of the company, will have to refrain from deliberations regarding that operation, being liable for damages produced to the company, if without its vote would not have obtained the majority required. Voting rights cannot be transferred, any convention by which the shareholder undertakes to exercise the right to vote in a certain manner is null. In addition to the provisions of the Articles of Association and the Companies Law, being admitted to trading on a regulated market, the Issuer complies with the capital market and issuers’ provisions that establish certain shareholder rights that may be exercised within the Issuer’s general meeting of shareholders, including certain obligations of the Issuer in relation to: a) the right of one or more shareholders who individually or jointly hold at least 5% of the share capital:  to insert items on the agenda of the Issuer’s general shareholders' meeting, provided that each item is accompanied by a justification or a draft decision proposed for approval by the Issuer’s general meeting of shareholders; and  to submit draft decisions for the items included or proposed to be included on the agenda of the Issuer’s general shareholders meeting b) the right of all shareholders to receive equal treatment regarding the participation and exercise of voting rights in the Issuer’s general shareholders meeting; c) the right of all shareholders to have access to sufficient information and documents on the items subject to by the Issuer’s general shareholders meeting and to those which would allow them to exercise their rights in the general shareholders meeting of the Issuer; d) the right of all shareholders to have quick and non-discriminatory access to the Convening Notice of the Issuer’s general shareholders meeting; e) the right of each shareholder to ask questions about the items on the agenda of the general shareholders' meeting of the Issuer and to receive answers from the Issuer; f) the right to participate in the Issuer’s general shareholders meeting, directly or indirectly, including by electronic means, by correspondence or by a representative. ii. Right to dividends, namely, to participate in the distribution of the Issuer's net profit The general shareholders meeting is the Issuer’s main corporate governance body, which decides on issues such as: annual financial statements, appointment of Board Members, dividend distribution, schedule of activities, and various corporate actions. The general shareholders meeting will meet at least once a year, the meeting being mandatory no more than 4 months after the closing of the financial year. For the financial years in which the Issuer registers profit, the general shareholders meeting will decide on the distribution of net profit in the form of dividends, if applicable. If there is a loss of the net asset, the subscribed share capital will have to be increased or reduced before any distribution of profit can be made. The general shareholders meeting which decides the distribution of dividends will also determine a registration date, which will be after at least 10 business days of the date of the meeting and which will serve to identify the shareholders to receive dividends. The dividends will be paid on the date set by the general shareholders meeting in which the dividend is set, which cannot exceed 15 business days from the registration date. In any case, the payment term for dividends will not exceed 6 months from the date of dividend distribution. Dividends are distributed to shareholders proportionally to the number of shares held within the Issuer. Dividends may only be distributed if the Issuer registers profit, in accordance with the annual financial statements approved by the Issuer's general shareholders meeting and only if the OGMS decides to distribute dividends. Before dividends are paid, the Issuer must publish a press release in a national newspaper and a current report on the BSE website which details i) the value of the dividend per share; ii) the ex-date; iii) the registration date and iv) the date of payment of the dividends. The Issuer must also publish the means of payment of the dividends and the identification of the payment agent. The statute of limitation for dividend payments is three years, meaning that the dividends distributed, but unpaid at the end of this period remain at the Issuer’s disposal.

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iii. Preference right The preference right is a right associated often with a share capital increase operation and offers to all the shareholders listed in the shareholders’ register of the Issuer shareholders at the registration date set by the shareholders' meeting approving the share capital increase, the right to primarily subscribe the newly issued shares within a share capital increase, proportional to the share in the share capital, in order to maintain its share in the share capital. Accordingly, any such New Shares will first be offered for subscription to all existing shareholders proportionally to their number of preference rights held on the registration date. The period for exercising the Preference Right to subscribe New Shares must be at least one month from the date mentioned in the simplified prospectus, which cannot be earlier than the registration date set for the respective share capital increase or the date of publication in the Official Gazette of Romania, Part IV, of the extraordinary general shareholders meeting’s resolution/ Board of Directors’ decision on the share capital increase. If, after expiry of the term, the New Shares have not been fully subscribed, the New Shares that have not been subscribed may be cancelled or offered to other investors, in accordance with the decisions of the competent statutory body. According to regulations applicable to capital markets, in the event of an increase of share capital, the inapplicability of Preference Rights must be decided by the EGMS, in which shareholders representing at least 85% of the subscribed share capital participate, and with the approval of shareholders holding at least 3/4 of the voting rights. Following the inapplicability of the Preference Rights, these new shares will be offered for subscription to the public with observance of the provisions regarding public offerings. iv. Right to information The Shareholders are entitled to a correct and complete disclosure of the Issuer's situation in the Issuer's general shareholders meeting. In particular, in relation to any general shareholders meeting of the Issuer, shareholders are entitled to receive documents supporting each item on the agenda of the meeting, including, in case of the ordinary general shareholders meeting for the approval of the annual financial statements, copies of financial statements, annual reports, proposal of the Board of Directors on the distribution of dividends, as well as information on the exercise of the voting rights at least with 30 days before the date of the general meeting. The Issuer also has to inform the shareholders about the voting results. At the same time, shareholders have the right to receive information about the Issuer’s shareholding structure and to consult the Issuer's books, such as the one kept for the registration of the Issuer’s general meeting of shareholders. In addition, the Issuer must provide the shareholders with various information in the event of certain corporate events for the dissemination of this information, benefiting from the technical support provided by Depozitarul Central. v. Right to elect, and be elected to, the management bodies In accordance with the Companies Law and the Articles of Association, the general shareholders meeting appoints and revokes the members of the Board. According to capital markets legislation, the members of the Board may be elected by simple voting (according to the principle that each Share gives the right to one vote, to the extent that the exercise of that respective vote is not suspended, being applied the quorum and the majority requirements stipulated by the Companies Law and/or the Articles of Association) or by cumulative voting. In case of cumulative voting, a shareholder or a group of shareholders acting in concert and holding directly or indirectly a holding of at least 5% of a company or voting rights may request that the election should be based on this method. On the basis of the cumulative vote, each shareholder has the right to allocate his votes in full to one or more persons nominated for election to the Board. vi. Right of withdrawal in certain cases and conditions provided by law According to the law, the shareholders who have not voted in favour of a certain corporate action proposed for resolution at the general meeting of shareholders have the right to withdraw from the Issuer's shareholding structure and to request the purchase of their shares by the Issuer. This right may be exercised only if the corporate actions referred to above relate to: a) changing the Issuer's main business object, as stipulated in the Articles of Association; b) relocation of the Issuer's registered office in another country; c) changing the legal form of the Issuer, or d) merger or spin-off of the Issuer and others.

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The right of withdrawal also applies if, following a public purchase offer / takeover bid conducted by a Issuer's shareholder, he acquires a certain stake in the Issuer. In this case, the other shareholders have the right to ask the respective bidder to acquire their shares in the Issuer under certain conditions. vii. Right to participate in the distribution of assets in case of liquidation Following completion of the liquidation, the liquidators prepare a final financial statement, showing what is due to each share from the distribution of the Issuer’s assets. The amounts due to the shareholders which are not cashed in two months from the publication of the financial statement, will be deposited in a bank in the name of the shareholder. Liquidators should not pay the shareholders any amount on the account of the parts that would be due to them from liquidation, before the payment of the Issuer’s creditors. viii. The right to challenge the decisions of the general shareholders meeting Under the Companies Law, a shareholder who did not participate in a general shareholders meeting or who voted against a certain shareholders decision and requested of his vote in the minutes of the general Issuer’s shareholders meeting, has the right to challenge in court that decision within 15 days of its publication in the Official Gazette of Romania, Part IV, if the respective decision was taken in violation of the provisions of the Articles of Association or of the legal regulations in force. Requests for an absolute nullity reasons of the decision of the general shareholders meeting may be filed in court at any time without any time limit. ix. The right to secure registration and confirmation of the ownership of shares issued by the Issuer The Issuer's shareholders' register is held by an independent company - Depozitarul Central - authorized and supervised by ASF, to ensure the transparency of the operations with the shares and protection of the shareholders and the securities held by them. x. Other shareholders rights The Companies Law, the Law 24/2017 and the FSA Regulation 5/2018 also provide for certain categories of shareholders the following rights, the observance of which is closely followed by the Issuer: a) the right of the shareholder/ shareholders individually or jointly holding at least 5% of the Issuer's share capital, to request internal auditors to investigate complaints regarding the Issuer; b) the right of the shareholder / shareholders individually or jointly holding at least 5% of the Issuer's share capital, to request the convening of a general shareholders meeting, to propose items on the meeting agenda and to propose resolutions to the agenda of the general shareholders meeting; c) the right of the shareholder / shareholders individually or jointly holding at least 5% of the Issuer's share capital, to request the court to appoint one or more experts to investigate certain operations in the Issuer's management and to prepare a report in this case; d) the right of the shareholder/ shareholders representing directly or indirectly at least 5% from the share capital of the Issuer or of the total voting rights in a GMS may request to elect the Board members by the cumulative voting method. If this request is not complied with, the shareholders concerned have the additional right to ask the court to convene a general meeting immediately; e) the general shareholders meeting may decide to bring actions against the founders, directors, managers, Board of Directors members, as well as censors or financial auditors for damages caused to the company, by breaching their duties with the Issuer. If the general meeting does not decide to introduce actions and does not follow the proposal of one or more shareholders to initiate such action, the shareholders representing individually or together at least 5% of the share capital have the right to bring an action for damages, in its own name, but in the Issuer's account, against any person mentioned above. xi. Obligation to report important shareholding According to the Law 24/2017, if a shareholder acquires or disposes of shares in the Issuer in a percentage that reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, 33%, 50% or 75% of the total voting rights in the Issuer, such shareholder must immediately notify the Issuer of the percentage of voting rights it holds following the acquisition or disposal in question. Voting rights are calculated based on the total voting right of the shares, even if the exercise of such rights is suspended. xii. Obligation to make a mandatory takeover bid

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The Law 24/2017 provides an obligation for any person who, as a result of its acquisitions or of the acquisition of persons with whom it acts jointly, holds more than 33% of the voting rights of an issuer, to launch a public offering addressed to all the holders of securities. Such mandatory takeover offer must have the objective of obtaining all their shareholdings and be made at a fair price as soon as possible, but no later than two months from reaching the 33% threshold. There is no obligation to launch a mandatory takeover offer for shareholders who already have shareholdings of over 33% of the voting rights prior to the Law 24/2017 coming into force and in compliance with the legal provisions in force at the time when such shareholdings threshold was reached. The provisions regarding the mandatory takeover offer do not apply where the 33% shareholding of voting rights over the issuer was acquired as a result of an exempted transaction. Exempted Transaction means the acquisition of such a position: a) in a privatization process; b) by the acquisition of shares from the Romanian Ministry of Public Finance, or from other legally entitled entities, in the procedure of execution of budgetary receivables; c) following the transfer of shares made between a parent company and its subsidiaries or between the subsidiaries of the same parent company; d) following a voluntary takeover offer addressed to all the holders of such securities and with respect to all such securities held. Until launch of a mandatory takeover offer, the voting rights related to the securities exceeding the 33% threshold is suspended, and such shareholder (and any persons with whom it acts jointly) can no longer acquire, by any other means, shares of the same issuer. If the acquisition of shares representing more than 33% of the voting rights in the Issuer is reached unintentionally, the holder of such shares may either conduct a public takeover offer or dispose of the number of shares which triggered the obligation. It is presumed that an acquisition of shares representing more than 33% of the voting rights in the Issuer is unintentional if it is the result of an operation such as: a) reduction of the share capital, by the Issuer repurchasing its own shares following their cancellation; b) the exercise of the right of preference, subscription or conversion of initially attributed rights, as well as of the conversion of preferential shares into ordinary shares; c) merger/division or succession. xiii. Provisions regarding squeeze-out from Electrica Pursuant to the Law 24/2017, a shareholder who has conducted a buying public offer addressed to all the shareholders and for all their shares, has the right to request the shareholders who have not subscribed during the offering to sell such shares to it, at a fair price calculated according to the legal provisions, if one of the following situations apply: a) it holds shares representing at least 95% of the total number of shares of the share capital conferring voting rights and at least 95% of the voting rights that may be actually exercised; b) it acquired, during the buying public offer addressed to all the shareholders and for all their shares, shares representing at least 90% of the total number of shares from the share capital conferring voting right and at least 90% of the voting rights targeted in the offer. The offeror may exercise such right within 3 (three) months of the closing date of the buying public offer. In addition, where a shareholder conducts a buying public offer, a minority shareholder is entitled to request that an offeror who falls within one of the situations mentioned above purchase its shares at a fair price calculated according to the legal provisions. Such right must also be exercised within 3 (three) months of the closing date of the buying public offer. The main rights attached to the existing GDRs are presented in Part 12 “Terms and Conditions of the Global Depositary Receipts”.

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3. TRANSACTION AND SETTLEMENT The settlement of the subscription instructions made within the Offering shall be made through the facilities of RoClear (the Romanian clearing, settlement, custody, depository and registration system) administered by Depozitarul Central.

4. ADMISSION TO TRADING AND DEALING ARRANGEMENTS Upon the successful completion of the Offering and the carrying out of all the formalities related to the registration of the Share Capital Increase, the New Shares will be traded in the form of Shares on the Regulated Spot Market of the BSE and in the form of GDRs on the Main Market of the LSE. The BSE's regulated market is a regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/UE). There are no commitments by any parties to act as intermediaries in secondary trading of the New Shares, providing liquidity. Following the issue of the New Shares, the Issuer does not intend to require New Shares’ admission to trading on another market different from the market on which the Issuer’ Shares, respectively GDRs are currently traded.

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PART 12 TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECEIPTS

The following terms and conditions apply to the GDRs and are endorsed on each GDR certificate. The GDRs are issued in respect of ordinary shares of the Issuer pursuant to and subject to an agreement dated 4 July 2014 concluded between the Issuer and The Bank of New York Mellon in its capacity as depositary (the ‘‘GDR Depositary’’) for the “Regulation S Facility” and for the “Rule 144A Facility” (the “Deposit Agreement”). Pursuant to the provisions of the Deposit Agreement, the GDR Depositary has appointed Raiffeisen Bank S.A. as Custodian (the ‘‘Custodian’’) to receive and hold on its behalf any relevant documentation regarding certain Shares (the “Deposited Shares”) and all rights, interests and other securities, property and cash deposited with the Custodian which are attributable to the Deposited Shares (together with the Deposited Shares, the “Deposited Property”). The GDR Depositary holds the Deposited Property for the benefit of the holders as bare trustee in proportion to their holdings of GDRs.

