www.eximbank.ro 03 Message from the President

A solid business that generates profit, an improved structure and high quality assets, a competitive cost structure and a high solvency, and, of course, a professional team. This is the business card that EximBank presents at the end of 2014. A year which continued the modernization process of the Bank, aimed at redefining and increasing the efficiency of operational flows, diversifying and improving the quality of the Bank’s products and services and the expansion of its territorial network. We are talking about a process of reshaping the modern operational principles that transformed EximBank into a relevant player in the local banking market. Throughout 2014, EximBank has maintained the work towards boosting support for the national economy, sustaining business environment through the work performed, reaching a total turnover of 4.7 billion lei. Meanwhile, the Bank has kept its position within the small category of profitable banking institutions, reporting a net income of 46.6 million lei and managed to end the year with a rate of nonperforming loans of only 3.1%, well below banking system average of 13.9%. We believe that the results are remarkable, especially considering that we have assumed increasing the degree of support for the real economy in a difficult period for the corporate financing market, marked by several external factors such as reduced demand and intense competition on the supply side. We intend to continue the accelerated upward trend that the Bank has followed for the last two years, and our strategy remains focused on developing integrated banking relationships with local companies, prioritizing not only financing and guarantee activities but also complementary banking services. In 2015, we will focus our efforts on increasing the customer base, accelerating lending and diversification of products and services and towards alignment with the national and international banking standards by reorganizing and increasing the efficiency of activities. Also, we are ready to assume a greater role in financing and economic development of Romania, including in the context of a possible extended term as development bank.

Traian Halalai President, EximBank

004 2014 Annual Report www.eximbank.ro 005 Executive Board

Traian Halalai President of EximBank since November 2012, he has a large experience in the banking sector, as a Deputy CEO and Member of the Board of Directors of Banca Românească SA, part of the National Bank of Greece Group, as well as CFO of ING Romania and Member of various Boards of ING Group Romania entities. Mr. Halalai was part of the team which set up ING Securities in Romania in 1998. He holds an MBA degree from the Bucharest Finance and Banking PhD School and conducted PhD research with the Erasmus University of Rotterdam, the Netherlands.

Crina Cosma Vicepresident of EximBank since August 2014, she has a large experience in the banking sector following the positions of Deputy General Director and Counsellor to the General Director that she held between 2009 and 2013 within Banca Românească, member of the National Bank of Greece Group. Also, between 2009 and 2010 she transiently ran Banca Românească until the appointment and investment, by the National Bank of Romania, of a new General Director. Her career in the banking sector includes also Bancpost – where, between 2003 and 2007 she filled the positions of General Director of Operations and Deputy General Director - and Alpha Bank (1998-2003). She is a graduate of the Bucharest University of Economic Studies’ Finance Department and completed numerous post-university programs.

Paul Ichim Vicepresident of EximBank since March 2009, he ran the Bucur Obor Corporate Branch of ING Bank NV Amsterdam between September 2007 and March 2009. From 2005 to 2007 he managed the Financial Institutions Department of ING Bank NV Amsterdam, Bucharest branch, after having managed the Financial Institutions and Custodial Services Department for the two previous years. Prior to this, Mr. Ichim worked in the Ministry of Public Finances as an advisor for the Secretary of State and the Minister, and then as Secretary of State himself. He is a graduate of the Bucharest University of Economic Studies’ Finance, Banking, Insurance and Stock Exchange Department.

006 2014 Annual Report www.eximbank.ro 007 Summary

I. General overview oF the Bank and Group i.1. Export - Import Bank of Romania – EXIMBANK SA 011 i.2. Exim Romania SA Insurance - Reinsurance Company

II. The local financial and economic environment in 2014 014

III. evolution of the commercial activity structure in 2014 iii.1. Activity of EximBank in 2014 iii.1.1. Activity on Behalf of and to the Benefit of the Bank iii.1.2. Activity on Behalf of and to the Benefit of the State iii.1.3. Budget Execution 017 iii.2. C.A.R.E. Activity in 2014 iii.2.1. Commercial Activity iii.2.2. Budget Execution iii.3. Marketing Policy

IV. separate and Consolidated Financial Result IV.1. Legal Framework iv.2. Balance Sheet 031 iv.3. Separate and Consolidated Financial Result

V. capital Adequacy and main financial indicator dynamics 037

VI. corporate Governance 039

VII. Human Resources 041

VIII. Risk management 044

IX. intErnal Control System 048

X. sTrategy and Priorities 051

XI. separate and consolidated financial statements 054

008 2014 Annual Report www.eximbank.ro 009 General Overview of the Bank and Group

The Export - Import Bank of Romania – EXIMBANK SA Bank") is the parent company of the Group and was set Group ("The Group") is made up of Export - Import Bank up in 1992 as a specialized institution which provides of Romania – EXIMBANK SA ("the Bank" or "EximBank") services in support of the Romanian business environment and Exim Romania SA Insurance - Reinsurance Company and international transactions through specific financial, (Compania de Asigurări - Reasigurări Exim Romania S.A banking and insurance tools. EximBank is a private law or CARE). entity, a joint stock company owned 95.374% by the state, through the Ministry of Public Finances. Export - Import Bank of Romania – EXIMBANK SA ("the

I.1. Export - Import Bank of Romania - EXIMBANK SA

EximBank operates in accordance with Law no. Today the product portfolio is customized on three 96/2000 regarding the organization and operation main pillars – finance, guarantees and insurance – of Export - Import Bank of Romania – EXIMBANK and allows EximBank to sustain both exports and SA, republished, with subsequent changes and international transactions, but also other activities amendments, with banking legislation requirements, of small and medium enterprises and companies with legislation requirements related commercial developing various projects within priority areas of the companies operating in the insurance and reinsurance economy or companies that develops projects financed field, with Law 31/1990 requirements, republished, as through European Funds. By channeling funds in well as with its own regulations. these directions, in accordance with the Romanian Government’s policies, it is aimed at securing the EximBank supports the economy on two different tiers: economic development and improvement of the n As a State agent – through EximBank, funds from standard of living in Romania. Supporting existing or the State Budget are distributed in the real economy new economic projects implies training of the Romanian with the purpose to support the Romanian business workforce and thus contributes to maintaining and environment through specific financing, guarantee creating new employment opportunities. and insurance products (generally, this activity is seen as being conducted on behalf of and to the benefit of the State) n As a commercial bank – EximBank has its own portfolio of banking products and services, operating under fair competition rules with other banks of the banking system (generally, this activity is seen as being conducted on behalf of and to the benefit of the bank).

010 2014 Annual Report www.eximbank.ro 011 I.2. Exim Romania SA Insurance - Reinsurance Company

Exim Romania SA Insurance - Reinsurance Company insurance of goods in transit and financial loss (EximAsig) was established in 2009 as a specialized insurance. The Company’s products are addressed to entity providing insurance against financial risks both customers developing business with both foreign and for export and domestic operations. The Company domestic counterparts, in a variety of areas such as became operational in August 2010 and was trade/commerce, goods and products, transportation, authorized to provide insurance against risks related construction/building, oil and gas, IT, etc. to loans and guarantees. The company has extended EximAsig's main shareholder is EximBank SA, with a its activity throughout 2011 by obtaining authorization participation of 93.7792% of the share capital of RON to practice 6 new insurance classes, namely: fire and 44,109,990, the remaining portion being held by private natural calamities insurance, insurance for damages individuals as minority shareholders. to property, civil liability insurance, accident insurance,

012 2014 Annual Report www.eximbank.ro 013 to commercial banks (narrowing of the symmetrical Interest rates on the interbank money market also interest rate corridor composed of the interest rates on followed a downward trend during 2014, due to The Local Financial standing facilities around the monetary policy rate from excess liquidity in the banking sector. +/- 3.0 percentage points to +/-2.0 percentage points).

and Economic Thus, we had the following evolution of the ROBOR reference rate for the year 2014:

DatE ROBOR 1 m ROBOR 3 m ROBOR 6 m ROBOR 9 m ROBOR 12 m

Environment in 2014 31.12.2013 1.88 2.44 2.99 3.10 3.15 31.12.2014 0.91 1.70 2.01 2.02 2.02

As regards the evolution of the EUR/RON foreign Barclays played a significant part in raising interest exchange rate, 2014 was a year that presented relatively in Romanian treasury bills, the continuance of this low volatility, the exchange rate fluctuating within an trend mainly derived from the correlation with regional In 2014 the Romanian economy recorded a growth main improvement taking place at the level of services interval of 4.1% during the period (4.3800/4.5600). and emerging markets which absorbed funds by rate of 2.9%. This growth rate is slightly lower than (its positive balance increased by 25% up to 5.9 b Futhermore, the 2014 closing EUR/RON exchange seeking better yields as compared to those offered by the growth recorded in the previous year (3.4%), given EUR). Also, a positive evolution was recorded by the rate was almost identical to the one for 2013 (around developed economies. that 2013 was an exceptional year for the agriculture primary income balance, its deficit was reduced by 4.4800). sector, which recorded a growth in real terms of 7.8% down to 2.9 b EUR. As regards the commercial It is also worth mentioning that both the EUR/RON 29.2%, thus contributing 1.4 percentage points to GDP goods deficit, it increased for the first time in the exchange rate and the EUR/CZK exchange rate, were The obvious downward trend of the yield curve growth. Therefore, excluding the volatile agriculture last four years (+1.4%, up to 5.5 b EUR), given that the least volatile currency pair in the region. Furthermore, for treasury bills can be observed below: component, the real GDP growth rate in 2014 was the export growth rate decelerated while the import during 2014 RON has appreciated against all other 2.8%, compared to 2.0% in 2013, suggesting an growth rate accelerated. MID MID MID currencies in the region (PLN, HUF, CZK). DatE improvement of economic activity in other sectors. 3 years (%) 5 years (%) 10 years (%) Net foreign investments reached 2.5 b EUR, recording The dynamic of the market for treasury bills continued The most important contributions to the growth a slight decrease compared to 2013 (2.9 b EUR). 31.12.2013 3,91 4,65 5,27 to record a high level due to increased demand. If rate was the industry and certain service sectors, 31.12.2014 2,285 2,64 3,61 Fiscal consolidation continued in 2014, the budget in 2013 their inclusion in the JP Morgan Chase and supported both by external demand, and by an deficit reaching a level of 1.9% of the GDP, compared improvement in consumption, especially in the private to 2.5% of the GDP in 2013. This adjustment took sector. Industry, which has a ratio of 24% in GDP place as a result of a slight increase of the ratio of total formation and which posted an increase of 3.5% budgetary revenues to GDP (from 31.7% to 31.3%), compared to last year, remained the main driving and a slight decrease in the ratio of total public force behind economic growth, contributing 0.9% expenditures to GDP (from 33.6% to 33.8%). to GDP expansion. Regarding the service sector, the most important contributions came from IT and The constant level maintained by the demand deficit, communications (+11%), real estate services (+3.5%), the downward adjustment of expectations regarding professional, scientific and technical activities (+4.1%), inflation, the significant reduction of the oil price, a as well as wholesale and retail (+2.2%). However, strong agricultural production in the region, as well the construction sector, which represents 6.3% of as the favorable development of certain administered GDP, nearly stagnated (+0.2%) in the context of weak prices brought the annual inflation rate to very low investment activity. levels, which remained for most of the year below the lower limit of the range of +/- 1 percentage point As regards GDP utilization, an improvement in around the target set by the National Bank of Romania consumption is noticed, from government spending, (NBR) of 2.5%. Thus, in 2014, the average inflation and especially from the private sector, the latter rate was 1.1%, well below the 4.0% average of 2013. accounting for a significant share of GDP (60.9%). As opposed to the previous two years in which net exports In this context, the NBR continued the process of of goods and services brought positive contributions monetary policy easing, by gradually reducing the to GDP, in 2014 the contribution was virtually null, monetary policy interest rate (from 4.0% to 2.75% in as the increase in exports was trailed closely by an November 2014, the process continuing at the start equivalent increase in imports. An unfavorable element of the current year with another two rate cuts down recorded for the second consecutive year was the to 2.25% as of February 2015), cutting the minimum negative contribution from investments to GDP, given reserve requirement rates applicable to liabilities that investments decreased by 3.6% in 2014. measured in RON and foreign currency of credit institutions (from 15% to 10% for RON and from 20% to The current account deficit of the balance of payments 14% for foreign currency), as well as modifying interest continued its adjustment, decreasing from 0.8% of rates on standing facilities (deposits and loans) offered GDP (1.2 b EUR) to 0.5% of GDP (0.7 b EUR), the

014 2014 Annual Report www.eximbank.ro 015 Evolution of the Commercial Activity Structure in 2014

III.1. Activity of EximBank in 2014

Following its strategic objectives, in 2014 the Bank’s Towards this purpose, the Bank’s efforts have been priorities included supporting and promoting Romanian focused on increasing its client base, accelerating exports and Romanian investments in foreign coutries, lending and diversifying its product and service portfolio, financing and guaranteeing, through specific products, as well as alignment with national and international projects in priority areas of the national economy, banking standards, reorganizing and increasing the encouraging projects which contribute to increasing efficiency of its activities and developing its territorial the absorption of european funds and supporting the network by expanding its area of activity and improving Romanian business environment, particularly SME’s. its visibility and accessibility.

31-Dec-14 31-Dec-13 On Behalf of On Behalf of On Behalf of On Behalf of Type of exposure and to the and to the and to the and to the Benefit of the Benefit of the Total Benefit of the Benefit of the Total Bank State Bank State Total exposure 2,366 2,353 4,719 2,074 2,466 4,540 Lending 2,021 127 2,148 1,719 147 1,866 Loans – gross value 1,775 123 1,898 1,340 113 1,453 Lending commitments 246 4 249 379 34 413 Letters of guarantee 327 2,184 2,511 342 2,292 2,634 Letters of comfort 18 0 18 13 0 13 Insurance 0 42 42 0 27 27

At the end of 2014 the Bank managed exposures of 4,719 million RON, up 5% as compared to the prior year, primarily from financing activity, which recorded a growth of exposures of over 300 thousand RON.

46% guarantees SNB

7% 3% guarantees ONB financing SNB

exposure structure 2014

43% 11% 1% lending others insurance ONB NCS

016 2014 Annual Report www.eximbank.ro 017 Compared to 2013, the Bank maintained a similar level of sales in 2014. The analysis of how sales objectives set for 3.000 5.000 2014 have been achieved, by product type, indicates that all targets for product types have been surpassed, except for financing on Behalf of and to the Benefit of the State. 2.500 evolution of exposure 4.000 2008-2014 2.000 (RON THOUSANDS) 3.000 900 1.500 800 state's name and behalf 2.000 1.000 realization of 700 own name and behalf 600 1.000 the sales plan by 500 total exposure product type 500 400

2008 2009 2010 2011 2012 2013 2014 achieved 300 sales plan 200 100 By engaging funds and commercial agreements in force at 31 December 2014, EximBank contributes the economy 0 Financing Guarantees Letters Financing Guarantees Insurance by supporting projects worth over 9 billion RON, an influx that means not only strengthening the Romanian business ONB ONB ONB SNB SNB SNB environment and the national economy development through new revenue to the state budget, but also a definite opportunity for maintaining and creating new employment opportunities, and through this, maintaining and improving the population standard of living. Referring to the main strategic priority, aligned to the and competitive capabilities on the external markets Bank’s specific mission, of sustaining exports, in where they wish to place their products. 2014 this has resulted in products granted in amount of Products having this destination represent 54% of 7% 917 thousand RON (of which 611 million RON on Behalf trade - 10% the total sales volume for 2014 of 1,685 thousand commerce of and to the Benefit of the Bank and 306 thousand on RON, comprised of specific financing, guarantee and Behalf of and to the Benefit of the State) to the benefit 7% - extractive industry insurance products, distributed by areas as follows: of exporters, businesses that invest in developing new STRUCTURE 12% metallurgy OF TOTAL 6% - public administration EXPOSURE BY 4% - agriculture SECTOR OF STRUCTURE BY ECONOMIC AREAS OF FUNDS MOBILIZED BY EXPORTERS ACTIVITY 22% 4% energy machinery and equipment 9% 4% 2% rolling stock 6% engineering and technical postal services, energy consultancy telecom, IT 28% other areas 6% - metallurgy 11% 2% transport furniture 19% and storage other The Bank’s strategic objectives have been translated founded. A summary of the volume of products granted 12% 1% textile ind. into a sales plan which is comprised of concrete targets in 2014, compared to the sales plan established for electrical equipment and performance criteria for the Bank’s business lines, each product type is presented below, in RON millions: 1% agriculture 4% based on which the Bank’s budget for the year was 13% chemical machinery and 25% wholesale industry 5% - wood processing equipment and retail Activities Realized 2014 Plan 2014 ±Δ ±Δ%

Total sales 1,685 1,361 323 24% Financing and guaranteeing projects of the national economy was primarily motivated by stimulating the economic On Behalf of and to the Benefit of the Bank 1,143 931 211 23% development of Romania, a government objective to which EximBank, by its nature, is aligned to. Financing 874 866 8 1% Towards this purpose, a series of strategic objectives was set for 2014 which represent the focus of the Bank’s Guarantees 247 65 182 280% commercial activity. Letters of comfort 22 - 22 100%

On Behalf of and to the Benefit of the State 542 430 112 26%

Financing 17 30 (14) -45%

Guarantees 489 400 89 22%

Insurance 36 - 36 100%

018 2014 Annual Report www.eximbank.ro 019 Of the total volume of products granted in 2014 of 1,685 million RON, the total value of funds aimed at priority areas as stipulated by the Bank’s policy of 1,428 million RON represents 85%, assigned as follows: III.1.1. Activity on Behalf of and to the Benefit of the Bank

STRUCTURE OF FUNDS ASSIGNED TO PRIORITY AREAS

8% Exposures on Behalf of and to the Benefit of the Bank at the end of 2014 consist of loans, letters of credit, guarantees 9% electrical equipment 4% and multiproduct ceilings totaling 2,366 million RON, up 14% compared to the end of 2013. transport and storage chemicals and 4% 7% - furniture chemical products food industry 9% STRUCTURE OF LENDING EXPOSURE BY machinery 4% 3% agriculture i. Financing TYPE OF PRODUCT and equipment metallurgy The total volume of EximBank’s portfolio of loans on Behalf 3% water supply, 14% sanitation of and to the Benefit of the Bank, consisting of drawn and energy undrawn loans, reached 2,021 thousand RON at the end 2% factoring production 1% public of 2014, 18% higher than at the end of the previous year. and distribution administration 29% 5% Of all economic sectors that have absorbed these funds, other wood wholesale and retail - 24% areas processing 5% - postal services, telecom and IT the largest share is the metallurgical industry (14%), followed by trade (12%), public administration (10%) and 37% 61% term lines electrical equipment (9%). The structure by type of customer of the loan portfolio Financing and guaranteeing projects that contribute to 2014 for the support of projects that absorb European shows that beneficiaries that have a majority share are the absorption of European funds also represent a funds for Romania, through prefinancing or cofinancing, regulations, during the year EximBank performed write large companies (55%), followed by SMEs (35%) and target of the Bank in line with the governmental target. an amount of 103 million RON was engaged, assigned off of balance loans worth 151 million RON, which is one Local Public Authorities (10%). Of the total volume of products granted to customers in as follows: of the main reasons for the reduction by 52% of non- performing loans compared to the end of the previous STRUCTURE OF LENDING EXPOSURE BY year. This fact, in conjunction with a 32% increase in TYPE OF CLIENT outstanding loans, resulted in a ratio of 3.92% non- STRUCTURE BY AREAS SUPPORTED in order to ATTRACT EUROPEAN FUNDS performing loans, significantly decreased from 10.72% 9% 7% 1% 35% level of the previous year but also significantly better metallurgy wood processing services SME's than the average level of 13.93% across the Romanian 4% banking system before 31.12.2014. 7% public 1% wholesale and retail agriculture - 11% construction administation 10% Of the total committed financing in 2014, funds 1% - research 55% public mobilized to support exports totaled 449 million RON, and development large local respectively 51%, while funds mobilized in order companies authorities 17% to attract European funds totaled 52 million RON, chemicals and 1% chemical products furniture respectively 6%. Credit lines represent the majority of products offered, accounting for 58% of the total. In terms of portfolio quality, the non-performing loans 32% 16% 4% ratio (loans with debt service greater than 90 days and/ From the analysis of the structure of financing granted water supply, sanitation other transport 5% and waste management areas and storage textile industry or initiation of legal proceedings against the debtor in 2014 by area of activity, the following areas stand out: by EximBank, contaminated by customer) was at trade (21%), transport and storage (13%), machinery a comfortable level at 31.12.2014. In line with NBR and equipment (7%), electrical equipment (7%).

Another important strategic priority of the Bank, resulted in the opening of 5 agencies in 2014 covering sustaining of SMEs, had a special place in the the following counties: Bistrița-Năsăud (Bistrița), STRUCTURE BY AREAS OF ACTIVITY OF COMMITED FINANCING development of the activity of EximBank in 2014. Suceava, Maramureș (Baia Mare), Arad and Vâlcea. 5% SME’s have benefited from products totaling 640 Taking into account the business strategy of the Bank, 6% wood processing 4% 4% million RON, oriented mainly towards machinery and during the year it was decided to regroup the regional furniture agriculture construction equipment; wholesale and retail trade; postal services, territories and to increase their number from 4 to 7 for 7% 5% 4% 3% chemicals and telecommunications and IT; metallurgical industry. the purpose of intensifying sales dynamic, and implicitly, electrical equipment energy postal services, to increase the number of customers benefiting from production chemical products Developing a territorial network in order to increase telecom, IT the Bank’s products. 7% and the activity, visibility and accessibility of the Bank machinery distribution and equipment 3% services 13% transport 5% and storage metallurgy 3% 34% technical 21% other 5% 5% consultancy wholesale and retail areas food industry other and engineering

020 2014 Annual Report www.eximbank.ro 021 their total value is 5% lower. This variance is explained • Purchase of treasury bonds worth over 1 billion maturity. In 2014 interest income from government ii. Guarantees and by dispersed customer concentration, as a prudential RON and selling of government securities worth securities reached 82.5 million RON. The monthly requirement. Of the total value of 326.8 million RON approximately 650 million RON, sale from which evolution of the volume of investments in securities, Multiproduct Ceilings revenues of 36.1 million RON were obtained. At the along with the associated yield, can be observed in the same time, securities worth 1.1 billion RON reached following charts: The total volume of guarantees issued on Behalf of and THE STRUCTURE OF GUARANTEES OFFERED TO to the Benefit of the Bank reached 326.8 million RON at NON-BANKING CLIENTS BY TYPE OF PRODUCT the end of 2014, of which 157.4 million RON represent 5.5% 5.2% 5.5% 5.4% 4.9% guarantee accords to non-banking customers, 152.3 2,000 5.3% 6.00% 5.2% 5.0% 5.0% 5.3% 5.0% million RON represent unused multiproduct ceilings and 36% 1,800 4.6% payment 1% 1,600 5.00% 17.1 million RON represent guarantees agreements letters auction letters investments in 1,400 4.00% to banking customers. The evolution of the securities of guarantee of guarantee ron denominated 1,200 portfolio is distinguished from the previous year by a securities 1,000 3.00% total of three times more guarantees issued, although 22% 41% 800 advance good 600 2.00% refund execution average balance 400 1.00% average interest 200 Structure of EXPOSURE FROM 0 0.00% GUARANTEES BY ClIENT TYPE Jul-14 of committed guarantees, funds mobilized in order to Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 attract European funds totaled 5.3 million RON and 2% respectively. In the structure by types of customers of 19% the collateral portfolio, the majority share of 76% is held SME's by large companies, while SME’s represent 19%. 450 5.00% 4.3% While the value of the Bank’s exposures to support 400 4.0% 3.9% 4.50% 5% 76% 3.9% large 3.7% 4.00% banks exports totaled 204.8 million RON, respectively 63%, 350 3.3% 3.3% 3.1% 3.5% placements in 3.2% 3.2% companies the value of funds mobilized through export contracts 300 3.0% 3.50% eur denominated 3.00% amounted to over 2 billion RON. 250 securities 2.50% 200 2.00% 150 The graph below can be seen the targeting of this product on areas of national economy in 2014: 1.50% average balance 100 1.00% average interest 50 0.50% 0 0.00% STRUCTURE BY AREAS OF ACTIVITY OF GUARANTEEING ACTIVITY IN 2014

Jan-14 Feb-14 Mar-14 Apr-14 Jun-14 Jul-14 Oct-14 18% 6% 1% 1% MaY-14 Aug-14 Sep-14 Nov-14 Dec-14 trade electrical engineering chemicals equipment 1% 1% transport metallurgy and storage • Ensuring the necessary sources for the Bank’s main trend during the second half of the year, in line with investments by attracting banking and non-banking the Bank’s strategy to intensify its activity in this area 3% 1% agriculture 19% deposits, as well as placements in banking deposits, and to diversify its sources of funding The monthly rolling stock construction thus realizing an efficient management of the Bank’s evolution of the volume of RON denominated deposits balance sheet. attracted, along with the associated interest, can be observed in the following chart: 38% 4% 6% • The volume of RON denominated deposits attracted energy 18% postal machinery from non-banking customers recorded an upward production other services, and equipment and distribution areas telecom, IT

450 2.50% 400 1.9% 1.9% 350 2.00% • Proactive approach to non-banking customers to AMOUNTS IN RON 1.9% 1.6% promote treasury products 300 1.7% AVAILABLE TO 1.6% 1.7% 1.6% 1.7% 1.50% iii. Treasury and Capital Markets 250 1.4% CLIENTS 1.5% • Efficient administration of the Bank’s balance sheet, 200 1.00% Given the Bank's strategic orientation towards the deve- cautious management of risks through placed invest- 150 lopment of integrated banking relationships with customers, ments, optimizing the government securities portfolio 1.3% average balance 100 0.50% prioritizing not only financing and guarantee activities, but and diversifying and broadening the funding sources 50 also banking services, the Bank’s treasury activity was average interest • intensifying operations on the interbank market. 0 0.00% oriented towards the following major objectives:

Treasury operations detailed by main activities are Jul-14 • Providing financial resources to support objectives set Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 presented below: for financing/guarantee activities

022 2014 Annual Report www.eximbank.ro 023 Transactions on the interbank foreign exchange market tively in developing Internet Banking services (“Banca la Insurance Interministry Committee (CIFGA). behalf totaled 2,353 million RON at the end of 2014 recorded significant growth in 2014, by approximately 11.7 distanta”), EximBank signed a Protocol with the Ministry of and represent 50% of the total value of the Bank’s Specific financing, guaranteeing and insurance comm- billion RON, turning EximBank into an active counterparty Public Finance/National Agency of Fiscal Administration engagements of 4,719 million RON. itments undertaken in the State’s name and on its on this market. Foreign exchange transactions conducted (NAFA) which would permit the Bank to grant TrezoLink with non-banking customers reflects the proactive type facilities to its customers, a new product launched approach of the Bank in this area and its interest to during the course of the year. This product is intended develop this line of activity, the trading volume recording to contribute to efficient time management by customers i. Guarantees an increase of 50% in 2014. Revenues from the foreign of EximBank regarding accessing available amounts in exchange market reached 3.5 million RON. their accounts opened at the treasury department. At the end of 2014, the Bank’s ongoing guarantee portfolio, financed by State funds, consisted of 228 issued It is worth mentioning that in the process of developing guarantees, 48 more than at the end of 2013, with a total value of 2,184 million RON, down 5% from last year. and implementing cash management products, respec- The decrease in total value is explained by the expiry during 2014 of large value guarantees, which exceeded sales for the year, even though realization exceeded the approved sales plan by 89 million RON (22%). iv. Commercial Information The largest share of beneficiaries of these products is represented by large companies (85%), SMEs owning 15%.

The Bank continued its commercial information trade activity on the two main pillars – providing commercial information reports for the use of the business environment but also for the internal use of the bank’s business lines. In 2014, a STRUCTURE OF EXPOSURE FROM SNB STRUCTURE OF EXPOSURE FROM SNB number of 1,039 reports on Romanian companies were written and 544 reports on foreign companies were obtained. GUARANTEES BY BENEFICIARY BANK GUARANTEES BY TYPE OF CLIENT

III.1.2. Activity on Behalf of and to the Benefit 15% SME's of the State 47% 53% beneficiary: beneficiary: 85% EximBank other large banks companies Aiming to fulfill the strategic objective of supporting the are not controlled by the Bank and do not meet the Romanian national economy, the Bank also acts as an recognition criteria set by the applicable International agent of the State, on Behalf of and to the Benefit of Financial Reporting Standards and the IASB General the State, by offering specific products and services of Framework, and are therefore not disclosed in the Of the total volume of ongoing guarantees, 151 million RON support projects that absorb European funds. As guarantees, finance and insurance to market players. Bank’s Statement of Financial Position. regards sustaining exports, while the total value of guarantees oriented towards this objective is 784 million RON (36%), the value of export contracts through which funds were deployed on Behalf of and to the Benefit of the State In line with Law 96/2000, with subsequent changes In line with the stipulations of Law 96/2000 the funds’ is close to 1,045 million RON. and amendments, EXIMBANK – S.A. benefits from the sources of financing are as follows: following funds being available to it: The distribution of issued guarantees across areas of the national economy indicates coverage predominantly of the • Amounts received from the State - stipulated in the energy production and distribution sector (39%). • Fund for guarantee operations- Law 96/2000 - art. 10 a annual budget Law • Fund for insurance and reinsurance operations - Law • Amounts taken in proportion of 25% from external 96/2000 - art. 10 b receivables recovered by the State from debtor countries STRUCTURE OF EXPOSURE FROM GUARANTEES BY MAIN AREA OF ACTIVITY • Fund for financing operations - Law 96/2000 - art. 10 c. The funds are used for paying off commitments • Net amounts from insurance premiums 7% 7% 2% 2% assumed by EXIMBANK - S.A. on Behalf of and exctractive industry electrical furniture aircrafts • Amounts recovered from insurance of loans equipment to the Benefit of the State (Law 96/2000 - art. 12, 2% 2% paragraph 1). • Amounts recovered from the guaranteed legal entity 7% machinery and equipment construction wholesale and retail • Interest obtained by using available amounts from the The temporarily available amounts in the aforementioned 2% wood process. funds 4% funds are made available to EXIMBANK - S.A as 10% agriculture metallurgy 2% water supply attracted funding sources, necessary for sustaining • Interest income from financing with subsidized banking activity on Behalf of and to the Benefit of interest payments and from priority projects 2% rolling stock the Bank, in order to meet the Bank’s objective of 39% 4% • Other sources, according to applicable laws. 29% stimulating foreign trade activity and developing and energy public 2% production other administration food industry promoting the Romanian business environment (Law The sources of building up State funds in 2014 arise and distribution areas 6% - other areas 96, chapter 4, “Activity of EXIMBANK – S.A. on Behalf exclusively from commissions, interest payments, of and to the Benefit of the Bank”). The aforementioned insurance premiums, reimbursements of financing or funds remain at the Bank’s disposal indefinitely with recoveries, as budgetary allowances have not been the exception of those amounts for which a minimum recorded since 2009, and neither have amounts from Regarding guarantees on Behalf of and to the Benefit of the State issued during 2014, 58% of these were granted holding period of 5 years is agreed upon by convention. foreign debts recovered by the State. to exporters, 9% to structured fund projects, the majority of 63% were granted to large clients and the main areas The assets and commitments financed or covered Operations covering financing, guaranteeing and insurance towards which the issue of new guarantees was oriented were: trade (22%), energy production and distribution (11%), by the State’s funds made available for EXIMBANK are subject to approval of the Finance, Guarantees and machinery and equipment (9%), furniture (8%), rolling stock (7%), electrical equipment (7 %), other areas (35%).