The GDRs are represented by interests in a Regulation S Master GDR, evidencing Regulation S GDRs, and by interests in a Rule 144A Master GDR, evidencing Rule 144A GDRs. The GDRs are exchangeable for a certificate in definitive registered form in respect of GDRs representing all or part of the interest of the holder in the Master GDR. Holders of GDRs are not party to the Deposit Agreement and as such, under English Law, have no contractual rights against, or obligations to, the Issuer or to the GDR Depositary. However, any holder may enforce the relevant provisions of the Deposit Agreement as if it were a party to the Deposit Agreement and the ‘‘depositary’’ in respect of that number of Deposited Shares to which the GDRs of which he is the holder relate. The GDR Depositary is under no duty to enforce any of the provisions of the Deposit Agreement on behalf of any holder of a GDR or any other person.

Withdrawal of Deposited Property and Further Issues of GDRs Any holder may request withdrawal of the Deposited Property attributable to any GDR upon submission of such evidence of its entitlement to the respective GDR as the GDR Depositary may reasonably request and making the payment for the withdrawal of the Deposited Property. The GDR Depositary may, in accordance with the terms of the Deposit Agreement and upon delivery of a duly executed order/ certificate, by or on behalf of any investor who is to become the beneficial owner of the Regulation S GDRs/ Rule 144A GDRs, execute and deliver further GDRs having the same terms and conditions and shall accept for deposit any further Shares in connection therewith. The certificate certifies that the person providing such certificate is located outside the United States/ is a qualified institutional buyer (as defined in Rule 144A under the Securities Act (‘‘QIB’’)) or is acting for the account of another person and such person is a QIB and will comply with the restrictions of the transfer. Any further GDRs issued which (i) represent Shares which have rights (whether dividend rights or otherwise) which are different from the rights attaching to the Shares represented by the outstanding GDRs, or (ii) are otherwise not fungible (or are to be treated as not fungible) with the outstanding GDRs, will be represented by a GDR certificate in definitive form or a separate temporary Regulation S Master GDR and/or a temporary Rule 144A Master GDR. Upon becoming fungible with outstanding GDRs, such further GDRs shall be evidenced by a Regulation S Master GDR and/or a Rule 144A Master GDR (by increasing the total number of GDRs evidenced by the relevant Regulation S Master GDR or Rule 144A Master GDR by the number of such further GDRs, as applicable). The GDR Depositary may issue GDRs against rights to receive Shares from the Issuer. The GDR Depositary may execute and deliver GDRs or issue interests in a Regulation S Master GDR or a Rule 144A Master GDR, as the case may be, prior to the receipt of Shares. The GDR Depositary may deliver Shares upon the receipt and cancellation of GDRs or receive GDRs instead of Shares. These provisions shall only apply to the extent a written legal opinion of Romanian counsel in form and substance acceptable to both the GDR Depositary and the Issuer is received by the GDR Depositary confirming that the transactions described therein are permissible under Romanian law.

The GDR Depositary may retain for its own account any compensation received by it in connection with the aforementioned including, without limitation, earnings on the collateral.

In order to comply with any applicable laws and regulations, the GDR Depositary may request: - each holder of GDRs to, and each holder shall upon receipt of such request, provide to the GDR Depositary information relating to: (a) the capacity in which such holder and/or any owner holds GDRs; (b) the identity of any owners of GDRs or other person or persons then or previously

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interested in such GDRs; (c) the nature of any such interests in the GDRs; and (d) any other matter where disclosure of such matter is required to enable compliance by the GDR Depositary with applicable laws or the articles of association of the Issuer; - Euroclear, Clearstream and DTC to provide the GDR Depositary with details of the account holders within such settlement systems that hold interests in GDRs and the number of GDRs recorded for the account of each such account holder, and each holder or owner of GDRs, or intermediary acting on behalf of such holder or owner, hereby authorises each of Euroclear, Clearstream and DTC to disclose such information to the Depositary as issuer of the GDRs.

Suspension of Issue of GDRs and of Withdrawal of Deposited Property The GDR Depositary shall be entitled, at its reasonable discretion, at such times as it shall determine, to suspend the issue or transfer of GDRs (and the deposit of Shares) generally or in respect of particular Shares. In particular, to the extent that it is in its opinion practicable for it to do so, the GDR Depositary will refuse to accept Shares for deposit, to execute and deliver GDRs or to register transfers of GDRs if it has been notified by the Issuer in writing that the Deposited Shares or GDRs or any depositary receipts representing Shares are listed on a U.S. Securities Exchange or quoted on a U.S. automated inter dealer quotation system unless accompanied by evidence satisfactory to the GDR Depositary that any such Shares are eligible for resale pursuant to Rule 144A under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’). Further, the GDR Depositary may suspend the withdrawal of Deposited Property during any period when the Register, or the register of shareholders of the Issuer is closed or, generally or in one or more localities, suspend the withdrawal of Deposited Property or deposit of Shares if deemed necessary or desirable or advisable by the GDR Depositary in good faith at any time or from time to time, in order to comply with any applicable law or governmental or stock exchange regulations or any provision of the Deposit Agreement or for any other reason. The GDR Depositary shall (unless otherwise notified by the Issuer) restrict the withdrawal of Deposited Shares where the Issuer notifies the GDR Depositary in writing that such withdrawal would result in ownership of Shares exceeding any limit under any applicable law, government resolution or the Issuer’s articles of association or would otherwise violate any applicable laws.

Transfer and Ownership The GDRs are in registered form. Title to the GDRs passes by registration in the Register and accordingly, transfer of title to a GDR is effective only upon such registration. The GDR Depositary will refuse to accept for transfer any GDRs if it reasonably believes that such transfer would result in violation of any applicable laws. The holder of any GDR will (except as otherwise required by law) be treated by the GDR Depositary and the Issuer as its beneficial owner for all purposes (whether or not any payment or other distribution in respect of such GDR is overdue and regardless of any notice of ownership or any interest in it or any writing on, or theft or loss of any certificate issued in respect of it) and no person will be liable for so treating the holder.

Rights in accordance with Rule 144A GDRs, represented by the Rule 144A Master GDR, may be transferred to a person whose interest in such Rule 144A GDRs is subsequently represented by the Regulation S Master GDR only upon receipt by the GDR Depositary of written certifications (in the forms provided in the Deposit Agreement) from the transferor and the transferee in accordance with provisions of Regulation S under the Securities Act.

Cash Distributions Whenever the GDR Depositary shall receive from the Issuer any cash dividend or other cash distribution on or in respect of the Deposited Shares (including any amounts received in the liquidation of the Issuer) or otherwise in connection with the Deposited Property, the GDR Depositary shall, as soon as practicable, convert the same into United States dollars. The GDR Depositary shall give notice to the holders of its receipt of such payment specifying the amount per Deposited Share payable in respect of such dividend or distribution and the earliest date, determined by the Depositary, for transmission of such payment to holders and shall as soon as practicable distribute any such amounts to the holders in proportion to the number of Deposited Shares represented by the GDRs so held by them respectively, provided that:

- in the event that the GDR Depositary is aware that any Deposited Shares are not entitled to such full proportionate amount, the amount so distributed to the respective holders shall be adjusted accordingly; and

- the GDR Depositary will distribute only such amounts of cash dividends and other distributions as may be distributed without attributing to any GDR a fraction of the lowest integral unit of currency in which

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the distribution is made by the Depositary, and any balance remaining shall be retained by the GDR Depositary beneficially as an additional fee.

Distributions of Shares Whenever the GDR Depositary shall receive from the Issuer any distribution in respect of Deposited Shares which consists of a dividend or free distribution of Shares, the GDR Depositary shall cause to be distributed to the holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, additional GDRs representing an aggregate number of Shares received pursuant to such distribution. Such additional GDRs shall be distributed by an increase in the number of GDRs represented by the Master GDRs or by an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the holders hold their GDRs provided that, if and in so far as the GDR Depositary deems any such distribution to all or any holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Issuer, the Custodian or the GDR Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the GDR Depositary shall (either by public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) sell such Shares so received and distribute the net proceeds of such sale as a cash distribution.

Distributions other than in Cash or Shares Whenever the GDR Depositary shall receive from the Issuer any dividend or distribution in securities (other than Shares) or in other property (other than cash) on or in respect of the Deposited Property, the GDR Depositary shall distribute or cause to be distributed such securities or other property to the holders entitled thereto, in proportion to the number of Deposited Shares represented by the GDRs held by them respectively, in any manner that the GDR Depositary may deem equitable and practicable for effecting such distribution provided that, if and in so far as the GDR Depositary deems any such distribution to all or any Holders not to be reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Issuer, the Custodian or the GDR Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the GDR Depositary shall deal with the securities or property so received, or any part thereof, in such way as the GDR Depositary may determine to be equitable and practicable, including, without limitation, by way of sale (either by public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) and shall (in the case of a sale) distribute the resulting net proceeds as a cash distribution.

Rights Issues If and whenever the Issuer announces its intention to make any offer or invitation to the holders of Shares to subscribe for or to acquire Shares, securities or other assets by way of rights, the GDR Depositary shall as soon as practicable give notice to the Holders of such offer or invitation, specifying, if applicable, the earliest date established for acceptance thereof, the last date established for acceptance thereof and the manner by which and time during which holders may request the GDR Depositary to exercise such rights as provided below or, if such be the case, specifying details of how the GDR Depositary proposes to distribute the rights or the proceeds of any sale thereof. The GDR Depositary will deal with such rights in the manner described below:

- if and to the extent that the GDR Depositary shall, at its discretion, deem it to be lawful and reasonably practicable, the GDR Depositary shall make arrangements whereby the holders may, upon payment of the subscription price in RON or other relevant currency together with such fees, taxes, duties, charges, costs and expenses as may be required under the Deposit Agreement and completion of such undertakings, declarations, certifications and other documents as the GDR Depositary may reasonably require, request the GDR Depositary to exercise such rights on their behalf with respect to the Deposited Shares and to distribute the Shares, securities or other assets so subscribed or acquired to the holders entitled thereto by an increase in the numbers of GDRs represented by the Master GDRs or an issue of certificates in definitive registered form in respect of GDRs, according to the manner in which the holders hold their GDRs; or - if and to the extent that the GDR Depositary shall at its discretion deem it to be lawful and reasonably practicable, the GDR Depositary will distribute such rights to the holders entitled thereto in such manner as the GDR Depositary may at its discretion determine; or - if and to the extent that the GDR Depositary deems any such arrangement and distribution as is referred to in paragraphs above to all or any holders not to be lawful and reasonably practicable (including, without limitation, due to the fractions which would otherwise result or to any requirement that the Issuer, the Custodian or the GDR Depositary withhold an amount on account of taxes or other governmental charges) or to be unlawful, the GDR Depositary (i) will provided

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that, holders have not obtained up rights through the GDR Depositary, sell such rights (either by public or private sale and otherwise at its discretion subject to all applicable laws and regulations), or (ii) may, if such rights are not transferable, in its discretion, arrange for such rights to be exercised and the resulting Shares or securities sold and, in each case, distribute the net proceeds of such sale as a cash distribution; - In the event that the GDR Depositary offers rights pursuant, if authorised by the Issuer to do so, the GDR Depositary may, in its discretion, make arrangements whereby in addition to instructions given by a holder to the GDR Depositary to exercise rights on its behalf, such holder is permitted to instruct the GDR Depositary to subscribe on its behalf for additional rights which are not attributable to the Deposited Shares represented by such holder’s GDRs (‘‘Additional GDR Rights’’) if at the date and time specified by the GDR Depositary for the conclusion of the primary GDR rights offering (the ‘‘Instruction Date’’) instructions to exercise rights have not been received by the GDR Depositary from the Holders in respect of all their initial entitlements. Any GDR Holder’s instructions to subscribe for such Additional GDR Rights (‘‘Additional GDR Rights Requests’’) shall specify the maximum number of Additional GDR Rights that such Holder is prepared to accept (the ‘‘Maximum Additional Subscription’’) and must be received by the GDR Depositary by the Instruction Date. If by the Instruction Date any rights offered in the primary GDR rights offering have not been subscribed by the Holders initially entitled thereto and receipt of the relevant subscription price in RON or other relevant currency, together with such fees, taxes, duties, charges, costs and expenses as it may deem necessary, the GDR Depositary shall make arrangements for the allocation and distribution of Additional GDR Rights; - Holders submitting Additional GDR Rights Requests shall be bound to accept the Maximum Additional Subscription specified in such Additional GDR Rights Request but the GDR Depositary shall not be bound to arrange for a holder to receive the Maximum Additional Subscription so specified but may make arrangements whereby the unsubscribed rights are allocated pro rata on the basis of the extent of the Maximum Additional Subscription specified in each holder’s Additional GDR Rights Request. - In order to proceed in the manner contemplated in the Deposit Agreement as regards the above, the GDR Depositary shall be entitled to receive such opinions from Romanian counsel and United States counsel as in its discretion it deems necessary, which opinions shall be in a form provided by counsel satisfactory to the GDR Depositary and at the expense of the Issuer and may be requested in addition to any other opinions and/or certifications which the GDR Depositary shall be entitled to receive under the Deposit Agreement and these Conditions. For the avoidance of doubt, save as provided in these Conditions and the Deposit Agreement, the GDR Depositary shall have no liability to the Issuer or any holder in respect of its actions or omissions and, in particular, the GDR Depositary will not be regarded as being negligent, fraudulent, or in wilful default if it elects not to make arrangements. The Issuer has agreed in the Deposit Agreement that it will, unless prohibited by applicable law or regulation, give its consent to, and if requested use all reasonable endeavours to facilitate, any such distribution, sale or subscription by the GDR Depositary or the holders, as the case may be, (including the obtaining of legal opinions from counsel reasonably satisfactory to the Depositary concerning such matters as the GDR Depositary may reasonably specify).

If the Issuer notifies the GDR Depositary that registration is required in any jurisdiction under any applicable law of the rights, securities or other property to be distributed or the securities to which such rights relate in order for the Issuer to offer such rights or distribute such securities or other property to the holders or owners of GDRs and to sell the securities corresponding to such rights, the GDR Depositary will not offer such rights or distribute such securities or other property to the holders or sell such securities unless and until the Issuer procures the receipt by the GDR Depositary of an opinion from counsel reasonably satisfactory to the Depositary that a registration statement is in effect or that the offering and sale of such rights or securities to such holders or owners of GDRs are exempt from registration under the provisions of such law. Neither the Issuer nor the GDR Depositary shall be liable to register such rights, securities or other property or the securities to which such rights relate and they shall not be liable for any losses, damages or expenses resulting from any failure to do so.

If at the time of the offering of any rights, at its discretion, the GDR Depositary shall be satisfied that it is not lawful or practicable (for reasons outside its control) to dispose of the rights in any manner provided above, the GDR Depositary shall permit the rights to lapse. The GDR Depositary will not be responsible for any failure to determine that it may be lawful or feasible to make such rights available to holders or owners of GDRs in general or to any holder or owner of a GDR or holders or owners of GDRs in particular.

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Conversion of Foreign Currency Whenever the GDR Depositary shall receive any currency other than United States dollars by way of dividend or other distribution or as the net proceeds from the sale of securities, other property or rights, and if at the time of the receipt thereof the currency so received can in the judgement of the GDR Depositary be converted on a reasonable basis into United States dollars and distributed to the entitled holders, the GDR Depositary shall as soon as practicable convert or cause to be converted, by sale or in any other manner that it may reasonably determine, the currency so received into United States dollars.

Distribution of cash /securities by the GDR Depositary Any distribution of cash will be made by the GDR Depositary to holders on the record date established by the GDR Depositary for that purpose and notice shall be given promptly to holders, in each case subject to any laws or regulations applicable thereto and distributions will be made in United States dollars by cheque drawn upon a bank in New York City or, in the case of the Master GDRs, according to usual practice between the GDR Depositary and Clearstream, Euroclear or DTC, as the case may be. The GDR Depositary or the Agent, as the case may be, may deduct and withhold from all moneys due in respect of such GDR in accordance with the Deposit Agreement all fees, taxes, duties, charges, costs and expenses which may become or have become payable under the Deposit Agreement or under applicable law or regulation in respect of such GDR or the relative Deposited Property. Delivery of any securities or other property or rights other than cash shall be made as soon as practicable to the holders on the record date established by the GDR Depositary for that purpose (such date to be as close to the record date set by the Issuer as is reasonably practicable), subject to any laws or regulations applicable thereto. If any distribution made by the Issuer with respect to the Deposited Property and received by the GDR Depositary shall remain unclaimed at the end of three years from the first date upon which such distribution is made available to holders in accordance with the Deposit Agreement, all rights of the holders to such distribution or the proceeds of the sale thereof shall be lapsed and the GDR Depositary shall (except for any distribution upon the liquidation of the Issuer when the GDR Depositary shall retain the same) return the same to the Issuer for its own use and benefit subject, in all cases, to the provisions of applicable law or regulation.

Capital Reorganisation

Upon any sub-division, consolidation or other reclassification of Deposited Shares or any other part of the Deposited Property or upon any reduction of capital, or upon any reorganisation, merger or consolidation of the Issuer or to which it is a party (except where the Issuer is the continuing corporation), the GDR Depositary shall as soon as practicable give notice of such event to the holders and at its discretion may treat such event as a distribution or may execute and deliver additional GDRs in respect of Shares or may require the exchange of existing GDRs for new GDRs which reflect the effect of such change. Withholding Taxes and Applicable Laws Payments to holders of dividends or other distributions on or in respect of the Deposited Shares will be subject to deduction of Romanian and other withholding taxes, if any, at the applicable rates. Voting Rights Holders will have voting rights with respect to the Deposited Shares. The Issuer has agreed to notify the GDR Depositary of any resolution to be proposed at a General Meeting of the Issuer and the GDR Depositary will vote or cause to be voted on the basis of the Deposited Shares. The Issuer has agreed with the GDR Depositary that it will promptly provide to the GDR Depositary sufficient copies, as the GDR Depositary may reasonably request, of notices of meetings of the shareholders of the Issuer and the agenda thereof as well as written requests containing voting instructions by which each holder may give instructions to the GDR Depositary to vote for or against each and any resolution specified in the agenda for the meeting, which the GDR Depositary shall send to any person who is a holder on the record date established by the GDR Depositary for that purpose (which shall be the same as the corresponding record date set by the Issuer or as near as practicable thereto) as soon as practicable after receipt of the same by the Depositary. The Issuer has also agreed to provide to the GDR Depositary appropriate proxy forms to enable the GDR Depositary to appoint a representative to attend the relevant meeting and vote on behalf of the GDR Depositary.

In order for each voting instruction to be valid, the voting instructions form must be completed and duly signed by the respective holder (or in the case of instructions received from the clearing systems should be received by authenticated SWIFT message) in accordance with the written request containing voting instructions and returned to the GDR Depositary by such record date as the GDR Depositary may specify.

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The GDR Depositary will exercise or cause to be exercised the voting rights in respect of the Deposited Shares so that a portion of the Deposited Shares will be voted for and a portion of the Deposited Shares will be voted against any resolution specified in the agenda for the relevant meeting in accordance with the voting instructions it has received. If it is not permitted by Romanian law to exercise the voting rights in respect of the Deposited Shares differently (so that a portion of the Deposited Shares may be voted for a resolution and a portion of the Deposited Shares may be voted against a resolution) the Depositary shall, if permissible under Romanian law, calculate from the voting instructions that it has received from all holders (i) the aggregate number of votes in favour of a particular resolution and (ii) the aggregate number of votes opposed to such resolution and cast or cause to be cast in favour of or opposed to such resolution the number of votes representing the net positive difference between such aggregate number of votes in favour of such resolution and such aggregate number of votes opposed to such resolution. The GDR Depositary will only endeavour to vote or cause to be voted the votes attaching to Shares in respect of which voting instructions have been received, except that if no voting instructions are received by the GDR Depositary from a holder (either because no voting instructions are returned to the GDR Depositary or because the voting instructions are incomplete, illegible or unclear) from a holder with respect to any or all of the Deposited Shares represented by such holder’s GDRs on or before the record date specified by the Depositary the GDR Depositary shall not vote in respect of such Deposited Shares of such holder. If it is not permissible under Romanian law or the GDR Depositary determines that it is not reasonably practicable to vote or cause to be voted such Deposited Shares, the GDR Depositary shall not vote or cause to be voted such Deposited Shares. Where the GDR Depositary is to vote in respect of each and any resolution, the GDR Depositary shall notify the Board of Directors and appoint a person designated by him as a representative of the GDR Depositary to attend such meeting and vote on the basis of the Deposited Shares in the manner required by this Condition. The GDR Depositary is entitled to request the Issuer to provide to the GDR Depositary, and where such request has been made shall not be required to take any action unless it shall have received, an opinion from the Issuer’s legal counsel (such counsel being reasonably acceptable to the Depositary) at the expense of the Issuer to the effect that such voting arrangement is valid and binding on holders under Romanian law and the articles of assocaition of the Issuer and that the GDR Depositary is permitted to exercise votes but that in doing so the GDR Depositary will not be deemed to be exercising voting discretion. The GDR Depositary shall not, and the GDR Depositary shall ensure that the Custodian and its nominees do not, vote or attempt to exercise the right to vote that attaches to the Deposited Shares, other than in accordance with instructions given, or deemed given.

Recovery of Taxes, Duties and Other Charges, and Fees and Expenses due to the GDR Depositary The GDR Depositary shall not be liable for any taxes, duties, charges, costs or expenses which may become payable in respect of the Deposited Shares or other Deposited Property or the GDRs, and these shall be paid by the holder to the GDR Depositary at any time on request or may be deducted from any amount due or becoming due on such GDR in respect of any dividend or other distribution. The GDR Depositary may sell (whether by way of public or private sale and otherwise at its discretion, subject to all applicable laws and regulations) for the account of the holder an appropriate number of Deposited Shares or amount of other Deposited Property and will discharge out of the proceeds of such sale any charges, and any fees or expenses due to the GDR Depositary from the holder and subsequently pay any surplus to the holder.

Liability The GDR Depositary shall have only those duties, obligations and responsibilities expressly specified in the Deposit Agreement and other than holding the Deposited Property for the benefit of holders as bare trustee, does not assume any relationship of trust for or with the holders or owners of GDRs or any other person.

Issue and Delivery of Replacement GDRs and Exchange of GDRs Subject to the payment of the relevant fees, taxes, duties, charges, costs and expenses and such terms as to evidence and indemnity as the Depositary may require, replacement GDRs will be issued by the GDR Depositary and will be delivered in exchange for or replacement of outstanding lost, stolen, mutilated, defaced or destroyed GDRs upon surrender thereof (except in the case of the destruction, loss or theft).

GDR Depositary’s Fees, Costs and Expenses The GDR Depositary shall be entitled to charge and receive remuneration and reimbursement from the holders

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in respect of its services under the Deposit Agreement for issuing, transferring or cancellation of GDRs, for issuing GDR certificates in definitive registered form, for receiving and paying cash dividends or other cash distribution in respect of the Deposited Shares, for any issue of rights or distribution of Shares or other securities or other property upon exercise of any rights, any free distribution, stock dividend or other distribution, depositary services fees, fees for local share registry inspection and related services by the GDR Depositary or the Custodian and any other charge payable by the Depositary, including the Custodian in connection with the servicing of Deposited Shares or other Deposited Property. The GDR Depositary is entitled to receive from the Issuer the fees, taxes, duties, charges costs and expenses as specified in a separate agreement between the Issuer and the GDR Depositary.

Agents The GDR Depositary shall be entitled to appoint one or more agents for the purpose of making distributions to the holders, based on notices submitted to the holders.

Listing The Issuer has undertaken in the Deposit Agreement to use all reasonable endeavours to maintain, so long as any GDR is outstanding, a listing for the GDRs on the Official List and admission to trading on the regulated market of the London Stock Exchange. For that purpose, the Issuer pays all fees and signs and delivers all undertakings required by the FCA or the LSE in connection with such listings.

The Custodian The GDR Depositary has agreed with the Custodian that the Custodian will receive and hold all Deposited Property for the account of the GDR Depositary.

Termination of appointment of the GDR Depositary The Issuer may revoke the appointment of the GDR Depositary under the Deposit Agreement by giving at least 120 days’ prior notice in writing to the GDR Depositary and the Custodian, and the GDR Depositary may resign as GDR depositary by giving at least 120 days’ prior notice in writing to the Issuer and the Custodian. Within 30 days after the giving of either such notice, notice thereof shall be duly given by the GDR Depositary to the holders. SUMMARY OF THE PROVISIONS RELATING TO THE GLOBAL DEPOSITARY RECEIPTS WHILST IN MASTER FORM The GDRs were initially evidenced by a single Regulation S Master GDR and a single Rule 144A Master GDR in registered form..

The Regulation S Master GDR and the Rule 144A Master GDR contain provisions which apply to the GDRs while they are in master form, some of which modify the effect of the Terms and Conditions of the GDRs set out in this document. The following is a summary of certain of those provisions. Words and expressions given a defined meaning in the GDR Terms and Conditions shall have the same meanings in this section unless otherwise provided.

Potential risks related to potential future limitations on the exercise of voting and/or dividends rights by a GDRs holder are provided and can be consulted in the section ‘‘Risk Factors—Risks relating to the Offering of New Shares’’.

The Master GDRs will be exchanged in whole and not in part for certificates in definitive registered form representing GDRs only in the circumstances described in (i), (ii), (iii), or (iv) below. The GDR Depositary will irrevocably undertake in the Master GDRs to deliver certificates in definitive registered form in exchange for the relevant Master GDR, to GDR holders within 60 calendar days in the event that:

(i) DTC, in the case of the Rule 144A Master GDR, or Euroclear or Clearstream, in the case of the Regulation S Master GDR, notifies the Issuer that it is unwilling or unable to continue as a settlement system and a successor settlement system is not appointed within 90 calendar days; or (ii) either DTC in the case of Rule 144A Master GDR, or Euroclear or Clearstream in the case of the Regulation S Master GDR, is closed for business for a continuous period of 14 calendar days (other than by reason of holiday, statutory or otherwise) or announces an intention to permanently cease business or does in fact do so, and, in each case, no alternative settlement system satisfactory to the GDR Depositary is available within 45 calendar days; or

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(iii) in respect of the Rule 144A Master GDR, DTC or any successor ceases to be a ‘‘clearing agency’’ registered under the Exchange Act; or (iv) the GDR Depositary has determined that, on the occasion of the next payment in respect of the Master GDRs, the GDR Depositary or its agent would be required to make any deduction or withholding from any payment in respect of the Master GDRs which would not be required were the GDRs represented by certificates in definitive registered form, provided that the GDR Depositary shall have no obligation to so determine or to attempt to so determine. Any such exchange shall be at the expense (including printing costs) of the Issuer.

A GDR evidenced by an individual definitive certificate will not be eligible for clearing and settlement through Euroclear; Clearstream or DTC.

Upon any exchange of a Master GDR for certificates in definitive registered form, or any exchange of interests between the Rule 144A Master GDR and the Regulation S Master GDR, or any distribution of GDRs or any reduction in the number of GDRs represented thereby following any withdrawal of Deposited Property pursuant to GDR Terms and Conditions, the relevant details shall be entered by the GDR Depositary on the register maintained by the Depositary whereupon the number of GDRs represented by the Master GDR shall be reduced or increased (as the case may be) for all purposes by the number so exchanged and entered on the register. If the number of GDRs represented by a Master GDR is reduced to zero such Master GDR shall continue in existence until the obligations of the Issuer under the Deposit Agreement and the obligations of the GDR Depositary pursuant to the Deposit Agreement and the GDR Terms and Conditions have terminated.