024 2014 Annual Report www.eximbank.ro 025 The vast majority of the beneficiaries of these products ii. Financing were SME’s (97%). Furthermore, 10% of the total III.1.3. Budget EXECUTION exposure was oriented towards exporters. Total financing on Behalf of and to the Benefit of the In the distribution across areas of the national economy, State reached 127 million RON at the end of 2014, the largest share belongs to the extractive industry approx. 14% less than at the end of the previous year. Further to analyzing the realized Income and Expense Budget before December 31, 2014, versus the planned (68%): budget approved by the General Shareholders Meeting through the Decision 1/27th February 2014, the following data and dynamics are relevant:

STRUCTURE OF EXPOSURE FROM SNB GUARANTEES BY AREA SUPPORTED Budget indicators – thds, RON Actual Budget ±Δ ±Δ%

9% 2% Net interest income 125,416 124,100 1,316 1% services 2% chemicals and 7% water supply, sanitation chemical products metallurgy and waste management Net commission income 36,563 40,479 (3,916) -10% 1% machinery Gain (loss) from FX operations 3,468 6,300 (2,832) -45% and equipment 2% Other income 45,409 10,401 35,008 337% hotels and restaurants 2% Net operating income 210,856 181,280 29,576 16% other areas 68% Operating expenses (90,166) (107,156) 16,990 -16% extractive industry 16% Result before impairment 120,690 74,124 46,566 63% other 3% 4% areas rubber, electrical Adjustments for impairment (67,126) (31,024) (36,102) 116% plastic, glass equipment Gross result 53,564 43,100 10,464 24%

Tax (6,978) (6,896) (82) 1% Of the total value of financing granted during 2014, the main area supported is metallurgy (60%), all loans on Behalf Net result 46,586 36,204 10,382 29% of and to the Benefit of the State being granted to exporting SME’s. In 2014 interest compensated payments in amount of 10.5 million RON were made for loans contracted by economic agents through commercial banks, of which 88% benefited SME’s. The main areas of activity stimulated Gross realized result amounting to 53,564 thousand the Bank could also not meet the budgeted target. in through these products were: trade (19%), energy production and distribution (17%), public services (14%), food RON exceeded by 24% the bugeted level, respectively Deviations from the proposed commission budget, industry (8%), construction (6%), engineering and technical consulting (5%), transport and storage (4%), chemicals by 10,464 thousand RON. The difference is mainly due as well as foreign exchange transactions in a volatile and chemical products (4%). to an increase in operating income of 29,576 thousand market, were compensated for by a sale of securities in RON, savings in expenses of 16,990 thousand RON amount of more than 36 million RON (included in Other and adjustments for depreciation higher by 36,102 income). private insurance market. thousand RON. iii. Insurance The positive effect of exceeding the net operating At the end of 2014 exposures related to insurance Net interest income exceeding the sales plan by income by 29.6 million RON (16%), as well as operating activity in amount of 42.3 million RON were recorded, 1,316 thousand RON is the result of efforts to cover expense savings of 17 million RON (16%), was partially In accordance with the principles and rules of the as opposed to 27 million at the end of 2013. The total the unfavorable evolution of reference rates on the compensated by a cost of risk exceeding the budget by European Commission on granting short-term value of export contracts supported sums up to roughly banking market. In 2014 the average ROBOR 3M 36 million RON (116%), in the context of removing from insurance policies, EximBank, on Behalf of and to the 160 million EUR, structured as follows: reference rate was only 2.6%, well under the estimate the balance sheet receivables associated in proportion Benefit of the State, ensures against risks that cannot of 3.75% and representing a significant drop from last of 98% to exposures arising before 2013. be covered by the private insurance market in Romania. year’s average of 4.32%. Counteracting the continuous In this respect, the Romanian State, through EximBank, As will be shown in Chapter V, a brief comparison downward trend of reference rates presented a real grants protection to exporters’ foreign receivables in of EximBank’s result with the average profitability STRUCTURE OF EXPOSURE FROM INSURANCE challenge during the year, necessitating a greater accordance with Government policy to support access indicators for the banking system, where results are BY TYPE OF PRODUCTS EXPORTED volume of interest-bearing placements, as well as a net to foreign markets. mostly negative, places EximBank among the best interest margin of 50 percentage points higher that the performing banks. EximBank takes over the non-payment risk regarding 10% automation budgeted one. and electrical exporters’ foreign receivables from countries outside equipment In the context of growing competitiveness in the area the EU and developed member states of the OECD, 27% paper and 3% live animals of targeted clients, the level of commissions used by countries known as bearing non-market risks (normally cardboard CIS countries, the Middle East, Africa and Asia). As an 2% para- exception and for a strictly limited period of time, state pharma- insurers are permitted to cover risks regarding buyers 57% ceuticals industrial from Greece (temporarily non-market risks), as a result equipment of the Commission finding a lack of coverage from the

026 2014 Annual Report www.eximbank.ro 027 EximAsig realized in 2014 net operating income with RON below the target. Reinsurance premiums ceded III.2. C.A.R.E. activity in 2014 49% below its target, mainly as a result of expenses are also lower than the planned amount by 3.5 million regarding the variation of technical reserves grater by RON, generating income from reinsurance 1.6 million 2.1 million RON than was expected. RON above estimates. Operating expenses exceeded net incomes but are still 1.6 million RON (14%) lower III.2.1. Commercial activity Examining in detail net income, the volume of gross than the budget, leading to a loss of 6.3 million RON, premiums underwritten, not taking annulments into 2.3 million RON above the estimate. account, is 32% above the budgeted target, but taking EximAsig is undergoing a business model optimization prudential and corporate governance principles into account annulments yields realization of 2.6 million process, being concerned with improving the efficiency applicable at every level of EximBank Group. Thus, the of its general operational framework and resource majority shareholder has followed and coordinated: utilization, as well as improving the qualitative and n The process of integrating EximAsig’s financial results quantitative aspects of its customers and products into EximBank’s consolidated financial statements III.3. Marketing policy portfolio, which will lead to a more dynamic activity. n Regulating all activities of EximAsig Two of the Company’s strategic objectives for 2014 were those of introducing efficient financial protection n Activating the Risk and Audit Committees, as products to the market and offering consulting services required by applicable laws but previously inactive at for the purpose of elaborating a financial protection the level of the Company EximBank’s marketing policy is concentrated on foreign institutions and with organizations which plan suited for the needs of its customers. identifying and utilizing the most efficient marketing and operate in its particular business segment. EximBank n Developing an internal control system and communication tools in order to: collaborates with corresponding banks, loan insurance harmonizing procedures, strategies and policies with During 2014 a total of 2,283 new insurance contracts agencies and other institutions from around the world those of EximBank n Meet the targets set in the general strategy of the were signed, rising from last year’s level in the context of involved in similar activities to those undertaken by maintaining a medium risk tolerance. Gross premiums Bank and of the EximBank Group, by ensuring brand n Raising the proportion of commercial loan insurance EximBank. underwritten (from which annulments were excluded) presence and visibility of the Bank’s services and in EximAsig’s portfolio, keeping in mind that the entity for the year totaled 25.7 million RON, up 17.4% products for potential customers, but also within the As concerns the promotion of the EximBank Group’s was initially created to serve this business segment from last year, the total ensured amounts adding up banking and financial environment member entities and their image, the main objective exclusively which was followed was consolidating the positive to 5.2 billion RON. The volume of gross premiums n Maintain a favorable perception and good image of n Increasing the volume of gross premiums underwritten image capital accumulated through mass-media, underwritten as the result of attracting new clients was the Group’s member entities, thus contributing to by taking into account the following factors: which, along with marketing and public relations, will 1.22 million RON. lowering reputational risk. lead to attracting new customers, on the one hand, and • increasing the level of support offered by At 31.12.2014 reinsurance remiums ceded totaled The efforts towards promoting EximBank’s brand and promoting products and services offered, on the other EximBank’s sales team 8.61 million RON, representing 33.5% of gross products were fulfilled in gaining valuable capital of hand. These messages have been sent throughout premiums underwritten. The value of reinsurance • increasing complementary solutions with the trust both from the business community as well as from the year by means of writen press and the on-line premiums ceded corresponding to activity performed Bank. financial institutions which perceive member entities of environment. exclusively on the territory of Romania (excluding Italy), the EximBank Group as partners for supporting the Simultaneously the Bank launched a marketing project in line with reinsurance treaties, was 3.92 million RON, Romanian business environment and international through sport activities expected to ensure increased representing 15.3% of total PBS. transactions. reputation of the EximBank brand. The partnership Coordination and control of EximAsig by EximBank Towards this purpose meetings were set with developed with “Steaua București” basketball team targeted its alignment with correct business, efficiency, representatives of the local business communities was an alternative channel meant to spread the news from Bacău, Buzău, Brașov, Iași and Timișoara, which of a strategy change and a new way to approach the brought together more than 300 businessmen and local market, setting the Bank on modern business principles officials. The meetings main purpose was to inform the fully aligned with the market practices and creating III.2.2. Budget EXECUTION public about the advantages of products and services important image benefits for EximBank. offered, underlining the fact that the EximBank Group is Another alternative channel for increasing the notoriety headed towards becoming a key player in the corporate of the member entities of EximBank Group is the sector, bringing forward a complex and complete offer, Romanian Association of Exporters, an organization and continuously modernizing its financial solutions on in the creation and operation of which the Bank has Budget indicators – thds, RON Actual Budget ±Δ ±Δ% all fronts, from financing, guaranteeing and insurance been involved in order to fulfill its role, namely that of Net insurance income 2,596 7,647 (5,051) -66% to trade finance, cash management and treasury supporting the Romanian business environment and of services. Net claims (97) (1,050) 953 -91% international transactions, in line with the Law on the Other operating income 1,375 1,017 358 35% Business meetings were doubled by work meetings organization and operation. with representatives of the local banking communities Total operating income 3,874 7,614 (3,740) -49% Increasing the awareness of both EximBank’s brand in order to identify the most efficient methods to Operating expenses (9,987) (11,564) 1,577 -14% and products was a constant target during various collaborate. During these meetings it was highlighted Result before impairment (6,113) (3,951) (2,162) 55% corporate events organized in Bucharest and other that EximBank has set as its major objective channeling major cities of Romania. Adjustments for impairment (177) (177) as many State funds as possible into the economy, in Gross result (6,290) (3,951) (2,339) 59% partnership with other commercial banks. Tax Furthermore, EximBank has consolidated its external Net result (6,290) (3,951) (2,339) 59% relations set through collaboration agreements with

028 2014 Annual Report www.eximbank.ro 029 Separate and Consolidated Financial ResultIV IV.1. Legal framework

The 2014 separate and consolidated financial Romanian No. 27/2010 with subsequent amendments. statements of EximBank SA were prepared in EximAsig accounting records are prepared in accordance with the International Financial Reporting accordance with the Romanian Accounting Law and Standards (IFRS) as adopted by the European Union specific regulations issued by the Financial Supervisory at 31st December 2014, and are based on the Bank’s Authority, restated and adjusted accordingly, in all accounting records and its subsidiary’s EximAsig. material respects, in order to consolidate with the The Bank's accounting records are kept in RON, financial statements of EximBank S.A. Group. in accordance with Romanian Accounting Law and Financial records provide a true and fair view of the banking regulations issued by the National Bank of financial result, financial performance and of other Romania and are based on International Financial information in respect of activity undertaken by the Reporting Standards, implemented as a basis of Bank and EximBank Group, during year 2014. accounting under the Order of National Bank of

IV.2. Balance Sheet

Consolidated balance sheet assets in net terms as at 31.12.2014 amount to 3,925 million RON, showing a decrease by 2% in comparison with 4,010 mil RON at the end of previous year. Separate balance sheet assets in net terms as at 31 December 2013 amount to 3,869 million RON, in decrease by 3% of the ones booked at previous year end, of 3,979 million RON.

Main assets dynamics show as follows:

bank GROUP Description – RON, millions Cash 2013 ±∆ ±∆% 2014 2013 ±∆ ±∆% Cash 1 1 -1 -44% 1 1 -1 -46% Mandatory reserve 74 176 -102 -58% 74 176 -102 -58% Interbank placements 423 273 150 55% 455 301 154 51% Net loans 1.681 1.178 502 43% 1.681 1.178 502 43% AFS and trading portfolio 1.567 2.213 -646 -29% 1.573 2.219 -646 -29% Investments in subsidiaries 37 37 0 0% 0% Fixed assets, investment property 61 63 -1 -2% 63 66 -3 -5% Other assets 25 38 -13 -35% 80 70 10 14% TOTAL ASSETS 3.869 3.979 -110 -3% 3.925 4.010 -85 -2%

030 2014 Annual Report www.eximbank.ro 031 In 2014, it is noticed that liquidity resulting from sales Allowance for impaired receivables booked by the The Bank’s other assets of 25 million RON (decreased RON (2013: 23 million RON) and state funds or maturities of government securities were absorbed Bank as at 31.12.2014 amounted to 94 million RON by 13 million RON compared to 2013) included the administration commission receivables in amount of mostly (70%) within customer loans portfolio, as we can and included 54 million RON (2013: 143 million following: 1 million RON (2013: 13 million RON identify a change in the structure of assets – expansion RON) individually identified specific adjustments for n Sundry debtors, net amount 1.6 million RON, gross n Current income tax receivables in amount of 3 in the case of loans and contraction in investments in depreciation and 40 million RON (2013: 18 million RON) amount 9 million RON million RON (2013: the Bank displayed income tax securities. for incurred but not reported collective depreciation liabilities in the amount of 3.5 million RON). adjustments. n Other assets, including prepayments of 19 million Cash Balances and Accounts with Central Bank Bonds and Other Fixed Income Instruments The position of cash held at the central bank drops to 74 million RON at 31.12.2014 (from 176 million RON The Group / Bank hold debt instruments classified as At 2014 year end separate and consolidated balance sheet liabilities of EximBank, by at 31.12.2013), resulting in a relative variation of -58%, available for sale or held to maturity, as follows: comparison to the end of the previous year, shows as follows: due to the reduction of minimum compulsory reserve n Fixed income instruments issued by the central requirements, as a result of the relaxation of reserve BANK GRoUP government held by the Bank, amounting to 1,488 requirements imposed by the NBR on the banking Description – RON, millions million RON (2013: 2.139 million RON) 2014 2013 ±∆ ±∆% 2014 2013 ±∆ ±∆% system on one hand, and on the other due to the changing of the regime for state funds, established in n Fixed income instruments issued by other credit Due to credit institutions 489 1,204 -715 -59% 489 1,204 -715 -59% accordance with Emergency Ordinance no. 8/2014 institutions in amount of 78 million RON (2013: 74 State Funds 1,593 1,596 -3 0% 1,593 1,596 -3 0% which resulted in a 5 years deposit being set up using million RON) Due to customers 647 109 538 494% 646 103 543 527% state funds which is excluded from the minimum Other liabilities 47 53 -6 -11% 130 109 21 19% n Fixed income instruments issued by the central compulsory reserve requirements. government in RON, owned by insurance subsidiary Total liabilities 2,776 2,962 -186 -6% 2,858 3,012 -154 -5% Due from Credit Institutions EximAsig, in amount of 6 million EUR (2013: 6 Total equity 1,093 1,017 76 7% 1,067 998 69 7% million RON). TOTAL LIABILITIES & EQUITY 3,869 3,979 -110 -3% 3,925 4,010 -85 -2% Amounts due from credit institutions are comprised of the following items: n Investments made by the Bank in amount of 423 Tangible and Non-tangible Assets, Investment Deposits from customers and from other credit Due to Credit Institutions million RON (2013: 273 million RON), which include Property institutions decreased by 177 million RON from 1,313 Include Bank’s debts to other banks, weighting 13% sight and term deposits placed on the money million RON at 31.12.2013, down to 1,136 million at At 31.12.2014, the Bank’s net tangible and non- of the balance sheet liabilities and comprising mainly market and interbank balances 31.12.2014, due to the absorption of amounts released tangible assets amounts to 61 million RON (2013: 63 deposits taken of 489 million RON (2013: 1,204 million from the securities portfolio into the portfolio of loans n Deposits placed by EximAsig at banks, in amount of million RON), and for EximAsig, at the same date, net RON). 33 million RON (2013: 34 million RON) value add up to 1 million RON (2013: 3 million RON). granted to customers, and balance sheet contraction due to the reduction in minimum reserve requirements. Due to Customers n Deposits placed by EximAsig at the Bank, in The net amount of tangible assets of EximAsig amount of 1.1 million RON (2013: 5.9 million decreased by 2 million RON since the beginning of the It is worth noting the change in financing sources, Comprise resources received from non-banking RON) have been eliminated as a result of Group year, and the Bank’s recorded an insignificant variation compared to 2013. Deposits changed by replacing customers of 647 million RON, or 646 million RON consolidation. from 63 million at the end of 2013 to 61 million at the the interbank liabilities with deposits from non-bank adjusted by subsidiary’s deposit of 1.1 million RON end of 2014 (the impairment of assets outweighed the customers (up by 538 million RON compared to the (2013: 109 million RON, including C.A.R.E. deposit value of new investments). previous year end). Note that dependence on wholesale of 6,000 RON). At the Group level these debts have a The structure of dues from credit funding decreased significantly compared to the end of weight of 16% (2013: 2.6%) of the total balance sheet Investment property amounting to 33.6 million RON institutions is presented below: 2013. The graph below illustrates the evolution of net liabilities. (2013: 32.4 million RON) represents the value of interbank position (deposits attracted minus deposits buildings owned by the Bank and rented out on the State Funds 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 placed) and customer deposits. market. Group Bank Group Bank State funds administrated by the Bank amounted evolution of net interbank position and to 1,593 million RON (2013: 1,596 million RON), Payable on demand 101 100 84 84 Other Assets deposits attracted from customers maintaining a virtually constant level during the year. Term deposits 354 323 108 81 These include various assets of EximAsig in balance Reverse repo 0 0 109 108 at 2014 year end amounting to 55 million RON (2013: Other Liabilities Total 455 423 301 273 31 million RON) and assets of the Bank amounting to 1.20 Cumulated sundry debts of EximAsig of 47 million RON 25 million RON (2013: 38 million RON). Comparing to Millions 1.00 (2013: 53 million RON), and of the Bank amounting to the beginning of the year, EximAsig’s other assets have 83 million RON (2013: 55 million RON). increased by 24 million RON, sourced from: 0.80 Due from Customers Other liabilities booked by the subsidiary, increased n Insurance premiums settlements decrease of 2 The Net value of loans granted by the Bank to non- 0.60 with 27 million RON at year end comparing with the million RON banking customers increased by 43% (2013: 37%) 0.40 beginning of year, represented mainly by premium amounting to 1,681 million RON equivalent as at year n Sundry debtors decreased by 0.6 million RON reserves, which increased by 35.5 million RON during 0.20 the year, and the settlements balance regarding end with an absolute increase of 502 million RON. n Premium reserve increase by 27.5 million RON – reinsurance operations, of 5.3 million RON, representing portion ceded to reinsurers 0 Impaired receivables as at 31.12.2014, out of the Dec ‘13 Mar ‘14 Iun ‘14 Sep ‘14 Dec ‘14 a decrease by 1.8 million RON. gross portfolio of loans granted, have a weight of 6%, n General insurance acquisition expenses decrease in comparison with 13% recorded at the beginning of The Bank’s other liabilities, decreased by 6 million RON by 1 million RON Net interbank position the year. in total compared to the beginning of the year. The Deposits from clients most significant amount is represented by provisions for

032 2014 Annual Report www.eximbank.ro 033 future obligations of the Bank, amounting to 12 million EximAsig’s equity has diminished by 6.3 million RON The operating income of the Group varies insignificantly RON, lower by 11 million RON compared to 2013. compared to the beginning of the year, due to the loss compared to the previous year, mainly due to the incurred for the year. following factors: Equity n Reduction of commission income by 9.4 million The Group equity amounts to 1,068 million RON. Commitments and Contingent Liabilities RON, in the context of loans expansion Of which the part of equity attributable to the parent company’s shareholders amounts to 1,067 million RON Presented within the off-balance sheet by the Bank/ n Increase in interest income of 14.4 million RON (2013: 998 million RON), while the part of funds related Group, the main categories of exposure are presented n Increase of other operating income by 35.7 million to non-controlling interest shareholders amounts to 0.7 below. Loan commitments have decreased by 133 RON million RON (2013: 1.1 million RON). million RON, as a result of non-banking customers using approved loans. n Increase in depreciation adjustments with a Bank’s equity has increased by 8% from the beginning negative impact of 42.8 million RON. of the year, respectively 76 million RON, as a result of the following: Description – RON, BANK / GROUP EximAsig has booked a loss of 6.3 million RON in 2014 millions (2013: 11.7 million RON). The loss was mainly due to n Raising the legal capital reserve from 49.8 million 2014 2013 ±∆ ±∆% insurance and reinsurance activity of the Company. RON at 31.12.2013 to 52.6 million RON at Letters of guarantee 310 325 -16 -5% 31.12.2014, positive impact on equity (+2.8 million Letters of credit 18 13 4 32% RON) Loan commitments 246 379 -133 -35% n Increase of other reserves representing own Others 17 17 1 3% financing sources from 56.9 million RON at COMMITMENTS AND 590 735 -144 -20% 31.12.2013 to 103.4 million RON at 31.12.2014, CONTINGENCIES positive impact on equity (+46.5 million RON) n Raising financial assets revaluation reserves from Operations on Behalf of and to the Benefit of the 14.5 million RON at 31.12.2013 to 44.3 million RON State at 31.12.2014, considering a favorable change of The Bank’s Off-Balance Sheet presents such government securities market prices, with positive commitments taken on Behalf of and to the Benefit of impact on equity of +29.7 million RON the Bank amounting to 2,353 million RON for financing, guaranteeing and insurance products. n Retained earnings decreased from 42.8 million RON at 31.12.2013 to 40.1 million RON at 31.12.2014, negative impact on equity (-2.8 million RON).

IV.3. Separate and Consolidated Financial Result

The agregated net result of the year 2014 is 40,296 thousand RON (2013: 38,573 thousand RON), including the profit booked by the Bank of 46,586 thousand RON (2013: 45,716 thousand RON) and the current loss of EximAsig of 6,290 thousand RON (2013: 11,745 thousand RON).

Consolidated financial results as at 31.12.2014 compared with the ones as at 31.12.2013 are as follows:

BANK GRoUP Description – RON, thousands 2014 2013 ±∆ ±∆% 2014 2013 ±∆ ±∆% Net interest income 125,416 111,160 14,256 13% 126,510 112,072 14,438 13% Net commission income 36,563 45,926 -9,363 -20% 36,525 45,882 -9,357 -20% Net insurance income 0 0 0 0% 2,499 3,728 -1,229 -33% Impairment losses and provisions -67,126 -26,378 -40,748 154% -67,303 -24,547 -42,756 174% Other operating income 48,877 13,532 35,345 261% 49,196 13,535 35,661 263% Operating income 143,730 144,240 -510 0% 147,427 150,670 -3,243 -2% Operating expenses -90,166 -89,916 -250 0% -100,153 -103,489 3,336 -3% Gross result 53,564 54,324 -760 -1% 47,274 47,181 93 0% Tax -6,978 -8,608 1,630 -19% -6,978 -8,608 1,630 -19% NET RESULT 46,586 45,716 870 2% 40,296 38,573 1,723 4%

034 2014 Annual Report www.eximbank.ro 035 Capital Adequacy and Main Financial Indicator DynamicsV

The capital adequacy indicator as at 31.12.2014, calculated in accordance with the statutory provisions in force at the balance sheet date indicates a strong solvency ratio of over 60%, in line with EU Regulation no. 575/2013. Evolution of the main performance indicators of the Bank during the year 2014 is presented in comparison with the previous year, below:

2014 2013 Indicators Banking Group Bank System Group Bank ROE 3.9% 4.4% -11.6% 3.7% 4.5% ROA 1.0% 1.2% -1.2% 1.0% 1.2% Operating costs/income 47% 43% n.a. 59% 53% Non-performing loans rate (net)3 n.a. 3.9% 13.9% n.a. 10.7% Credit risk rate n.a. 25% 36% n.a. 18% Leverage n.a. 24% 7% n.a. 120% Immediate liquidity n.a. 71% 41% n.a. 82% Solvency n.a. 65% 17% n.a. 78%

Compared to the existing results in the banking system, funds and higher capital requirement, due to the EximBank is distinguished by higher profitability, due to associated risk, as evidenced by the increase in IFRS its high-quality, low-risk assets, in the context of better provisions. liquidity and superior solvency. At 31.12.2014 EximAsig recorded an available Regarding the evolution of the liquidity and solvency solvency margin of 16,531 thousand RON (2013: indicators, a slight decrease is due to increasing loan 2,326 thousand RON). The safety fund recorded a portfolio and especially large exposures. Increasing value of 16,322 thousand RON (2013: 1.109 thousand the value of total exposures and average degree of RON), thus the subsidiary meets the minimum capital customer concentration led both to a need for higher requirements set by the FSA.

036 2014 Annual Report www.eximbank.ro 037 Corporate GovernanceVI and of EximBank. Both appointments made by and THE BANK the activity of this body are subject to Government decision. The Board of Directors (BoD) is the leading management body of EximBank, exercising general management of the bank's activity. BoD consists EximAsig of 7 members, individuals (including three executive The Supervisory Board is the governing body directors and four non-executive directors) appointed EximAsig administrative board, consisting of 3 by the General Shareholders Meeting for a term of four members, individuals, appointed by the Annual General years, which may be renewed. Meeting for a term of four years, which can be renewed. The 2014 BoD was formed by the following: Composition of the Supervisory Board in 2014 was as n Traian Sorin Halalai – President follows: n Paul Ichim – Vice-president January 2014 - April 2014 n n Crina Cosma – Vice-president (starting 08.08.2014) Sorin Traian Halalai - President n n Vasile Secăreș – Member Paul Ichim - Member n n Georgel Călin – Member (up to 28.04.2014) Maria Dimitriu - Member n Emilian Bădică – Member April 2014 - December 2014 n n Nina Puiu – Member Sorin Traian Halalai - President n Executive Committee (ExC) is the operational Paul Ichim - Member management body of EximBank acting based on n Tudor Baltă - Member delegation from the Board of Directors and under The Executive Board ensures the executive its supervision, except for duties in the express management of EximAsig on the basis of delegation and competence of the General Meeting of Shareholders under control of the Supervisory Board. The Executive and Board of Directors (BoD). ExC is composed of Board is composed of three members appointed by three members, executive president of the Bank and the mandate, for a period of 4 years. The Executive the two executive vice presidents. Board in 2014 was as follows: The componence of the ExC in 2014 was the following: January 2014 - April 2014 n Traian Sorin Halalai – President n Tudor Baltă - President n Paul Ichim – Vice-President n Răzvan Andrei Micu - Member n Crina Cosma – Vice-president (starting 08.08.2014) n Mircea Dumitru Vâlceanu - Member Interministerial Committee for Financing, April 2014 - December 2014 Guarantees and Insurance (CIFGA) examines and approves internal regulations, as well as any activity or n Răzvan Andrei Micu - President products granted on behalf of and to the benefit of the n Dan Dobrea - Member State. The Committee is composed of representatives of specialized bodies of the central public administration n Ionuț Loșonți Boncea - Member

038 2014 Annual Report www.eximbank.ro 039 Human ResourcesVII establishment of sound remuneration practices by General Framework issuing competent and independent views on payroll policies and practices and the incentives created for The strategies and policies in the field of human managing risk, capital and liquidity, taking into account resources are aimed at fulfilling the business objectives the long-term interests of shareholders. The Nomination of the Bank by ensuring the necessary resources, and Remuneration Committee met 5 times during 2014, quantitatively and qualitatively, based on the following being made up of non-executive members of the Board main objectives: of Directors (BoD), with voting rights. The number of committee members is less than half the non-executive n Ensuring an appropriate motivational framework members of the BoD, but not less than 2, of which one that boosts performance and maintains the is an independent, non-executive manager. position of EximBank as an attractive employer for workforce specialized in finance and banking In order to prevent conflicts of interest, overseeing the implementation of the remuneration policy will n Skill development training focused on developing be performed at all higher levels, meaning that the the managerial, technical and language skills of General Shareholder’s Meeting decides the terms and employees by providing an optimal volume of conditions of remuneration which will be translated training in specific areas according to the structure into management contracts for executive and non- of personnel and its training needs executive members of the BoD, the BoD supervises n Ensuring optimal security conditions and health the implementation of the policy at the level of the standards and preventing workplace risks in order Executive Committee (ExC), and the ExC ensures to protect the health and safety of the Bank’s the implementation of personnel policy for middle employees management and executive management. n Developing and implementing policies for: The remuneration system used at EximBank has a fixed component and also a variable component, correlated • remuneration of employees as to attract and both with the individual performance of each employee retain a skilled, competitive and responsible as well as with the Bank’s Risk profile, financial workforce which will ensure both meeting the performance and medium and long-term perspectives. Bank’s objectives and discouraging excessive The variable component of remuneration cannot exceed risk-taking the fixed component for each employee, the two being • promoting diversity within EximBank both at the balanced appropriately. Thus, the fixed component has level of recruitment, as well as in the process of the greatest weight according to internal policies, in professional development and training order to permit flexibility in remuneration, including the possibility of the variable component not being paid. • selection, appointment and monitoring, as well as planning the succession of people in key The criteria for determining the variable remuneration positions reflect both the performance exceeding what is needed to fulfill the attribution set out in the employee’s job • assessment of the adequacy of board members. description, as part of the terms of employment, as well as sustainable and risk-adjusted performance (performance obtained, employee involvement in The remuneration policy of EximBank is based on achieving the objectives set and the degree of their the opinions of the Nomination and Remuneration achievement). Committee, whose mission is to support the

040 2014 Annual Report www.eximbank.ro 041 Considering the criteria of size, internal organization, nature, scale and complexity of the activities, to establish proportionality, EximBank fulfills the conditions for neutralizing the requirements of the NBR Regulation no. 5/2013 art. 171 (1) lit.1, as the Bank's remuneration policy does not include non-cash remuneration in the form of shares, bonds or share-linked instruments.

Staff Structure and Number of Employees

EximBank operates through its headquarters and its regional network, composed at 31.12.2014 of 21 regional units. At 31.12.2014 EximBank had a total of 318 permanent employees (2013: 309 employees), of which 240 in the headquarters (including executive management of the bank) and 78 in the regional units. At the end of the year, of the total of 318 employees, 62% were women. The employees with higher education represent 95% of the total.

5% 56 - 60 years 1% over 60 years

11% 51 - 55 years 11% 20 - 30 years STAFF STRUCTURE BY 13% AGE-GROUP 46 - 50 years

22% 37% 41 - 45 years 31 - 40 years

STAFF STRUCTURE BY 95% 5% EDUCATION Employees with Employees with higher education secondary education

Regarding the subsidiary EximAsig, at 31.12.2014 it employed a total of 28 employees, compared to 21 employees at the end of 2013, following the reorganization process and relocation of activities within the internal structures of EximAsig, in order to meet targets for current and future commitments.

042 2014 Annual Report www.eximbank.ro 043 n Managing the bank's exposure to currency risk, rates, the Bank periodically performs appropriate stress interest rate risk, liquidity, etc. tests and ensures that the level of capital is sufficient to cover these risks. The significant risk management strategy developed Risk by the Bank and revised annually by the BoD aims to Currency Risk analyze and determine the risk profile that EximBank The measuring, monitoring and management of foreign finds acceptable, in order to optimize the risk versus exchange risk to EximBank is based on the following profit ratio and to correlate the capital requirement of indicators: EximBank for developing a sound and prudent banking Management activity. The main risk categories defined in the strategy n Individual currency position are highlighted in the NBR regulations. n Total currency position, and Credit Risk n V@R (the estimated maximum loss that the Bank In order to keep control of credit risk EximBank could incur, with a probability of 99%, if it maintains established the following: its current currency positions for one day). VIII n A concentration limit exposures system Liquidity Risk (counterparty, large exposures, special Liquidity risk management is focused to maintain an Risk management is an integral part of all decision- the process of decision making, the risk management relationships, quality of assets, by industry, by making processes and of business in EximBank. function will ensure that all aspects regarding risks are optimal ratio between the effective liquidity and the product, by currency, by country, guarantee profitability objectives, by observing the prudential The Bank’s management and internal structures taken into account appropriately, however, business suppliers etc.), consistent with the risk appetite, risk continuously evaluate the risks to which the bank units and their support functions, and ultimately, the requirements related to minimum reserve requirements tolerance, risk profile and capital soundness of the and liquidity ratios provided. is or might be exposed, and which may affect the management body of the Bank remain responsible for Bank achievement of the objectives and take action on any decision making. In order to limit the liquidity risk, the Bank uses the n change in the conditions in which the Bank operates. A system of competencies for approving each following: Within the Bank, the risk management function is exposure / transaction performed primarily at the following levels: n A system of limits on daily liquidity positions and on n Regulations for the analysis of each individual loan a predetermined time frame Organization n Strategic: includes risk management duties request application (financial and non-financial performed by the Board of Directors and the Risk analysis, customer framing in class of performance/ n A stock of quality assets, liquid, unencumbered by The Board of Directors (BoD) has the responsibility Management Committee rating, framing exposure limits established by the obligations, composed of government securities in to approve and periodically review the profile and n Tactic: includes risk management duties performed regulations in force, analysis of risks of exposure, order to act as liquidity reserves, and for obtaining risk appetite of the Bank in order to ensure healthy by senior management etc.) guaranteed financing as: intraday, overnight operations, in order to meet the strategic objectives of collateralized loans, repo. EximBank. n Operational: involves management of risks at the n Regulations on collaterals accepted by the Bank, as level at which they are created. well as regarding the evaluation of collaterals Monitoring and limiting liquidity risk is based on The Executive Committee (ExC) is responsible for following daily the current liquidity and daily liquidity n ensuring the implementation of the strategy and The risk management model from an operational Approval of implementation regulations, position of the Bank, as well as monitoring the significant risk management policies approved by the perspective includes three lines of defense consisting management and continuous monitoring of evolution of: BoD implementation and to develop procedures and of: exposures n methodologies for identifying, measuring, monitoring The liquidity indicator n Business units (business lines), being the first level, n Regulations on the management of non-performing and controlling risk, according to the nature and n responsible for assessing and minimizing risks for a loans and their recovery etc. The liquidity coverage ratio (LCR) complexity of the relevant activities. given profit level Due to its profile, the Bank’s portfolio includes only n The net stable funding ratio (NSFR) Risk Management Committee (RMC) is an advisory n Bank risk management function at the second level: exposures on legal persons. Credit risk includes residual n Early warning signs. body with the objective of assisting the BoD regarding monitoring, controlling, quantifying risk risk, country risk and transfer risk, loan concentration fulfillment of the responsibilities related to risk risk, as well as foreign exchange risk associated with Operational Risk management in the bank's business. n Internal Audit Department - provides independent loans granted in foreign currency. In order to monitor and limit operational risk, the Bank review function. Other committees operating in the Bank (Audit Interest Rate Risk uses a system of key operational risk indicators for Committee, Credit Committee, Assets and Liabilities The monitoring and risk control functions within the which limits are established, and manages a database Management Committee) together with RMC Bank have clear responsibilities defined that are The bank assesses interest rate risks by using the of operational risk events, periodically reviewing risks represents the needed framework for the functioning independent of those functions taking risk exposures. following indicators: and controls. At the same time, the Bank establishes and supervision of bank activities. n The potential modification of the economic value of and implements action plans for preventing and Asset and Liability the Bank, if subjected to a standard shock of 200 mitigating operational risks. Internal Risk Management Management basis points (standardized method dictated by NBR Operational risk includes: legal risk and risk related Regulation no. 5/2013) to information technology (IT), model risk and Function The Asset and Liability Management Committee n A GAP analysis, assessing the impact of the interest uncontrollable risks. monitors the policy implementation: The risk management function implements risk policies non-correlation on annualized interest net income, Reputational Risk and controls the risk management framework, ensuring n Evolution, structure and quality of bank assets and respectively on interest net margin. that all material and significant risks are identified, liabilities Reputational risk analysis takes into account the In order to quantify the vulnerability of the balance sheet potential implications / effects generated by other risks evaluated and reported appropriately, and also that n Attracting resources, investment performance and to losses caused by adverse modifications of interest to the Bank's image. For management of this risk, the the Bank has efficient risk management strategies. In the lending and deposit rates of the bank

044 2014 Annual Report www.eximbank.ro 045 Bank uses a system of key risk indicators for which limits are set, as well as managing a database of Compliance Risk reputational risk events. Compliance risk is managed within EximBank as Risk Associated with Outsourced Activities follows: Managing risks associated with outsourced activities n Identifying compliance risk is performed on an is based on the following: analyzing opportunities and ongoing basis, based on reports / information sent ways in which certain activities can be outsourced, for this purpose by the Bank's internal structures selection in an optimal manner of service providers and through direct observation through compliance to whom activities are outsourced, appropriate control missions management of risks related to outsourced activities, including ensuring business continuity. n To assess this risk, specific performance indicators are followed, which are calculated and monitored at Strategic Risk both structure and bank level Strategic risk management takes into account: n In order to control / decrease compliance risk n Conducting business in terms of efficiency, which mitigation actions are proposed, making them ultimately leads to positive financial results for the mandatory for indicators that have a medium-high Bank or high risk level. n Development of the Bank's activity on a sustainable Risk management at the level of the EximAsig subsidiary basis, adjusted for factors / developments in the consists in identifying, assessing, monitoring, controlling economic environment and reporting the risks to the governing body, arising from internal or external factors and that could have a n Defining and implementing the Bank's strategies in negative impact on company business. a cohesive manner In this respect, at the level of the EximAsig subsidiary, n Carrying out an analysis on a regular basis, enabling risk management follows sizing technical reserves an assessment of how the results obtained under conditions of caution, setting maximum limits matched strategies established in conjunction of concentration of insurance classes / risks on top with the changing landscape in which the Bank clients/ exposures and limits by types of currency and operates. framing indicators for risk tolerance limits. The objectives noticed during the strategic risk management process relates to maintaining a permanent balance in the bank’s asset management on sound grounds, so that the overall activity to fit the risk profile assumed by the Bank. Risk Associated with Excessive Use of Leverage To manage this risk the Bank follows: n The correct sizing of assets, off-balance sheet obligations to pay, to provide a service or to provide collateral against the Bank's own funds n Monitoring the level of the leverage indicator calculated in accordance with Basel III requirements.

046 2014 Annual Report www.eximbank.ro 047 The Risk Management Division has duties and n Simulations on interest rate, foreign exchange and responsibilities on managing the risk management liquidity to assess the overall impact on the activity framework. This structure supports the Risk of the Bank. Management Committee, and EximBank management, Responsibility for risk management lies with all Internal monitoring significant risks in the Bank’s activity, in EximBank structures directly involved in placing or order to maintain the efficiency of the internal control taking funds. system. The Risk Division shares responsibility for implementing The risk management function plays an important role the strategy and risk management policy with all within the Bank, ensuring that it has an efficient risk Control System business units within the bank. While operational units management processes, involved in: must implement relevant risk limits, the risk management n Developing and reviewing risk management function is responsible both for ensuring that the limits strategies and, within the decision making process, are in line with general risk appetite and tolerance of the the management of significant risks institution and monitoring on an ongoing basis that the Bank does not take excessive risks. n Analysis of related party transactions IX In terms of internal control at the level of the EximAsig n Identifying risks generated by the complexity of the subsidiary, supervision of the manner in which The Bank develops and maintains a robust, legal structure of the Bank comprehensive framework for its internal controls, Risk Management the insurance company manages the risks of its including specific independent control functions of n Evaluating significant changes business is conducted by the Risk Division of the appropriate authority to perform their attributions. Risk management is based on a variety of operational n Internal measurement and evaluation of risks Bank, by endorsing the strategy, policies, specific risk and control functions defined in accordance with the management procedures, monitoring and evaluating In organizing and maintaining an internal control Regulations of Organizing and Operation of EximBank. n Monitoring risks the registered level by relevant risk indicators versus system, EximBank has observed the independence of The main responsibilities of structures involved in risk n risk tolerance limits, as well as monitoring and reporting the three functions: risk management, compliance and Aspects regarding unapproved exposures. management activities are shown below: to the Board of Directors all significant developments internal audit. Risk management activities imply the following: related to risk management within EximAsig. n Board of Directors (BoD) - is responsible for setting The internal control framework is structured on three n the strategy and policies applicable to the Bank Analysis for establishing / updating exposure limits The same procedure for harmonization of EximAsig levels: and ensuring a rigorous business management relating to financial institutions, banking and non- strategies and policies applies to all activities at the n The first level of control is implemented to ensure framework. Also, the BoD watches that the banking institutions, and insurance companies level of the subsidiary, through their endorsement by that transactions are correctly performed. Controls Executive Committee of EximBank performs the n Analysis for establishing or updating exposure relevant organizational structures of the Bank, as it is are performed by the entities that take risks implementation of an adequate and efficient internal limits by customers and by economic sectors and the Group’s interest to harmonize processes and the and are incorporated into specific procedures. control system. countries governance framework at the level of all structures and Responsibility for this area is delegated to each entities. n Executive Committee - is responsible for n Analyses for setting limits for economic sectors, internal structure. implementing the strategy and applicable policies, products, currencies, large exposures, related In implementing strategies, policies and procedures n The second level is exercised by the Risk including risk management strategy and policies, parties, ceded debtors etc. harmonized at a group level, the internal control Management and Compliance Function. and for the organization of a rigorous business functions of the Bank, with the approval of the Bank’s n Analyses to establish / update exposure limits management framework. leadership, perform control actions at the EximAsig n The third level of checks is carried out by the relating to countries of origin of non-resident clients subsidiary, with the following results: Internal Audit Function that assesses and Specialized committees with responsibilities in risk in the Bank’s portfolio periodically checks the completeness, functionality management: n Operational measures taken during the inspection, n Analysis on interest rate risk and exchange rate and adequacy of the internal control framework. in order to remedy deficiencies n The Audit Committee has responsibilities related to impact based on daily monitoring of the evolution of Internal control framework provides for the deployment internal control and significant risks management. relevant parameters n Working with management and staff of the audited of efficient and effective operations, proper control The Audit Committee assesses the effectiveness of entity to interpret the results of the control and to n Assessment of credit risk associated with the of risks, prudent conduct of business, credibility of the risk management process as part of the internal implement proposed measures Bank's loan portfolio financial and non-financial information, reported both control system and periodically analyzes the related n Measures contained in action plans with clear internally and externally, and compliance with legal and information. n Assessment of the operational risk, reputational deadlines and persons responsible. regulatory frameworks, as well as requirements, rules risk, residual risk, strategic risk, and so on n The Risk Management Committee operates by and internal decisions of the Bank. identifying, monitoring, evaluating and managing n Determining the prudential value adjustments, and In order to implement a robust framework for the internal significant risks to maintain the efficiency of the depreciation adjustments respectively, related to the control in all areas of activity of the Bank, the Bank's internal control system of the Bank. Bank’s exposures internal structures must have primary responsibility for n The Asset and Liability Management Committee has n Assessment of internal capital adequacy establishing and maintaining adequate internal control responsibilities regarding the management of the procedures. n Assessment of compliance to tolerance levels for assets and liabilities in accordance with the Bank's categories of significant risks taken strategy. n Preparation of macroeconomic crisis scenarios n The Credit Committee has the responsibility of with differentiated results on banking activity / the approving the credit facilities, contributing to the evolution of the economic - sector / residual risk reduction and limitation of credit risk according to credit policy.

048 2014 Annual Report www.eximbank.ro 049 Strategy and PrioritiesX EximBank has consistently acted to strengthen its To implement the above mentioned components, the presence on the market of financial solutions providers following principles will be implemented: for corporate clients, while strategic priorities have I) Identifying the target market both in terms of focused on the strategic framework set by the region and sector Government, which established the coordinates and macroeconomic objectives, while providing With regard to lending in the Bank’s own name and opportunities for all institutions involved to participate in on its behalf, the target market for 2015 is represented the effort to stimulate national economic growth. by SME’s with turnover of between 2 and 50 million euros and large companies with turnover exceeding 50 As the Romanian banking system framework million euros. Within this target, the Bank will pay more experiences a period of consolidation and restructuring attention to attracting customers who want to access: of operations due to lower foreign funding lines, the commercial policy of EximBank focused on boosting n Pre and co-financing projects with EU funds business by putting to good use activity specific absorption – loans in the State’s name and on its features and available resources. The upward trend of behalf and in the Bank’s own name and behalf EximBank performance indicators demonstrates that n Guarantees on Behalf of and to the Benefit of the the principles applied in the general strategy of the State for the facilities mentioned in the previous Bank have been correct, based on a business model point focused on continuous quality improvement activities. n Export loans or guarantees. In 2015, EximBank will continue to focus on providing integrated financial solutions for the Romanian business The economic sectors and sub-sectors of greatest environment, establishing as a strategic priority to interest to EximBank in 2015 will be those that have identify and supporti a large number of business performed well under stress and/or possess the projects with impact for local communities and the prerequisites to evolve favorably this year, in the context economy in general. of proper management of concentration risk. Thus, the Bank's marketing efforts will be directed primarily (but Taking into account market risks, the volatility of the without excluding the other areas) towards companies economic environment, as well as the resources with good financial results in the fields of machinery available to the Bank, but also the need to develop and equipment, electrical equipment, road transport income generating activities, both from lending and vehicles, furniture and various appliances, medical from other banking services, the commercial strategy instruments and optical communications, chemistry, of EximBank will be focused on several elements: food, agriculture, pharmaceutical industry, cosmetic n Resegmentation of clients according to turnover industry, postal services and telecommunications, and adjusting products and relationship medical clinics and Local Public Authorities. management according to their specific needs Regarding activities on Behalf of and to the Benefit of the n Increasing the number of clients benefiting from the State, the main focus will remain on State guarantees. Bank’s products The sales strategy will adjust to changes implemented in the new product structure at the end of 2014, sales n Reducing the response time to client requests targets will be achieved both through cross-selling n Increasing the ratio of treasury, cash management with transactions on Behalf of and to the Benefit of the and trade/finance related products Bank, but also as the effect of product promotion and simplified (fast-tracked) analysis procedures among n Increasing market share within total corporate loans. partner commercial banks.

050 2014 Annual Report www.eximbank.ro 051 Financing on Behalf of and to the Benefit of the State Treasury will focus on developing long-term will be directed to support large projects in the priority relationships with bank customers, ensuring quality areas set by the Law on the operation and functioning and providing the services and support necessary to of the Bank and companies seeking access to de achieve business objectives. minimis aid through loans with subsidized interest. Given the strategic objectives of the Bank, treasury II) Developing and strengthening the product activity will focus on the following areas: providing portfolio for cash, cash-management and trade financial resources and support necessary to sustain finance, given their integration with new / existing the objectives laid down for financing / guaranteeing, lending and guarantee products pro-active approach to non-banking clientele for treasury products, effective management of the Bank’s The strategic orientation of the Bank will be the balance sheet, prudent risk management by making development of an integrated banking relationship investments, optimizing the government securities with clients: by a pro-active approach to non-banking portfolio and diversifying and expanding funding clientele for complementary products, respectively sources, ensuring an active position on the interbank integrating treasury and cash management products market (interbank transaction volume growth, achieved with financing / guarantee / insurance offers, in the cost-effectively, and appropriate risk-management). Bank’s own name and on Behalf of and to the Benefit of the State (the "mix / product portfolio" perspective). In the area of cash management, the strategy is to increase revenues while simultaneously taking risks into For the activity of trade finance, the Bank will aim account, by: increasing the number of clients (especially to promote specific products: letters of credit, letters those clients benefiting from credit facilities who will of guarantee, collection, documentation orders, by turn to EximBank as one of their main funding sources), offering solutions tailored to specific customer activity. personalized fee and commission packages, diversifying For the period 2015 - 2020 the Bank aims to achieve and updating the Bank’s product portfolio (new a growth rate of revenues from treasury and cash products, personalized solutions), close collaboration management products higher than the one for lending with the salesforce in order to promote the product activities. portfolio, both for existing and potential customers.

052 2014 Annual Report www.eximbank.ro 053 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) EXPORT – CONTENTS

Statement Regarding the Responsibility for Preparation of the Separate and Consolidated Financial Statements056 Independent Auditor’s Report �����������������������������������������������������������������������������������������������������������������������������057 IMPORT BANK I. Consolidated and separate Statement of Profit or Loss ���������������������������������������������060 II. Consolidated and separate Statement of Profit or Loss and Other Comprehensive Income �������������������������������������������������������������������������������������������������������������������061 III. Consolidated and separate Statement of Financial Position ��������������������������������������062 OF ROMANIA IV. Consolidated and separate Statement of Changes in Equity ��������������������������������������064 V. Consolidated and separate Statement of Cashflows ����������������������������������������������������068 VI. Notes to the consolidated and separate financial statements ��������������������������������069

EximBank sa 01. General Information ����������������������������������69 22. Due to Banks �����������������������������������������107 02. Accounting Principles, Policies and 23. State Funds ��������������������������������������������108 Methodology ��������������������������������������������69 24. Commission Receivables from the State �110 03. Interest Income ���������������������������������������91 25. Due to Customers ����������������������������������110 04. Interest Expense ���������������������������������������91 26. Provisions �����������������������������������������������111 05. Gain/(loss) on Impairment of 27. Other Liabilities ���������������������������������������113 Financial Assets and Guarantees ��������������91 28. Other Sundry Liabilities ���������������������������113 06. Gain/(loss) of Foreign Exchange Differences �����������������������������������������������92 29. Deferred Income �������������������������������������114 07. Net Gain on Available-for-sale 30. Share Capital ������������������������������������������114 Financial Assets ����������������������������������������92 31. Dividends �����������������������������������������������115 08. Net Fee and Commission Income �������������92 32. Retained Earnings ����������������������������������115 09. Net Income from Insurance Activities ��������93 33. Reserves ������������������������������������������������116 10. Other Income �������������������������������������������93 34. Available-for-sale Reserve ����������������������116 SEPARATE AND CONSOLIDATED 11. Salaries and Similar Expenses ������������������93 35. Contingent Liabilities, Commitments FINANCIAL STATEMENTS 12. Other Operating Expenses �����������������������94 and Leasing Arrangements ���������������������117 13. Income Tax Expense ��������������������������������94 36. Risk Management ����������������������������������118 31 DECEMBER 2014 14. Accounts with the 37. Credit Risk ����������������������������������������������123 National Bank of Romania ������������������������95 38. Liquidity Risk ������������������������������������������129 Prepared in Accordance with International Financial Reporting 15. Due from Banks ���������������������������������������96 39. Market Risk ��������������������������������������������133 Standards as Endorsed by the European Union 16. Derivative Financial Instruments ����������������96 40. Own Funds ���������������������������������������������140 17. Loans and Advances to Customers ����������97 41. Capital Requirements �����������������������������141 18. Investments ����������������������������������������������99 42. Fair Value of Financial Instruments ����������142 19. Property, Plant and Equipment and 43. Related Party Transactions ���������������������146 Intangible Assets ������������������������������������102 44. The Economic Environment in which 20. Investment Property �������������������������������106 the Bank/Group Operates ����������������������149 XI 21. Other Assets ������������������������������������������106 45. Subsequent Events ��������������������������������150

054 2014 Annual Report www.eximbank.ro 055 KPMG Audit SRL Tel: +40 (21) 201 22 22 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. Victoria Business Park +40 (372) 377 800 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 ABCD DN1, Soseaua Bucuresti-Ploiesti nr. 69-71 Fax: +40 (21) 201 22 11 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) Sector 1 +40 (372) 377 700 www.kpmg.ro P.O. Box 18-191 Bucharest 013685 Romania

Statement regarding the responsibility Independent Auditors’ Report 1 for preparation of the separate and (free translation ) consolidated financial statements To the shareholders of The Export - Import Bank of Romania – EXIMBANK S.A.

Report on the Separate and Consolidated Financial Statements

In accordance with Article 10, paragraph 1 of the Accounting Law No.82/1991, the administrator, authorized officer We have audited the accompanying separate and consolidated financial statements of the Export - Import or another person which has the obligation to manage the entity, holds the responsibility to organize and manage Bank of Romania – EXIMBANK S.A. (“the Bank”) and its subsidiary (the “Group”), which comprise the accounting operations. the separate and consolidated statements of financial position as at 31 December 2014, the separate and consolidated statements of profit or loss and other comprehensive income, changes in equity and cash As President of the Export - Import Bank of Romania - EximBank SA, in accordance with Articles 30 and 31 of flows for the year then ended, and notes, comprising a summary of significant accounting policies and Accounting Law No. 82/1991, I assume responsibility for the Export – Import Bank of Romania EXIMBANK SA other explanatory information (hereinafter the “financial statements”). Group consolidated financial statements and for the Export – Import Bank of Romania EXIMBANK SA separate financial statements for the year ended December 31, 2014, and confirm that: Management’s Responsibility for the Financial Statements

A) The accounting policies used in the preparation of the separate and consolidated financial statements as The Bank’s Management is responsible for the preparation and fair presentation of these financial at December 31, 2014 are in accordance with the International Financial Reporting Standards as adopted statements which have been presented together to report the financial position, result of operations and by Europeam Union as at December 31, 2014 and implemented through the Order of the National Bank of other comprehensive income, changes in equity, and changes in cash flows for both for the Group and Romania no. 27/2010, with subsequent changes and amendments the Bank, in accordance with International Financial Reporting Standards as endorsed by the European B) The consolidated and separate financial statements as at December 31, 2014 present fairly the financial Union, and for such internal control as management determines necessary to enable the preparation of position, financial performance and other information related to the operations carried on financial statements that are free from material misstatement, whether due to fraud or error. C) The Export – Import Bank of Romania EXIMBANK SA Group, respectively the Export – Import Bank of Romania EXIMBANK SA operate as a going concern. Auditors’ Responsibility

The Export – Import Bank of Romania EXIMBANK SA Group comprises the Export – Import Bank of Romania Our responsibility is to express an opinion on these financial statements based on our audit. We conducted EXIMBANK SA and the Exim Romania SA Insurance - Reinsurance Company. our audit in accordance with International Standards on Auditing as adopted by the Romanian Chamber The Export – Import Bank of Romania EXIMBANK SA is the parent company of the Group, with the headquarters of Financial Auditors. Those standards require that we comply with ethical requirements and plan and located at 6A, Barbu Delavrancea Street, District 1, Bucharest, Romania and is registered with the Commerce perform the audit to obtain reasonable assurance whether the financial statements are free from material Registry, the registration number being J40/8799/1992. misstatement. The Exim Romania SA Insurance - Reinsurance Company is the subsidiary of EximBank, with the headquarters at Grigore Alexandrescu Street, No. 89 - 97, Metropolis Center, 6th floor, District 1, Bucharest, Romania, and is An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in registered at the Commerce Registry, registration number J40/3151/2009. the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal Președinte, control. An audit also includes evaluating the appropriateness of accounting policies used and the Traian Sorin Halalai reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

______

1 TRANSLATOR’S EXPLANATORY NOTE: The above translation of the auditors’ report is provided as a free translation from Romanian which is the official and binding version.

Fiscal registration code ©2015 KPMG Audit SRL, a Romanian limited liability company and a RO12997279 member firm of the KPMG network of independent member firms Trade Registry affiliated with KPMG International Cooperative ("KPMG no.J40/4439/2000 2014 Annual Report International"), a Swiss entity. All rights reserved. PDC no.15632 Share Capital 2,000 RON 056 ABCD

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group and the Bank as at 31 December 2014, their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as endorsed by the European Union.

Other Matters

The financial statements of the Group and the Bank for the financial year ended 31 December 2013 were audited by another auditor, whose report dated April 16, 2014, expressed an unmodified opinion on those financial statements.

This report is made solely to the Bank's shareholders, as a body. Our audit work has been undertaken so that we might report to the Bank's shareholders those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Bank and the Bank's shareholders as a body, for our audit work, for the report on the financial statements and the report on conformity or for the opinion we have formed.

Report on conformity of the Administrators’ Report with the financial statements Details on the transparency requirements according to Regulation 575/2013 and The National Bank of Romania Regulation no.5/2013 In accordance with the Order of the National Bank of Romania no. 27/2010 and subsequent amendments, articles no. 16, point e) and no. 40, point e) respectively of accounting regulations in accordance with the can be found under the ‘ABOUT US’ section of www.eximbank.ro International Financial Reporting Standards applicable to credit institutions, we have read the accompanying administrators’ report on the financial statements of the Export - Import Bank of Romania – EXIMBANK S.A. and its subsidiary (the “Group”) prepared in accordance with International Financial Reporting Standards as endorsed by the European Union as at and for the year ended 31 December 2014. The administrators’ report as presented from page 1 to 61 is not a part of the financial statements. In the administrators’ report we have not identified any financial information which is not consistent, in all material respects, with the information presented in the financial statements as at 31 December 2014.

For and on behalf of KPMG Audit S.R.L.:

Refer to the original signed Refer to the original signed Romanian version Romanian version

Furtuna Cezar-Gabriel

registered with the Chamber of Financial registered with the Chamber of Financial Auditors of Romania under no 1526/20.11.2003 Auditors of Romania under no 9/2001 Bucharest, 9 April 2015 ______

1 TRANSLATOR’S EXPLANATORY NOTE: The above translation of the auditors’ report is provided as a free translation from Romanian which is the official and binding version.

2 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

I. Consolidated and separate Statement II. Consolidated and Separate Statement of Profit of Profit or Loss or Loss and Other Comprehensive Income

31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13 NOTE GROUP BANK GROUP * BANK * GROUP BANK GROUP * BANK * Interest income 3 187,187 185,972 213,259 212,439 Net profit for the period 40,296 46,586 38,573 45,716 Interest expense 4 (60,677) (60,556) (101,187) (101,279) Other comprehensive income, net of tax 29,747 29,747 9,508 9,508 Net interest income 126,510 125,416 112,072 111,160 Items that may be reclassified to profit or loss 29,747 29,747 12,488 12,488 Fee and commission income 37,073 37,077 46,305 46,316 Net gain from the revaluation of available-for-sale financial assets 35,413 35,413 14,299 14,299 Fee and commission expense (548) (514) (423) (390) Deferred tax on the revaluation of available-for-sale financial assets (5,666) (5,666) (2,288) (2,288) Net fee and commission income 8 36,525 36,563 45,882 45,926 Items that will never be reclassified to profit or loss - - (2,503) (2,503) Gross written premium, net of reinsurance 11,741 - 13,372 - Revaluation surplus - - (2,979) (2,979) Gross written premium income 20,352 - 31,976 - Deferred tax on revaluation surplus - - 476 476 Premiums ceded to reinsurers (8,611) - (18,604) - Total comprehensive income for the period 70,043 76,333 48,081 55,224 Expense with the variation of technical reserves net of reinsurance (7,361) - (8,206) - Profit attributable to: Deferred acquisition costs and other underwriting expenses (1,784) - (1,405) - Equity holders of the Parent company 40,296 - 38,573 - Other technical expenses, net of reinsurance (97) - (33) - Non – controlling interests 40,688 - 39,303 - Gross benefits and claims paid (2,343) - (6,381) - -392 - (730) - Claims ceded to reinsurers 2,246 - 6,348 - Total comprehensive income attributable to: 70,043 48,081 Net income from insurance activities 9 2,499 - 3,728 - Equity holders of the Parent company 70,435 - 51,723 - Gain / (loss) on impairment of financial assets and guarantees 5 (67,303) (67,126) (24,547) (26,378) Non – controlling interests (392) - (730) - Net gain / (loss) of foreign exchange differences 6 3,448 3,468 4,909 4,955 Net gain on available-for-sale financial assets 7 36,061 36,061 4,943 4,943 Gain / (loss) on investment property 20 1,235 1,235 - - Other income 10 8,452 8,113 3,683 3,634 * Please refer to note 2 jj Correction of Accounting Errors Net operating income 147,427 143,730 150,670 144,240 Salaries and similar expenses 11 (62,711) (57,459) (68,775) (62,488) The financial statements were approved by the Board of Directors on 9 April 2015. Depreciation and amortization 19 (9,148) (7,598) (8,894) (6,991) Other operating expenses 12 (28,294) (25,109) (25,820) (20,437) Operating expenses (100,153) (90,166) (103,489) (89,916) Profit before tax 47,274 53,564 47,181 54,324 Income tax expense 13 (6,978) (6,978) (8,608) (8,608) Net profit 40,296 46,586 38,573 45,716

* please refer to note 2 jj Correction of Accounting Errors The financial statements were approved by the Board of Directors on 9 April 2015.

060 2014 Annual Report www.eximbank.ro 061 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

III. Consolidated and separate Statement of Financial Position

NOTE 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Assets Group Bank Group * Bank * Cash and cash equivalents 801 774 1,470 1,387 Derivative assets 16 22 22 - - Accounts with the National Bank of Romania 14 74,055 74,055 175,591 175,591 Due from banks 15 454,617 423,304 300,997 272,863 Loans and advances to customers, net 17 1,680,930 1,680,930 1,178,448 1,178,448 Investments in subsidiaries 18 - 36,764 - 36,764 Available-for-sale investments 18 1,443,753 1,443,753 946,207 946,207 Investments held to maturity 18 129,125 123,399 1,272,476 1,266,648 Property, plant and equipment, net 19 20,188 19,744 22,478 21,432 Intangible assets, net 19 8,866 8,167 10,840 9,192 Investment property, net 20 33,586 33,586 32,351 32,351 Commission receivable from the State 24 1,165 1,165 13,248 13,248 Other assets 21 77,452 23,746 56,340 24,945 Total assets 3,924,560 3,869,409 4,010,446 3,979,076 Liabilities and shareholders’ equity Derivative liabilities 16 2,098 2,098 64 64 Due to banks 22 488,833 488,833 1,203,654 1,203,654 State funds 23 1,593,188 1,593,188 1,596,458 1,596,458 Due to customers 25 646,116 647,221 103,100 109,005 Deferred income and accrued expenses 29 14,181 14,140 16,355 10,862 Provisions 26 14,571 11,571 25,794 22,971 Other liabilities 27 86,725 8,213 63,512 15,546 Deferred tax liability 13 11,183 11,183 3,887 3,887 Total liabilities 2,856,895 2,776,447 3,012,824 2,962,447 Share capital 30 1,701,474 1,701,474 1,701,474 1,701,474 Retained earnings, not distributed 32 13,951 40,086 22,600 42,837 Retained earnings, adjustment for inflation of share capital under IAS 29 32 (900, 714) (900,714) (900,714) (900,714) Reserves 32 182,655 182,530 133,314 133,189 Revaluation reserve 33 25,314 25,314 25,318 25,318 Available for sale reserve 34 44,272 44,272 14,525 14,525 Total equity attributable to: Equity holders of the Parent company 1,066,952 1,092,962 996,517 1,016,629 Non – controlling interests 713 - 1,105 - Total equity 1,067,665 1,092,962 997,622 1,016,629 Total liabilities and equity 3,924,560 3,869,409 4,010,446 3,979,076

* please refer to note 2 jj Correction of Accounting Errors The financial statements were approved by the Board of Directors on 9 April 2015.