Payments, Distributions and Voting Rights

Payments of cash dividends and other amounts (including cash distributions) will, in the case of GDRs represented by the Regulation S Master GDR be made by the Depositary through Euroclear and Clearstream and, in the case of GDRs represented by the Rule 144A Master GDR, will be made by the GDR Depositary through DTC, on behalf of persons entitled thereto upon receipt of funds therefor from the Issuer. A free distribution or rights issue of Shares to the GDR Depositary on behalf of the Holders will result in the record maintained by the GDR Depositary being marked up to reflect the enlarged number of GDRs represented by the relevant Master GDR.

Holders of GDRs will have voting rights as set out in the GDR Terms and Conditions.

Governing Law

The Master GDRs, and all non-contractual obligations arising from or connected with the Master GDRs, shall be governed by and construed in accordance with English law, except for certain certifications and any provisions relating thereto which shall be governed by and construed in accordance with the laws of the State of New York.

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DESCRIPTION OF ARRANGEMENTS TO SAFEGUARD THE RIGHTS OF THE HOLDERS OF THE GLOBAL DEPOSITARY RECEIPTS Information relating to the GDR Depositary The GDR Depositary is an entity established in the State of New York and is a state-chartered New York banking corporation and a member of the United States Federal Reserve System, subject to regulation and supervision principally by the United States Federal Reserve Board and the New York State Financial Services Department.

Rights of Holders of GDRs Relationship of Holders of GDRs with the Depositary The rights of Holders against the GDR Depositary are governed by the GDR Terms and Conditions and the Deposit Agreement, which are governed by English law (except for the certifications to be given upon deposit or withdrawal of shares, which are governed by the laws of the State of New York). The GDR Depositary and the Issuer are parties to the Deposit Agreement. Holders of GDRs have contractual rights against the GDR Depositary under the GDR Terms and Conditions in relation to cash held by the GDR Depositary, and rights against the GDR Depositary under the GDR Terms and Conditions under a bare trust in respect of Deposited Property other than cash (including Deposited Shares, which are Shares of the Issuer represented by GDRs) deposited with the GDR Depositary under the Deposit Agreement, and certain limited rights against the Issuer as mentioned in “Terms and Conditions of the GDRs”.

Voting: With respect to voting of Deposited Shares and other Deposited Property represented by GDRs, the GDR Terms and Conditions and the Deposit Agreement provide that, if instructed by the Issuer, the Depositary shall send to any person who is a holder on the record date established by the GDR Depositary for that purpose voting materials and instructions for voting. The Deposit Agreement and the GDR Terms and Conditions provide that the GDR Depositary will endeavour to exercise or cause to be exercised the voting rights with respect to Deposited Shares in accordance with the voting instructions it has received from holders. As at the date of this Prospectus, the Issuer confirms that there are no restrictions under applicable law, the articles of association of the Issuer or the provisions of the Deposited Shares that would prohibit or restrict the GDR Depositary from voting based on any of the Deposited Shares in accordance with instructions from holders.

Delivery of GDRs The Deposit Agreement and the GDR Terms and Conditions provide that the Deposited Shares can only be delivered out of the Regulation S and Rule 144A GDR facilities to, or to the order of, a holder of respective GDRs upon receipt and cancellation of such GDRs.

Rights of the Issuer The Issuer has broad rights to revoke the GDR Depositary under the terms of the Deposit Agreement, but no specific rights under the Deposit Agreement which are triggered in the event of the insolvency of the GDR Depositary.

Insolvency of the GDR Depositary If the GDR Depositary becomes insolvent, the insolvency proceedings will be governed by US law applicable to the insolvency of banks.

Effect of applicable insolvency law in relation to cash. The GDR Terms and Conditions state that any cash held by the GDR Depositary for holders is held by the Depositary as banker. Under current US law, it is expected that any cash held for holders by the GDR Depositary as banker under the GDR Terms and Conditions would constitute an unsecured obligation of the GDR Depositary. Holders would therefore only have an unsecured claim in the event of the GDR Depositary’s insolvency for such cash, and such cash would also be available to general creditors of the Depositary or the US Federal Deposit Insurance Corporation (‘‘FDIC’’). Effect of applicable insolvency law in relation to non-cash assets. The Deposit Agreement states that the Deposited Shares and other non-cash assets which are held by the GDR Depositary for Holders are held by the GDR Depositary as bare trustee and, accordingly, the holders will be tenants in common for such Deposited Shares and other non-cash assets. Under current US law, it is expected that any Deposited Shares and other non-cash assets held for holders by the Depositary on trust under the GDR Terms and Conditions would not constitute assets of the GDR Depositary and that holders would have ownership rights relating to

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such Deposited Shares and other non-cash assets and be able to request the GDR Depositary’s liquidator to deliver to them such Depositary Shares and other non-cash assets, and such Depositary Shares and other non- cash assets would be unavailable to general creditors of the GDR Depositary or the Federal Deposit Insurance Corporation (FDIC).

Default of the GDR Depositary If the GDR Depositary fails to pay cash or deliver non-cash assets to holders in the circumstances required by the GDR Terms and Conditions or otherwise engages in a default for which it would be liable under the GDR Terms and Conditions, the GDR Depositary will be in breach of its contractual obligations under the GDR Terms and Conditions. In such case, holders will have a claim under English law against the GDR Depositary to the extent that the GDR Depositary is in breach of its contractual obligations under the GDR Terms and Conditions.

The Custodian

The Custodian is Raiffeisen Bank S.A., an entity established under Romanian law. The Custodian holds securities for the GDR Depositary subject to a custody agreement between the Custodian and the GDR Depositary which is governed by New York law.

Relationship of holders of GDRs with the Custodian: The Holders do not have any contractual relationship with, or rights enforceable against, the Custodian. All Shares, including the Deposited Shares, will be held through RoClear (the Romanian clearing, settlement, custody, depository and registration system) managed by Depozitarul Central. The accounts of RoClear will show a global account in the name of and managed by the Custodian. A sub-account of the Custodian’s global account in the name of the GDR Depositary will also show in RoClear’s records. The Deposited Shares will be held in this sub-account held in the name of the GDR Depositary.

Default of the Custodian Failure to deliver cash: Cash payments from the Issuer (which are expected to be denominated in RON) will initially be received by the GDR Depositary in an account held with the Custodian in the GDR Depositary’s name. Subject to Romanian legislation (which currently permits amounts in RON to be withdrawn from Romania and converted into US dollars by the GDR Depositary without restriction), amounts received from the Issuer by the GDR Depositary will then be exchanged for US dollars in accordance with the GDR Terms and Conditions and the US dollars will be received by the GDR Depositary in New York. After deduction of any fees and expenses of the GDR Depositary, the US dollars will then be credited to the appropriate accounts of the Holders. If the Custodian fails to deliver cash to the GDR Depositary as required under the custody agreement or otherwise engages in a default for which it would be liable under the terms of the custody agreement, the Custodian will be in breach of its contractual obligations under the custody agreement. In such case, the GDR Depositary would have a claim under New York law against the Custodian for the Custodian’s breach of its contractual obligations under the custody agreement. The GDR Depositary can also revoke the Custodian and appoint a substitute or additional custodians and may exercise such rights if it deems necessary.

Failure to deliver non-cash assets: If the Custodian fails to deliver Deposited Shares or other non-cash assets held for the GDR Depositary as required by the GDR Depositary or otherwise defaults under the terms of the custody agreement, the Custodian will be in breach of its obligations to the GDR Depositary. In such case the GDR Depositary will have a claim under New York law against the Custodian for the Custodian’s breach of its obligations under the custody agreement. The GDR Depositary can also revoke the Custodian and appoint a substitute or additional custodians and may exercise such rights if it deems necessary.

The GDR Depositary’s liability

The GDR Depositary is only liable to GDR Holders for loss incurred by GDR Holders as a result of default by the Custodian if such loss arises from the wilful default, negligence or bad faith of the GDR Depositary or that of its agents, officers, directors or employees.

The GDR Depositary’s obligations The GDR Depositary has no obligation to pursue a claim for breach of obligations against the Custodian on behalf of Holders. The GDR Depositary is not responsible for and shall incur no liability in connection with or arising from default by the Custodian due to any act or omission to act on the part of the Custodian, except to the extent that the Custodian has (i) committed fraud or wilful misconduct in the provision of custodial services to the GDR Depositary or (ii) failed to use reasonable care in the provision of custodial services to

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the GDR Depositary as determined in accordance with the standards prevailing in the jurisdiction in which the Custodian is located.

Applicable law: The custody agreement is New York State law governed.

Insolvency of the Custodian Applicable law: If the Custodian becomes insolvent, the insolvency proceedings will be governed by applicable Romanian law.

Effect of applicable insolvency law in relation to cash: Cash held by the GDR Depositary on deposit with the Custodian represents an unsecured claim of the GDR Depositary against the Custodian. Under current Romanian law, it is expected that any cash held for the GDR Depositary by the Custodian at the time of the Custodian’s insolvency would form part of the Custodian’s insolvency estate and would be available to satisfy the claims of the Custodian’s creditors in general.

Effect of applicable insolvency law in relation to non-cash assets: The GDR Depositary will have ownership rights in the Deposited Shares or other non-cash assets held by the Custodian at the time of its insolvency and applicable Romanian legislation makes clear that the Deposited Shares would not be available to satisfy the claims of the Custodian’s creditors in general. Rather, the Deposited Shares would be transferred into an account maintained by another custodian appointed by the Depositary.

The GDR Depositary’s liability The GDR Depositary is only liable to GDR Holders for loss incurred by GDR Holders as a result of the Custodian’s insolvency if such loss arises from the wilful default, negligence or bad faith of the GDR Depositary or that of its agents, officers, directors or employees.

The GDR Depositary’s obligations The GDR Depositary has no obligation to pursue a claim in the Custodian’s insolvency on behalf of the Holders. The GDR Depositary has no responsibility for and will incur no liability in connection with or arising from, the insolvency of any custodian. In the event of the insolvency of the Custodian, the holders have no direct recourse to the Custodian under the Deposit Agreement, though the GDR Depositary can revoke the Custodian and appoint a substitute or additional custodians and may exercise such rights if it deems necessary.

GDR HOLDERS ARE REMINDED THAT THE ABOVE DOES NOT CONSTITUTE LEGAL ADVICE AND IN THE EVENT OF ANY DOUBT REGARDING THE EFFECT OF THE DEFAULT OR INSOLVENCY OF THE GDR DEPOSITARY OR THE CUSTODIAN, GDR HOLDERS SHOULD CONSULT THEIR OWN ADVISORS IN MAKING A DETERMINATION.

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PART 13 SUBSCRIPTION AND SALE

Offering Summary According to the resolution dated 25 April 2019, the EGMS decided the increase of the Issuer’s share capital and the delegation to the Board of Directors for a period of three years of the powers regarding the share capital increase by the maximum amount of RON 18,000,000, from the current value of RON 3,459,399,290 to the maximum value of the share capital of RON 3,477,399,290, representing authorised share capital, by issuing of a number of New Shares (as represented by the Shares and GDRs) of up to 1,800,000 dematerialised, ordinary, nominal new shares, each Share having a nominal value of RON 10 per share at a subscription price equal to their nominal value of RON 10 per share and as calculated in accordance with the procedure described in Part 13 “Subscription and Sale - Subscription Procedure of New Shares by the Entitled Holders of GDRs”), the USD equivalent of RON 40 per one GDR as of the Subscription Price Conversion Date, plus certain costs, fees and expenses (the “Subscription Price”). According to the Board of Directors decision no. 19 dated 4 October 2019, the Board of Directors decided to increase the Issuer’s share capital by in kind and cash contributions with a maximum amount of RON 6,049,830 by issuing a maximum number of 604,983 New Shares with the nominal value of RON 10 per Share, as follows: - RON 2,951,140 (following rounding down from the amount of RON 2,951,144 as presented below), representing 295,114 New Shares, respectively, in kind contribution of the Romanian State represented by the Ministry of Energy, following the acquirement of the certificates attesting the ownership rights issued by the Ministry of Economy, according to the evaluation report 151/2019 of 30 September 2019, prepared by the independent expert Mapps Master Appraisal S.R.L., an ANEVAR corporate member with registration number 0464, designated by the resolution no. 61670 / 09.05.2019 of the National Trade Register Office – the Bucharest Trade Register Office, within the file no. 230529 / 08.05.2019; - up to RON 3,098,690, representing a maximum number of up to 309,869 New Shares, to be offered for subscription with cash contributions, within exercising the preference right, to the other shareholders (i.e. excepting the Romanian State), registered with the shareholders’ registry held by Depozitarul Central as of the Registration Date. Thus, within the Offer is envisaged an increase of the share capital of the Issuer through offering a number of up to 309,869 New Shares for subscription (including New Shares represented by GDRs) to the existing shareholders registered in the Issuer’s shareholder register held by Depozitarul Central (“Entitled Shareholders”) and, respectively to the GDR holders (“Entitled Holders of GDR”) through The Bank of New York Mellon, in his capacity as depositary of the GDR facility (the “Depositary”) as of the registration date 24 October 2019 (“Registration Date”) based on the preference right that they hold (“Preference Right”). The total number of the Preference Rights issued in relation to the Share Capital Increase will be equal to the number of shares issued by the Issuer and held by the other shareholders, excepting those held by the Romanian State, registered in the Issuer’s shareholders registry held by Depozitarul Central at the Registration Date, i.e. 177,188,744 Preference Rights. An Entitled Shareholder, respectively an Entitled Holder of GDR may purchase a maximum number of New Shares calculated as a ratio between the number of Preference Rights held and the number of the neccesarry Preference Rights for the subscription of a New Share. Consequently, to subscribe one New Share in the form of a Share a number of 571.8182328661470 Preference Rights (the “Share Subscription Rate”) is necessary, and for the subscription of New Shares in the form of one GDR, 571.8182328661470 GDR Preference Rights are necessary (the “GDR Subscription Rate”). In case the maximum number of Shares and/or GDRs that can be subscribed during the subscription period of the Preference Rights (as it results from the calculation above) is not a integer, the maximum number of Shares and/or GDRs which may actually be subscribed will be rounded down to the lower integer. The New Shares which remain unsubscribed after the expiry of the period of exercising the Preference Rights, will be cancelled through the decision of the Board of Directors of the Issuer by means of which the final results of the Share Capital Increase are acknowledged. The subscription period for Shares is of 33 calendar days (the “Subscription Period for Shares”), starting with the first Business Day following the Business Day when the Prospectus was published, respectively between 1 November 2019 inclusively and 3 December 2019 inclusively, the subscriptions taking place exclusively at the branch offices of the Manager BRD – Groupe Société Générale S.A mentioned in Appendix 1 “BRD network for subscriptions within the Share Capital Increase” to the present Prospectus, during the working hours (in case of the holders of Preference Rights registered at the moment of the subscription in Section I), as well as at any

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authorized Participant/Manager (in case of the holders of Preference Rights registered in an account opened by the respective Participant/Manager in Section II). During the Subscription Period for Shares, the Entitled Shareholders may exercise the Preference Rights they enjoy. After the expiry of the Subscription Period for Shares, no subscriptions from the Entitled Shareholders will be accepted. The New Shares that were not subscribed following the exercise of the Preference Rights during the Subscription Period for Shares shall be cancelled by decision of the Board of Directors. Offering Manager The Manager of the Offering is BRD - Groupe Société Générale S.A., organised and functioning according to the laws of Romania, registered in the FSA Register under no. PJR01INCR/400008 of June 13th, 2006, having FSA Certificate no. 255 of June 8, 2008, registered in the Trade Registry under no. J40/608/1991, having sole registration code 361579, with registered office in 1-7 Ion Mihalache Blvd., 1st District, 011171 Bucharest.