062 2014 Annual Report www.eximbank.ro 063 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

IV. CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY

Retained earnings, Total attributable to Group – 2013 Share capital Revaluation Available-for-sale reserve Reserves adjustment for inflation Retained Equity holders of the Non-controlling Total equity reserve under IAS 29 earnings Parent company interests

Balance as at 1 January 2013 1,701,474 27,821 2,514 143,722 (900,714) 109,017 1,083,834 1,509 1,085,343

Available for sale revaluation - - 12,011 - - - 12,011 - 12,011

Revaluation of land/ buildings - (2,503) - - - - (2,503) - (2,503)

Other movements in retained earnings - - - (13,487) - 13,487 - - 0

Profit for the year - - - 3,079 - 36,224 39,303 (730) 38,573

Comprehensive income - subtotal - (2,503) 12,011 (10,408) - 49,711 48,811 (730) 48,081

Dividends paid to shareholders - - - - - (135,821) (135,821) - (135,821)

Share capital increase in subsidiary - - - - - (307) (307) 326 19

Balance as at December 31, 2013 * 1,701,474 25,318 14,525 133,314 (900,714) 22,600 996,517 1,105 997,622

Retained earnings, Total attributable to Group – 2014 Share capital Revaluation Available-for-sale reserve Reserves adjustment for inflation Retained Equity holders of the Non-controlling Total equity reserve under IAS 29 earnings Parent company interests

Balance as at 1 January 2014 1,701,474 25,318 14,525 133,314 (900,714) 22,600 996,517 1,105 997,622

Available for sale revaluation - - 29,747 - - - 29,747 - 29,747

Revaluation of land/ buildings - (4) - - - 4 - - -

Other movements in retained earnings - - - 46,503 - (46,503) - - -

Profit for the year - - - 2,838 - 37,850 40,688 (392) 40,296

Comprehensive income - subtotal - (4) 29,747 49,341 - (8,649) 70,435 (392) 70,043

Dividends paid to shareholders ------

Balance as at December 31, 2014 1,701,474 25,314 44,272 182,655 (900,714) 13,951 1,066,952 713 1,067,665

064 2014 Annual Report www.eximbank.ro 065 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Retained earnings, adjustment Bank - 2013 Share capital Revaluation reserve Available-for-sale reserve Reserves for inflation under IAS 29 Retained earnings Total Equity

Balance as at 1 January 2013 1,701,474 27,821 2,514 143,597 (900,714) 122,534 1,097,226

Available-for-sale revaluation - - 12,011 - - - 12,011

Revaluation of land/ buildings - (2,503) - - - - (2,503)

Other movements in retained earnings - - - (13,487) - 13,487 -

Profit for the year - - - 3,079 - 42,637 45,716

Comprehensive income - subtotal - (2,503) 12,011 10,408 - 56,124 55,224

Dividends paid to shareholders - - - - - (135,821) (135,821)

Balance as at December 31, 2013 * 1,701,474 25,318 14.525 133,189 (900,714) 42,837 1,016,629

Retained earnings, adjustment Bank - 2014 Share capital Revaluation reserve Available-for sale reserve Reserves for inflation under IAS 29 Retained earnings Total Equity

Balance as at 1 January 2014 1,701,474 25,318 14,525 133,189 (900,714) 42,837 1,016,629

Available for sale revaluation - - 29,747 - - - 29,747

Revaluation of land/ buildings - (4) - - - 4 -

Other movements in retained earnings - - - 46,503 - (46,503) -

Profit for the year - - - 2,838 - 43,748 46,586

Comprehensive income - subtotal - (4) 29,747 49,341 - (2,751) 76,333

Dividends paid to shareholders ------

Balance as at December 31, 2014 1,701,474 25,314 44,272 182,530 (900,714) 40,086 1,092,962

* please refer to note 2 jj Correction of Accounting Errors The financial statements were approved by the Board of Directors on 9 April 2015.

066 2014 Annual Report www.eximbank.ro 067 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

V. Consolidated and separate statement of VI. NOTES TO THE CONSOLIDATED AND SEPARATE cashflows FINANCIAL STATEMENTS

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 NOTE Group Bank Group restated Bank restated 01. General information Cash flow from operating activities Profit before tax 47,274 53,564 47,181 54,324 Adjustments for: (54,760) (56,256) (108,270) (94,686) The Export – Import Bank of Romania – EximBank the Group, and is not subject to consolidation as a Depreciation and amortization 19 9,148 7,598 9,412 6,991 SA was founded in 1992 as a joint stock company subsidiary of another Group. Net impairment allowances for financial assets 5 67,303 67,126 24,547 26,378 having the Romanian State as majority shareholder, The Exim Romania SA Insurance - Reinsurance Company Other provisions (5,972) (6,149) 8,119 5,348 through the Ministry of Public Finance (MFP). The State ("EximAsig”) was founded in 2009 as a specialized entity Financial assets (128,920) (128,686) (137,045) (137,045) participation is of 95.374% of the share capital. in providing financial risk insurance for both domestic and Other non-cash adjustments 4,035 3,855 (13,303) 3,642 In accordance with Law 96/2000 and subsequent foreign operations. The subsidiary became operational Change in operating assets (572,945) (556,742) (327,376) (314,946) amendments, the Bank operates both as an agent of in August 2010, and was authorized for the insurance Decrease / (increase) in loans and advances to customers (576,319) (576,319) (336,671) (336,671) the State and also on its own behalf by offering financing activity of loans and guarantees. Its products are and refinancing products and services, guarantees for designed for companies doing business with internal and Decrease / (increase) in other assets 3,374 19,577 9,295 21,725 export operations and other financial instruments. external partners in trade, manufacturing, transportation, Change in operating liabilities (156,094) (179,878) 151,389 112,213 construction, factoring, oil and gas industry and IT The head office of the Bank is at 6A, Barbu Delavrancea (Decrease) / increase in due to banks (714,821) (714,821) 344,954 344,954 services. The headquarters of the subsidiary is in Street, District 1, Bucharest, Romania. The Bank (Decrease) / increase in deposits from customers 543,013 538,213 (6,091) (1,718) Bucharest, district 1, Grigore Alexandrescu Street, No. is registered with the Trade Register under number (Decrease) / increase in other liabilities 15,714 (3,270) (187,474) (231,023) 89 - 97, 6th floor, Metropolis Center. J40/8799/1992. At December 31, 2014, the Bank had Income tax paid (11,877) (11,877) (8,053) (8,053) branches in Bucharest and in Bacău, Brașov, Buzău, The Bank controls the activity of its subsidiary, Net cash flows used in operating activities (748,401) (751,188) (245,129) (251,148) Cluj, Constanța, Craiova, Oradea, Timișoara, Iași, EximAsig, and holds 93.78% of its share capital. Cash flows from investing activities Sibiu, Pitești, Târgu Mureș, Ploiești, Galați, Deva, Arad, The consolidated and separate financial statements Acquisition of investment securities (1,101,314) 1,095,585 (1,949,950) 1,948,500 Râmnicu-Vâlcea, Bistrița, Baia-Mare and Suceava. The of the Export-Import Bank of Romania - EximBank SA Proceeds from sale and buy back of investment branches in Arad, Râmnicu-Vâlcea, Bistrița, Baia-Mare securities 1,905,787 1,899,722 2,264,240 2,264,240 Group, for the year ended on December 31, 2014 were and Suceava were opened in 2014, and the branch in Cash paid for share capital increase of the subsidiary - - - (11,015) authorized by the Board of Directors on 9 April 2015. Deva was closed in February 2015. Acquisition of property, plant and equipment and (4,908) (4,908) (14,002) (14,002) The Group had 349 employees at December 31, intangible assets The Export - Import Bank of Romania - EximBank SA 2014 (of which 318 are employees of the Bank and Proceeds from the sale of property, plant and Group ("Group”) includes the Export - Import Bank equipment and intangible assets - - 5 5 31 are employees of EximAsig, respectively), whereas of Romania - EximBank SA ("Bank" or "EximBank”) at December 31, 2013 the Group had 333 employees Dividends cashed in 252 252 278 278 and the Exim Romania SA Insurance - Reinsurance (of which 309 were Bank's employees and 24 were Net cash flows from investing activities 799,816 799,480 300,571 291,006 Company ("EximAsig”). The Export - Import Bank of employees of EximAsig, respectively). Cash flows from financing activities Romania - EximBank SA is the parent company of Dividends paid - - (115,687) (115,687) Net cash flows used in financing activities - - (115,687) (115,687) Change in cash and cash equivalents 51,415 48,292 (60,245) (75,829) 02. Accounting principles, policies and Balance at the beginning of the period 478,058 449,841 538,303 525,670 Balance at the end of the period 529,473 498,133 478,058 449,841 methodology Cash and cash equivalents 529,473 498,133 478,058 449,841 Cash 801 774 1,470 1,387 Accounts with the National Bank of Romania 74,055 74,055 175,591 175,591 The financial statements have been prepared in Due from other banks – maturity less than 3 months 454,617 423,304 300,997 272,863 A. basis of Preparation accordance with International Financial Reporting Additional information: Standards as endorsed by the European Union as at The separate and consolidated financial statements Interest received 170,175 168,960 151,188 150,274 December 31, 2014, on a historical cost basis, modified (hereinafter referred to as "financial statements”) are under IAS 29, except for property, plant and equipment, Interest paid 101,056 100,935 26,219 26,211 prepared and presented in thousands of Romanian representing buildings or investment property which The financial statements were approved by the Board of Directors on 9 April 2015. Lei (“RON’000”), the Bank/Group’s functional and are recorded at their revaluated value, and derivative presentation currency, rounded to the nearest thousand. financial instruments, as well as available-for-sale financial assets which are measured at fair value.

068 2014 Annual Report www.eximbank.ro 069 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The Bank's accounting records are kept in RON, Statements”, performing annual impairment tests the tax liabilities and deferred tax liabilities for the period in accordance with the Romanian Accounting Law to assess whether there is an objective evidence of D. Judgments and Accounting in which the final tax is set. and banking regulations issued by the National Bank impairment. Provisions for Retirement Benefits of Romania ("NBR”) and are based on International Estimates Concerning the consolidation method applicable for Financial Reporting Standards as endorsed by the In the process of applying the Bank and Group The Bank/Group determines the provision for investments in subsidiaries, the Bank applies "the European Union (hereinafter referred to as "IFRS"), accounting policies, management makes use of retirement benefits in accordance with IAS 19, global consolidation - purchase method" as described implemented as a basis of accounting under the Order judgments and estimates, which may significantly "Employee Benefits" using actuarial techniques based by the International Financial Reporting Standard 10 of the National Bank of Romania No. 27/2010 with impact the amounts recognized in the financial on assumptions about discount rates, inflation rates, "Consolidated Financial Statements”. The consolidation subsequent amendments. statements. These judgments and estimates are and future wage increases. process involves the restatement of accounts and reviewed on a timely basis and changes in estimates are EximAsig accounting records are prepared in statutory financial statements of subsidiaries, whenever Financial Guarantees recognized when become known. The most significant accordance with the Romanian Accounting Law and national accounting regulations differ materially from use of judgments and estimates are as follows: The Bank/Group periodically reviews the portfolio of specific regulations issued by the Financial Supervisory International Financial Reporting Standards issued by guarantees issued to customers, in order to obtain Authority, restated and adjusted accordingly, in all the International Accounting Standards Board ("IASB”) Allowance for Impairment of Loans and Advances objective evidence, which serves as a basis for material respects, in order to consolidate with the and endorsed by the European Union. to Customers estimating the probability of specific payments towards financial statements of EximBank SA Group. As at 31.12.2014, EximBank’s subsidiary was Exim The Bank/Group reviews its loans and receivables the beneficiary of the financial guarantee, with the Romania SA Insurance - Reinsurance Company portfolio periodically, for objective evidence in respect purpose of compensating the beneficiary’s loss in B. Basis of Consolidation (EximAsig, in which it holds 93.78% at the end of 2014, of estimated unrecoverable receivables, from an case a specific debtor is unable to fulfill his obligations 2013: 93.78% of the share capital). individual loan or a portfolio of homogeneous loans. towards the beneficiary. If objective evidence of Evidence includes the customer’s payment history, impairment is identified, the Bank/Group will recognize The Group's consolidated financial statements Settlements and transactions within the Group, as the overall financial position and the recoverable value an impairment adjustment, which is booked as an comprise the financial statements of EximBank SA and well as unrealized profits as a result of transactions of collaterals. If such evidence exists, the recoverable expense in the profit or loss account. of its subsidiary’s as at December 31, 2014. within the group, are eliminated entirely from the amount is estimated and a provision is made for consolidated financial statements. The unrealized Insurance Technical Reserves A subsidiary is an entity, including an unincorporated impairment, which is booked as an expense in the profit profits as a result of transactions with related or jointly entity such as a partnership, which is controlled by or loss account. The review of credit risk is continuous. The professional judgment and estimates of the Group controlled parties are eliminated based on the Group’s a parent company. The financial statements of the The methodology and assumptions used for estimating as regards to the insurance technical reserves, refer to: participation percentage. The unrealized profits as a subsidiary are prepared for the same reporting period allowances, are reviewed regularly to reduce any result of transactions with a related party are eliminated • Premium Reserve as for the Bank, using consistent accounting policies differences between estimated and actual loss. in counterpart with the investment within that related and balances, transactions, income and expenses The premium reserve is determined on a monthly basis, party. Unrealized losses are eliminated in the same Impairment of Financial Assets Available for Sale within the group, and shall be compensated at full by adding the installments of gross written premiums manner as unrealized profits, provided that no objective value. The Bank and Group assess their debt securities corresponding to the remaining period of the insurance evidence of impairment exists. classified as available-for-sale investments at each contracts, so that the difference between the volume Non-controlling interests are disclosed in the reporting date, to assess whether evidence of of gross written premiums and this reserve reflects the Consolidated statement of financial position own impairment exists. gross premiums assigned to the part of expired risks, capital, separately from the equity of the Group, in C. Accounting for Hyperinflation as at the reporting date. observance of the participation percentage. Non- The Bank / the Group also books impairment charges controlling interests are disclosed separately in the IFRS requires that financial statements prepared on a on available-for-sale equity investments when there • Reserve for Reported But Not Settled Claims Group’s profit or loss account, in observance of the historical cost basis be adjusted to take into account has been a significant or prolonged decline in the (RBNS) ownership percentage. the effects of inflation, if significant. IAS 29 “Financial fair value of these investments, below their cost. The The RBNS reserve is set up and updated on a Reporting in Hyperinflationary Economies” provides determination of what is “significant” or “prolonged” Where losses applicable to non-controlling interests monthly basis, through estimated claim notifications guidance on how financial information should be is based on management professional judgment. In exceed the non-controlling interests in the equity of the received by the insurer. The RBNS reserve is set up for prepared in such circumstances. In summary, it making this judgment, the Bank / the Group assess, relevant subsidiary, the excess or any further losses reported claims and which have not yet been settled; requires that financial statements be restated based on among other factors, historical share price movements attributable to non-controlling interests are listed on the it is calculated for each insurance contract where the current measure unit at the reporting date, and that and to what extent the fair value of an investment is less Group’s account, except where an obligation with legal the insured event has been notified, starting with the any gain or loss on monetary position be included in than its cost. repercussions exists, or where the ability to cover these predictable expenses to be incurred in the future, in the statement of profit or loss and disclosed separately. losses exists. If excess losses were covered by the Taxation order for these claims to be settled. The restatement of financial statements in accordance Group, and the subsidiary subsequently reports profits, with IAS 29 requires the use of a general price index The value of payable or recoverable taxes is based • Reserve for Incurred But Not Reported Claims all such profits are allocated to the Group until the part which reflects changes in general purchasing power. on assumptions regarding the recoverability of loans, (IBNR) of losses pertaining to the minority’s interests, which respectively on the existence of sufficient taxable was previously covered by the group, is recovered. The Bank ceased to apply hyperinflation accounting The IBNR reserve is created and updated monthly, profit. Estimates are required in determining the tax starting 1 July 2004. The Romanian economy ceased based on the insurer’s estimates, statistical data and In the separate financial statements, the Bank presents provision at the reporting date, and therefore, the tax to be hyperinflationary and was officially declared as actuarial calculations for claims which have occurred, the participation in subsidiaries as Investments in determination is uncertain. When the final tax value is such, starting 1 July 2004. but were not yet reported. In order to estimate this Subsidiaries, valued at cost according to paragraph different from the amounts that were initially recognised, reserve, the following methods are used, based on the 38 of IAS 27 "Separate and Consolidated Financial such differences will impact the income tax expense,

070 2014 Annual Report www.eximbank.ro 071 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

insurance class: the Chain-Ladder method (without on the financial statements because they do not apply n IFRS 7 – Financial Instruments Presentation: the c) Amendments to IAS 1 (effective for annual periods inflation and adjusting the claims spread), and the the offsetting of financial assets and liabilities, and amendments clarify the continuous implication in a beginning on or after 1 January 2016) exponential delay model. present no other offsetting commitments. transferred asset. The definition of materiality was amended to clarify its • Unexpired Risks Reserve IFRS 10 establishes a single control model, applied B. Standards Not Yet Adopted by the European applicability on the financial statements as a whole and to all entities, including special purpose vehicles. Union on each presentation requirement within a standard. The unexpired risks reserve is computed based on the The changes introduced by IFRS 10 require the Changes were also made on the financial statements claims estimates which have not yet occurred as at the a) IFRS 9 Financial Instruments (effective date: annual management to apply significant judgment in order to and notes in order to clarify that entities have flexibility reporting date, and in respect of which the subsidiary periods starting from January 1, 2018) determine which entities are controlled and must, as regarding disclosure of accounting policies in the notes. assumes future estimated claims will exceed premium a result, be consolidated by the parent company, in This standard replaces the provisions of IAS 39 "Financial reserves currently set up and, as a result, the next The Bank does not expect that the amendaments accordance with IAS 27 requirements. The adoption instruments: recognition and evaluation” regarding years’ premium reserve will not be sufficient to cover to IAS 1 to have a material impact on the separate of this standard had no impact on the consolidated the classification and assessment of financial assets, the claims which incur in upcoming financial years. financial statements. financial statements of the Group, due to the fact that excepting the aspects regarding hedge accounting • Benefits and Rebates Reserve it did not provide any changes to the consolidation based on which entities may opt for the application of d) Amendments to IAS 16 and IAS 38- Clarification perimeter. former IAS 39 provisions or IFRS 9 provisions. of the acceptable depreciation and amortization The benefits and rebates reserve is established for methods (effective for periods beginning on or after insurance contracts where premium discounts are Standards and Interpretations Not Yet Financial assets shall be classified by using one of two 1 January 2016) foreseen, where there are renewals and/or premium Implemented evaluation methods: at amortized cost and at fair value. refunds, as well as the participation of the insured to A financial asset can be evaluated at amortized cost The amendments provides that depreciation based on A. Standards Adopted by the European Union: the insurers’ profit. provided that the 2 following conditions are observed: income for tangible is inappropriate and place restrictions a) IFRIC 21 – Government Taxes (effective for annual assets must be held within the business model of on the applicability of this method for intangible assets. periods starting on or after 17 June 2014): the company, the objective being the management The Bank considers that this amendment will not have E. Changes in Accounting Policies based on contractual return; and cash flows at the a material effect on the separate financial statements This interpretation offers additional details regarding dates specified according to the contractual terms because it does not apply the depreciation method the date at which such an obligation should be The Bank/Group ensures the compliance of its must be represented only by principal and interest. based on income. reflected as a debt in accounting. In accordance with accounting policies with changes in international Subsequent profit or loss from the value adjustments this interpretation, the date at which the obligation is e) Amendments to IAS 27 (effective for periods financial reporting standards, as required. IASB issued of assets measured at fair value are reflected in the acknowledged should be the date at which the activity beginning on or after 1 January 2016) a series of documents, detailed in the section below, statement of profit or loss, excepting investments in that generates the debt was performed. The debt which however, do not significantly impact the Group’s capital instruments not held for trading, for which the The amendments allow an entity assesses its should be recognized as the activity is performed. or Bank’s financial statements, for the financial year standard allows the fair value measurement upon initial subsidiaries, associates and joint ventures in the ended 31.12.2014, that would require the significant b) IFRS annual changes (cycles 2010-2012 and 2011 recognition, the subsequent value modifications being consolidated financial statements using the equity review of the Group’s/Bank’s accounting policies. – 2013, most applicable to annual periods starting recognized under the comprehensive income. method. The Bank considers that this amendment with 1 February 2015) will not have a material effect on the separate financial The Bank/Group acknowledged and applied the "IAS It is to be notes that the presentation requirements are statements. 32 Financial Instruments” ("IAS 32”) amendments, These amendments introduce 11 changes on 9 substantial. regarding offsetting of financial assets and liabilities, standards. Below are presented the amendments that The Bank is currently assessing the potential effects starting 1 January 2014. The Bank also acknowledged might have an impact on the Bank’s activity: that the application of IFRS 9 may have on the financial F. Foreign Currency Transactions and applied "IFRS 10 Consolidated financial statements” n IFRS 8 – Segmented reporting: the amendments statements. ("IFRS 10”), which replaces the stipulations regarding introduce requirements regarding the presentation Transactions in foreign currencies are translated to the accounting for consolidated financial statements in "IAS b) IFRS 15 Revenue from contracts with customers of judgments performed for the purpose of functional currency of the Bank/Group at exchange 27 Separate and consolidated financial statements” (effective for annual periods beginning on or after 1 presenting the aggregated segmented reporting. rates as at the transaction dates. Monetary assets and ("IAS 27”). January 2017) liabilities denominated in foreign currencies at the date n IFRS 13 – Fair value measurement: the IAS 32 amendments do not add any new rules Issued on May 28, 2014 the standard replaces IAS 11, of the statement of financial position are retranslated amendments clarify that debts and short-term regarding the offsetting of financial assets and liabilities, IAS 18, IFRIC 13, IFRIC 15, IFRIC 18 and SIC – 31. to the functional currency at the exchange rate as receivables without attached interest can be however, these amendments clarify the instances in The standard is applicable to contracts withcustomers, at reporting date, using the NBR closing exchange presented in the fair value note – at the invoiced which offsetting is permitted, to limit inconsistencies other than insurance, financial instruments, leasing. rate. Foreign exchange translation differences are value, if the discount effect is insignificant. when applying standards. The amendments clarify the This standard prescribes a single model for the analysis recognized in the profit or loss account. Non-monetary right to offset, when: n IAS 16 and IAS 38 – Clarify the cumulated of customer contracts and two approaches for revenue assets and liabilities are measured in terms of historical impairment restatement method at the time of the recognition - at a specific moment in time or during cost in a foreign currency and translated using the n It is not conditioned by future events revaluation. the contract, depending on the time of fulfilling the exchange rate as at the date of the transaction. n It can be applied in case of ongoing concern obligation under the contract. n IAS 24 – Extends the definition of related parties. The exchange rates of the main foreign currencies were: over the business operations, as well as in case The Bank does not consider that these amendments of non-fulfillment of a commitment, insolvency or n IAS 40 – Real estate investments: the amendments will have a material effect on the separate financial Currencies 31-dec-2014 31-dec-2013 % bankruptcy of the entity or any related parties. clarify the separation criteria between a real estate Euro (EUR) 1: RON 4.4821 1: RON 4.4847 -0.06% investment in line with IAS 40, and a business statements, as the majority of contracts signed with These amendments did not have a significant impact combination in line with IFRS 3. customers are subject to other standards. US Dollar (USD) 1: RON 3.6868 1: RON 3.2551 +13.26%

072 2014 Annual Report www.eximbank.ro 073 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Gains and losses from foreign exchange differences The unamortized part afferent to these commissions, is for distribution is the current year profit, as per the n Held-for-trading financial instruments. from translation of monetary assets and liabilities are reflected as an amount to be amortized. statutory financial statements, which is different from c) Held-to-maturity investments. presented in the profit or loss account for the reporting the profit included in consolidated financial statements Once a financial asset, or a group of financial assets period. prepared in accordance with IFRS as endorsed by d) Available-for-sale financial assets. recorded an impairment loss, the interest income is the European Union, due to differences between the subsequently recognized by using the interest rate to Loans and receivables represent nonderivative financial Romanian accounting standards and IFRS. G. Interest Income and Expense update the future cash flows, in order to measure the assets with fixed or determined payments, not traded impairment loss applied to the net book value of the on an active market, which are not held for trading, nor asset. are designated at fair value through the profit and loss Interest income and expenses related to financial account nor available for sale. instruments are recognized in the statement of profit J. Foreign Exchange Gain/Loss or loss on an accrual basis, using the effective interest H. Fee and Commission Income Loans and advances to customers, originated by rate method. Interest income and expense include Income from exchange rate differences include the providing cash directly to the debtors, are measured the amortized value of any discount, premium, or any and Expense statement of profit or loss from transaction and the initially at fair value including arrangement costs. exchange rate differences from the revaluation of the difference between the initial value of the financial Fee and commissions income is acknowledged based Loans and advances are subsequently measured at foreign currency position. instrument and the value at maturity, as well as the on commitment accounting, once the service has been amortized cost using the effective interest rate method, deferred commissions or charges for financial services delivered. The income from this category includes less allowance for impairment. which are part of the effective interest rate using the commission income and charges for banking services, Financial instruments at fair value through profit or loss interest rate method. k. Financial Instruments – Initial such as: loans, guarantees, letters of credit, client account include: The effective interest rate is the rate at which estimated transactions, foreign exchange, mandate operations etc. Recognition, Classification and n Financial instruments designated at fair value future cash payments or receipts are discounted during Fee and commission expense mainly includes Subsequent Measurement through profit or loss at inception the expected life of the financial instrument, to the net commissions with services rendered by third parties, (I) Date of Recognition n carrying amount of the financial asset or liability. The such as: Financial instruments held for trading calculation takes into account all contractual terms Purchases or sales of financial assets that require delivery The Bank and Group initially recognize a financial asset of the financial instrument and includes any fees or n Commissions for guarantees and securities of assets within a time frame, generally established or liability as a financial instrument at fair value through incremental costs that are directly attributable to the transactions settled by the Bank on behalf of its by regulation or convention in the marketplace, are profit or loss account if: instrument and that are an integral part of the effective customers. recognized on the settlement of financial position as at n interest rate, without considering however future credit n Commissions for processing payment orders and date on which the contract is settled through the actual The designation eliminates or significantly reduces losses. other account management charges delivery of instruments. the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or For other items of the Bank’s financial position, such as Derivatives are recognized as at the trade date, which n Commissions charged for foreign exchange recognizing gains and losses on a different basis or credit lines, placed or drawn deposits on money market operations. is the date on which the Bank commits itself to buy or and deposits from customers, the Bank considers the sell the derivatives. n The assets and liabilities are part of a group of contractual interest rate as an appropriate estimate of Loan origination fees and direct incremental expenses financial assets, respectively financial liabilities, (II) Initial Recognition of Financial Instruments the interest rate computed through the effective interest are part of the effective interest rate, therefore deferred or both, which are managed and performance rate method. over the tenor of the loan and recognized as interest All financial instruments are measured initially at their evaluated on a fair value basis, in accordance income. fair value plus, in case of financial assets and financial with risk management or investment strategy, Commissions which are part of a financial instrument’s liabilities not recorded at fair value through profit or loss, and the information about the Group is delivered effective interest rate, represent a compensation for any directly attributable incremental costs of acquisition internally on that criteria, towards the Bank’s key operations such as the analysis of the debtor’s financial I. Dividend Income or issue. management personnel. performance, the valuation and booking of collaterals, negotiation of the financial instrument terms, the Dividend income is recognized when the Bank’s / Group (III) The Classification and Measurement of n The financial instrument contains an embedded drafting and processing of contracts, as well as granting has the right to receive dividends. Dividend income is Financial Assets derivative, unless the embedded derivative does not loans, commitment fees received for granting loans. significantly modify the cash flows or it is clear with recognized in the statement of profit or loss, at the date The initial classification of financial instruments depends These commissions, together with the corresponding little or no analysis, that it would not be separately the right to receive the payment is established. on their features and the purpose for which they were transaction fees, are deferred and recognized as an recognised. Income from shares and other investments represent acquired. interest income adjustment, using the effective interest The Bank and Group classify a financial asset or fixed income from securities are recognized as dividend The Bank and Group classify their financial assets into rate. The unamortized part of these commissions, is liability as held for trading, if that instrument is: presented as a deferral amount. income only when the respective dividends are stated. the following categories: Dividends are presented as a component of other n Acquired to be sold or redeemed in the near future Transaction costs are incremental costs that are operating income. a) Loans and receivables n Part of an identified financial instruments portfolio, directly attributable to the granting of a loan, which b) Financial assets or financial liabilities at fair value Dividends are treated as an appropriation of profit in managed together, for which there is evidence of a would not exist if the Bank would not grant the loan. through profit or loss: Transaction costs include fees and commissions paid the period they are distributed and approved by the real and recent pattern of realizing profit in the short to third parties and do not include financing costs or Shareholders General Assembly. n Financial instruments designated at fair value term. internal administrative costs. In the case of subsidiaries, the only profit available through profit and loss account upon initial recognition

074 2014 Annual Report www.eximbank.ro 075 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

n A derivative (with the exception of a derivative which less than 3 months to maturity), and as such variations impaired if the decline in their fair value is significant the remaining duration of the investment by utilizing is a financial guarantee contract, or a hedging in the market interest rate do not have a significant and prolonged. The amount of cumulative loss that is the effective interest rate. Any difference between the instrument). effect on the fair value of the financial asset ; reclassified from equity to profit or loss is the difference new amortized cost and the expected cash flow is also between the acquisition cost (net of any principal amortized during the asset’s remaining life, by using the The Bank and Group includes derivatives in the Held- ii) Sales/reclassifications which take place after the repayment and amortization) and its current fair value, effective interest rate. If it’s subsequently considered for-trading category with the purpose of financing entity has collected most of the initial value of the less any impairment loss on that financial assets that the asset’s value is impaired, the amount booked operations or mitigating currency risk and interest rate financial asset, through regular payments or early previously recognized in the statement of profit or loss. in equity is reclassified in the profit or loss account. risk. redemptions ; or Impairment losses recognized in profit or loss for an The reclassification is decided by management and is Derivatives are initially recognized at fair value as at iii) The sale or reclassification is attributable to an equity instruments classified as available-for-sale are determined based for each instrument. the derivative contract date and are subsequently re- isolated event, which is not under the control of the not reversed in the statement of profit or loss. measured at their fair value. Fair values are computed entity, unlikely to repeat itself and that could not have During 2014 and 2013 the Bank/Group did not based on valuation techniques, including discounted been reasonably foreseen by the Bank/Group. Repurchase Agreements Financial Assets (REPO) reclassify any financial assets. cash flow models. All derivatives are carried as assets The Bank/Group recognises accrued interest at Securities sold with a repurchase agreement, at a (v) Derecognition of Financial assets and when fair value is positive and as liabilities when fair acquisition in the "Accrued interest” account. Interest specified future date (repos) continue to be recognized Financial liabilities value is negative. Gain or loss on derivative instruments, subsequently computed (based on the coupon rate in the balance sheet as securities and are measured whether realized at the moment of the transaction, or A financial asset (or, where applicable, part of a or contractual interest rate) is recognised as "accrued in accordance with the accounting policy applicable to unrealized and derived from changes in fair value of financial asset or part of a group of similar financial interest”, and the Bank/Group also recognizes the that class of financial instruments. Obligation to repay derivative instruments are recognized immediately in assets) is derecognized when: the rights to receive corresponding interest income. All other amounts which the cash received is recognized under liabilities as repo profit or loss, in net income from trading caption. cash flows from the asset have expired; or the Bank are part of the effective interest rate are recognised operations reflecting the economic substance of a loan has transferred its rights to receive cash flows from the Certain derivatives embedded in other financial similarly in financial assets caption, the respective received by the Bank/Group. asset or has assumed an obligation to pay the received instruments, such as the conversion option of a income being included in the "Interest income” caption. Securities purchased under a similar commitment, cash flows in full without material delay to a third party convertible bond, are treated as separate derivatives Available-for-sale financial assets are financial to resell at a specified date (reverse repos), are not under a ‘pass-through’ arrangement; and either: when their economic characteristics and risks are not assets which are not classified in any of the previous recognized in the statement of financial position and closely related to those of the host contract and the (a) the Bank/Group has transferred substantially all the categories. Available-for-sale financial assets are the receivables corresponding to the cash advance host contract is not carried at fair value through profit risks and rewards of the asset, or investments designated to be sold, or which are not are recognized as asset in the statement of financial or loss. These embedded derivatives are measured at classified in any of the other three categories. After position as a reverse repo operation. (b) the Bank/Group has neither transferred nor retained fair value with changes in fair value recognized in the initial recognition, these financial assets are carried substantially all the risks and rewards of the asset, but statement of profit or loss. No embedded derivatives (iv) The Reclassification of Financial Assets at fair value, gains and losses exempt from tax being has transferred the control of the asset. exist at reporting date. recognized as a separate component of equity, until In certain cases, The Bank/Group can reclassify non- When the Bank/Group has transferred its rights to the investment is derecognised or until the investment derivative financial assets from the "Held for trade” Held-to-maturity investments are non-derivative receive cash flows from an asset or has entered into a is determined to be impaired, at which time the category, in the "Available for sale”, "Loans and financial assets with fixed or determinable payments pass-through arrangement, and has neither transferred cumulative gain or loss previously recognized in equity receivables” or "Held until maturity” categories. From this and fixed maturity date that the Bank/Group has both nor retained substantially all the risks and rewards of is included in the statement profit or loss. date forward, it is also possible to reclassify, in certain the intention and ability to hold to maturity. Assets the asset nor transferred the control of the asset, the classified in this category are measured at amortized cases, the financial instruments from the "Available Available-for-sale investments are measured at fair asset is recognized to the extent of the Bank/Group’s cost using the effective interest method, calculating for sale” category, in the "Loans and receivables” value, based on the market price of listed securities. continuing involvement in the asset. provisions for impairment, other than temporary. These category. The reclassifications are recognized at fair The fair value of unlisted securities is estimated using instruments are measured at amortized cost and value as at the reclassification date, which becomes In that case, the Bank/Group also recognizes an appropriate models or valuation methods adopted include treasury bills issued by the Ministry of Public the new amortized cost. associated liability. The transferred asset and the to match the specific financial results of the investor, Finance and National Bank of Romania. In 2013, this associated liability are measured on a basis that reflects conditions and prospects compared to those of The Bank/Group can reclassify a tradable non-derivative category also included debt instruments issued by the rights and obligations that the Bank/Group has similar companies, for which quoted market prices are asset from the "Held for trade” category, in the "Loans multilateral development bodies (issuer European retained. Continuing involvement that takes the form of available. and receivables” category, if it meets the definition a guarantee over the transferred asset is measured at Investment Bank), but which have reached maturity in criteria given to "Loans and receivables” and the Group In order to determine the fair value of available-for-sale the lower of the original carrying amount of the asset 2014. has the intention and ability to keep the financial asset financial assets, for which no market prices are available and the maximum amount of consideration that the The Bank/Group does not classify as held-to-maturity in the near future or until maturity. If a financial asset or it was established that the conditions are not met to Bank/Group could be required to repay. assets from which the Bank/Group has sold or is reclassified, and if the Bank/Group subsequently consider the market of those securities as liquid, the reclassified, in the current year or past two financial increases the future cash return estimates as a result A financial liability is derecognized when the obligation Bank employs valuation methods and techniques based years, more than one insignificant amount (insignificant of a cash flow increase, the effect of the increase is under the liability is discharged or cancelled or expires. on indirectly observed data entries, and establishes the amount as compared to the total value of held – to – recognized as an adjustment of effective interest rate Where an existing financial liability is replaced by another, prices indirectly based on the observed data (interest maturity investments), excepting the following sales or as at the change in estimate date. from the same lender, on substantially different terms, rate, swap quotes, CDS quotes), applicable on the reclassifications: or the terms of an existing liability are substantially markets specific to the currencies of the denominated For a financial asset reclassified from the "Available for modified, such an exchange or modification is treated securities owned. sale” category, any gain or loss already recognized in i) Sales/ reclassifications which are close to the maturity as a derecognition of the original liability and the or the anticipated redemption of the financial asset (e.g. equity is amortized in the profit or loss account during Investments available for sale in equity shares are recognition of a new liability, and the difference in the

076 2014 Annual Report www.eximbank.ro 077 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

respective carrying amounts is recognized in profit or market for that instrument. A market is regarded as It may be impossible to identify a singular event which n A rating of D or E on an A to E scale loss. active if transactions for the asset or liability take place triggered the impairment. Most likely a series of events n The management of the Group/Bank may identify with sufficient frequency and volume to provide pricing combined brought about the impairment. Estimated Financial assets represented by loans and advances other impairment indicators based on information information on an ongoing basis. losses as a result of future events, regardless of their to customers in relation to which the Bank/Group has suggesting a deterioration in the financial position probabilities, are not recognized. no expectation of recovering the exposure (having set If there is no quoted price in an active market, then of the debtor for instance due to decrease in sales up allowances covering the entire gross exposure) are the Bank/Group uses valuation techniques that Objective evidence that a financial asset or group or gross profit margin or due to other events which written off and recorded in off balance sheet accounts maximize the use of relevant observable inputs and of financial assets is impaired include information occurred subsequent to the initial recognition of the as contingent assets, by writing off the gross exposure minimize the use of unobservable inputs. The chosen observable by the owner of the asset about the loan and which may affect the ability of the customer and the corresponding allowance for impairment. This valuation technique incorporates all factors that market following loss triggering events: to comply with the reimbursement schedule. operation is carried out as there are no reasonable participants would take into account in pricing a n Significant financial difficulty of the issuer or debtor The provision amount is represented by the difference expectations that economic benefits will flow from the transaction. between the carrying amount and the present value of respective assets and as such the definition of assets n Breach of contractual conditions, such as non- The best evidence of the fair value of a financial future cashflows discounted using the effective interest in no longer met under IFRS. payment or delayed payment of principal and interest instrument at initial recognition is normally the rate (excluding future losses). The transfer of loans and advances to customers to off transaction price – i.e. the fair value of the consideration n The Bank, for a legal or economic reasons relating The present value of future cashflows is based balance sheet contingent assets is performed provided given or received. If the Bank/Group determines that to the debtor’s financial difficulty, agrees to grant on management’s assessment of the quality and the following conditions are simultaneously met: the fair value at initial recognition differs from the certain concessions which it would not have financial performance of debtors, debt service history, transaction price and the fair value is evidenced neither otherwise considered n There are no realistic possibilities to recover recoverable amounts from guarantees and collaterals, by a quoted price in an active market for an identical the asset or recovery costs exceed estimated n The existence of reliable information which indicate the historical pattern of credit losses, credit ratings asset or liability nor based on a valuation technique recoveries the bankruptcy or financial reorganization of the allocated to debtors and of the economic climate in that uses only data from observable markets, then debtor which debtors operate. n The Bank/Group still has legal means of recovery the financial instrument is initially measured at fair and as such these assets cannot be completely value, adjusted to defer the difference between the fair n The disappearance of an active market for the The Bank/Group takes into account the fair value of derecognized value at initial recognition and the transaction price. respective financial asset due to financial difficulties guarantees and collaterals estimated by management Subsequently, the respective difference is recognized of the debtor in order to arrive at the recoverable amount, however n The exposures are fully covered with allowances for in profit or loss on an appropriate basis over the life any change in economic circumstances can affect the impairment, in accordance with the internal policy of n The existence of reliable information which indicate of the instrument but no later than when the valuation estimates and the amounts which will eventually be the Bank. a measurable decrease in estimated future is wholly supported by observable market data or the cashflows of a group of financial assets after its recovered when collaterals are realized. transaction is closed out. The Bank/Group recognizes initial recognition, even if the decrease cannot yet Loans and advances which have a nil resulting transfers between hierarchical levels of fair value at the L. Offsetting Agreements be identified for each particular asset including: provision after the individual assessment are included end of the reporting period, as well as in the period unfavorable changes in the payment behavior of in the collective assessment, for incurred losses not yet when such transfers occur. Financial assets and liabilities are offset and presented group debtors or unfavorable changes in local/ identified. in the statement of financial position at their net value regional economic conditions, directly linked to the In order to perform the collective assessment, only when a legal right for offsetting exists and the depreciation of the respective assets. financial assets are grouped based on similar credit Group/Bank intends to realize the asset and settle the n. Impairment of Financial Assets Impairment of Loans and Advances from risk characteristics indicative of the debtor’s ability liability simultaneously. (I) Financial Assets Booked at the Amortized Cost Customers to pay all amounts due according to contractual Revenues and expenses are not offset in the statement terms, allowances for impairment being computed The Bank/Group assesses as at each reporting date The impairment is determined through individual of profit or loss unless is required or permitted by IFRS collectively, using adjusting parameters for the specific whether there is any objective evidence that a financial assessment in case of loans with objective evidence or related interpretations, in which case offsetting will loan type and tenor, which are determined using asset or a group of financial assets is impaired. of impairment and through collective assessment for be clearly specified in the accounting policies. receivables without objective evidence of impairment, statistic historical methods, respectively the probability A financial asset or a group of financial assets is deemed estimating the overall value of incurred losses not yet of default (PD) and the loss given default (LGD). to be impaired and an allowance for impairment is identified. The Bank/Group applies professional judgment m. Determination of Fair Value recognised provided that the following conditions are regarding observable data for the loan portfolio which met: The main impairment indicators considered by the Fair value is the price that would be received to sell an Bank/Group are: indicates a lower recoverability of cashflows from asset or paid to settle a liability in an orderly transaction 1) There is objective evidence of impairment as a result voluntary reimbursements, before this decrease is n More than 60 days past due for principal and between market participants at the measurement of one or more events which have occurred after identified for each individual loan in the portfolio. the initial recognition of the asset (an incurred ‘loss interest payments date in the principal or, in its absence, the most The carrying amount of loans and advances is adjusted event’) and advantageous market to which the Bank/Group has n The initiation of legal proceedings by allowances for impairment, the allowance being access at that date. The fair value of a liability reflects 2) That loss event (or events) has an impact on the n Restructuring procedures granted during the past recognized in the profit or loss account. If, during the risk of not settling the respective liability. estimated future cash flows of the financial asset 12 months, due to legal or economic difficulties of the following periods, the impairment decreases, the When available, the Bank/Group measures the fair or group of financial assets that can be reliably the debtor, which the Bank/Group would not have allowance for impairment previously recognized is value of an instrument using quoted price in an active estimated. otherwise considered; reversed in the profit or loss account.

078 2014 Annual Report www.eximbank.ro 079 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The gross exposure of fully provided assets that cannot of the instrument below its cost. When evidence of any accumulated depreciation and any accumulated be reasonably expected to be recovered and that do impairment exists, the cumulated loss – measured P. Cash and Cash Equivalents impairment losses. not meet derecognition criteria is written off against the as the difference between the acquisition cost and Revaluation surplus is included in equity and corresponding allowance for impairment account. the current fair value, less any impairment loss on the For the purpose of the cash flow statement, cash transferred directly in retained earnings when the asset financial asset previously recognized in profit or loss, and cash equivalents comprise cash in hand, current Any potential recovery in respect of written-off assets is is derecognized. Decreases in value are offset against is released from other comprehensive income and accounts and short-term placements with other banks recognized in the profit or loss account, decreasing the any existing revaluation reserve for the respective asset. recognized in the statement of profit or loss. Impairment and National Bank of Romania with an original maturity loss from the impairment of recovered assets. If such surplus does not exist or it is not sufficient for losses recognized in profit or loss for an investment in of less than 90 days. the decrease, the corresponding amount is recognized For impairment of receivables and setbacks of EximAsig, an equity instrument classified as available-for-sale in the Statement of Profit or Loss. Bank revaluates its the Group analyzes the respective receivables on shall not be reversed through profit or loss. “Buildings” portfolio every 3 years through professionally an individual basis, by taking into consideration the Q. Property and Equipment In case of debt securities classified as available – for – qualified valuators. number of overdue days and the qualitative status sale, the impairment losses are computed similarly to of the debtor at the moment when the analysis is Property an equipment represent assets that: Depreciation of Property and Equipment is charged those of financial assets held at amortized cost. Interest performed, including his legal status and other available from the month following the date when the asset was income continues to be recognized using the effective n Generate future economic benefits information. put into operation until full recovery of their cost using interest rate on the carrying amount of the asset net n Are meant to be used in the activity of the Bank straight-line method. (II) Financial Assets Carried at Cost of allowances for impairment, and is recognized as “Interest income”. If, in subsequent periods, the fair n Are used over a period longer that 1 year Lands is not depreciated. Leasehold improvements are If there is objective evidence that an impairment value of a debt security increases, and the increase depreciated using straight-line method, over the shorter loss has incurred in respect of an unquoted equity n Have a purchase value higher or equal to RON is objectively related to an event occurring after the of the remaining lease term and their useful lives. instrument that is not carried at fair value, the amount 2,500, either as a separate item or as part of an impairment loss was recognized in the statement of of the impairment loss is measured as the difference aggregate of more components of the same item of The annual depreciation rates and the useful lives profit or loss, the allowance for impairment in reversed between the carrying amount of the financial asset property and equipment applied are as follows: through the statement of profit or loss. and the present value of estimated future cash flows Tangible assets that do not qualify for recognition as discounted at the current market rate of return for a (IV) Impaired Assets and Past-Due Assets Annual depreciation property and equipment are fully recognized in the Category Useful life rate similar financial asset. statement of profit and loss to date in use and will be The Bank classifies as impaired those assets with Buildings 50 years 2% The Bank tests for impairment equity instruments evidence of impairment (either individually or through presented separately, in the off balance sheet accounts. Office equipment 3 – 6 years 16.67% - 33.33% measured at cost if their value exceeds 0.5% of the collective statistical methods). Property and equipment includes: total assets of the Bank as at the reporting date. Furniture and fixtures 5 – 24 years 4.16% - 20% Loans and receivables without impairment indicators, a) Land and land improvements Motor vehicles 5 years 20% The impairment of investments in subsidiaries is collectively assessed for incurred losses not identified, measured as the difference between the carrying as well as loans and receivables assessed individually or b) Constructions Expenses for repairs and maintenance are charged amount of the asset and the present value of future collectively for impairment due to impairment indicators c) Office improvements to operating expenses as incurred. Subsequent cashflows discounted at the current market rate of which are not deemed to be impaired as a result of the expenditure on property and equipment is only return for similar financial assets and the allowance for analysis are classified as not impaired. d) Technical equipment and transportation recognized as an asset when the expenditure improves impairment is charged in the statement of profit or loss. the condition of the asset beyond the originally Past due loans and advances include the entire exposure e) Furniture, office equipment, protective equipment for assessed standard of performance. Allowances for impairment of investments in of loans and advances with overdue instalments, not human and material assets, and other tangible assets. subsidiaries may be released in accordance with IAS only in the respective overdue amounts. The Bank uses the revaluation model for the "Buildings" When the carrying amount of a tangible asset is greater 36, provided that the assumptions used to determine category, respectively the cost model for all the other than the estimated recoverable amount, it is written the recoverable amount of the asset have changed items of property, including "Leasehold improvements". down to its recoverable amount. Gains and losses on since the moment the impairment was recognized. O. Provisions If an asset is re-valued, all the assets in that group are disposals of property and equipment are determined The carrying amount of investments in subsidiaries, re-valued except for the initial case when there is no by reference to their carrying amount and are included Provisions are recognized when the Bank/Group has a after the release of allowances for impairment may not active market for that respective asset. in the statement of profit or loss. present obligation (legal or constructive) as a result of a exceed the carrying amount which would have been past event, it is probable that an outflow of resources After its recognition as an asset, a tangible asset determined if no impairment would have previously embodying economic benefits will be required to measured at cost is subsequently measured at been booked. R. Intangible Assets settle the obligation and the obligation can be reliably cost less any accumulated depreciation and/or any (III) Available-for-sale Financial Assets measured. accumulated impairment losses. Until 30 June 2004, Intangible assets owned by the Bank are assets the cost has been obtained by restating the historical acquired for own activities and include: computer The Bank/Group determines at each reporting date if When the Bank/Group expects some or all of a provision cost in RON with the general price index for the period software, licenses and other similar assets. there is evidence of impairment of available-for-sale to be released, for example under an insurance between acquisition date and reporting date financial assets. contract, the release is recognized as a separate asset, An intangible asset is initially recognized at cost. After but only when the release is virtually certain. After the initial recognition as an asset, an item of its initial recognition, an intangible asset is recognized In case of equity investments classified as available property classified as “Building” whose fair value can at its historical cost less any cumulated amortization – for – sale, objective evidence of impairment refers The expense relating to any provision is presented in be measured reliably is carried at a revalued amount, and any cumulated impairment loss. to a significant, prolonged decline in the fair value the statement of profit or loss net of any reimbursement. representing its fair value at the date of revaluation less

080 2014 Annual Report www.eximbank.ro 081 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Intangible assets are amortised using straight-line measurement in accordance with IAS 16, is the fair an accounting period, the Bank recognizes the granting loans, guarantees and insurance products to method over their useful life period estimated at 3-5 years. value at the date of change of use. undiscounted value of short/long term benefits to be local market participants. The licenses and other intangible assets are amortised paid as expenses, respectively as expenses booked If a property used by the Bank changes to an investment In accordance with articles of Law 96/ 2000, with over the contractual period or during the period they are in advance, only if the already paid value exceeds the property measured at fair value, the Bank applies subsequent amendments, EximBank SA uses the available for use, whichever is appropriate. undiscounted value of the benefits. The short/long term IAS 16 until the change of use date, considering any following State funds: benefits are recognized as expenses excluding the difference at that date, between the carrying amount cases in which these are capitalized in the cost of assets a) The fund for guarantee operations – article 10a of of the property and the fair value, as a revaluation S. Impairment of Non-financial according to IAS 2 or IAS16. The Bank recognizes the Law 96/2000 performed in accordance with IAS 16. estimated cost of the short term benefits represented Assets b) The fund for the insurance – reinsurance activity – The gains or losses resulted from the change of by cumulated paid leave during the financial period in article 10b of Law 96/2000 Tangible and intangible assets are reviewed investment properties’ fair value in accordance with IAS which the services are provided. for impairment whenever events or changes in 40 are recognized in the profit or loss of the financial c) The fund for financing activity – article 10c of Law Compensations for employment termination are circumstances indicate that the carrying amount of an period in which they take place, without determining 96/2000 employee benefits that are paid as a result of the asset may not be recoverable. Whenever the carrying and booking their amortization. amount of an asset exceeds its recoverable amount, Bank’s decision to terminate the employment contract which are used for fulfilling commitments assumed by an impairment loss is recognized in the statement of An investment property is derecognized at the time of an employee or group of employees before the EXIMBANK SA – on Behalf of and to the Benefit of the profit or loss for items carried at cost and treated as of disposal or when the investment property is legal retirement date, or grant compensations for the State (article 12, paragraph 1 of Law 96/2000). permanently retired of and can no longer provide future a revaluation decrease for assets that are carried at termination of the employment contract as a result of The temporarily available balances of the above economic benefits from its withdrawal. revalued amounts to the extent that the impairment an offer made to encourage voluntary layoffs. mentioned funds are used by EXIMBANK SA as loss does not exceed the amount held in the revaluation The Bank recognizes the employment termination borrowings for financing the Bank’s own activity, so surplus for the same asset. U. Employee Benefits compensations as liabilities or provisions only if the as to fulfill its goal of encouraging external commercial The recoverable amount is the higher of an asset’s net Bank engaged to terminate the employment contract trading, promoting and developing the Romanian of an employee or group of employees before the business environment (Law 96, chapter 4 "The Activity selling price and value in use. The net selling price is the Short Term Benefits Granted to Employees amount obtainable from the sale of an asset in an arm’s legal retirement date, or grant compensations for the of EXIMBANK SA in its own name and on its behalf"). Short term benefits represent employee benefits length transaction while value in use is the present value termination of the employment contract as a result of The above mentioned funds may be used indefinitely (other than employment termination compensations) of estimated future cash flows expected to arise from an offer made to encourage voluntary layoffs. by the Bank except for those amounts which in which are due in full within twelve months from the the continuing use of an asset and from its disposal accordance with the provisions of the Convention are period end in which the employees perform the service, Post-employment benefits include benefits granted for at the end of its useful life. Recoverable amounts are available for a fixed period of at least 5 years. and include salaries, social security contributions, retirement, classified as defined benefits plan valuated estimated for separate assets or, if it is not possible, for State funds used by EximBank are presented in the annual paid leave and annual paid medical leave, through actuarial methods based on the projected the income-generating unit. consolidated and separate statement of financial bonuses, profit participation and non-financial benefits. credit unit method. position as financial liabilities in the "State funds" A reversal of an impairment loss recognized in prior Short term benefits given to employees are recognized A defined benefits plan is a plan that defines the amount caption, being initially recognized at fair value of the years is recorded when there is an indication that the as expenses when incurred. that an employee will receive at the retirement date, amounts received less transaction costs. In order impairment loss previously recognized may no longer usually depending on one or more factors, such as Social Security to utilize these funds the Bank reinstates the funds exist or may have decreased. The reversal is recorded age, number of year of activity and salary. The liability with the corresponding interest defined by Law 96/ in the statement of profit or loss unless the asset is The Bank/Group as well as its employees are legally recognized in the Bank’s statement of financial position 2000, which is included as "Interest expense" in the carried at a revalued amount in which case the reversal obliged to make contributions described in the financial in relation to the defined benefits retirement plan, is the consolidated and separate statement of profit or loss. is treated as a revaluation increase. statements as social security contributions to the present value of the defined benefits at the reporting National Pension Fund, managed by the Romanian date, less the fair value of assets of the plan at which Assets and commitments financed using state funds State Social Security (a defined contribution plan adjustments for unrecognized actuarial gains/losses are granted on Behalf of and to the Benefit of the State, T. Investment Property financed on a pay-as-you-go basis). The Bank/Group and costs of past services are added. without being controlled by the Bank and without has no legal or constructive obligation to pay future generating economic benefits for EximBank, and as Ina ccordance with the collective employment contract, Real estate investments are either properties held for benefits. Its only obligation is to pay the contributions such they do not meet the recognition criteria defined the Bank has the legal obligation to pay all employees rent, or for the capitl appreciation, or both, but never to as they become due. If the members of the Romanian by IFRS and the IASB framework. Consequently, benefits consisting of two monthly salaries, at the be sold during ordinary course of business, to be used State Social Security plan cease to be employed by the these assets and commitments are not included in the retirement date. in the banking activity or other administration purposes. Bank/Group, there will be no obligation by the Bank/ financial position of the Bank. Group to pay the benefits earned by these employees Investment property is initially recognized at cost, The Bank earns a commission income for managing in previous years. The Bank/Group’s contributions are including the acquisition price and any other direct State funds and for its operations as agent of the included in salaries and related expenses. V. State Funds and Activity as Agent expenses included, and subsequently measured at on Behalf of the State Romanian State, including a commission for managing their fair value, after initial recognition. Long term benefits include bonuses and profit assets, loans and commitments granted from State Aiming to fulfill the strategic objective of supporting In order to transfer an investment property booked at participations which are not payable in full within twelve funds. This commission income is included in the the Romanian national economy, the Bank acts as fair value in the Bank’s property and equipment, the months from the delivery of services. statement of profit or loss in the "Fee and commission an agent, on Behalf of and to the Benefit of the State, income" heading. presumed cost of the property used for its subsequent For services delivered by the employees during by offering specific products and services such as

082 2014 Annual Report www.eximbank.ro 083 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

n Controls, is controlled or is jointly controlled by the n Other reserves are own funding sources from W. Financial Guarantees Y. Contingent Assets and Liabilities Group or Bank (including parent companies and assets and tax facilities according to the law, or subsidiaries) set up from net profit, as decided by the general Financial guarantees are contracts whereby the Bank/ A contingent liability is: shareholders meeting. n Has an interest in the Group or Bank, which gives a Group assumes a commitment to make specific n A potential obligation that arises from past events significant influence over the Bank or payments to the beneficiary of the financial guarantee and whose existence will be confirmed only by to compensate the loss suffered by the beneficiary if n Jointly controls the Group or Bank the occurrence or non-occurrence of one or BB. Segment Information a specific debtor fails to make payment when due in more uncertain future events, that are not wholly b) Is an associate of the Group or Bank accordance with the terms of a debt instrument. A segment is a distinct component of the Group/Bank controlled by the Bank/Group or c) Is a joint venture in which the Group or Bank is a engaged in providing products or services that are The guarantees are presented in the financial n A present obligation that arises from past events member subject to risks that are different from those of other statements at fair value as contingent liabilities, related but is not recognized because: segments. fees collected in advance being amortized over the life d) Is a key management personnel of the Group or of the financial guarantee referred. • is unlikely that for the settlement of that Bank obligation an outflow of resources embodying e) Is a relative of any of the persons mentioned at points economic benefits will be required; or CC. Lease Agreements X. Income Tax a) to d) • the amount of obligation cannot be measured A lease is classified as a finance lease if it transfers f) Is an entity controlled, under joint control or significant with sufficient reliability. substantially all the risks and rewards in respect of the Current income tax payable, based on the Romanian influence, or has significant voting rights, directly or leased asset. A lease is classified as an operating lease tax law, is recognized as an expense in the period in Contingent liabilities are not recognized in the financial indirectly by any person mentioned at points d) or e) if it does not transfers substantially all the risks and which profits arise. statements, but are disclosed, unless is not estimated or rewards in respect of the leased asset. an outflow of resources embodying economic benefits Deferred income tax is provided, using the balance sheet g) Is a post-employment defined benefit plan for the is remote. The leases entered into by the Bank/Group are liability method, for all temporary differences between benefit of the Bank’s employees, or for any entity primarily operating leases. The total payments made the tax bases of assets and liabilities and their carrying A contingent asset is a potential asset that arises from which is a related party of the Bank. under operating leases are charged to other operating values for financial reporting purposes. Deferred income past events and whose existence will be confirmed The Ministry of Public Finance is a related party of the expenses in the statement of profit or loss on a straight- tax is measured at the tax rates that are expected to only by the occurrence or non-occurrence of one or Group/Bank, also all entities in which the Ministry of line basis over the period of the lease. be applied for the year when the asset is realized or more uncertain future events not wholly controlled by Public Finance is the main shareholder are considered the liability is settled based on tax rates that have been the Bank. A contingent asset is not recognized in the When an operating lease is terminated before related parties. enacted or substantially enacted at the reporting date. financial statements but is disclosed in the explanatory contractual maturity, any payment required to be made notes when an inflow of economic benefits is probable. Related parties transactions represent a transfer of to the lessor by way of penalty is recognized as an Deferred income tax liabilities are recognized for all resources and obligations between parties, irrespective expense in the period in which termination takes place. temporary differences between the tax bases of assets A provision is an uncertain liability in terms of due date of a price being paid or not. The Group/Bank is and liabilities and their net amounts at the date of the or value. Provisions are current liabilities in respect of considering the substance as well as the legal form of statement of financial position for financial reporting which is probable an outflow of resources embodying existing and potential transactions with related parties. DD. Borrowings purposes, which will result in taxable amounts in future economic benefits that will be required to honor the periods. obligations (assuming that a reliable estimate can be Borrowings are recognized initially at fair value, being made). Deferred income tax assets are recognized for all AA. Equity Reserve their issue proceeds net of transaction costs incurred. deductible temporary differences and carry-forward of A provision may be recognized when: Borrowings are subsequently stated at amortized cost; unutilized tax losses to the extent that it is probable The reserves recognised in equity in the Bank’s any difference between proceeds net of transaction n The Bank has a present obligation (legal or that taxable profit will be available, against which the statement of financial position include: costs and the redemption value is recognized in constructive) as a result of a past event; deductible temporary differences and carry-forward the statement of profit or loss over the period of the n Available-for-sale reserve which comprises changes of unutilized tax losses can be utilized. The carrying n It is possible that an outflow of resources borrowings using the effective interest method. Interest in fair value of available-for-sale investments; amount of deferred income tax assets is reviewed at embodying economic benefits will to be required to expense is capitalized in case of production qualifying each statement of financial position date and reduced settle the obligation; and n Property, plant and equipment reserve including assets. changes in the fair value; to the extent that it is no longer probable that sufficient n A reliable estimate of the amount of the obligation taxable profit will be available to utilize all or part of the can be made. n Reserve from share capital restatement includes the deductible temporary differences or tax losses. difference from adjusted share capital to inflation. EE. Insurance Premium Income Current and deferred tax assets and liabilities are offset n Legal reserve - is established up to 5% of profit Gross written premium income for insurances for when they arise from the same tax reporting entity and Z. Related Parties before tax deduction. which the contract duration is greater than 1 year are relate to the same tax authority and when the legal right determined as follows: to offset exists. A counterparty (person or entity) is a related party to the n General reserve for banking risks - includes Group or Bank if that counterparty: reserves set up until the end of 2006, in limits n For insurance contracts with single premium, the The tax rate used to calculate the current and deferred provided by law. gross written premium is the amount of the single tax at December 31, 2014 was 16% (December 31, a) Directly or indirectly through one or more gross premium associated with the contract 2013: 16%). intermediaries:

084 2014 Annual Report www.eximbank.ro 085 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

n For the insurance contract where the premium n Significant errors related to prior periods are For the purpose of the present consolidated financial payable by the insured party is collected in GG. Insurance Receivables corrected with an impact in retained earnings, statements, the Group has restated the balances installments, the gross written premium is the otherwise the error is corrected affecting the current presented in the statutory financial statements of amount of gross premiums received and receivable Receivables from insurance business are recognized year statement of profit or loss; the subsidiary – EximAsig, so as to comply with relating to one calendar year within the insurance when due or, for receivables related to traditional life IFRS requirements, restating the figures presented n If the impact in retained earnings generates a loss contract. insurance contracts are recognized on a yearly basis at in the consolidated statement of profit or loss and carried forward as a consequence of the correction, subscription and are measured at initial recognition at consolidated statement of financial position for 2013, Gross written premium income for general insurances this loss must be compensated before any profits fair value of the consideration received or to be received. as follows: at which the duration of the contract is less than one distribution; The carrying value of insurance receivables is reviewed year, are recognized on a pro-rata basis over the n Decreasing the ceded reserve to reinsuers by RON for impairment whenever events or circumstances n Corrections of accounting errors related to prior period of the insurance policy. Other premium income 723 thousands; indicate that it is possible that the carrying value may not periods have no impact on the published financial are recognized during the period they relate. be recoverable and an impairment loss is recogniseed statements for the respective periods; n Increasing the allowance for general insurance For insurance contracts denominated into foreign in profit or loss account. sundry debtors by RON 2,305 thousands; n Whenever a correction of accounting error is currency, gross written premiums are presented in lei required and it impacts retained earnings: n Other liabilities increase by RON 860 thousands. at the exchange rate as at the date of subscription. HH. Insurance Liabilities • the Bank/Group restates the comparatives Consequently to the decrease in the retained earnings for the period(s) presented in which the error of EximAsig, the Group has revalued the recoverable FF. Reinsurance Insurance liabilities are recognized when due and occurred; amount of the investment in its subsidiary, changing the measured on initial recognition at fair value of the net assets figure, without modifying other parameters. • if the error occurred before the earliest prior Within its operating activity, the Group transfers part consideration received less directly attributable An adjustment of RON 4,602 thousands representing period presented, the opening balances of of the insurance risk. Reinsurance assets represent transaction costs. Subsequent to initial recognition, allowance for impairment was booked as a result of assets, liabilities and equity for the earliest prior balances due from reinsurance companies. Amounts these are measured at amortized cost using the the recoverable amount recomputation (RON 3,866 period presented are restated. recoverable from reinsurers are estimated in accordance effective interest rate method. thousands net of deferred tax), which is carried with the provision for unearned claims or with settled forward in the 2014 year end figures, in accordance Derecognition of insurance liabilities is recognised claims associated to the reinsurer policies and in with the actual computation of the recoverable amount when the obligation is settled, canceled or expires. accordance with the related reinsurance contract. considering new market conditions, respectively the present value of future cashflows generated by Reinsurance assets are reviewed for impairment at each EximAsig. reporting date, or more frequently, if there are impairment II. Technical Reserves indicators emerged during the year under review. Impairment occurs when there is objective evidence, as a Premium reserve represents the proportion of the result of an event that occurred after the initial recognition gross annual written premium corresponding to the of the asset from reinsurance, that it is possible that the unexpired period of the insurance policy contractual Company will not collect all amounts due according year. to the contractual agreement, and the event reliably Reported but not settled claims reserve is measurable impact on the Company’s receivable from calculated considering the entire amount of payment the reinsurer. The impairment loss is recognised in for the damages reported but not yet paid. profit or loss account. Gains or losses from buying of reinsurances are recognized immediately in profit or loss Incurred but not reported claims reserve is account, at the date of purchase and is not amortised. calculated based on estimates of the insurer, statistics or actuarial calculations for claims incurred but not A cession under reinsurance contracts does not approved. release the Group of obligations that they have towards insurance policy holders. The premiums and claims are presented on a gross basis both for direct insurance JJ. Correction of Accounting Errors and related reinsurance. Reinsurance assets or liabilities are derecognized when the contractual rights The correction of accounting errors is performed during are settled or expire or when the contract is transferred period when these errors are identified considering the to a third party. followings: Reinsurance contracts that do not transfer significant n Errors related to the current financial period are insurance risks are recognized directly in the statement corrected by reversing the incorrect entry and of financial position. These are receivables or liabilities posting the correct entry prior to the issuance of that are recognized according to the equivalent paid financial statements; or charged, minus any premiums or fees explicitly identified which are retained by the reinsured party.