Subscription Procedure under the Offering By subscribing in the Offering, each Preference Right holder confirms having unconditionally accepted the terms and conditions applicable to the New Shares, having made the subscription according to these and warrants to the Issuer and the Manager that he/she/it is an investor who may lawfully subscribe the New Shares (without being subject to any restriction or limitation) under its jurisdiction of residence. Any application made in breach of the terms and conditions applicable to the New Shares or in breach of applicable law shall be invalid and shall be cancelled. The execution of the Subscription Form represents the unconditional acceptance of the terms and conditions of the New Shares in entirety. Subscriptions can be made during the entire Subscription Period for Shares from 1 November 2019 inclusively and until 3 December 2019 inclusively, each Business Day between 9:00 a.m. and 5:00 p.m. Romania time and between 9:00 a.m. and 11:00 a.m. Romanian time on the last Business Day of the Subscription Period for Shares. After the expiry of the Subscription Period for Shares, no subscriptions from the Entitled Shareholders will be accepted. Subscription Procedure of New Shares by the Entitled Shareholders The New Shares may be subscribed by the Preference Rights’ holders as follows: a) in case of Preference Rights holders whose Preference Rights are registered, at the time the subscription is made, in Section Im the subscription will be done exclusively through the Manager, namely BRD - Groupe Société Générale S.A. at the locations mentioned in Appendix 1 “BRD network for subscriptions within the Share Capital Increase” to the present Prospectus; and b) in case of Preference Rights’ holders whose Preference Rights are registered, at the time the subscription is made, in an account opened by a Participant/Manager in Section II, the subscription will be done exclusively through that Participant/Manager. Any placement of subscription/purchase orders with participants other than the Manager and / or the Participants in the case of subscriptions made by the Preference Rights’ holders registered in Section II shall not be taken into consideration and the Issuer and the Manager shall have no liability whatsoever in relation thereto. 1. Subscription of New Shares by the Preference Rights’ holders that have a valid contract for financial investment services concluded with a Participant, Manager included, and that, at the time the subscription is made, have their Preference Rights registered in an account opened by that Participant in Section II The Preference Rights’ holder may validly subscribe the New Shares by exercising the Preference Rights, without being necessary to submit the identification documents mentioned below, unless changes have occurred with respect to identification data from the date of the last update. The subscription is made by sending a subscription instruction according to the provisions of a valid contract for financial investment services/custody concluded with the Participant/Manager, by any communication means

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included in the respective contract. In this case, it is not mandatory for the Entitled Shareholders to fill in a Subscription Form. The Participant/Manager will accept the subscriptions according to the present Prospectus and the internal regulations applicable for receiving, validating and sending for execution the subscriptions received, as well as the ones pertaining to managing the settlement of subscription instructions. The validation of subscriptions by the Participant/ the Manager includes also checking the fact that the Preference Rights’ holder has not subscribed a number of New Shares larger than it was entitled based on the number of Preference Rights held. After checking each subscription, the Manager or the Participant, as the case may be, will register the respective subscription in the system of Depozitarul Central. Subscription instructions are placed based on the Preference Rights held by the Preference Rights’ holders, and the funds are settled using the settlement mechanism managed by Depozitarul Central, within the daily settlement sessions. During the Subscription Period for Shares, the Participant/Manager taking over the subscription will receive the subscription instructions and will process, validate and register, in the shortest time possible, all the subscriptions validly received. The subscriptions for the New Shares shall not be validated if the subscription procedures included in the present Prospectus were not observed. The subscriptions for New Shares that were not validated will be cancelled, and the Preference Rights’ holders will be informed accordingly, as per the conditions included in the contract for investment/custody contract concluded with the Participant/Manager. The liability for the funds necessary for the settlement of the subscription instructions lies completely with the Participant/Manager through which subscriptions were made under the Offering. The subscribed New Shares will have to be paid according to the procedures communicated by the Participant/Manager. The subscription of New Shares during the Subscription Period for Shares shall be made by observing the regulations and procedures of Depozitarul Central, as well as the internal procedures of the Participant/Manager by which the subscription of New Shares is made. Participants must inform the Preference Rights’ holders about the conditions for implementing the Offering and are solely responsible for implementing the Offering and for complying with this Prospectus and the FSA regulations, including, but not limited to, the settlement of the subscription instructions validated and recorded in the system of Depozitarul Central. 2. Subscription of New Shares by the Preference Rights’ holders that, at the time the subscription is made, have their Preference Rights registered in Section I The subscription is carried out exclusively through the Manager, i.e. BRD – Groupe Société Générale S.A., at the locations mentioned in Appendix 1 “BRD network for subscriptions within the Share Capital Increase” to the present Prospectus, during the entire Subscription Period for Shares on each Business Day between 9:00 a.m. and 5:00 p.m. Romania time and respectively between 9:00 a.m. and 11:00 a.m. Romanian time on the last Business Day of the Subscription Period for Shares. The Manager will validate the subscriptions on condition that the Preference Rights’ holders subscribing New Shares observes all the requirements below: a) hold Preference Rights registered in Section I; b) submit/ send the Subscription Form signed in two original copies for the number of New Shares the shareholder wishes to subscribe and up to the limit of the maximum number of New Shares it is entitled to subscribe based on the Preference Rights it holds. The Subscription Form shall be available on the Manager’s website (www.brd.ro) and the Issuer’s website (www.electrica.ro); c) submit the document confirming the payment of the subscribed New Shares, according to the requirements included in the section “Payment for subscriptions made in the Offering” within this section of the Prospectus; d) submit/send together with the Subscription Form the documents necessary for subscription, mentioned in the section “Subscription Documents” of this section of the Prospectus. The Preference Rights’ holders may submit/send the documents mentioned above using the following means: (i) Through the Manager’s branches listed in Appendix 1 “BRD network for subscriptions within the Share Capital Increase” to the present Prospectus, on the respective locations, during the working hours, between 9:00 a.m. and 5:00 p.m. Romanian time on each Business Day of the Subscription Period for Shares, except for the last Business Day of the Subscription Period for Shares when the subscription may be registered only between 9:00 am and 11:00 a.m., Romanian time. (ii) By courier/ post, with the return of receipt, during the Subscription Period for Shares, send to the Manager’s registered office of 1-7 Ion Mihalache Blvd., 6 floor, room 209-210, 1st District, 011171,

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Bucharest, Romania, mentioning on the envelope, caps lock “Electrica Share Capital Increase”. The Manager will take into consideration only the Subscription Forms registered up to 11:00 a.m. Romanian time in the last Business Day of the Subscription Period for Shares. Irrespective of the means chosen, the subscriptions made based on documents received outside the Subscription Period for Shares and/or which do not meet the subscription conditions in the Prospectus shall not be validated. Irrespective of the means chosen to send/submit the documents, the subscription under this Offering represents the unconditional acceptance of the Offering terms and conditions and the present Prospectus, while every Preference Rights’ holder confirms that it received, read, understood and accepted the terms and conditions included in this Prospectus and subscribed in accordance herewith. The New Shares will be subscribed during the Subscription Period for Shares in compliance with the Manager’s internal procedures. Subscriptions for New Shares shall not be validated if the subscription procedures included in this Prospect are not fulfilled. Subscriptions for New Shares that were not validated shall be cancelled. The Preference Rights’ holders whose subscriptions for New Shares were not validated shall be notified accordingly and the amounts paid will be returned to them in the account mentioned in the Subscription Form within maximum 5 (five) Business Days from the end of the Subscription Period for Shares. The Manager and/or the Issuer shall not be held liable if, for reasons outside their control, the Collection Account is not effectively credited with the amounts representing the value of the New Shares subscribed by the Preference Rights’ holders before 11:00 a.m., Romanian time on the last Business Day of the Subscription Period for Shares. If the amount transferred in the Collection Account for a specific subscription is higher than the Subscription Price multiplied by the number of New Shares represented by Shares mentioned by the respective Preference Rights’ holder in the Subscription Form, the subscription shall be validated only for the number of New Shares mentioned in the Subscription Form. In case the amount transferred to the Collection Account for a specific subscription is lower than the Subscription Price multiplied by the number of New Shares mentioned by the respective Preference Rights’ holder in the Subscription Form, the subscription is considered valid for the number of New Shares corresponding to the amount transferred. If a Preference Rights’ holder subscribed a higher number of New Shares than it could subscribe according to the Preference Rights it holds and transferred to the Collection Account a higher amount, the subscription shall be validated only for the number of New Shares that could be subscribed according to the number of Preference Rights held by the respective Preference Rights’ holder. Subscription Documents In case the Preference Rights’ holder whose Preference Rights, at the time the subscription was made, were registered in an account of a Participant, including the Manager, opened in Section II, it may validly subscribe through the respective Participant/Manager, if it has concluded with the latter an investment services contract, without being required to submit the identification documentation listed below, unless any changes occurred in relation to his/her/its identification data since the latest update. In case of subscriptions made through the Manager corresponding to the Preference Rights registered in Section I at the time the subscription is made, the Preference Rights’ holder will submit or send to the Manager the Subscription Form duly filled in in two original copies, accompanied by a Payment Evidence and by the documents listed below, which shall be provided in English or Romanian language. For the avoidance of any doubt, the Manager shall be liable for verifying the documents corresponding to subscriptions it receives and shall not be liable for verifying or validating the subscriptions of New Shares carried out through Participants, for the latter the liability lies with the Participant through which the subscription is made.

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The Subscription Form is available at the Manager’s branches listed in Appendix 1 “BRD network for subscriptions within the Share Capital Increase” to the Prospectus and on each of the Manager’s and the Issuer’s websites and must be accompanied by the following documents: A. Resident individuals - ID (original and copy); subscribing in their own - Bank excerpt corresponding to the account mentioned in the name: Subscription Form

B. Resident individuals - ID (original and copy) of the representative and the ID (in subscribing in the name of copy) of the represented individual; other individuals: - Power of attorney in authenticated form (original and copy); - Bank excerpt corresponding to the account mentioned in the Subscription Form.

C. Resident individuals - ID (original and copy) of the resident individual subscribing without legal capacity for the represented individual and the ID of the person (impaired judgment) or without legal capacity (copy); placed under guardianship: - Passport (original and copy) and/or residence permit (original and copy) of the individual subscribing for the person without legal capacity – applicable only to foreign citizens; - The guardianship document or, as appropriate, the trustee or the special trustee document; - Bank excerpt corresponding to the account mentioned in the Subscription Form.

D. Non-resident individuals - Passport or ID for citizens of the EU/EEA (original and subscribing in their own copy); name - Bank excerpt corresponding to the account mentioned in the Subscription Form.

E. Non-resident individuals - Passport or ID for the represented individual issued by an subscribing through EEA Member State (copy); resident authorized - ID for the authorized representative (original and copy); representatives - Authenticated and, if the case, apostilled power of attorney for the representative (original and copy); - Bank excerpt corresponding to the account mentioned in the Subscription Form.

F. Resident corporate entities - Registration certificate issued by the Trade Registry (copy); subscribing in their own - Updated articles of incorporation (copy certified for its name: conformity with the original by the legal representative of the legal person); - Original certificate of current standing issued by the Trade Registry (issued no more than 30 Business Days prior to the date of subscription); - Power of attorney/Mandate in original for the person signing the Subscription Form, issued as stipulated by the articles of incorporation, or proof that the person concerned is legally representing the subscribing corporate entity, with individual representation right (if the company is collectively represented by two or more persons who all are

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present for the signing of the Subscription Form, such proof shall be presented for all such persons) (power of attorney in original and any other documents certified for their conformity with the original by the legal representative of the legal entity); - ID (original and copy) of the person subscribing in the name of the legal person; - Bank excerpt corresponding to the account mentioned in the Subscription Form.

G. Non-resident corporate - Certificate of incorporation or incorporation document entities subscribing in their issued by the Trade Registry or by any equivalent institution, own name: if existing (copy); - Updated articles of incorporation/statute (copy certified as true to the original by the legal representatives of the non- resident corporate entity); - Certified certificate/certificate of current standing or equivalent documents issued by the Trade Registry or by any equivalent institution from the jurisdiction of incorporation or, if no institution is authorised to issue such certificate, any other corporate document evidencing the capacity of the legal representatives of the corporate entity (in original), which shall be issued no more than 30 Business Days prior to the date of subscription (in original); such corporate document of the non-resident corporate entity shall set out clearly whether the legal representatives are entitled to act individually or jointly; - In case subscriptions are made through a person other than the legal representative(s) of the non-resident corporate entity, the power of attorney/mandate signed by the legal representatives of the non-resident corporate entity empowering the respective person to subscribe the New Shares on behalf of the non-resident corporate entity (in original and copy); - IDs for the person making the subscription as legal representative or attorney in fact of the non-resident corporate entity: passport, ID (for citizens of EU/EEA) (copy); - Bank excerpt corresponding to the account mentioned in the Subscription Form.