086 2014 Annual Report www.eximbank.ro 087 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The correction of the 2013 accounting errors derived from restatement, for purposes of these statutory financial statements of the subsidiary EximAsig, are presented as follows:

Group IFRS Group Bank Impairment of inv. Bank ASSETS Restated Adjustments Initial restated in subsidiary Opening Cash and cash equivalents 1,470 - 1,470 1,387 - 1,387

Accounts with the National Bank of Romania 175,591 - 175,591 175,591 - 175,591

Due from banks 300,997 - 300,997 272,863 - 272,863

Loans and advances to customers, net 1,178,448 - 1,178,448 1,178,448 - 1,178,448

Investments in subsidiaries - - - 36,764 (4,602) 41,366

Available-for-sale investments 946,207 - 946,207 946,207 - 946,207

Investments held to maturity 1,272,476 - 1,272,476 1,266,648 - 1,266,648

Property, plant and equipment, net 22,478 - 22,478 21,432 - 21,432

Intangible assets, net 10,840 - 10,840 9,192 - 9,192

Investment property, net 32,351 - 32,351 32,351 - 32,351

Commissions receivable from the State 13,248 - 13,248 13,248 - 13,248

Other assets 56,340 (723) 57,063 24,945 - 24,945

Total assets 4,010,446 (723) 4,011,169 3,979,076 (4,602) 3,983,678

LIABILITIES AND SHAREHOLDERS’ EQUITY

Due to banks 1,203,654 - 1,203,654 1,203,654 - 1,203,654

State funds 1,596,458 - 1,596,458 1,596,458 - 1,596,458

Derivative liabilities 64 - 64 64 - 64

Due to customers 103,100 - 103,100 109,005 - 109,005

Deferred income and accrued expenses 16,355 - 16,355 10,862 - 10,862

Provisions 25,794 2,305 23,489 22,971 - 22,971

Other liabilities 63,512 860 62,652 15,546 - 15,546

Deferred tax liability 3,887 (736) 4,623 3,887 (736) 4,623

Total liabilities 3,012,824 2,429 3,010,395 2,962,447 (736) 2,963,183

Share capital 1,701,474 - 1,701,474 1,701,474 0 1,701,474

Retained earnings, not distributed 22,600 (2,911) 25,511 42,837 (3.866) 46,703

Retained earnings, adjustment for inflation of share capital under IAS 29 (900,714) - (900,714) (900,714) - (900,714)

Reserves 133,314 - 133,314 133,189 - 133,189

Revaluation reserve 25,318 - 25,318 25,318 - 25,318

Available for sale reserves 14,525 - 14,525 14,525 - 14,525

Total equity attributable to: Equity holders of the Parent company 996,517 (2,911) 999.428 - - -

Non-controlling interests 1,105 (241) 1,346 - - -

Total equity 997,622 (3,152) 1,000,774 1,016,629 (3,866) 1,020,495

Total liabilities and equity 4,010,446 (723) 4,011,169 3,979,076 (4,602) 3,983,678

088 2014 Annual Report www.eximbank.ro 089 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Group IFRS Group Bank Branch inv. Bank 03. Interest income Category Restated Adjustments Initial restated impairment Initial

Interest income 213,259 - 213,259 212,439 - 212,439 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Interest expense (101,187) - (101,187) (101,279) - (101,279) Group Bank Group Bank Net interest income 112,072 - 112,072 111,160 - 111,160 Loans to customers 99,973 99,973 84,976 84,976 Fee and commission income 46,305 - 46,305 46,316 - 46,316 Current accounts and deposits with banks 3,533 2,604 10,310 9,756 Fee and commission expense (423) - (423) (390) - (390) Reverse repurchase agreements 858 858 1,577 1,577 Net fee and commission income 45,882 - 45,882 45,926 - 45,926 Available for sale financial assets 56,871 56,871 27,498 27,498 Gross written premium, net of reinsurance 13,372 - 13,372 - - - Held-to-maturity investments 25,952 25,666 88,898 88,632 Expense with the variation of technical reserves, net of reinsurance (8,206) (723) (7,483) - - - 187,187 185,972 213,259 212,439 Deferred acquisition costs and other underwriting expenses (1,405) - (1,405) - - - The income related to impaired loans, both at Group and Bank level, amounted to RON 4,777 thousand in 2014, Other technical expenses, net of reinsurance (33) - (33) - - - respectively RON 5,548 thousand in year 2013. Net income from insurance activities 3,728 (723) 4,451 - - - Gain / (loss) on impairment of financial assets and guarantees (24,547) (2,305) (22,242) (26,378) (4,602) (21,776) 04. Interest expense Gain / (loss) of foreign exchange differences 4,909 - 4,909 4,955 - 4,955 Net gain on available-for-sale financial assets 4,943 - 4,943 4,943 - 4,943 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Net gain on real estate investments ------Group Bank Group Bank Other income 3,683 - 3,683 3,634 - 3,634 Interest on funds received from the State 46,482 46,482 74,866 74,866 Net operating income 150,670 (3,028) 153,698 144,240 (4,602) 148,842 Deposits from banks 10,835 10,835 24,433 24,433 Salaries and similar expenses (68,775) 158 (68,933) (62,646) - (62,646) Customers deposits 3,360 3,239 1,888 1,980 Depreciation and amortization (8,894) - (8,894) (6,991) - (6,991) 60,677 60,556 101,187 101,279 Other operating expenses (25,820) (1,018) (24,802) (20,279) - (20,279) Operating expenses (103,489) (860) (102,629) (89,916) - (89,916) The methodology for determining the interest expense on State funds as well as details referring to the annual Profit before tax 47,181 (3,888) 51,069 54,324 (4,602) 58,926 variation are presented below in Note 23. Income tax expense (8,608) 736 (9,344) (8,608) 736 (9,344) Net profit 38,573 (3,152) 41,725 45,716 (3,866) 49,582 05. Gain/(loss) on impairment of financial assets and guarantees

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 statement of financial position (adjusting events) or GROUP BANK GROUP BANK kk. Subsequent Events those that indicate that the going concern assumption Provisions for loans charged in the current period (216,974) (216,974) (135,893) (135,893) is not appropriate. Subsequent events that are not Adjusting subsequent events are reflected in the adjusting events are disclosed in the notes to the Provisions for loans released in the current period 143,138 143,138 115,960 115,960 financial statements, that provide additional information financial statements when these are significant. Gain/(Loss) from allowances for loans (see note 17) (73,836) (73,836) (19,933) (19,933) about the Bank/Group’s position as at the date of the Recoveries from loans written off 1,280 1,280 - - Provisions for sundry debtors charged in the current period (1,762) (1,585) (4,635) (4,635) Provisions for sundry debtors released in the current period 1,579 1,579 5,083 7,854 Gain/(Loss) from sundry debtors provisions (see note 21) (183) (6) 448 3,219 Recoveries related to sundry debtors written off 43 43 - - Provisions for financial guarantees charge (55) (55) (5,253) (5,253) Provisions for financial guarantees released 5,448 5,448 191 191 Provisions for financial guarantees issued on behalf of customers (see note 26) 5,393 5,393 (5,062) (5,062) Allowance for the impairment of the investment in the subsidiary - - - (4,602) (67,303) (67,126) (24,547) (26,378)

090 2014 Annual Report www.eximbank.ro 091 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

06. Gain/(loss) of foreign exchange differences 09. Net income from insurance activities 31-Dec-13 31-Dec-13 31-Dec-12 31-Dec-12 Gains/(Losses) from exchange rate differences include n The net result arising from the revaluation of all assets Group Bank Group Restated Bank Restated the following: and liabilities denominated in foreign currencies Insurance net income n Gains or losses arising from foreign exchange n Unrealized gains or losses related to SPOT and/ Gross written premium income, net of reinsurance 11,741 - 13,372 - transactions (spot and derivatives) that were settled or derivatives on exchange rate transactions, not Gross written premium 20,352 - 31,976 - during the year settled at the balance sheet date. Premiums ceded to reinsurers (8,611) - (18,604) - Technical reserves variation expenses, net of reinsurance (7,361) - (8,206) - 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Acquisition and other underwriting expenses (1,784) - (1,405) - Other technical expenses, net of reinsurance (97) - (33) - Group Bank Group Bank Losses incurred related to insurance contracts (2,343) - (6,381) - A. Gains/(Losses) realized 5,396 5,416 5,363 5,409 Losses ceded to reinsurers 2,246 - 6,348 - B. Gains/(Losses) unrealized (1,948) (1,948) (454) (454) 2,499 - 3,728 - B1. SPOT transactions (unsettled)) 66 66 (390) (390) B2. Derivative transactions (unsettled) (2,014) (2,014) (64) (64) Gain/(loss) from exchange rate differences – total: 3,448 3,468 4,909 4,955 10. Other income Gains or losses from open position revaluation reflect the impact of exchange rate volatility over on and off balance 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 sheet positions in foreign currencies. Group Bank Group Restated Bank Restated Income from contractual penalties 3,458 3,458 2,693 2,693 07. Net gain on available-for-sale Other income 1,003 664 400 351 Rental income 3,739 3,739 312 312 financial assets Dividends and similar income 252 252 278 278 8,452 8,113 3,683 3,634 During 2014, the Group/Bank recorded a positive and bonds in RON and EUR, under the circumstances result in amount of RON 36,061 thousand (2013: RON of the significant yield reduction for new issues of 4,943 thousand) from the disposal of available-for- such instruments (please see Note 45 regarding the 11. Salaries and similar expenses sale financial assets, including government securities macroeconomic context). 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank 08. Net fee and commission income Salaries expense 46,077 41,811 40,444 35,440 Provisions charge/ release, net (4,501) (4,501) 4,689 4,689 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Total salaries expenses 41,576 37,310 45,133 40.129 Payments related to collaborators (i) 9,137 9,137 7,307 7,307 Group Bank Group Bank Provisions charge/ release, net 254 254 3,503 3,503 Commission income Total collaborators expenses 9,391 9,391 10,810 10,810 Commission income from State 13,945 13,945 22,460 22,460 Layoff compensation payments 303 303 1,840 1,840 Commission income from transactions with clients 42 46 78 78 Provisions charge/ release, net (8) (8) (807) (807) Commission income related to guarantees granted 20,586 20,586 21,945 21,945 Total layoff expenses 295 295 1,033 1,033 Commission income from import letters of credit 193 193 136 136 Employer contribution related to salaries 12,676 11,690 12,926 11,643 Commission income from banking transactions 267 267 193 193 Retirement severance expenses 76 76 244 244 Other commission income 2,040 2,040 1,493 1,504 Provisions charge/ release, net (1,553) (1,553) (1,881) (1,881) 37,073 37,077 46,305 46,316 Total retirement benefits (1,477) (1,477) (1,637) (1,637) Commission expense Other salary related expenses 250 250 510 510 Commission expenses with banking transactions (548) (514) (423) (390) Total salaries and similar expenses 62,711 57,459 68,775 62,488 (548) (514) (423) (390) Net fee and commission income 36,525 36,563 45,882 45,926 Details regarding the movement in provisions are presented below in note 25. (i) Expenses with collaborators include the benefits of administrators, executives and non–executives under mandate contracts, as The computation of the commission income from state fund administration as well as details referring to the annual well as indemnities for General Shareholders Meeting members and members of the Interministerial Committee for Foreign Trade variation are presented below in Note 24. Loans and Guarantees, in accordance with Law 96/2000 (note 23, "State Funds ").

092 2014 Annual Report www.eximbank.ro 093 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The differences between the regulations issued by the Romanian Ministry of Public Finance and accounting standards 12. Other operating expenses used in preparing these financial statements have given rise to temporary differences in the carrying amount of assets and liabilities between the financial reporting and those for tax purposes. 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank Statement of financial position Statement of profit or loss * Taxes 1,241 1,041 1,463 1,449 2014 2013 2014 2013 Postal and telecommunication expenses 2,710 2,607 2,679 2,494 Deferred tax (through profit or loss)) Maintenance expenses 4,481 4,393 3,500 3,292 Retirement benefits 224 460 (236) (262) Advertising, protocol and sponsorship expenses 3,261 3,135 2,731 2,093 Other provisions regarding employees 1,112 1,887 (776) 926 Consumables 1,494 1,405 1,976 1,770 Loan provisions - 619 (619) (621) Water and energy 792 792 1,196 1,196 Impairment of investment in the subsidiary 736 736 - 736 Rent expenses 4,803 4,803 1,961 1,961 Fiscal loss - - - (3,901) Consulting services 1,173 323 1,234 627 Prudential filters - - - 5,421 Other services provided by third parties 3,460 2,320 4,315 2,031 2,072 3,702 (1,631) 2,299 Security expenses 499 499 791 791 Deferred through equity Expenses on commercial information 137 137 130 130 Reevaluation reserve (4,822) (4,822) - - Expenses on Guarantee Fund 3,061 3,061 2,059 2,059 Available-for-sale investments, fair value adjustment (8,433) (2,767) - - Other expenses 1,182 593 1,785 544 Net deferred tax (11,183) (3,887) (1,631) 2,299 28,294 25,109 25,820 20,437 (* The value of deferred tax is the same for Bank and Group.

13. Income tax expense Deferred tax assets for tax loss are recognized when it which is applicable since 1 January 2005. is likely to obtain future taxable profits. Under the Fiscal The Group did not compute deferred income tax for Code, tax loss is recovered from the taxable profits The main components of income tax expense are: the statutory reserves established in accordance with obtained in the next 7 consecutive years. Romanian Banking and Company Laws considering 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 The Group computed deferred income tax using the the applicable tax provisions. Group Bank Group Bank statutory tax rate of 16% for 2014 and 2013, tax rate Current income tax 5,347 5,347 10,907 10,907 Deferred income tax 1,631 1,631 (2,299) (2,299) 6,978 6,978 8,608 8,608

Reconciliation between the tax expense and the accounting profit multiplied by the tax rate is as follows: 14. Accounts with the National Bank of Romania 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank Group Bank Group Bank IFRS profit before tax 47,274 53,564 51,069 58,926 Current account in RON 66,853 66,853 160,283 160,283 Tax calculated at 16% (2013:16%) 7,564 8,570 8,171 9,428 Current account in foreign currency 7,202 7,202 15,308 15,308 Tax effect of non-taxable income (5,178) (5,146) (3,529) (3,529) Tax effect of non-deductible expenses 3,710 3,481 5,177 5,028 Total 74,055 74,055 175,591 175,591 Tax effect - reserves distributions (452) (452) (493) (493) Tax effect - prudential filters deductions (620) (620) 4,801 4,801 Current accounts in RON at the National Bank of which are part of the minimum compulsory reserve, Impact of tax losses carried forward 810 - (2,793) (3,901) Romania represent the minimum compulsory reserve the balance complies with the computed average Tax profit before tax credit 5,834 5,833 11,334 11,334 and comply with the average values for the periods 24 level of 1,446 EUR for the period 24 December 2014 Tax credit (486) (486) (427) (427) December – 23 January, respectively 53,091 thousand – 23 January 2015. Please note that the Bank chose Current profit tax 5,348 5,347 10,907 10,907 RON for 24 December 2014 – 23 January 2015 and to maintain minimum reserves in Euro starting with Effect of origination and reversal of temporary differences 1,631 1,631 (2,299) (2,299) 246,567 thousand RON for 24 December 2013 – 23 24 April 2014 – 23 May 2014. At the end of 2013 the January 2014. calculated level of the minimum compulsory reserve Income tax recognized in profit and loss 6,979 6,978 8,608 8,608 was 36,613 thousand dollars. (+) = expense / (-) =income Similarly, in case of current accounts in foreign currency

094 2014 Annual Report www.eximbank.ro 095 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The interest rate paid by National Bank of Romania in reserves denominated in RON and between 0.14% and As at 31.12.2013 the Bank was engaged in operations with not-matured and unsettled derivatives, namely swap - 2014 ranged between 0.27% and 1.30% for reserves 0.50% for reserves held in USD, the bank choosing to leg 2 of the transaction, as follows: held in RON, while for the reserves held in Euros the maintain its currency reserves in dollars in 2013). interest rate paid ranged between 0.27% p.p. and Settlement Bought Sell amount Fair value(RON) As at December 31, 2014 the minimum compulsory Counterparty 31.12.2014 0.36% p.p. leg 2 amount (RON) (EUR) Assets Liabilities reserve requirement was set at 10% for RON and 14% By comparison, during 2013 the Central Bank paid for balances denominated in USD or EUR (December CITIBANK EUROPE PLC DUBLIN ROMANIAN BRANCH 03.01.2014 111,538,750 25,000,000 - 63,750 interest rates ranging between 0.55% and a 1.30% for 31, 2013: 15% for RON and 20% for USD or EUR). TOTAL UNSETTLED FORWARD TRANSACTIONS 111,538,750 25,000,000 -

17. Loans and advances to customers 15. Due from banks 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank Group Bank Group Bank Loans in LCY - public authorities 192,672 192,672 231,848 231,848 Repayable on demand 101,125 100,177 84,451 83,700 Loans in LCY – corporate clients 1,413,694 1,413,694 969,326 969,326 Term deposits 353,492 323,127 108,115 80,732 Loans in FCY- corporate clients 168,300 168,300 138,414 138,414 Reverse repurchase agreements - - 108,431 108,431 Total exposure 1,774,666 1,774,666 1,339,588 1,339,588 Total 454,617 423,304 300,997 272,863 Allowances for loans granted to public authorities - - - - Allowances for individually assessed loans (54,114) (54,114) (143,048) (143,048) Average interest rates on term deposits placed by the bank during 2014 ranged as follows: Allowances for collectively assessed loans (39,622) (39,622) (18,092) (18,092) n 0.61% to 3.48% - for RON deposits (2.42% to 5.87% in 2013) Total impairment adjustments (93,736) (93,736) (161,140) (161,140) n 0.00% to 0.37% - for EUR deposits (0.33% to 1.47% in 2013). Loans and advances to customers, net 1,680,930 1,680,930 1,178,448 1,178,448

Loans can be repaid before their scheduled maturity. In the event of anticipated payment some loan categories are subject to an early reimbursement commission/penalty. Generally, all loans and advances are granted to Romanian 16. Derivative financial instruments incorporated companies. The comparative situation between 2013 and 2014 is presented as follows:

As at December 31, 2014 the Bank was engaged in operations with unsettled derivatives as follows: a) Movement in Provisions Fair value(RON) Counterparty 31.12.2014 Settlement Bought Sell amount leg 2 amount (RON) (EUR) Assets Liabilities 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 CITIBANK EUROPE PLC DUBLIN SUCURSALA ROMANIA 12/01/15 44,410,000 (10,000,000) - (422,500) Group Bank Group Bank CITIBANK EUROPE PLC DUBLIN SUCURSALA ROMANIA 12/01/15 22,213,000 (5,000,000) - (203,250) Impairment provision, opening balance 161,140 161,140 141,019 141,019 CITIBANK EUROPE PLC DUBLIN SUCURSALA ROMANIA 12/01/15 44,441,000 (10,000,000) - (391,500) Impairment adjustments 169,421 169,421 145,931 145,931 ING BANK N.V., BUCHAREST BRANCH 05/01/15 44,810,000 (10,000,000) - (11,700) Accrued interest on impaired loans (8,281) (8,281) (4,912) (4,912) ING BANK N.V., BUCHAREST BRANCH 09/01/15 44,768,000 (10,000,000) - (61,400) Gain / Loss from provisions in the current period 73,836 73,836 19,933 19,933 ING BANK N.V., BUCHAREST BRANCH 12/01/15 44,763,000 (10,000,000) - (69,500) Impairment adjustments 75,601 75,601 23,291 23,291 J.P. MORGAN SECURITIES PLC 05/01/15 22,157,500 (5,000,000) - (253,350) Accrued interest on impaired loans (1,765) (1,765) (3,358) (3,358) J.P. MORGAN SECURITIES PLC 05/01/15 22,152,000 (5,000,000) - (258,850) Release of provisions related to loans written off (140,854) (140,854) - - J.P. MORGAN SECURITIES PLC 08/01/15 22,139,500 (5,000,000) - (274,650) Release of impairment provisions (150,544) (150,544) - - J.P. MORGAN SECURITIES PLC 16/01/15 22,360,000 (5,000,000) - (58,450) Accrued interest on impaired loans 9,690 9,690 - - J.P. MORGAN SECURITIES PLC 20/01/15 31,389,050 (7,000,000) - (140) Exchange rate differences (386) (386) 188 188 J.P. MORGAN SECURITIES PLC 08/01/15 22,436,500 (5,000,000) 22,350 - Impairment adjustments (492) (492) 199 199 J.P. MORGAN SECURITIES PLC 22/01/15 22,404,500 (5,000,000) - (17,600) Accrued interest on impaired loans 106 106 (11) (11) J.P. MORGAN SECURITIES PLC 08/01/15 22,365,000 (5,000,000) - (49,150) Impairment provision, closing balance 93,736 93,736 161,140 161,140 J.P. MORGAN SECURITIES PLC 23/01/15 22,397,000 (5,000,000) - (25,750) Provisions related to impaired loans 93,986 93,986 169,421 169,421 TOTAL UNSETTLED FORWARD TRANSACTIONS 455,206,050 (102,000,000) 22,350 (2,097,790) Accrued interest on impaired loans (250) (250) (8,281) (8,281)

096 2014 Annual Report www.eximbank.ro 097 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

18. Investments B) Analysis by Industry

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 A) Investments in Subsidiaries Group Bank Group Bank Public authorities 192,672 192,672 231,848 231,848 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 31-Dec-13 31-Dec-13 Other economic sectors: 1,581,994 1,581,994 1,107,740 1,107,740 restated restated restated restated A. Agriculture, forestry and fishing 106,510 106,510 122,740 122,740 Group Bank Group Bank Group Bank B. Mining industry 104,646 104,646 105,896 105,896 Investments in subsidiaries - 41,366 - 41,366 - 41,366 C. Manufacturing 707,592 707,592 452,446 452,446 Impairment adjustments - (4,602) - (4,602) - - D. Electricity, gas, steam and air conditioning supply 79,710 79,710 42,871 42,871 Total - 36,764 - 36,764 - 41,366 E. Water supply 36,890 36,890 35,530 35,530 % participation held 93.78% 93.78% 93.78% F. Construction 28,095 28,095 62,319 62,319 G. Retail and wholesale trade 208,004 208,004 85,287 85,287 The main investment, amounting to 41,366 thousand revealed the existence of impairment indicators, the value H. Transportation and storage 105,182 105,182 5,072 5,072 RON, represents 93.78% of the share capital of the Exim of the impairment amounting to RON 4,602 thousand. Romania Insurance-Reinsurance Company (EximAsig) I. Accommodation and restaurants 19,185 19,185 22,843 22,843 The allowance for impairment recognized as at located in 89-97 Grigore Alexandrescu Street, Metropolis December 31, 2014 represents the result of the J. Information and communication 52,024 52,024 53,596 53,596 Center, Bucharest, district 1). Impairment tests carried correction of errors related to 2013, which were K. Financial services 66,001 66,001 48,141 48,141 out by the Bank for December 31, 2013, and for the identified during 2014, as detailed in note 2 jj - L. Real estate activities - - 1,302 1,302 period ended on December 31, 2014, respectively, Correction of Accounting Errors. M. Professional, scientific and technical 57,375 57,375 50,740 50,740 N. Administrative and support activities 5,384 5,384 4,823 4,823 O. Education 5,099 5,099 6,644 6,644 B) Available-for-sale Investments P. Health and social work services 297 297 - - Q. Arts, entertainment and recreation - - 7,485 7,485 R. Individuals - - 5 5 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Total portfolio 1,774,666 1,774,666 1,339,588 1,339,588 Group Bank Group Bank Debt instruments – bonds and securities (cost) 1,360,458 1,360,458 907,044 907,044 Accrued interest 30,215 30,215 21,550 21,550 Decrease / increase in fair value of investments available for sale 52,913 52,913 17,446 17,446 Total investments at fair value 1,443,586 1,443,586 946,040 946,040 C) Analysis of Credit Quality Other investments at cost 167 167 167 167 Total 1,443,753 1,443,753 946,207 946,207 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13

Group Bank Group Bank As at 31.12.2014, the bank portfolio consisted of: c2. Bonds issued by UNICREDIT TIRIAC BANK SA Neither past due nor impaired 1,644,881 1,644,881 1,151,521 1,151,521 with a nominal value of RON 40,000 thousand a) Debt instruments of the central government and interest rate of 6.35%. Past due but not impaired 14,942 14,942 16,239 16,239 denominated in RON issued by the Romanian Less than 30 days overdue 14,856 14,856 16,211 16,211 Ministry of Public Finance Available-for-sale investments are measured at fair Overdue between 31 -60 days 86 86 - - value based on market prices of listed securities b. Debt instruments of the central government (classified as level 1) or using alternative valuation Overdue between 61 -90 days - - - - denominated in EUR issued by the Romanian techniques in the case of bonds issued by other credit Overdue over 90 days - - 28 28 Ministry of Public Finance institutions (classified as level 2). Total loans receivables not impaired 1,659,823 1,659,823 1,167,760 1,167,760 c. Bonds issued by other credit institutions, of which: Impaired loans 114,843 114,843 171,828 171,828 The fair value of unlisted securities (classified as level 3) c1. Bonds issued by JP MORGAN CHASE BANK is estimated using appropriate models and assessment Gross exposure of loans and receivables 1,774,666 1,774,666 1,339,588 1,339,588 NA NYK with a nominal value of RON 30,000 methods based on the specific investor's financial thousand and an interest rate of 7%. results, conditions compared with those of similar

098 2014 Annual Report www.eximbank.ro 099 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

companies for which prices are available on the market. respectively, determines the prices indirectly based on observable dates (interest rates, swap quotes, CDS In order to calculate the fair value of available-for- quotations), applicable on markets corresponding sale securities, classified as level 2, for which market to currencies in which the securities owned are prices are not available, the Bank/Group uses valuation denominated. methods based on indirectly observed data inputs,

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank MFP Treasury Bills (Level 1) 19,985 19,985 - - MFP (Level 1) 1,344,972 1,344,972 872,032 872,032 JP MORGAN Bonds (Level 2) 34,078 34,078 32,969 32,969 UNICREDIT TIRIAC BANK SA Bonds (Level 2) 44,551 44,551 41,039 41,039 Transfond, Swift Shares (Level 3) 167 167 167 167 Total 1,443,753 1,443,753 946,207 946,207

C) Investments Held to Maturity

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank Treasury bills - - 907,505 907,505 Bonds 124,194 118,576 357,103 351,453 Accrued interest 4,931 4,823 7,868 7,690 Total 129,125 123,399 1,272,476 1,266,648

Investments held to maturity are carried at amortized The Bank set up collaterals consisting in eligible cost. financial instruments, worth RON 1,000 thousand and government securities with final maturity at 30.04.2015, The Bank assesses individually whether there are objective respectively. indicators of impairment. If there is objective evidence that an impairment has occurred, the impairment loss is As at 21 December 2014, the bank portfolio of measured as the difference between the book value of instruments classified as held to maturity consists of assets and the present value of future cash flows. The securities issued by the central government as follows: assets book value is reduced and the loss amount is n Bonds issued by the Romanian Ministry of Public recognized in the statement of profit or loss. Finance, in the national currency As at December 31, 2014 the Bank has pledged as n Treasury bills issued by the Romanian Ministry of collateral bonds amounting to RON 1,000 thousand in Public Finance, in the national currency. favor of Transfond in its capacity as an agent of the National Bank of Romania for clearing operations (RON 1,000 thousand in 2013). Multilateral net positions resulting from the compensation may be covered by guarantees such as: n cash deposits in reserve accounts settlement n blocked and eligible financial instruments.

100 2014 Annual Report www.eximbank.ro 101 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

19. Property, plant and equipment and intangible assets

EXIMBANK Land and Improvements rented Computer, equipment, Tangibles, in Total property Intangibles, in (As at December 31, 2014) buildings locations furniture Vehicles progress and equipment Intangibles progress Total Intangibles Total Cost As at January 1, 2014 9,572 582 22,441 2,130 2,977 37,702 17,795 5,262 23,057 60,759 Additions - 53 990 10 1,318 2,371 639 1,899 2,538 4,909 Revaluation ------Disposals - - (1,017) (1,210) (1) (2,228) (2,359) - (2,359) (4,587) Transfers between categories - 553 537 2,945 (4,036) (1) 6,971 (6,971) - (1) Transfers to investment property ------As at December 31, 2014 9,572 1,188 22,951 3,875 258 37,844 23,046 190 23,236 61,080 Accumulated depreciation As at January 1, 2014 37 245 14,084 1,904 - 16,270 13,865 - 13,865 30,135 Amortization for the year 225 167 3,167 476 - 4,035 3,563 - 3,563 7,598 Revaluation ------Disposals - - (995) (1,210) - (2,205) (2,359) - (2,359) (4,564) Transfers between categories ------Transfers to investment property ------As at December 31, 2014 262 412 16,256 1,170 - 18,100 15,069 - 15,069 33,169 Carrying value as at December 31, 2014 9,310 776 6,695 2,705 258 19,744 7,977 190 8,167 27,911 Carrying value as at January 1, 2014 9,535 337 8,357 226 2,977 21,432 3,930 5,262 9,192 30,624

Buildings were last revalued as of December 31, 2013 by expert valuators, ANEVAR members (The National In 2013 the Bank transferred a real estate property from the Property, Plant and Equipment heading to Investment Association of Romanian Appraisers). The estimation of market values was determined following the principles Property. The asset had been initially recognized at cost, which includes the purchase price and any other directly and evaluation techniques presented in International Valuation Standards – 9th edition 2011, using the market attributable expenditure, and was valued after its initial recognition at fair value. Prior to its reclassification as comparison approach. investment property, the fair value of the property had been appraised by an independent ANEVAR evaluator using the income method approach.