H. Non-resident corporate - Certificate of incorporation or incorporation document of the entities subscribing through non-resident corporate entity issued by the Trade Registry or a resident corporate entity by any equivalent institution from the jurisdiction of incorporation, if existing (copy);

- Updated articles of incorporation/statute of the non-resident corporate entity (copy certified as true to the original by the legal representatives of the non-resident corporate entity); - Certified certificate/certificate of current standing or equivalent documents issued by the Trade Registry or by any equivalent institution from the jurisdiction of incorporation or, if no institution is authorised to issue such certificate, any other corporate document evidencing the capacity of the

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legal representatives of the corporate entity (in original), which shall be issued no more than 30 Business Days prior to the date of subscription (in original); such corporate document of the non-resident corporate entity shall set out clearly whether the legal representatives are entitled to act individually or jointly; - Incorporation certificate for the representing resident corporate entity issued by the Trade Registry(copy); - Updated articles of incorporation/statute of the representing resident corporate entity (copy certified for its conformity with the original by the legal representative of the legal person); - Certificate of current standing, for the representing resident corporate entity issued by the Trade Registry, not older than 30 Business Days prior to the date of subscription (in original); - ID for the legal representative of the representing resident corporate entity subscribing on behalf of the non-resident corporate entity (original and copy); - Power of attorney signed by the legal representative(s) of the non-resident corporate entity empowering the respective person to subscribe on behalf of the non-resident corporate entity within the Offering; - Bank excerpt corresponding to the account mentioned in the Subscription Form.

I. International financial - Articles of incorporation/statute of the IFI or a copy of the institutions (IFIs) Romanian law through which Romania accepts or adheres to the articles of incorporation of the relevant IFI; - Power of attorney/certificate empowering the person who will sign the Subscription Form to subscribe the New Shares on behalf of the IFI (in original or notarised copy); - ID for the person who signs the Subscription Form on behalf of the IFI (copy); - Bank excerpt corresponding to the account mentioned in the Subscription Form.

J. Resident/non-resident - ID (copy) for the resident individuals; individuals represented by - Passport or ID for the citizens of an EEA Member State an asset management (copy), in case of non-resident individuals; company through a portfolio management - Representation mandate (in original and in copy); mandate. Documents for the - Certificate of incorporation issued by the Trade Registry asset management (copy); company: - Updated articles of incorporation/statute (copy certified as true to the original by the legal representatives of the corporate entity); - Certified certificate issued by the Trade Registry no more than 30 Business Days prior to the date of subscription (in original);

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- Power of attorney/mandate in original for the person(s) signing the Subscription Form, issued as stipulated by the articles of incorporation, or proof that the person concerned is legally representing the subscribing corporate entity, with individual representation right (if the company is collectively represented by two or more persons who all are present for the signing of the Subscription Form, such proof shall be presented for all such persons) (power of attorney in original and any other documents certified for their conformity with the original by the legal representative of the legal entity); - ID (original and copy) of the person subscribing in the name of the legal person; - Bank excerpt corresponding to the account mentioned in the Subscription Form.

K. Entities managed by other - The documents listed below shall be presented for the legal resident / non-resident legal entity which manages the respective entity and will be entities (e.g., investment accompanied by the authorization obtained from the funds, pension funds) competent supervisory authority by the entity which manages the investment fund/pension fund or alike; - Certificate of incorporation issued by the Trade Registry (copy); - Updated articles of incorporation/statute (copy certified as true to the original by the legal representatives of the corporate entity); - Certified certificate issued by the Trade Registry no more than 30 Business Days prior to the date of subscription (in original); - Power of attorney/mandate in original for the person(s) signing the Subscription Form, issued as stipulated by the articles of incorporation, or proof that the person concerned is legally representing the subscribing corporate entity, with individual representation right (if the company is collectively represented by two or more persons who all are present for the signing of the Subscription Form, such proof shall be presented for all such persons) (power of attorney in original and any other documents certified for their conformity with the original by the legal representative of the legal entity); - ID (original and copy) of the person subscribing in the name of the legal person; - Bank excerpt corresponding to the account mentioned in the Subscription Form.

The Manager is entitled to request any additional documents for carrying out its duty to comply with the “know your clients” rules, based on its internal norms and procedures of client identification. All documents submitted by the investors in relation to their applications for the subscription of New Shares, with the exception of IDs/ passports presented by individuals, shall be in English or Romanian, or accompanied by a notarized translation of such documents into English or Romanian.

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Payment for subscriptions made in the Offering 1. Payment of the price for New Shares in case the subscription of New Shares is made through a Participant in accordance with the Preference Rights registered in the Participant’s/Manager’s account in Section II at the time the subscription is made The payment of the New Shares subscribed by a Preference Rights’ holder in accordance with the Preference Rights held in Section II on the subscription date shall be made according to theprovisions of the investment/custody services contract concluded with the Participant or the Manager, as the case may be, through which the subscription is made and in compliance with the requirements of Depozitarul Central and the provisions included in this Prospectus. The Participant or the Manager, as the case may be, shall validate the subscriptions exclusively at the time the subscription amounts are credited to the client’s account opened with the Participant or the Manager, as the case may be. 2. Payment of the price for New Shares in case the subscription of New Shares is made through the Manager in accordance with the Preference Rights registered in Section I at the time the subscription is made The proof of payment of the price for the New Shares subscribed by a Preference Rights’ holders through the Manager is represented by the payment order evidencing that the price for the New Shares subscribed as Shares was transferred by bank transfer to the Collection Account opened by the Manager provided that the respective amount is received in the Collection Account before 11:00 a.m., Romania time on the last Business Day of the Subscription Period for Shares (the “Payment Evidence”). The Collection Account for the subscriptions of New Shares is the RON bank account opened by the Manager, having IBAN RO52BRDE427SV00624894270 (the “Collection Account”). The Collection Account does not bear any interest. The bank account to be filled in by a Preference Rights’ holder in the Subscription Form is the bank account from which the amount is effectively transferred to the Collection Account. For the avoidance of any doubt, the payment of New Shares subscribed based on the Preference Rights registered on Section I, at the time the subscription is made, will be performed exclusively from the Preference Rights’ holder’ bank account. The Preference Rights’ holder must consider possible transfer fees and, as the case may be, the fees for opening the bank account. The Manager shall validate the subscriptions exclusively at the time the subscription amounts are credited to the Collection Account. The payment order must contain the personal number/ passport number / registration code of the Preference Rights’ holder. In order for the subscription to be valid, the amount payable for the subscribed New Shares must be paid in full. No deposit in cash directly to the Collection Account is accepted. Subscriptions for the purchase of New Shares shall only be considered for the amount effectively transferred to the Collection Account. The price for the subscribed New Shares will be paid net of any banking fees and/or commissions. No brokerage fees will be payable in relation to subscriptions by any Preference Rights’ holder made in the Offering. The Issuer will cover all fees payable in relation to subscriptions by any investors through the Manager. Neither the Manager, nor the Issuer will be liable if, for reasons outside their control, the Collection Account is not effectively credited with the amounts representing the value of the subscriptions on the last Business Day of the Subscription Period for Shares before 11:00 a.m., Romanian time. Change and Withdrawal of Subscriptions Preference Rights’ holders may change or revoke the subscriptions for the New Shares only if the Prospectus is subject to an amendment, case in which subscriptions may be revoked by any Preference Rights’ holders within 2 (two) Business Days from the date when the respective amendment to the Prospectus was published. In such a case, the Preference Rights’ holders may revoke their subscriptions for New Shares by filling in a subscription

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Revocation Form with the same Participant used for making the subscription, or with the Manager if they subscribed through the Manager. The revocation of a subscription may be performed only entirely, and not partially, and can be made only during the period clearly indicated in the amendment to the Prospectus. Repayments Preference Rights’ holders shall be repaid: - the amount representing the price paid for the New Shares subscribed, in case the respective subscription is not validated/is cancelled according to the provisions of this Prospectus; - the amount paid representing the product between the Subscription Price and the New Shares subscribed, in case the respective subscription is revoked according to the provisions of this Prospectus; - the amount paid in addition to the product between the Subscription Price and the New Shares subscribed for which the subscription is validated; - the amount paid in addition for the New Shares that the Preference Rights’ holders did not have the right to subscribe considering the number of Preference Rights it holds In the cases mentioned above, the payment shall be made: (i) to the Preference Rights’ holders whose Preference Rights were registered in Section I to the bank account they specified in the Subscription Form within maximum 5 (five) Business Days from the end of the Subscription Period, unless the subscription is revoked, when the payment shall be made within maximum 5 (five) Business Days from the date on which the subscription was revoked. The payments will be made by bank transfer to the Preference Rights’ holders’ bank accounts mentioned in the Subscription Form; (ii) to the Preference Rights’ holders whose Preference Rights were registered in Section II, the amount corresponding to the revoked subscriptions will be available in the investment account opened with the Participant/Manager through which the subscription was made, after the settlement of the revocation instructions transmitted to the Central Depositary’s system and according to the internal procedures of the Participant/Manager. Subscription Procedure of New Shares by the Entitled Holders of GDRs Entitled Holders of GDRs that certify their capacity (as defined in Part 15 “Definitions and Glossary”) are entitled to instruct the GDR Depositary to exercise the Preference Rights granted in respect of the number of shares their GDRs represent. Entitled Holders of GDRs are those holders of GDRs having such capacity as of 24 October 2019, i.e. the Registration Date and which can subscribe up to a maximum number of 1,671 GDRs. The GDR Depositary will send a notice to all Entitled Holders of GDRs as of the Registration Date informing them the Issuer is carrying out the Share Capital Increase and that those that certify they are Entitled Holders of GDRs will receive further information. The GDR Depositary will make this Prospectus available to the Entitled Holders of GDRs, who will also be required to acknowledge and make certain additional representations that are set forth in the certification forms that they will receive. Entitled Holders of Regulation S GDRs wishing to exercise Preference Rights attached to the underlying shares will subscribe through the automatic system of Euroclear or Clearstream (each, a “European Clearing System”) and deposit an amount of USD 10.2696 (the “Deposit Amount”) for each new GDR subscribed for. Eligible Holders of Rule 144A GDRs wishing to exercise Preference Rights attached to the underlying shares will complete, sign and return to the GDR Depositary the subscription form provided by the GDR Depositary and deposit with the GDR Depositary the Deposit Amount for each new GDR subscribed for. To be valid a subscription from an Eligible Holder, the subscription form and the proof of payment of the Deposit Amount for the number of new GDRs being subscribed for, must be received by the GDR Depositary by 5:00 p.m., New York State time, on 22 November 2019 (the “GDR Expiration Time”). The European Clearing Systems and brokers and other securities intermediaries that are participants in those systems will establish their own cut off dates and times to receive instructions to subscribe from their customers and participants that will be earlier than the GDR Expiration Time. Entitled Holders of GDRs holding securities through an European Clearing System should contact their brokers or other securities intermediaries to determine the cut off dates and times that apply to them. The Deposit Amount is equal to the USD equivalent of RON 40, based on an exchange rate of 0.2334 USD per RON on 28 October 2019, plus 10% of that amount to cover exchange rate fluctuations between 28 October 2019

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and the GDR Expiration Time, as well as the currency conversion fees, the fee of the GDR Depositary of 0.05 USD per new GDR to be issued and any other applicable costs. Following the GDR Expiration Time, the GDR Depositary will use the Deposit Amount to subscribe New Shares, will retain the fee of 0.05 USD per new GDR and cover any other applicable costs. The final Subscription Price in USD per one GDR will be announced by the GDR Depositary on or about 25 November 2019 (the “Subscription Price Conversion Date”). If the Deposit Amount is insufficient to subscribe New Shares, to cover the fee of 0.05 USD per new GDR and any other applicable costs, the GDR Depositary will require the subscribing Entitled Holders of GDRs to pay the difference in order the number of new GDRs for which they have subscribed or reduce the number of new GDRs for which they have subscribed to the number for which the Deposit Amount is sufficient. In addition, if the GDR Depositary does not receive payment from a European Clearing System or an Entitled Holder of GDRs of the pro rata share of a deficiency in a timely manner, the GDR Depositary may, at its discretion, sell any part of the subscribed GDRs otherwise deliverable to the European Clearing System or to DTC for the account of the relevant Entitled Holder of GDRs (or the amount of Shares represented by them) to pay that deficiency. If subscriptions received from the GDR Depositary are not accepted, due to reasons such as invalid subscriptions, or the Offering is not completed, the GDR Depositary will refund the unused Deposit Amounts it received. If the Deposit Amount is greater than the USD equivalent of RON 40 per one GDR as of the Subscription Price Conversion Date, plus certain costs, fees and expenses (including the GDR Depositary’s issuance fee, and any other expenses and any taxes that are or may be applicable), the GDR Depositary will refund that excess as soon as practicable to the subscribing Entitled Holders of GDRs or the European Clearing Systems, as applicable, for allocation by them to the accounts of the Entitled Holders of GDRs, entitled to that excess. The GDR Depositary will pay the necessary amount for the subscription of New Shares to the Custodian and instruct the Custodian to exercise the applicable number of Preference Rights corresponding to the newly subscribed GDRs to subscribe New Shares. When the Custodian receives the New Shares, the GDR Depositary will deliver the new GDRs representing those New Shares subscribed, to the subscribing Entitled Holders of GDRs. Entitled Holders of GDRs that are qualified institutional buyers (QIB) as defined in Section 15 “Definitions and Glossary”, will receive Rule 144A GDRs and the Entitled Holders of GDRs that certified they were located outside the United States will receive Regulation S GDRs. The new Regulation S GDRs will be identified by a temporary ISIN US83367Y4052, will not be fungible with outstanding Regulation S GDRs and will be subject to restrictions on resale in the United States until 40 days after the date of issuance of the new Regulation S GDRs. No Entitled Holder of GDRs will be entitled to subscribe for any fraction of a new GDR. All entitlements will be reduced to the next lower whole number of new GDRs. The GDR Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own account and not as agent, advisor, broker or intermediary on behalf of any other person and will earn revenue, including, without limitation, from transactions, that it will retain for its own account. This revenue is based, among other things, on the difference between the exchange rate of the respective currencies and the exchange rates that the GDR Depositary or its affiliate receives when buying or selling foreign currency for its/their own account. The GDR Depositary makes no representation that the exchange rate used or obtained in any currency conversion will be the most favourable rate that could be obtained at the time or that the method by which that rate will be determined will be the most favourable to Entitled Holders of GDRs, subject to the GDR Depositary’s obligations under the Deposit Agreement. The methodology used to determine exchange rates used in currency conversions is available upon request to the GDR Depositary. The GDR Depositary will deliver new GDRs as soon as practicable after it is notified that the underlying New Shares have been deposited with the Custodian. Allocation of New Shares Each Entitled Shareholder/ Entitled Holder of GDRs that subscribed in the Offering shall receive a number of New Shares equal to the number of New Shares validly subscribed under the Offering. The Issuer is aware of its shareholder, the Romanian State through the Ministry of Energy’s in-kind contribution to the share capital increase, with the value of 9 land plots set by an appointed evaluator. The Issuer is not aware of the intention of

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any other shareholders or of the members of the administration, management or supervision bodies to subscribe under the Offering, or the intention of any person to subscribe more than 5% of the Offering. Settlement For the Preference Rights’ holders who subscribed based on the Preference Rights registered in Section II at the time the subscription was made, the New Shares shall be settled according to the regulations of Depozitarul Central on processing corporate actions. For the Preference Rights’ holders who subscribed through the Manager, based on the Preference Rights registered in Section I at the time the subscription was made, a list of the validated subscriptions shall be sent to Depozitarul Central around 7:00 pm Romanian time on the last Business Day of the Subscription Period for Shares For the Entitled Holders of GDRs who subscribed within the Offering based on their Preference Rights, when the Custodian receives the New Shares, the GDR Depositary will deliver the new GDRs to the subscribing Entitled Holders of GDRs as soon as practicable after it is notified that the underlying New Shares have been deposited with the Custodian. The GDR Depositary will deliver new GDRs through DTC, Euroclear and Clearstream. Notifying the Offering results The Board of Directors will determine by decision the actual results of the Issuer’s Share Capital Increase of the Issuer, according to the exercise of the Preference Rights during the Subscription Period, respectively the cancelled New Shares, as the case may be. The Offering results shall be notified to FSA and BSE within maximum 5 (five) Business Days from the end of the Subscription Period for Shares. The Issuer will carry out all the actions to complete the Share Capital Increase, namely the registration of the Share Capital Increase with the Trade Registry, request FSA to issue the updated securities registration certificate and request the registration of the New Shares subscribed and allocated in the Offering in the shareholders register kept by Depozitarul Central/ or in the register of the GDRs Holders kept by the GDR Depositary. After the New Shares subscribed and allocated under the Offering are registered with the Issuer’s shareholders registry, such New Shares shall be accepted to trading on the Regulated Spot Market managed by the BSE (in the case of Shares) and respectively on the Main Market of the LSE (in the case of GDRs). New Shares may be traded after the Share Capital Increase is registered with Depozitarul Central.

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PART 14

SELLING AND TRANSFER RESTRICTIONS The distribution of this document and the offer of New Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. The New Shares are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. This Prospectus has been prepared for the Offering and the admission to trading. This Prospectus does not constitute an offer to subscribe for or buy any of the New Shares directed at any person in any jurisdiction to whom it is unlawful to make such offer or request in such jurisdiction. European Economic Area In relation to each Member State of the European Economic Area (“EEA”) (including Romania) no New Shares have been offered or will be offered pursuant to the Offering to the public in that Member State prior to the publication of a prospectus in relation to the New Shares which has been approved by the competent authority in that Member State or, where appropriate, approved in another Member State and notified to the competent authority in that Member State, all in accordance with the Prospectus Regulation. For the purposes of this provision, the expression an “offer to the public” in relation to any New Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the Offering and any New Share to be offered so as to enable an investor to decide to purchase any New Shares. In the case of any New Shares being offered to a financial intermediary as that term is used in Article 5 of the Prospectus Regulation, each such financial intermediary will also be deemed to have represented, acknowledged and agreed that the New Shares acquired by it in the Offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any New Shares to the public in a Member State prior to the publication of a prospectus in relation to the New Shares which has been approved by the competent authority in that or, where appropriate, approved in another Member State and notified to the competent authority in the Member State, all in accordance with the Prospectus Regulation, other than their offer or resale to Qualified Investors or in circumstances in which the prior consent of the Manager has been obtained. The Issuer and the Manager and others will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement. Notwithstanding the above, a person who is not a Qualified Investor and who has notified the Manager of such fact in writing may, with the consent of the Manager, be permitted to purchase New Shares in the Offering. United States The New Shares have not been and will not be registered under the Securities Act, as amended, or the securities laws of any State or jurisdiction of the United States and may not be offered or sold, directly or indirectly within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to the registration requirements of the Securities Act. The New Shares are being offered and sold outside the United States to non-U.S. persons in reliance on Regulation Sand respectively to persons who have the capacity of QIB for the GDRs issued according to Rule 144A and who represent in writing (and electronically, using the automatic system the of DTC, Clearstream or Euroclear) that they have the capacity of Entitled Holder of GDRs. Terms used in this paragraph have the meanings given to them by Regulation S and Rule 144A under the Securities Act.

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PART 15 DEFINITIONS AND GLOSSARY

Additional GDR rights additional rights which are not attributable to the Deposited Shares represented by the holder’s GDRs;

Additional GDR Rights any instruction regarding any GDR Holder to subscribe such Additional GDR Requests Rights;

Admission the admission to trading of the New Shares on the Regulated Spot Market of the Bucharest Stock Exchange, respectively on the Main Market of the LSE;

ANEVAR The National Association of Authorized Romanian Valuers (in Romanian Asociaţia Naţională a Evaluatorilor Autorizaţi din România);

Annual Financial Statements audited consolidated financial statements prepared in accordance with International Financial Reporting Standards adopted by the European Union on and for the financial year ended on 31 December 2018 together with the independent auditor report dated 5 March 2019 together with the audited separate financial statements drawn up in accordance with Order of the Ministry of Public Finances no. 2844/2016 for the approval of the Accounting Regulations complying with International Financial Reporting Standards, together with the independent auditor report dated 5 March 2019;

ANRE The Romanian Energy Regulatory Authority (in Romanian Autoritatea Nationala de Reglementare in Domeniul Energiei);

Articles of Association the Articles of Association of the Issuer in force at the date of this Prospectus;

ASPAAS The Authority for Public Surveillance of the Activity of Statutory Audit

Board of Directors the board of directors of the Issuer;

BRD or the Manager BRD - Groupe Société Générale S.A.;

Brexit the referendum resulting in a vote for the United Kingdom to leave the European Union;

BRP means the Balance Responsible Party (Romanian PRE - Parte Responsabilă cu Echilibrarea);

BSE Bucharest Stock Exchange;

Business Day a day, other than Saturday or Sunday or a legal holiday day in which Depozitarul Central carries out his commercial activity in a manner that allows the activities defined in this Prospectus to be carried out for the Share Capital Increase;

Clearstream Clearstream Banking, société anonyme, incorporated under the laws of the Grand Duchy of Luxembourg;

Collection Account the collection account in RON opened by the Manager, having IBAN RO52BRDE427SV00624894270;

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Companies Law Law 31/1990 of the companies republished, as subsequently amended and supplemented;

CONEL The National Electricity Company CONEL S.A.;

Custodian Raiffeisen Bank S.A.;

Delegated Regulation Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 2019/980 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No 809/2004;

Deposit Agreement Deposit Agreement concluded on 4 July 2014 between the Issuer and the GDR Depositary for setting and maintenance of (i) the facility according to Regulation S and GDRs issued according to Regulation S, and (ii) the facility according to Rule 144A and GDRs issued according to Rule 144A. See Part 12 “Terms and Conditions of the GDRs” to the present Prospectus;

Deposited Property means the Deposited Shares, together with all the rights, interests and other securities, assets and cash deposited with the Custodian which are assigned in connection with them;

Deposited Shares shares which are being deposited with and held by the Custodian on behalf of the GDR Depositary;

Depozitarul Central Depozitarul Central S.A., a Romanian joint stock company, with the registered office in 34-36 Carol I Blvd., 3rd, 8th and 9th floors, Bucharest 020922, Romania;

DTC Depository Trust Company;

EFSA Electrica Furnizare S.A.;

EGMS the extraordinary general meeting of shareholders of the Issuer;

EL SERV Electrica Serv S.A.;

Entitled Holder of GDRs holder of GDRs registered in the registry held by the GDR Depositary as of the Registration Date that certifies in written (and electronically through registration in DTC, Clearstream or Euroclear) that is: (i) (i) a “qualified institutional buyers” (“QIB”) as such term is defined in Rule 144A under the U.S. Securities Act, purchasing to invest and not with a view to any resale, distribution or other disposition of the securities in violation of United States federal securities laws, for their own account or for the account of other QIBs for which they exercise sole investment discretion and on whose behalf they have full power to make the representation and that they (or such other QIBs) are institutions of a type to which GDRs may be sold in transactions exempt from any registration or qualification requirements under the securities laws of the respective states, territories, or possessions of the United States in which they are (or such other QIB are) located; or

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(ii) (A) a person not located in the United States or the European Economic Area (the “EEA”) who is exercising GDR rights in an “offshore transaction” as defined in Regulation S under the U.S. Securities Act; or (B) a person located in the United Kingdom and purchasing for its own account or for the account of a beneficial owner for which it exercises sole investment discretion, and who is (a) a “qualified investor” as defined in the Prospectus Regulation and is also: (i) an investment professional within the meaning of the Article 19(5) of the Order 2005 regarding Financial Services and Markets Act (Financial Promotion) from 2000, as amended (the “Order”); (ii) a high net worth entity or another person falling within Article 49(2)(a)-(d) of the Order; or (iii) a person to whom it may otherwise be lawful to distribute the New Shares; or (C) a person located within a member state of the EEA (other than the United Kingdom) and purchasing for its own account or for the account of a beneficial owner for which it exercises sole investment discretion, and who is (a) a “qualified investor” within the meaning of the Prospectus Regulation and (b) exercising GDR rights in an “offshore transaction” in accordance with Regulation S under the Securities Act.

Entitled Shareholders shareholders registered in the Issuer’s shareholders register as of the Registration Date, exercising their Preference Rights for subscribing New Shares within the Share Capital Increase;

EUR Euro;

Euroclear Euroclear Bank SA/NV, as operator of the Euroclear System;

Financial Conduct Authority Financial Conduct Authority acting in its capacity as the competent authority or FCA for the purposes of the United Kingdom Financial Services and Markets Act 2000;

Financial Statements Annual Financial Statements and Interim Financial Statements;

Fitch Fitch Ratings Ltd;

FSA Romanian Financial Supervision Authority and its successors and predecessors;

FSMA the United Kingdom Financial Services and Markets Act 2000;

GDR Depositary The Bank of New York Mellon;

GDR Expiration Time 22 November 2019;

GDR Holder the person or persons recorded as holder of GDRs, represented by interests in (i) the Regulation S Master GDR, such person whose name appears in the records of Clearstream or Euroclear or (ii) the Rule 144A Master GDR, such person whose name appears in the records of DTC, but in each case, as the owner of a particular amount of GDRs, and in relation to any other GDRs;

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GDR Preference Right Preference Rights for shares which constitute underlying securities for GDRs, each GDR thus entitling to 4 (four) Preference Rights;

GDR Subscription Rate number of GDR Preference Rights necessary to subscribe New Shares in the form of one GDR (i.e. 571.8182328661470 GDR Preference Rights);

GDRs Registered Global Depositary Receipts, each GDR representing 4 (four) Shares on deposit with the GDR Depositary’s Custodian, as custodian for the Depositary. The GDRs are issued by the GDR Depositary pursuant to the Deposit Agreement entered into between the Issuer and the GDR Depositary on 4 July 2014. The shares represented by the GDRs are held by the GDR Depositary’s Custodian, for the account of the GDR Depositary and for the benefit of the holders and beneficial holders of the GDRs. See Part 12 ‘‘Terms and Conditions of the Global Depositary Receipts’’ to the present Prospectus;

GEO 114/2018 Government Emergency Ordinance no. 114/2018 of 28 December 2018 on the establishment of measures in the field of public investments and fiscal- budgetary measures, modification and completion of normative acts and extension of time limits;

Group or Electrica Group the Issuer and its subsidiaries;

Initial Public Offer initial public offer approved by the Government Decision no. 85/2013, amended and supplemented by the Government Decision no. 47/2014 regarding the the Issuer's privatization process;

Instruction Date the date and time specified by the GDR Depositary for the conclusion of the primary GDR rights offering;

Interim Financial Statements From the revised interim financial statements of the Issuer on and for the ended period of 6 months at 30 June 2019, together with the independent auditor revised report dated 5 March 2019;

Issuer or Electrica Societatea Energetică Electrica S.A.;

LSE London Stock Exchange;

Master GDR either of the Regulation S Master GDR, the Rule 144A Master GDR and any temporary master GDR which may represent GDRs issued pursuant to Deposit Agreement;

Maximum Additional maximum number of Additional GDR Rights which the Eligible Holder of Subscription GDR is prepared to accept;

NBR National Bank of Romania;

New Shares Shares and GDRs issued under the Share Capital Increase;

Offering the New Shares offering issued as a result of the exercise if the Preference Rights in the Share Capital Increase;

Official List the official list maintained by the Financial Conduct Authority (FCA) for the listing of securities;

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OGMS the ordinary general meeting of shareholders of the Issuer;

Owner of Regulation S GDRs in respect of the Regulation S Master GDR, such person whose name appears in the records of Euroclear or Clearstream as the owner of a particular amount of Regulation S GDRs, and in respect of any other Regulation S GDR, or the Holder thereof;

Owner of Rule 144A GDRs in respect of the Rule 144A Master GDR, such person whose name appears in the records of DTC as the owner of a particular amount of Rule 144A GDRs, and in respect of any other Rule 144A GDR, the Holder thereof;

Paying Agent BRD - Groupe Société Générale S.A.;

Payment Evidence the payment order that evidence that the price for the New Shares in the form of Shares has been transferred by bank transfer in the Collection Account;

Preference Right the preference right held by the Entitled Shareholders and, respectively, the Eligible Holders of GDRs as of the Registration Date, for the subscription of the New Shares issued under the Share Capital Increase;

Prospectus means the prospectus prepared by the Issuer and approved by FSA in connection with the offer and admission to trading of the New Shares on the regulated market operated by the BSE and respectively the LSE;

Prospectus Regulation Delegated Regulation (EU) 2019/980 of the Commission from 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council as regards the format, content, scrutiny and approval of the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No 809/2004;

QIB qualified institutional buyer defined in Rule 144A;

RAB Regulated Assets Base;

Registration Date 24 October 2019;

Regulation 5/2018 FSA Regulation no. 5/2018 regarding the issuers of financial instruments and market operations;

Regulation S Regulation S issued under the Securities Act;

Regulation S Facility the separate account created in the books and records of the Custodian in the name of the GDR Depositary in which the Regulation S Shares and other Deposited Property represented by Regulation S GDRs are deposited;

Regulation S GDRs GDRs offered and sold outside of the United States in off-shore transactions in reliance on Regulation S under the Securities Act;

RRR regulated rate of return;

Rule 144A Rule 144A issued under the Securities Act;

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Rule 144A Facility the separate account created on the books and records of the Custodian in the name of the GDR Depositary in which the Rule 144A Shares and other

Deposited Property represented by Rule 144A GDRs are deposited.

Rule 144A GDRs GDRs offered and sold in the United States according to Rule 144A or any other exemption from or transaction which is not subject to registration under the Securities Act;

SAPE Societatea de Administrare a Participațiilor în Energie S.A.;

SDMN Societatea de Distribuție a Energiei Electrice Muntenia Nord S.A.;

SDTN Societatea de Distribuție a Energiei Electrice Transilvania Nord S.A.;

SDTS Societatea de Distribuție a Energiei Electrice Transilvania Sud S.A.;

Securities Act United States Securities Act of 1933, as amended;

SEM Servicii Energetice Muntenia S.A;

Share Capital Increase the share capital increase through in kind and cash contribution, approved by the EGMS which took place on 25 April 2019 and by the Issuer’s board of directors decision dated 4 October 2019;

Shares fully paid registered ordinary shares of the Issuer;

Share Subscription Rate number of Preference Rights necessary to subscribe a New Share as a Share (i.e. 571.8182328661470 Preference Rights)

Subscription Period means the Subscription Period for Shares, respectively the time interval in which the Eligible Holders of GDR may subscribe until the GDR Expiration Date;

Subscription Period for Shares 33 calendar days from 1 November 2019 inclusively to 3 December 2019 inclusively;

Subscription Price RON 10 per Share and as calculated in accordance with the procedure described in Part 13 “Subscription and Sale - Subscription Procedure of New Shares by the Entitled Holders of GDRs”), the USD equivalent of RON 40 per one GDR as of the Subscription Price Conversion Date, plus certain costs, fees and expenses;

Subscription Price Conversion 25 November 2019 or about 25 November 2019, being the date when the GDR Date Depositary will announce the final Subscription Price in USD per one GDR; the GDR Depositary will convert the Deposit Amounts received into RON on or about the same date;

Terms and Conditions of the represents the terms and conditions applicable to GDRs, as they are described GDRs in Section 12 – “Terms and conditions of the Global Depositary Receipts;

Trade Registry the Romanian Trade Registry Office attached to the Bucharest Tribunal; and

USA United States of America.

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PART 16

GENERAL INFORMATION

Authorisation The issue of the New Shares was authorised by resolution of the EGMS dated 25 April 2019 and through the Board of Directors’ Decision no. 19 dated 4 October 2019. The Issuer has obtained or will obtain from time to time all necessary consents, approvals and authorisations in connection with the issue of the New Shares. Legal and Arbitration Proceedings Save as disclosed in this Prospectus, there are no governmental, legal or arbitration proceedings, (including any such proceedings which are pending or threatened, of which the Issuer is aware), which may have, or have had during the 12 months prior to the date of this Prospectus, a significant effect on the financial position or profitability of the Issuer. Lock-up agreement Not applicable Dilution of participations The Offering is carried out in compliance with the Preference Right of the Issuer’s Entitled Shareholders registered in the Issuer’s shareholders register as of the Registration Date and of the Eligible Holders of GDR Therefore, if all Entitled Shareholders registered in the shareholders register as of the Registration Date or if Eligible Holders of GDR would exercise the Preference Right, no shareholder would be diluted. Significant/Material Change Save as disclosed in this Prospectus, since 30 June 2019 there has been no material adverse change in the prospects of the Issuer, nor any significant change in the financial or trading position of the Issuer. Statement regarding the working capital The Issuer’s management is of the opinion that the Issuer has sufficient working capital for its current needs for at least 12 months after the publication of the Prospectus. Interests of individuals or entities involved in the Offering There are no interests (including conflicts of interests) that could have a material impact on the Offering. The Manager and/or its respective affiliates have provided in the past, and may provide in the future, from time to time, investment services, financial advice and banking and commercial services to the Group in their ordinary course of business, for which they could or might receive specific fees and commissions. Incorporation of Certain Information by Reference This Prospectus incorporates by reference, and should be read and construed in conjunction with, the following information: 1. The audited consolidated financial statements of the Group for the year ended 31 December 2018; 2. The audited separate financial statements of the Issuer for the year ended 31 December 2018; 3. The reviewed consolidated interim financial statements of the Group for the six-month period ended 30 June 2019; and 4. The Articles of Association. The information contained in each document incorporated by reference in the present Prospectus is given as of the date of such document. Such information shall be deemed to be incorporated in, and form part of, this Prospectus, save that any statement contained in a document which is deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this document to the extent that a statement contained in the

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present Prospectus modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Auditors The separate and consolidated financial statements of the Issuer for the financial year ended 31 December 2018 have been audited by Deloitte Audit S.R.L, who have issued unmodified audit reports on such financial statements. Deloitte Audit S.R.L. is a member of the Chamber of Financial Auditors of Romania and is registered in the Electronic Public Register of ASPAAS. Documents on display Copies of the following documents (together with English translations thereof) may be inspected during normal business hours at the office of the Issuer at 9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania, headquarter of the Manager (1-7 Ion Mihalache Blvd., 1st District, Bucharest, Romania), as well as at the Manager’s branches assigned for subscriptions, as mentioned in Appendix 1 “BRD network for subscriptions within the share capital increase” to the present Prospectus (upon subscribers request) and in electronic form on the Issuer’s website www.electrica.ro or on the Manager’s website www.brd.ro, on the BVB website at www.bvb.ro and on the website of the national storage mechanism appointed by FCA for the United Kingdom at http://www.morningstar.co.uk/uk/NSM, during the entire Offering period: 1. The Prospectus; 2. The audited consolidated and separate financial statements of the Group for the financial year ended 31 December 2018 and the interim reviewed consolidated interim financial statements of the Group for the six 6 (six) months ended 30 June 2019. References in the auditor’s reports to “other information” are references to other information in the respective annual reports. Such other information does not form part of this Prospectus. 3. The Articles of Association; 4. The Subscription Form; and 5. The Revocation Form.

THE ISSUER

SOCIETATEA ENERGETICA ELECTRICA S.A.

Chief Executive Officer Georgeta Corina Popescu

Chief Financial Officer Mihai Darie

Chief Strategy & Performance Management Officer

Anamaria Dana Acristini-Georgescu

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REGISTERED OFFICE OF THE ISSUER

9 Grigore Alexandrescu Street, 1st District, Bucharest, Romania MANAGER BRD GROUPE SOCIETE GENERALE S.A. 1-7 Ion Mihalache Blvd., 1st District, Bucharest, Romania LEGAL ADVISORS TO THE ISSUER As to U.S. and English law

Freshfields Bruckhaus Deringer LLP

65 Fleet Street London EC4Y 1HT United Kingdom

***

Seilergasse 16 1010 Vienna Austria As to Romanian law Filip SCA SkyTower Building 246C Calea Floreasca 15th Floor 014476, 1st district, Bucharest Romania AUDITOR TO THE ISSUER Deloitte Audit S.R.L.

The Mark Tower, 82-98 Calea Griviței, floor 14, 010735, Bucharest Romania

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APPENDIX 1 BRD network for subscriptions within the share capital increase

No. Name of the City Adress District/County Telephone subsidiary number

1 Delfin Bucharest Bucharest, District 2, 258 Pantelimon Road, Building 47 District 2 +40212005900

2 Dorobanti Bucharest Bucharest, District 1, 135-145 Calea Dorobantilor, Building District 1 +40212086526 10, floor S+P+1

3 Mari Clienti Bucharest Bucharest, District 1, 1-7 Ion Mihalache Boulevard District 1 +40213014000 Corporativi

4 Unirea Bucharest Bucharest, District 3, 2 Vintila Voda Street, Building E1, District 3 +40374832100 Flat Bank Headquarters, Building E1, entrance 2A, floor P+M

5 Academiei Bucharest Bucharest, District 1, 32-34 Calea Victoriei District 1 +40213056900

6 Alba Iulia Alba Iulia Alba Iulia City, 2 Ardealului Street, Building 31 C, Alba Alba +40258806640 County

7 Brasov Brasov Brasov City, 5 Mihail Kogalniceanu Boulevard, Brasov Brasov +40268301122 County

8 Miercurea Ciuc Miercurea Ciuc Miercurea Ciuc City, 36 Marton Aron Street, Harghita Harghita +40266371367 County

9 Sfantu Gheorghe Sfantu Gheorghe Sfantu Gheorghe City, 43 1 Decembrie 1918 Street, Covasna Covasna +40374282595 County

10 Sibiu Sibiu Sibiu City, 55 General Magheru Street, Sibiu County Sibiu +40269202600

11 Targu Mures Targu Mures Targu Mures City, 11 Calarasilor Street, Mures County Mures +40265207410

12 Bacau Bacau Bacau City, 13 George Apostu Street, Bacau County Bacau +40234207722

13 Botosani Botosani Botosani City, 72 Calea Nationala, Botosani County Botosani +40231511091

14 Iasi Iasi Iasi City, 32A Anastasie Prunu Street, Iasi County Iasi +40232211343

15 Piatra Neamt Piatra Neamt Piatra Neamt City, 18 Republicii Boulevard, Neamt County Neamt +40233214494

16 Suceava Suceava Suceava City, 35 Stefan cel Mare Street, Suceava County Suceava +40230214973

17 Vaslui Vaslui Vaslui City, 2 Constantin Dobrogeanu Gherea Street, Vaslui Vaslui +40235361018 County

18 Baia Mare Baia Mare Baia Mare City, 38B Gheorghe Sincai Street, Maramures Maramures +40262212115 County

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19 Bistrita Nasaud Bistrita Bistrita City, 2 1 Decembrie 1918 Street, Bistrita-Nasaud Bistrita Nasaud +40263235032 County

20 Cluj Napoca Cluj Napoca Cluj-Napoca City, 81-83 21 Decembrie 1989 Boulevard, Cluj +40264405110 Cluj County

21 Oradea Oradea Oradea City, 4 Regele Ferdinand I Square, County Bihor Bihor +40259436038

22 Satu Mare Satu Mare Satu Mare City, 3 Corneliu Coposu Street, Satu Mare Satu Mare +40261710536 County

23 Zalau Zalau Zalau City, 2 1 Decembrie 1918 Square, Salaj County Salaj +40260611104

24 Alexandria Alexandria Alexandria City, 4 Confederatiei Street, Teleorman County Teleorman +40247314572

25 Calarasi Calarasi Calarasi City, 65 Flacara Street, Calarasi County Calarasi +40242312003

26 Giurgiu Giurgiu Giurgiu City, Vasile Alecsandri Street, Building 4/300, Giurgiu +40374283057 Giurgiu County

27 Pitesti Pitesti Pitesti City, 69 Bis Republicii Boulevard, Arges County Arges +40374158000

28 Ploiesti Ploiesti Ploiesti City, 8 Cuza Voda Street, Prahova County Prahova +40244595605

29 Slobozia Slobozia Slobozia City, 11 Chimiei Boulevard, Ialomita County Ialomita +40243213530

30 Targoviste Targoviste Targoviste City, 1 Stelea Street, Dambovita County Dambovita +40374209461

31 Braila Braila Braila City, 12 Traian Square, Braila County Braila +40239614415

32 Buzau Buzau Buzau City, 2 Prel. Democratiei – Center, Buzau County Buzau +40238720064

33 Constanta Constanta Constanta City, 250 Mamaia Boulevard, Constanta County Constanta +40241508604

34 Focsani Focsani Focsani City, 21A Mihail Kogalniceanu Street, Vrancea Vrancea +40374209601 County

35 Galati Galati Galati City, 29A Brailei Street, Galati County Galati +40236307800

36 Tulcea Tulcea Tulcea City, 116 Babadag Street, Tulcea County Tulcea +40240515610

37 Craiova Craiova Craiova City, 4 Carol I Boulevard, Building M6, Dolj Dolj +40251410970 County

38 Drobeta Turnu Drobeta Turnu Drobeta-Turnu Severin City, 55 Carol I Boulevard, Mehedinti +40374371456 Severin Severin Mehedinti County

39 Ramnicu Valcea Ramnicu Valcea Ramnicu Valcea City, 18 General Praporgescu Street, Valcea +40250734360 Valcea County

40 Slatina Slatina Slatina City, 51 Nicolae Titulescu Boulevard, Olt County Olt +40249413350

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41 Targu Jiu Targu Jiu Targu Jiu City, 20 Tudor Vladimirescu Street, Gorj County Gorj +40253217958

42 Arad Arad Arad City, 5-7 Revolutiei Boulevard, Arad County Arad +40257207200

43 Deva Deva Deva City, 7 Operei Square, Hunedoara County Hunedoara +40254206493

44 Resita Resita Resita City, 1 Petru Rares Street, Caras-Severin County Caras Severin +40374280044

45 Timisoara Timisoara Timisoara City, 1 Socrates Street, Timis County Timis +40256302000

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