EXIMBANK Land and Improvements rented Computer, equipment, Tangibles, in Total property Intangibles, in (As at December 31, 2013) buildings locations furniture Vehicles progress and equipment Intangibles progress Total Intangibles Total Cost As at January 1, 2013 46,929 532 18,715 2,937 - 69,113 17,168 878 18,046 87,159 Additions - 50 5,654 80 2,977 8,761 1,059 4,384 5,443 14,204 Revaluation (7,066) - - - - (7,066) - - - (7,066) Disposals - - (470) (36) - (506) (432) - (432) (938) Transfers between categories 2,309 - (1,458) (851) ------Transfers to investment property (32,600) - - - - (32,600) - - - (32,600) As December 31, 2013 9,572 582 22,441 2,130 2,977 37,702 17,795 5,262 23,057 60,759 Accumulated depreciation As at January 1, 2013 1,959 162 12,284 2,301 - 16,706 11,743 - 11,743 28,449 Amortization for the year 938 83 3,216 200 - 4,437 2,554 - 2,554 6,991 Revaluation (4,119) - - - - (4,119) - - - (4,119) Disposals - - (469) (36) - (505) (432) - (432) (937) Transfers between categories 1,508 - (947) (561) ------Transfers to investment property (249) - - - - (249) - - - (249) As at December 31, 2013 37 245 14,084 1,904 - 16,270 13,865 - 13,865 30,135 Carrying value as at December 31, 2013 9,535 337 8,357 226 2,977 21,432 3,930 5,262 9,192 30,624 Carrying value as at January 1, 2013 44,970 370 6,431 636 - 52,407 5,425 878 6,303 58,710

102 2014 Annual Report www.eximbank.ro 103 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Land and Improvements rented Computer, equipment, Tangibles, in Total property Intangibles, in GROUP (As at December 31, 2014) buildings locations furniture Vehicles progress and equipment Intangibles progress Total Intangibles Total Cost As at January 1, 2014 10,365 582 24,457 2,643 2,977 41,024 21,639 5,262 26,901 67,925 Additions - 53 990 10 1,318 2,371 639 1,899 2,538 4,909 Revaluation ------Disposals - - (1,021) (1,210) (1) (2,232) (2,359) - (2,359) (4,591) Transfers between categories - 55 537 2,945 (4,036) (1) 6,971 (6,971) - (1) Transfers to investment property ------0 As at December 31, 2014 10,365 1,188 24,963 4,388 258 41,162 26,890 190 27,080 68,242 Accumulated depreciation As at January 1, 2014 576 245 15,436 2,289 - 18,546 16,061 - 16,061 34,607 Amortization for the year 385 167 3,522 562 - 4,636 4,512 - 4,512 9,148 Revaluation ------Disposals - - (998) (1,210) - (2,208) (2,359) - (2,359) (4,567) Transfers between categories ------Transfers to investment property ------As at December 31, 2014 961 412 17,960 1,641 - 20,974 18,214 - 18,214 39,188 Carrying value as at December 31, 2014 9,404 776 7,003 2,747 258 20,188 8,676 190 8,866 29,054 Carrying value as at January 1, 2014 9,789 337 9,021 354 2,977 22,478 5,578 5,262 10,840 33,318

The last revaluation of buildings was carried out at December 31, 2013 by expert valuators, ANEVAR members (The comparison approach. The gross book value of fully depreciated tangible assets, still in use as at December 31, National Association of Romanian Assessors). The estimation of market value was made following the principles 2014 amounts to RON 11,880 thousand (2013: RON 9,653 thousand) and the gross book value of fully amortized and evaluation techniques presented in International Valuation Standards – 9th edition 2011, using the market intangible assets, still in use amounts to RON 7,524 thousand (2013: RON 10,248 thousand).

Land and Improvements rented Computer, equipment, Tangibles, in Total property Intangibles, in GROUP (As at December 31, 2013) buildings locations furniture Vehicles progress and equipment Intangibles progress Total Intangibles Total Cost As at January 1, 2013 47,722 532 20,376 3,835 - 72,465 17,368 4,522 21,890 94,355 Additions - 50 5,659 80 2,977 8,766 1,059 4,384 5,443 14,209 Revaluation (7,066) - - - - (7,066) - - - (7,066) Disposals - - (505) (36) - (541) (432) - (432) (973) Transfers between categories 2,309 - (1,458) (851) - 0 - - - - Transfers to investment property (32,600) - - - - (32,600) - - - (32,600) As at December 31, 2013 10,365 582 24,072 3,028 2,977 41,024 17,995 8,906 26,901 67,925 Accumulated depreciation As at January 1, 2013 2,338 162 13,200 2,601 - 18,301 12,739 - 12,739 31,040 Amortization for the year 1,098 83 3,674 285 - 5,140 3,754 - 3,754 8,894 Revaluation (4,119) - - - - (4,119) - - - (4,119) Disposals - - (491) (36) - (527) (432) - (432) (959) Transfers between categories 1,508 - (947) (561) ------Transfers to investment property (249) - - - - (249) - - - (249) As at December 31, 2013 576 245 15,436 2,289 - 18,546 16,061 - 16,061 34,607 Carrying value as at December 31, 2013 9,789 337 8,636 739 2,977 22,478 1,934 8,906 10,840 33,318 Carrying value as at January 1, 2013 45,384 370 7,176 1,234 - 54,164 4,629 4,522 9,151 63,315

104 2014 Annual Report www.eximbank.ro 105 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

At Group level, on December 31, 2014, sundry debtors for the location of the headquarters, ( the prepaid rent 20. Investment property increased as compared to December 31, 2013, mainly as at December 31, 2013 amounted to RON 20,985 due to balances recorded by the subsidiary EximAsig, thousand, and as at December 31, 2014 amounted to which recorded setbacks in its claim files. RON 17,349 thousand). According to the accounting policies of the Bank and EximBank Group, investment property is measured at fair value In the Bank’s other assets caption a slight decrease The Bank also recognized a debit balance representing using the income method. was noted as compared to 2013, mainly due to the the current income tax amounting to RON 2,367 decrease in the prepayments caption. This decrease thousand, due to anticipated payments for the previous Revaluation in prepayments is mainly due to the recognition of the year, updated with the inflation index. Balance as at Additions Disposals Balance as at January 1, 2014 Gains (Losses) December 31, 2014 rent expense for 2014, which had been paid in advance Land 5,880 - - - (107) 5,773 Building 26,471 - - 1,342 - 27,813 Sundry debtors’ situation is presented in the table below: Total 32,351 - - 1,342 (107) 33,586 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank The value of real estate owned by the Bank/Group classified as investment property in accordance with IAS40, was revalued as at 31.12.2014, the property being carried at market value determined based on the valuation report Sundry debtors - gross 19,381 9,196 41,966 30,871 issued by an independent member of ANEVAR, using the income method. Allowances (7,734) (7,557) (29,292) (29,292) Rent income in 2014 amounted to RON 3,739 thousand (in 2013 the income obtained was of RON 312 thousand, Sundry debtors, net 11,647 1,639 12,674 1,579 as the investment property had been leased starting with the last month of the year). During 2014 the Bank released allowances for sundry By comparison, as at December 2013, sundry debtors debtors as a result of the write off of receivables in total in gross amount of RON 41,966 thousand, consisted in: Balance as at Revaluation Balance as at amount of RON 21,732 thousand (RON equivalent at Additions Disposals n Current receivables from sundry debtors in amount January 1, 2013 Gains (Losses) December 31, 2013 the transaction date), representing receivables without of RON 12,523 thousand Land - 5,880 - - - 5,880 reasonable expectations of recovery, fully provisioned. n Past due receivables, not impaired, from sundry Building - 26,471 - - - 26,471 As at December 2014, sundry debtors in the gross debtors in amount of RON 151 thousand Total - 32,351 - - - 32,351 amount of RON 19,381 thousand, consist in: n Impaired receivables from sundry debtors in amount n Current receivables from sundry debtors in amount In 2013, the Bank had transferred a real estate property, rented out starting with December 2013, to investment of RON 29,292 thousand, fully provisioned. of RON 11,642 thousand property. Prior to its rental, the property was recognized at fair value as a tangible asset, included in the “land and buildings” category. The fair value at the time of the transfer was RON 32,351 thousand. After the transfer of the n Past due receivables, not impaired, related to sundry property, no other charges occurred in respect of this property. debtors in amount of RON 5 thousand n Impaired receivables from sundry debtors in amount of RON 7,734 thousand, fully provisioned 21. Other assets

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 22. Due to banks Group Bank Group Bank 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Sundry debtors 11,647 1,639 12,674 1,579 Group Bank Group Bank Income tax 3,030 3,030 - - Current accounts and sight deposits from banks 115,531 115,531 423,783 423,783 Prepayments 19,031 19,006 23,650 23,260 Term deposits 373,301 373,301 779,871 779,871 Premium reserve - ceded to reinsurers 4,141 - 6,619 - Total due to credit institutions 488,833 488,833 1,203,654 1,203,654 Reserves for claims relating to general insurance - ceded to reinsurers 31,540 - 5,442 - Other technical reserves relating to general insurance business –ceded to reinsurers 3,054 - - - Deferred acquisition costs related to general insurance 2,635 - 3,658 - Insurance settlements - fire and explosions 1,179 - 1,886 - Insurance settlements - third party liability 74 - 1,894 - Settlements on other insurance 847 - 355 - Others 274 71 162 106 Other assets, net 77,452 23,746 56,340 24,945

106 2014 Annual Report www.eximbank.ro 107 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

23. STATE FUNDS c) Net amounts from insurance premiums Sources of state funds in 2013-2014 referred solely d) Recoveries from credit insurance to commissions, interest and insurance premiums, reimbursements or recoveries, as no budgetary e) Recoveries from the owners of guarantees issued allocations were recorded since 2009 and neither have In order to achieve the strategic objective of supporting which will be used to pay the commitments made by f) Interest received from increasing the available amounts drawn from foreign claims, actually recovered the economy of the country, the Bank acts as an agent EximBank on behalf of and to the benefit of the State amounts of the funds from debtor countries. of the State, on behalf of and to the benefit of the State, (Law 96/2000 - art. 12, paragraph 1). g) Interest incumbent to subsidized interest and priority The Funds were used for financing agreements granted offerring guarantees, financing and insurance products Temporarily available amounts from the above mentioned projects financing on behalf of and to the benefit of the State, interest to companies. funds are made available to EximBank as attracted compensations, executions, claims and commissions h) Other sources, according to the law. In accordance with Law 96/2000, as amended sources, necessary to support the banking business on paid to related operations developed. and supplemented, EximBank benefits from the its own behalf and to its own benefit, to enable the Bank establishment of the following funds at its disposal: to fulfill the objectives of stimulating foreign trade and the development and promotion of Romanian business Fund for a) The Guarantee Fund - Law 96/2000 - art. 10 a Funds for environment (Law 96, Chapter 4, "EximBank SA - Fund for export insurance and RON - thousand guarantees reinsurance stimulating Total b) The Fund for insurance and reinsurance operations - Activity on the benefit and on behalf of the Bank"). The activities exports Law 96/2000 - art. 10 b above-mentioned funds remain available indefinitely for Opening balance as at January 1, 2013 1,620,559 35,246 122,522 1,778,328 the Bank, except for those amounts which, according c) The Fund for financing operations - Law 96/2000 - to the Convention, are maintained for a period of at least Budgetary allocations - - - - art. 10 c 5 years. Reallocations between funds (60,000) - 60,000 - Funding - - (92,086) (92,086) Interest compensation - - (17,261) (17,261) Uses State funds available to EximBank are presented in the consolidated and separate statement of financial position Foreclosures/Claims (226,924) (1,823) - (228,747) as financial liabilities in the “State funds” heading, the detailed and comparative statement for 2013-2014 being as Commissions - other payments (24,179) (283) (241) (24,703) follows: Financing reimbursements - - 10,604 10,604 Sources Recoveries 10,399 - 1,168 11,567 31-Dec-14 31-Dec-13 Commissions/interests/premiums 108,369 967 5,247 114,583 Funds for exports guarantees 1,477,175 1,428,224 Closing balance as at December 31, 2013 1,428,224 34,107 89,953 1,552,284 Fund for insurance and reinsurance activities 34,567 34,107 Funds for stimulating exports 77,564 89,953 Total State funds 1,589,306 1,552,284 Payments made in 2013 representing foreclosures and claims related to guaranteed or secured risks all come from Accrued interest 3,882 44,174 guarantee commitments/insurance issued before the fourth quarter of 2012. TOTAL 1,593,188 1,596,458

Fund for Fund for Funds for RON - thousand exports insurance and stimulating Total Assets and commitments funded or covered by State As of 28 February 2014, Law 96/2000 was amended by reinsurance guarantees activities exports funds made available for EximBank are not controlled by GEO 8/2014, which stipulated that the interest payable Opening balance as at January 1, 2014 1,428,224 34,107 89,953 1,552,284 the bank and do not meet the conditions for recognition henceforth by EximBank for temporarily available funds set by the International Financial Reporting Standards at its disposal is calculated and paid on a monthly basis Budgetary allocations - - - - and the General Framework IASB, and consequently based on the yield of securities issued by the NBR in Funding - - (35,704) (35,704) they were not included in the statement of the financial RON with a 1 year tenor, on the last day of the previous Interest compensation - - (10,540) (10,540) Uses position of the Bank/Group. reporting period (e.g. December 31, 2013). Foreclosures/Claims (47,282) (905) - (48,187) Operations carried out by the bank on behalf of and Sources and Use of Funds Commissions – other payments (25,405) (579) (435) (26,419) to the benefit of the State must be approved by the Financing reimbursements - - 25,993 25,993 In accordance with Law 96/2000, the financial sources Interministerial Committee for Foreign Trade Loans and of the funds are the following: Sources Recoveries 6,547 - 90 6,636 Guarantees, in accordance with Law 96/2000. 115,091 1,944 8,207 125,243 a) Amounts received from the state - stipulated in the Prior to 28 February 2014, the interest owed for using annual Budget Law Closing balance as at December 31, 2014 1,477,175 34,567 77,564 1,589,306 state funds represented the interest earned by the Bank from the investment of state funds on the money market, b) 25% of external receivables recovered by the State from debtor countries in treasury bills and bonds or loans to customers. Payments made in 2014 representing foreclosures and claims related to guaranteed or secured risks come in a proportion of 71% from guarantee commitments/insurance issued before the fourth quarter of 2012.

108 2014 Annual Report www.eximbank.ro 109 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Collateral deposits, as at December 31 2014, are For term deposits in RON, interest rate ranged from and term amounts is equal to the average yield on mainly represented by: 0.2% (for 1 week deposits) to 2.50% (2013: from 0.75% Interest Payable for State Funds government securities in RON issued by the Ministry to 4.50%), for deposits in USD from 0.0% to 0.40% of Finance, with a maturity of one year, published by n Cash collateral received for securing the loans (2013: from 0.40% to 1.20%), and for those in EUR According to GEO 8/2014, effective as of 28 February NBR on December 31 of the previous year of the year granted by the bank (77% - RON 58,577 thousand) from 0.00% to 0.45% (2013: from 0.40% to 1.75%). 2014, the Bank calculates and records on a daily basis of application. n Cash collateral received for letters of guarantee (21% the interest due to the State and accrues it monthly on The only deposits placed by individuals accepted by The cost of funding in 2014, subsequent to the - RON 16,037 thousand). the first day of the following month. the Bank are those placed by its employees. enactment of the new Convention, was of 2.86% per During 2014, the interest rate for customer current Prior to the enactment of GEO 8/2014, the bank paid annum. accounts was between 0.05% and 0.10% for all an interest equal to the interest rate resulting from The interest expense related to State funds used is currencies (2013: ranged between 0.05% and 0.1%). investing in temporarily available state funds at the included in the consolidated statement of profit or loss time of cashing it, in accordance with the Convention in the "Interest Expense" caption, presented in note 03 concluded with the Ministry of Public Finance. of these financial statements. As of 28 February 2014, the interest rate applicable 26. Provisions The accrued interest on State funds is included in the to financing received from the State, for both sight

The Bank/Group has set up provisions for financial benefits to be paid. The foreseeable period in which 24. CommissionS receivable from the State guarantees offered, for obligations towards employees, they are recognized as liabilities and paid to the respectively: benefits for outstanding annual leaves, employees is less than one year, except for provisions fund for employees' participation in the profit made, for other salary expenses and retirement benefit determined after tax, bonus pool, pensions and provisions. Provisions for other liabilities include profit The interest payable on State funds is presented above. month and applied the next month on the interest similar obligations, litigation with employees and other distribution for 2014 employees’ profit participation payable on State funds. During 2014, the average The Bank receives a commission for managing State compensatory payments. fund amounting RON 3,199 thousand, in accordance coefficient was 30% (2013: 30%). with the accounting treatment provided by both funds and conducting operations on behalf of and to Provisions recognized as expenses during the year Ministry of Finance No. 128/13.04.2005 and the NBR the benefit of the State, commission which represents Accrued commissions are presented in the consolidated were reviewed and adjusted at each balance sheet Order 27/2010. a percentage (allocation coefficient) applied to interest and separate statement of financial position as date to reflect the best estimate of the expected payable. The commission is determined by applying a “Commission receivable from the State”; commissions coefficient calculated based on the proportion of funds related to services provided in the current year are used, determined as the ratio between commitments in included in the consolidated and separate statement 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 force at the end of the reporting month and the funds of profit or loss as “Commission income”, presented in Group Bank Group Bank available and the end of the period, capped at 30%, note 8 “Net commission income”. Provisions for letters of guarantees - - 5,251 5,251 according to the change in regulations effective from As at December 31, 2014, the commission receivable July 1st 2010 and maintained after 28 February 2014. Provisions for other liabilities 8,939 8,939 13,711 13,711 from the State amounts to RON 1,165 thousand -with deferred payment for less than 1 year; 553 553 101 101 The coefficient is calculated on the last day of each (December 31, 2013: RON 13,248 thousand). - with deferred payment from 1 to 3 years; 986 986 188 188 Provisions for untaken vacation 1,235 1,235 1,134 1,134 25. dUE to customers Provisions for retirement benefits 1,397 1,397 2,875 2,875 Other provisions 3,000 - 2,823 - 14,571 11,571 25,794 22,971

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Provisioning for probable outflows of financial resources for the following financial years, as well as the use of Group Bank Group Bank provisions recognized in previous financial years or their cancellation due to the fact that an outflow of resources is Current accounts 81,886 81,991 37,677 37,694 no longer probable is presented as follows: Demand deposits 31,747 31,747 4,607 4,607 Term deposits 456,369 457,369 12,552 18,440 Collateral deposits 76,114 76,114 48,264 48,264 646,116 647,221 103,100 109,005

Deposits can be withdrawn before their maturity, in of withdrawal. Due to customers values eliminated which case the interest income is computed based on consolidation are RON 1,105 thousand in 2014, on current account interest rate prevailing at the date respectively RON 5,905 thousand for 2013.

110 2014 Annual Report www.eximbank.ro 111 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

27. other liabilities 2014 Financial Year

Balance at Provision Provision Balance at 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Bank/Group January 1, 2014 Provision use cancellation constitution December 31, 2014 Group Bank Group Bank Provisions for letters of guarantee 5,251 - (5,251) - - Contribution to social security 1,681 1,537 1,256 1,108 Provisions for other liabilities related to salaries, of which: 13,711 (8,562) (3,626) 7,416 8,939 Current income tax payable - - 3,500 3,500 Provisions for salary liabilities 13,371 (8,395) (3,453) 7,416 8,939 Other liabilities to employees 237 - 1,179 970 Provisions for litigation 340 (167) (173) - - Other sundry liabilities (Note 28) 83,871 5,808 56,837 9,297 Provisions for untaken vacation 1,134 (1,134) - 1,235 1,235 Other liabilities to state budget 936 868 740 671 Other provisions 2,823 - - 177 3,000 86,725 8,213 63,512 15,546

28. other sundry liabilities 2013 Financial Year

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Balance at Provision Provision Balance at Bank/Group January 1, 2014 Provision use cancellation constitution December 31, 2014 Group Bank Group Bank Provisions for letters of guarantee 218 - (218) 5,251 5,251 Technical reserves – total, in which: 61,552 - 27,516 - Provisions for other liabilities related Premium reserve 16,430 - 17,222 - to salaries, of which: 7,147 (7,030) (4,316) 17,910 13,711 Reserve for claims on general insurance 38,514 - 10,017 - Provisions for salary liabilities 6,650 (6,952) (4,237) 17,910 13,371 Other technical reserves relating to general insurance business 6,608 - 277 - Provisions for litigation 497 (78) (79) - 340 Settlements on reinsurance operations - total, in which: 5,269 - 7,027 - Provisions for untaken vacation 713 (713) - 1,134 1,134 Ceding in reinsurance operations - goods in transit 3,609 - 3,624 - Other provisions 52 - - 2,771 2,823 Ceding in reinsurance operations - fire and natural calamity - - 190 - Ceding in reinsurance operations - loans 649 - 86 - Movement in provisions for retirement benefits: In accordance with IAS 19 Employee Benefits, the Bank Reinsurance operations - insurance for guarantees 729 - 1,037 - recognized in the balance sheet the liability related to Ceding in reinsurance operations - other 282 - 2,090 - Provision change 31-Dec-14 31-Dec-13 long-term benefits for employees. Other sundry liabilities total, in which: 17,050 5,808 22,294 9,297 Opening balance 2,875 4,512 In assessing the net liability from benefit plans, the Bank Sundry creditors 1,280 81 2,431 485 Interest cost - - has followed the principles which need to be reflected Creditors - cash collateral 9,938 - 9,763 - Current service cost 1,196 - into the actuarial measurement of the liabilities, Interbank settlements 1,731 1,731 1,362 1,362 respectively: Benefits paid (95) - Suppliers 4,101 3,996 8,738 7,450 Payment obligations decrease (2,306) (1,637) n Actuarial valuation method must be the projected 83,871 5,808 56,837 9,297 (Gain)/loss for the period (273) - unit credit method Present value of the liability 1,397 2,875 n Benefits must be related to time period when the employee earns these benefits

The main assumptions used to determine post- n Actuarial assumptions must be fair and mutually employment retirement benefits were: compatible.

31-Dec-14 31-Dec-13 Discount rate 5,2% 5,2% Future increases in salaries 4,8% 4,2%

112 2014 Annual Report www.eximbank.ro 113 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Technical reserves ceded to reinsurers are presented in other assets (note 21), the gross and net changes in Number of shares Number of shares reserves, during 2014, being as follows: Name of the shareholder as of December Value as of December Value 31, 2014 31, 2013 Romanian State through the Ministry of Public Finance 127,286,457 763,720 127,286,457 763,720 Net Attributable to subscription year 31-Dec-14 31-Dec-13 SIF Banat Crisana 414,740 2,488 414,740 2,488 variation 2011 2012 2013 2014 SIF Moldova 414,740 2,488 414,740 2,488 Premium reserve 16,430 (792) (900) (6,681) 8,555 (1,766) 17,222 SIF Transilvania 414,740 2,488 414,740 2,488 Reserve for claims 38,514 28,497 7,865 (35) 1,934 18,733 10,017 SIF Muntenia 564,870 3,389 564,870 3,389 Other technical reserves relating to general insurance business 6,608 6,331 - - 142 6,189 277 SIF Oltenia 4,364,430 26,187 4,364,430 26,187 Technical reserves – gross value 61,552 34,036 6,965 (6,716) 10,631 23,156 27,516 Total 133,459,977 800,760 133,459,977 800,760 Premium reserve - the ceded part in reinsurance 4,141 (3,201) (388) (3,809) 2,278 (1,282) 7,342 Reserves for claims relating general insurance - the The authorized, subscribed and fully paid in share capital ceded part in reinsurance 31,540 26,821 5,333 (745) 5 22,228 4,719 31-dec-14 31-dec-13 of the Bank at December 31, 2014 is 133,459,977 Total technical reserves ceded in reinsurance 35,681 23,620 4,945 (4,554) 2,283 20,946 12,061 Romanian State through the Ministry of shares with a nominal value of RON 6 (December 31, Public Finance 95.374% 95.374% Technical reserves - net value 25,871 10,416 2,020 (2,162) 8,348 2,210 15,455 2013: 133,459,977 shares with a nominal value of SIF Oltenia 3.270% 3.270% RON 6). All issued shares are fully paid in and carry one vote right each. SIF Muntenia 0.423% 0.423% 29. Deferred income SIF Moldova 0.311% 0.311% SIF Transilvania 0.311% 0.311% SIF Banat Crisana 0.311% 0.311% The capital structure as at December 31, 2014 100% 100% 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 and 2013 is as follows: Group Bank Group Bank Deferred income - financing on behalf of the State 11,058 11,058 9,181 9,181 31. Dividends Deferred income - risk margin and letter of credit commission 2,025 2,025 1,236 1,236 Deferred income on insurance guarantees 38 - 5,428 0 Others 1,060 1,057 510 445 During 2014, the Bank did not pay dividends. During dividends from the profit realized in 2012. In terms of 14,181 14,140 16,355 10,862 2013, the Bank paid dividends in total amount of actual cashflows, we note that during 2013 dividends RON 135,822 thousand, respectively RON 129,700 actually paid amounted to RON 115,687 thousand, Deferred income represents income recorded in advance related to commissions for guarantees issued on behalf of thousand, representing dividends from remaining while the amount of RON 20,135 thousand was offset and to the benefit of the State, as well as income from commissions for loans granted on behalf of the State. undistributed profits for the period 2008-2010 and RON against a receivable from the Ministry of Finance. 6,122 thousand (0.05 RON per share) representing 30. Share capital 32. Retained earnings

During 2014 and 2013, respectively, there was no 31-dec-14 31-dec-13 increase in the share capital of the Bank. There were Statutory value (not restated) 800,760 800,760 no changes in the shareholders’ structure. 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Restatement of share capital 900,714 900,714 Group Bank Group Bank 1,701,474 1,701,474 Retained earnings, undistributed 13,951 40,086 22,600 42,837 Retained earnings, adjustment for inflation under IAS 29 (900,714) (900,714) (900,714) (900,714) Reserves (i) 182,655 182,530 133,314 133,189 (704,108) (678,098) (744,800) (724,688)

Undistributed retained earnings include both the current year result and retained earnings remained undistributed from previous years. Retained earnings representing the adjustment for inflation required by IAS 29 refer to the share capital restatement according to the inflation index. Reserves include the capital reserve fund and other reserves set up in previous years, in accordance with legal regulations or resolutions of general meetings of shareholders.

114 2014 Annual Report www.eximbank.ro 115 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

33. Reserves 35. Contingent liabilities, commitments and leasing arrangements

The Bank/Group has set up provisions for financial to be paid. The foreseeable period in which they are guarantees offered and for obligations towards recognized as liabilities and paid to the employees employees, respectively: benefits for outstanding is less than one year, except for provisions for other of loans, guarantees or letters of credit. With respect annual leaves, fund for employee's participation at salary expenses and retirement benefit provisions. Guarantees and Letters of Credit to credit risk on commitments to extend credit, the profit, determined after deducting tax, bonus pool, Provisions for other liabilities include profit distribution Bank is potentially exposed to a loss equal to the pensions and similar obligations, litigation with for 2014 employees’ profit participation fund The Bank/Group issues guarantees and letters amount of total unused commitments. However, the employees and other compensatory payments. amounting RON 3,199 thousand, in accordance with of credit on behalf of its customers. The primary likely amount of loss, although difficult to quantify, is the accounting treatment provided by both Ministry purpose of these instruments is to ensure that funds considerably lower than the total unused value of Provisions recognized as expenses in the year were of Finance No. 128/13.04.2005 and the NBR Order are available to a customer demand. Guarantees and commitments since most of commitments to extend reviewed and adjusted at each balance sheet date 27/2010. standby letters of credit, both represent an irrevocable credit are contingent upon customers complying with to reflect the best estimate of the expected benefits commitment that the Bank will make payments in the specific credit standards. While there is some credit event which a customer cannot meet its obligations to risk associated with remaining commitments, the risk third parties, and carry the same credit risk as loans. 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 is viewed as modest, since it results from the possibility Documentary and commercial letters of credit are of unused portions of authorized loans being drawn by Group Bank Group Bank collateralized and therefore have significantly less risk. the customer and from these drawings subsequently Legal reserves 52,714 52,589 49,877 49,752 Cash requirements under guarantees and standby not being repaid as due. letters of credit are considerably worth less than the Reserves for banking risks 22,896 22,896 22,896 22,896 The Bank/Group monitors the maturity date of credit amount of the commitment because the Bank does not Reserves representing bank’s sources of financing 103,372 103,372 56,868 56,868 commitments because longer-term commitments generally expect the third party to draw funds under the Other reserves 3,673 3,673 3,673 3,673 generally have a higher degree of credit risk than shorter- agreement. 182,655 182,530 133,314 133,189 term commitments. The total outstanding contractual The market and credit risk on these financial amount of commitments to extend credit does not instruments, as well as the operating risk is similar to necessarily represent future cash requirements, since Legal reserves are set to at most 5% of profit before Shareholders approved the distribution of profit of 2013 that arising from granting of loans. In the event of a many of these commitments will expire or terminate tax. General reserves for banking risks include reserves in amount of RON 46,503 thousand to other reserves complaint against the Bank as a result of a customer’s without being funded. default of a guarantee, these instruments also present established until the end of 2006, in quotas and limits (in 2013 for 2012, amounting to RON 6,122 thousand). In order to mitigate the credit risk associated with the provided by law. Other reserves are sources of own a degree of liquidity risk for the Bank. The financial statements include the accounting profit commitments and contingencies, the Bank/Group funding from assets and tax incentives, according to distribution for 2014 to the legal reserve in amount of obtains collaterals in the term of cash, State and bank the law provisions or constituted out of the net profit, RON 2,838 thousand, set up within the limit of 5% guarantees and mortgages and pledges over properties. as decided by the general assembly of shareholders. In Credit Related Commitments of gross profit, cumulated to the distribution of the 2013, the General Assembly of Shareholders approved The aggregate amount of outstanding commitments employees profit participation fund in amount of RON the distribution of remained undistributed profit in amount Commitments to loans granted represent unused and contingencies, including contingent assets, is as 3,199 thousand (note 33). of RON 6,122 thousand, to other reserves (2012: RON portions of authorizations to extend credit in the form follows: 27,886 thousand). In 2014, the General Assembly of 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Group Bank Group Bank Letters of guarantee issued to customers 309,694 309,694 325,443 325,443 34. Available-for-sale reserve Letters of credit 17,529 17,529 13,323 13,323 Undrawn loans commitments 245,974 245,974 379,452 379,452 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 Other 17,061 17,061 16,532 16,532 Group Bank Group Bank 590,258 590,258 734,750 734,750 At January 1 14,525 14,525 2,514 2,514 Net gains/ (losses) from changes in fair value 35,413 35,413 14,299 14,299 Deferred tax (5,666) (5,666) (2,288) (2,288) At December 31 44,272 44,272 14,525 14,525 Commitments Related to The Bank/Group has signed rent contracts for commercial spaces including its headquarters. The Operational Leasing - the Bank as future value of minimum operational lease payments is the Lessee presented in the table below:

116 2014 Annual Report www.eximbank.ro 117 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 The Group/Bank's risk management activities are It affects both balance sheet and off-balance sheet conducted primarily on the following pillars: positions. Concentration risk in the lending activity Group Bank Group Bank could result in a significant loss to the Bank/Group if n Strategic - includes risk management responsabilities Less than 1 year 5,311 4,978 6,000 5,337 a change in economic conditions were to affect the achieved by the Board of Directors and the Risk entire industry or the whole country. A relevant analysis From 1 to 5 years 12.755 12,755 15,910 15,579 Management Committee 18,066 17,733 21,910 20,916 is included in note 37. The Bank/Group minimizes n Tactical - includes risk management responsabilities risk related to lending activity by evaluation and close achieved by the senior management monitoring of credit exposures, establishing exposure The Bank/Group intends to review the contractual terms at the end of each lease agreement. limits and applying a prudent provisioning policy when n Operational – implies risk management the level the probable risk of loss occurs to the Bank/Group. The at which it is created, risk management model at loans are secured by collateral and other guarantees. operational level within the bank including three lines Exposure to credit risk of the Group/Bank by industry of defense consisting of: 36. Risk management is presented in Note 17. a) At the first level, business lines responsible Credit related characteristics, such as value, due dates, for assessing and minimizing risk for a given credit installments, duration, grace period, time of use, level of profit etc. can be changed through replacement operations of This note provides details of the Group/Bank’s of interest. The risk management function should be b) At the second level, the risk management the exposure and through mutual agreement between exposure to risk and describes the methods used by independent of operational functions, with enough function of the Group /Bank monitors, the Bank and the customer. management to mitigate and control risks. The most authority, importance, resources and access to controls, quantifies risk; reports to Exposures replacement operations at EximBank level important eposures to risk of the Group/Bank are: management body. appropriate levels and proposes mitigation are grouped into: measures. Compliance Division manages n Credit risk 4. Ensuring a consistent and effective framework for compliance risk at the bank level n rescheduling identifying, assessing, monitoring and controlling n Liquidity risk risk, which forms the basis for consistent definition c) Internal Audit Department at the third level, n refinancing. n Market risk (interest rate risk, currency risk) of strategies, policies and procedures within all units performs the independent review function. Rescheduling is the process of replacing the exposure of the Group/Bank which are exposed to risk. n Operational risk In accordance with the Operations and Organization that may change due date and/or the payment 5. Monitoring compliance with internal regulations Regulations, the Group/Bank operates a number of amount of one or more outstanding loan installments, n Tax risk. established for the significant risks and proposing committees with an active role in risk management in exceeding or not the initial duration of the loan, but Also, the Group is exposed to insurance risk. solutions for deficiencies. order to minimize risks to which the Bank is exposed: without increasing the principal amount oustanding Audit Committee, Risk Management Committee, at the time of rescheduling. Restructuring is also the Risk is inherent for the operations of the Group/ 6. Risk management function is involved in the approval Credit Committee, Asset and Liability Management operation which amends the terms of a loan, with Bank but is managed through a continuous process of new products or significant modification of existing Committee, Nomination and Remuneration Committee, changes in the repayment schedule. of identification, evaluation and monitoring, which is products. IT Committee. subject to risk limits and other controls. This process Refinancing is the process of replacing an exposure 7. Reviewing the strategy and significant risk of risk management is critical to permanent profitability through which a new loan may be granted or a loan management policies on a regular basis (at least of the Group/Bank and each person within the Group/ A) Credit Risk amount may be increased for repayment of outstanding yearly), in accordance with the regulatory framework Bank is responsible for the exposures to risk relating to loan(s) and interest due, current or outstanding amounts of the National Bank of Romania or Financial own area of responsability. Credit risk derives from the exposures assumed by the (excluding penalties). Supervisory Authority (FSA). Group/Bank, whereas there is the possibility of negative The general risk management principles adopted by The Group/Bank uses exposure replacement The Board of Directors, in order to reflect changes in effects on earnings and capital due to the debtors' failure the Group/Bank are: operations for debtors who are facing or are about to internal and external factors, has the responsibility to to fulfill contractual obligations. The policy of the Bank/ face difficulties in meeting their financial obligations. 1. Definition and classification of the risk profile, risk approve and periodically review both the profile, risk Group on credit risk is concentrated on maintaining tolerance and risk appetite established for categories tolerance and the risk appetite of the Group/Bank, at a good quality of assets, by appropriately selecting of significant risks assumed by the Group/Bank as a level which ensures the sound working and strategic counterparties and proper structuring of transactions. B) Liquidity Risk well as identification, assessment, monitoring and objectives achievement, as well as the risk strategy To effectively manage credit risk, the Group/Bank has controlling risks in accordance with specific rules as a whole and significant risk management policies, established criteria for granting loans, exposure limits The liquidity risk is associated either with difficulties and policies. pursuing their implementation. and levels of competence for transaction approval. face by the Group/Bank to raise the necessary funds Credit risk includes residual risk - the risk that credit in order to meet commitments or to its inability to sell a 2. Maintain an appropriate reporting system for risk The Executive Committee has the responsibility to risk mitigation techniques will prove less effective than financial asset in due time, at a rate as close to its fair exposures, respectively for corresponding limits ensure implementation of the strategy and significant forecasted - and the country risk and transfer risk, value as possible. on risk exposure, in accordance with the size and risk management policies approved by the Board respectively. Concentration risk is also recognized as a complexity of the Group/Bank. of Directors and to develop methodologies and The Bank/Group's policy on liquidity is to maintain significant credit risk. sufficient liquid reserves to meet its obligations as they 3. Adequate separation of duties within the significant procedures for identifying, measuring, monitoring and In granting facilities and loans, the Bank/Group faces a fall due. The amount of total assets and liabilities as at risk management process to avoid potential conflicts controlling all types of risk, according to the nature and complexity of the relevant activities. credit risk, that is the risk of non-payment of receivables. December 31, 2014 and December 31, 2013, analyzed

118 2014 Annual Report www.eximbank.ro 119 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

over the remaining period to maturity is included in has implemented since May 2014 a VaR model (Value- Although the tax due for a transaction may be minor, 8 – Insurance against fire and other calamities Note 38. at-Risk). 1day-99%-RON V@R indicator is defined as penalties may be more important because they can be 9 – Other insurance of goods an estimate with a probability of 99% of the maximum calculated taking as a basis the transaction amount C) Market Risk potential loss (in USD) that could be recorded by the plus: interest 0.03%, and penalties of 0.02% for each 11– Aircraft liability insurance Bank by maintaining the current foreign exchange day of delay. The Romanian authorities have completed 13 – General liability insurance positions, on a time horizon of one day in normal market reviews for fiscal years up to December 31, 2007. Market risk is the risk that the fair value or the future cash conditions, resulting from daily changes in exchange 14 – Loan insurance flows of financial instruments will fluctuate because of rates historically recorded for a period of 1 year. changes in market variables such as interest rates 15 – Guarantee insurance and foreign exchange rates. The Group/Bank has no H) Risks Related to the Insurance At the end of November 2014 it was redefined the risk 16 – Financial loss insurance. trading portfolios. profile of the Bank in respect of currency risk based on Business VaR indicator. EximAsig has adopted an analytical approach towards To manage market risk, the Bank/Group has established EximBank Group has established strategic guidelines the underwriting activity and has set the prices by taking trading limits per counterparty eligibility, and per types with respect to risk management, based on the into account a broader range of information. Thus, it of instruments that can be traded. following elements: F) Operational Risk has a greater probability to maintain the profitability for Debt instruments that the Bank/Group acquires in n Strengthening the risk management at group level; each type of insurance practiced. Operational risk is the risk of loss arising from system their portfolios are mainly represented by the issuance failure, human error, fraud or external events. When n Starting the process of implementation Solvency II Improving the quality of the underwriting process is of central government (Ministry of Public Finance) controls fail to operate effectively, operational risks can requirements; achieved through continuous quantitative and qualitative denominated in RON or EUR. In terms of types of cause damage to reputation, have legal or regulatory development of own sales force, by strengthening instruments, the Bank/Group holds bonds with discount n Reducing the underwriting risk costs by maintaining implications or lead to financial loss. The Bank/Group and developing partnership relations with insurance coupon, treasury bonds with coupon and by exception a high quality and continuous improvement of the cannot expect to eliminate all operational risks, but it brokers and not least, through the optimization of the a few bonds issued by other credit institutions, these portfolio; endeavors to manage these risks through a control reinsurance programs. being acquired in previous years. n An acceptable ratio between the assumed risk and framework and by monitoring and responding to The management of EximAsig analyzes constantly forecasted profit (on total portfolio, structured by potential risks. Controls include effective segregation the loss ratio per insurance class, so as to determine insurance forms and customers); D) Interest Rate Risk of duties, access, authorization and reconciliation the factors which caused undesirable developments procedures, staff education and assessment n Identifying and managing the impact of risks on and also incorporates the results of this analysis in The Group/Bank is exposed to various risks, due to processes, including the use of internal audit. In solvency ratios, profitability, liquidity, quality of the the calculation of the technical reserves and in the fluctuations of main interest rates levels in the market operational risk management process are used as tools insurance products portfolio; underwriting process. that influence its financial position and cash flows. periodic/annual self-assessment of risks and related n Distributing the available resources towards the Interest margins may increase as a result of such controls, key indicators of operational risk, operational CLASS/ Net reinsurance activities which provide a risk adjusted return loss ratio 31-Dec-2014 31-Dec-2013 changes, but may reduce and create losses in the event risk events base, remedial action plans and prevention. (underwriting risk, market risk, operational risk), that unexpected movements arise. The management Accident insurance - 12.29% superior to the standard set by the group. of the Group/Bank sets limits in respect of interest rate G) Taxation Risk Insurance of goods in transit - - changes, which are monitored daily. The group conducts the general insurance activity on Insurance against fire and other 10.80% 1.46% The taxation system in Romania provides detailed and the following types of insurance: natural calamities The amount of total assets and liabilities as at complex rules and it has suffered various modifications General liability insurance -1995.50% 0.26% December 31, 2014 and December 31, 2013 analyzed 1 – Accident insurance in recent years. Interpretation of procedures and into relevant interest rate re-pricing periods is included Loan insurance -128% 504% implementation of tax laws may vary, and there is a risk 5 – Aircraft insurance in Note 39b. Guarantee insurance 30.44% 47.35% that certain transaction may be interpreted differently by 7 – Goods in transit insurance Financial loss insurance - - the tax authorities, as compared to treatment applied E) Currency Risk by the Bank. In addition, the recent conversion to IFRS of Romanian banks raised more fiscal implications, The Bank/Group operates in a developing economy. which are not yet fully clarified in the legislation and A breakdown of the insured amounts on classes of insurance products is presented in the table below: Although in the past Romania experienced high rates of could bring potential tax risks. 31-Dec-2014 31- Dec -2013 inflation and significant currency devaluation, currently CLASS its economic environment is considered stable. The Romanian Government has a number of agencies Limits Insured amounts Limits Insured amounts that are authorized to conduct audit of companies Accident insurance 22,500 - 22,500 2,000 The Bank/Group manages its exposure to movements operating in Romania. These audits are similar in nature in exchange rates by modifying its assets and to tax audits performed by tax authorities in many Insurance of goods in transit 6,500 - 6,500 2,236 liabilities structure. An analysis of assets and liabilities countries, but may extend not only to tax matters but to Insurance against fire and other natural calamities 320,000 195,830 320,000 263,085 denominated in RON and other currencies is included other legal and regulatory issues in which the agencies General liability insurance 525,000 26,730 525,000 77,120 in Note 39a. could be interested. In certain circumstances, due to Loan insurance 180,000 145,610 180,000 49,050 In order to continue improving the process of inconsistencies of legal framework, tax authorities Guarantee insurance 450,000 393,450 450,000 213,105 can act arbitrarily in setting tax penalties and interest. evaluation and monitoring of currency risk, the Bank Financial loss insurance 1,500 780 1,500 780

120 2014 Annual Report www.eximbank.ro 121 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Breakdown analysis structured on main types of insured risks is presented in tables below: 37. Credit risk December 31, 2014 December 31, 2013 Premium reserve, Insurance FOR: Gross Reinsurance Net Gross Reinsurance Net ceded ceded The credit risk management function is based on the The Bank manages the country risk by identifying direct Accidents 4 4 15 15 following principles: exposures, limiting the concentration per country, monitoring and managing exposures on an aggregate Goods in transit - - 3 3 n Ensuring the independence of the lending process, level, in addition to monitoring the exposure per Fire and natural calamities 2,598 - 2,598 1,945 1 1,944 without being influenced by pressures or conflicts of customer and ultimate counterparty. General liability 630 352 278 1,573 509 1,064 interest Also, the Bank takes into account the indirect country Loans 1,516 804 712 427 97 330 n A sustainable growth of the loan portfolio as well as risk exposure by considering each transaction Guarantees and bonds 11,679 2,984 8,695 13,256 6,011 7,245 maintaining high quality assets so as to mitigate a between customers of the Bank/Group and external potential sudden deterioration of the portfolio which Financial loss 3 1 2 3 1 2 counterparties. may occur as a consequence of disruptive factors in Total 16,430 4,141 12,289 17,222 6,619 10,603 the economy The Credit Committee assesses lending conditions and guarantees issuing conditions by correlating them n The development of a prudential, adequate credit to associated risks and approves/rejects financing – limit system, consistent with the risk appetite, risk guaranteeing requests based on the competencies tolerance, risk profile, complying with the capital December 31, 2014 December 31, 2013 limits. Reserve for adequacy of the Group/Bank, in accordance with the RBNS claims: Reinsurance Reinsurance Gross ceded Net Gross ceded Net requirements of relevant regulations. These limits are The maximum gross exposure to credit risk is presented communicated on a regular basis to, understood and below as the gross exposure of all financial assets, Accidents 7,009 6,999 10 10 - 10 complied with by relevant employees inclusive exposures from commitments and contingent Fire and natural calamities 200 200 11 - 11 liabilities. n Lending criteria are well defined, included in internal General liability 4,637 4,086 551 50 24 26 methodologies which appraise the credit risk deriving The maximum gross exposure includes current and Loans - - - 2,243 1,121 1,122 from exposures of individual debtors. The purpose, past due but not impaired loans (note 17). Guarantees and bonds 24,226 19,570 4,656 6,590 3,740 2,850 terms of the loan and reimbursement sources are Total 36,072 30,655 5,417 8,904 4,885 4,019 also clearly defined n Credit limits present on an aggregate basis and in a comparable, relevant manner different types of exposures, on different levels: by customers or December 31, 2014 December 31, 2013 Reserve for groups of customers, industries/ economic sectors, IBNR claims: Gross Reinsurance Net Gross Reinsurance Net products, countries, the quality of assets, currencies ceded ceded and guarantee funds General liability 711 20 691 - - - n Existing of an adequate continuous monitoring Guarantees and bonds 1,731 865 866 1,113 557 556 system of loans Total 2,442 885 1,557 1,113 557 556 n Monitoring processes of both loan portfolios/ subportfolios and individual loans n Allowances for impairment of loans, as well as December 31, 2014 December 31, 2013 prudential provisions are adequately set up Other technical reserves for general insurance: Reinsurance Reinsurance n Troubled loans management and periodic remedial/ Gross ceded Net Gross ceded Net recovery actions of non-performing loans Fire and natural disasters 499 - 499 277 - 277 n The bank employs procedures for the valuation of Guarantees and bonds 6,109 3,054 3,055 - - - collaterals, verifying their enforceability and their Total 6,608 3,054 3,554 277 - 277 recoverability.

122 2014 Annual Report www.eximbank.ro 123 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The maximum exposure to credit risk as at December 31, 2014 is presented below: Fair value of collaterals held Fair value of collaterals held 31.12.2014 – The Bank Gross Other exposure Collateral Debt State financial Mortgages Other Gross Other deposits securities collaterals 31.12.2014 – The Group exposure Collateral Debt State guarantees Deposits securities collaterals financial Mortgages Other guarantees Due from banks 423,304 ------Due from banks 454,617 ------Derivative assets 22 ------

Derivative assets 22 ------Loans and advances to customers, gross 1,774,667 11,819 - 785,622 27,281 409,273 1,250,382 Loans and advances to 1,774,667 11,819 - 785,622 27,281 409,273 1,250,382 customers, gross Investments held to maturity 123,399 - - - - - Investments held to maturity 129,125 ------Available-for-sale investments 1,443,753 - - - - - Available-for-sale investments 1,443,753 ------Other assets 5,905 - - - - - Other assets 53,477 ------Off-balance sheet exposures: 590,258 10,375 - 140,027 29,526 196,796 747,854 Off – balance sheet exposures 590,258 10,375 - 140,027 29,526 196,796 747,854 Letters of credit 17,529 - - - - 3,478 4,152 Letters of credit 17,529 - - - - 3,478 4,152 Loan commitments 245,974 34 - 33,757 11,603 143,258 538,887 Loan commitments 245,974 34 - 33,757 11,603 143,258 538,887 Letters of guarantee 326,755 10,341 - 106,270 17,923 50,060 204,815

Letters of guarantee 326,755 10,341 - 106,270 17,923 50,060 204,815 Total 4,361,308 22,194 - 925,649 56,807 606,069 1,998,236

Total 4,445,919 22,194 - 925,649 56,807 606,069 1,998,236

Fair value of collaterals held The maximum exposure to credit risk as at December 31, 2013 is the following: Gross Other 31.12.2013 –The Bank exposure Collateral Debt State Fair value of collaterals held financial Mortgages Other deposits securities collaterals guarantees 31.12.2013 – The Group Gross Other exposure Collateral Debt State financial Mortgages Other Due from banks 272,863 - 108,446 - - - - Deposits securities collaterals guarantees Derivative assets ------Due from banks 300,997 - 108,446 - - - - Loans and advances to 1,339,588 10,884 - 489,174 19,751 505,532 1,213,363 Derivative assets ------customers, gross

Loans and advances to Investments held to maturity 1,266,648 ------customers, gross 1,339,588 10,884 - 489,174 19,751 505,532 1,213,363 Available-for-sale investments 946,207 ------Investments held to maturity 1,272,476 ------Other assets 14,933 ------Available-for-sale investments 946,207 ------Off-balance sheet exposures 734,750 14,686 - 243,045 20,260 116,744 242,342 Other assets 45,937 ------Letters of credit 13,323 13,156 - - - - - Off – balance sheet exposures 734,750 14,686 - 243,045 20,260 116,744 242,342 Loan commitments 379,452 553 - 45,584 441 70,297 118,837 Letters of credit 13,323 13,156 - - - - - Letters of guarantee 341,975 977 - 197,461 19,819 46,447 123,505 Loan commitments 379,452 553 - 45,584 441 70,297 118,837 Total 4,574,989 25,570 108,446 732,219 40,011 622,276 1,455,705 Letters of guarantee 341,975 977 - 197,461 19,819 46,447 123,505

Total 4.639.955 25.570 108.446 732.219 40.011 622.276 1.455.705

124 2014 Annual Report www.eximbank.ro 125 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Collateral value and type depend upon the appraisal of the Loans and advances to customers are aggregated Impairment Assessment Allowances for impairment are determined through counterparty risk. Guidelines are implemented regarding based on risk categories as follows: individual assessment for loans and advances with The Group/Bank takes into account the main following the maximum degree of acceptability of collateral types impairment indicators and based on a collective A – minimum risk; impairment indicators: and valuation parameters. The valuation of assets brought approach for loans with no impairment indicators, as collaterals is performed by authorized ANEVAR B – low risk, no losses are expected; n Principal or interest overdue for more than 60 days estimating the total value of losses incurred but not valuators, approved by the Group/Bank and notified identified. Loans and advances individually assessed C – average risk, but acceptable and mitigated by the n The initiation of legal procedures to the National Bank of Romania. Valuation reports with a nil individual provision resulting from the strict monitoring of commitments – losses are unlikely provided by external valuators are approved by internal n Restructurings which occurred during the past 12 assessment are included in the collective impairment to be incurred; valuators of the Group/Bank. Management monitors the months assessment. market value of collaterals and valuation parameters and D – high risk, exposures related to these customers are n Ratings of D or E, on an A to E scale In order to perform the collective assessment, requests additional collaterals in accordance with the carefully monitored and limited starting from the financial assets are grouped based on similar risk contractual agreement to ensure that collaterals cover moment the lending decision is made, throughout n The management of the Group/Bank may identify characteristics of payment of remaining exposure the entire exposure of the Group/Bank. the tenor of the loan – losses are likely to be incurred; other impairment indicators based on information suggesting a deterioration in the financial position according to contractual terms, allowances for E – maximum risk – with imminent losses in most cases. On balance sheet credit risk exposure, for both the of the debtor, for instance due to a decrease in impairment being computed on an individual basis, Group and the Bank, representing loans and advances to Impaired Loans and Advances sales or gross profit margin or due to other events using parameters for the specific type of loan and customers (note 17) may be classified on risk categories which occurred subsequent to the initial recognition tenor, which are determined using statistic historical The Group/Bank classifies loans and advances to as follows: of the loan and which may affect the ability of methods, respectively the probability of default (PD) customers as impaired when there is objective evidence the customer to comply with the reimbursement and the loss given default (LGD). of a loss event occurring after initial recognition, event schedule. Gross maximum exposure of loans which impacts the future estimated cashflows of the Risk category and advances to customers asset. 2014 2013 Past Due but Not Impaired loans The following table presents individual and collective allowances estimated by the Group/Bank as at December 31, 2014 and December 31, 2013. A 368,862 337,528 The Group/Bank classifies as past due but not impaired B 763,329 360,327 loans those exposures with overdue interest or 2014 2013 C 436,728 420,327 instalments but for which the Group/Bank has not yet D 160,796 88,55 identified sufficient evidence to classify them as non- Allowances for individually assessed loans 54,115 143,048 performing due to the number of days past due, overdue E 44,951 132,856 Allowances for collectively assessed loans 39,622 18,092 exposure to total exposure ratio or due to the financial 93,736 161,140 Total 1,774,666 1,339,588 position of the customer.

The aging of past due but not impaired loans is as follows: 2014 Neither past due nor impaired Customer Past due Impaired Total 31-Dec-14 31-Dec-14 31-Dec-13 31-Dec-13 type A B C D E Group Bank Group Bank Corporate customer 176,188 763,245 417,574 74,501 27,797 7,845 114,843 1,581,993 Past due but not impaired: 14,942 14,942 16,239 16,239 Public authorities 185,575 - - - - 7,098 - 192,673 Less than 30 days past due 14,856 14,856 16,211 16,211 31 – 60 days past due 86 86 - - Total gross 361,763 763,245 417,574 74,501 27,797 14,943 114,843 1,774,666 exposure 61 – 90 days past due - - - - 2013 Neither past due nor impaired More than 90 days past due - - 28 28 Customer Past due Impaired Total type A B C D E Corporate customer 104,681 349,266 416,754 54,754 381 10,136 171,768 1,107,740 Public authorities 225,685 - - - - 6,104 60 231,848 Total gross exposure 330,366 349,266 416,754 54,754 381 16,239 171,828 1,339,588

126 2014 Annual Report www.eximbank.ro 127 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Restructured Loans 38. Liquidity risk In 2014 EximBank had 24 restructured loans (2013: 17 restructured loans), of which 8 loans neither past due nor impaired, 13 loans past due but not impaired and 3 impaired loans as presented in the following table (exposures and classifications being those prior to restructuring): The Group recognizes the liquidity risk as representing In the process of mitigating liquidity risks, the Bank the current or future risk which affects negatively the daily determines the Immediate liquidity indicator, 2014 2013 profits and capital, due to the Group/Bank inability to representing the share of liquid assets, collateral free, in Neither past due nor impaired 6,073 5,492 fulfil its obligations as they fall due. the total attracted and borrowed sources, and ensures Past due but not impaired 72,243 9,694 its maintenance within the limits established through For an adequate management of this risk and an Impaired loans 6,522 11,409 internal risk strategies, values recorded for this indicator effective management of liquidity, the Group performs in 2014, compared with 2013 being as follows: Total 84,838 26,595 daily monitoring of all inflows and outflows of cash or cash equivalents related to interbank maturities, of 2014 2013 In accordance with letters no. 490/FG/28.04.2014, 533/FG/09.05.2014 and 703/FG/17.06.2014 received from the events on the securities portfolio or resulting from loan Minimum 63% 69% National Bank of Romania during 2014, the Bank performed writen off fully provided exposures. Exposures for which repayment, through monitoring of the liquidity position recovery means are not exhausted are recorded by the Bank/Group in off-balance sheet. on the relevant maturity buckets and actively managing Maximum 87% 108% liquidity reserves needed to fulfill its obligations with Annual average 74% 89% minimal costs. Written off exposures Note 31-Dec-14 31-Dec-13 Liquidity ratio determined monthly, according to Due from banks 1,008 - Giving special importance to liquidities, the Group/Bank NBR Regulation no.25/2011 is presented below. The maintains the minimum reserves required by Regulation Loans and advances to customers 17 150,544 - minimum level required by law is 1 for each bucket No.6 / 2002 of NBR, of 10% of the resources attracted below 1 year for all currencies in RON equivalent and Sundry debtors 22,050 2 in RON and 14% of the resources attracted in foreign is determined by dividing the actual liquidity at liquidity Total exposures written off 173,602 2 currency, in force at the end of 2014. needs. Furthermore, the Group ensures maintenance of a 2014 2013 Exposures monitored in off – balance sheet accounts 31-Dec-14 31-Dec-13 certain level of liquid asset stocks, unencumbered by Minimum 1.20% 1.18% Due from banks 1,013 - obligations, eligible for guaranteed financing operations, composed of government securities, to ensure the Maximum 1.39% 1.31% Loans and advances to customers 139,791 - necessary liquidities in the event of exceptional market Annual average 1.29% 1.24% Other receivables 4,175 - circumstances. The Bank has an early warning system Total exposures in off – balance sheet accounts 144,979 - in case of a liquidity crisis event in the banking system. Following the transposition into national legislation of the EU Regulation no. 575/2013, starting March 2014 The Group/Bank projects cash flows on predictable the Bank uses to monitor the liquidity risk coverage periods of time, using alternative scenarios. These indicator (LCR) and net stable funding indicator (NSFR), projections are used to perform analysis of cash flow reporting to the National Bank of Romania the gross mismatches (liquidity gap), based on assumptions data needed to calculate these indicators. The levels about future behavior of assets, liabilities and off- calculated internally for purposes of monitoring liquidity balance sheet items and calculates the cumulative net on 31.12.2014 is as follows: liquidity deficit for a time horizon. Dec-14 The Bank takes into account three types of crisis scenarios: scenarios related to the Bank's internal Assets with a high degree of liquidity 1,436,446 specifics, general market-related scenarios and a Net outflows in the next 30 days 422,791 scenario that develops a combination of the first two LCR % 340% types, according to the risk profile assumed. NSFR % 140%

128 2014 Annual Report www.eximbank.ro 129 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The table below analyzes financial assets and liabilities of the Group/Bank grouped by relevant maturity deadlines, The table from below analyzes financial assets and liabilities of the Group/Bank into relevant maturity groupings as at 31.12.2014: based on the remaining period to maturity, as at 31.12.2014:

31.12.2014 – The GROUP TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years 31.12.2013 – The Group TOTAL < 1 month 1 – 3 months 3 - 12 months 1 - 5 years Over 5 years FINANCIAL ASSETS FINANCIAL ASSETS Cash and cash equivalents 801 801 - - - - Cash and cash equivalents 1,470 1,470 - - - - Accounts with the National Bank of Accounts with the National Bank of Romania 175,591 175,591 - - - - Romania 74,055 74,055 - - - - Due from banks 300,997 272,089 17,578 11,330 - - Due from banks 454,617 425,750 19,175 9,692 - - Loans (gross value) 1,339,588 165,996 114,111 506,328 417,884 135,269 Loans (gross value) 1,774,666 79,390 156,366 1,043,638 383,905 111,367 Available-for-sale investments 946,207 19,935 2,361 16,528 708,506 198,877 Available-for-sale investments 1,443,753 65,586 6,690 101,317 788,996 481,164 Held to maturity investments 1,272,476 576,968 326,990 248,518 120,000 - Investments held to maturity 129,125 - - 14,882 114,243 - Commissions receivable from the state 13,248 9,057 3,720 19 312 140 Commissions receivable from the state 1,165 1,165 - - - - Other assets (* 32,690 32,605 1 84 - - Derivative assets 22 22 - - - - TOTAL FINANCIAL ASSETS 4,082,990 1,254,434 464,761 782,807 1,246,702 334,286 Other assets(* 52,312 52,312 - - - - FINANCIAL LIABILITIES TOTAL FINANCIAL ASSETS 3,930,516 699,081 182,231 1,169,529 1,287,144 592,531 Due to banks 1,203,654 1,140,519 58,103 5,032 - - FINANCIAL LIABILITIES State Funds 1,596,458 - - - - 1,596,458 Due to banks 488,833 488,833 - - - - Due to Customers 103,100 59,151 1,925 34,509 5,225 2,290 State Funds 1,593,188 193,188 - - 1,400,000 - Derivative liabilities 64 64 - - - - Due to customers 646,116 348,977 106,255 184,429 5,569 886 Other liabilities 63,512 35,996 - - - 27,516 Derivative liabilities 2,098 2,098 - - - - 2,965,928 1,234,870 60,028 39,541 5,225 1,626,264 Other liabilities 80,616 80,616 - - - - NET ASSETS 1,117,062 19,564 404,733 743,266 1,241,477 (1,291,978) 2,810,851 1,113,712 106,255 184,429 1,405,569 886 NET ASSETS 1,119,665 (414,631) 75,976 985,100 (118,425) 591,645 * Other assets do not include Prepaid expenses – RON 23,650 thousand, which were not exposed to liquidity risk.

*Other assets do not include Prepaid expenses – RON 19,031 thousand, which were not exposed to liquidity risk. 31.12.2013 – The Bank TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years FINANCIAL ASSETS 31.12.2014 – The Bank TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years Cash and cash equivalents 1,387 1,387 - - - - FINANCIAL ASSETS Accounts with the National Bank of Romania 175,591 175,591 - - - - Cash and cash equivalents 774 774 - - - - Due from banks 272,863 267,845 5,018 - - - Accounts with the National Bank of Romania 74,055 74,055 - - - - Loans (gross value) 1,339,588 165,996 114,111 506,328 417,884 135,269 Due from banks 423,304 423,304 - - - - Available-for-sale investments 946,207 19,935 2,361 16,528 708,506 198,877 Loans (gross value) 1,774,666 79,390 156,366 1,043,638 383,905 111,367 Investments held to maturity 1,266,648 576,968 326,990 242,690 120,000 - Available-for-sale investments 1,443,753 65,586 6,690 101,317 788,996 481,164 Commissions receivable from the state 13,248 9,057 3,720 19 312 140 Investments held to maturity 123,399 - - 13,399 110,000 - Derivative assets ------Commissions receivable from the state 1,165 1,165 - - - - Other assets (* 1,685 1,600 1 84 - - Derivative assets 22 22 - - - - TOTAL FINANCIAL ASSETS 4,017,217 1,218,379 452,201 765,649 1,246,702 334,286 Other assets (* 4,740 4,740 - - - - FINANCIAL LIABILITIES TOTAL FINANCIAL ASSETS 3,845,878 649,036 163,056 1,158,354 1,282,901 592,531 Due to banks 1,203,654 1,140,519 58,103 5,032 - - FINANCIAL LIABILITIES State Funds 1,596,458 - - - - 1,596,458 Due to banks 488,833 488,833 - - - - Due to customers 109,005 59,186 7,795 34,509 5,225 2,290 State Funds 1,593,188 193,188 - - 1,400,000 - Derivative liabilities 64 64 - - - - Due to customers 647,221 349,082 107,255 184,429 5,569 886 Other liabilities 15,546 15,546 - - - - Derivative liabilities 2,098 2,098 - - - - 2,924,727 1,215,315 65,898 39,541 5,225 1,598,748 Other liabilities 8,213 8,213 - - - - NET ASSETS 1,092,490 3,064 386,303 726,108 1,241,477 -1,264,462 2,739,553 1,041,414 107,255 184,429 1,405,569 886 NET ASSETS 1,106,325 (392,378) 55,801 973,925 (122,668) 591,645 *Other assets do not include Prepaid expenses – RON 23,660 thousand, which were not exposed to liquidity risk.

*Other assets do not include Prepaid expenses – RON 19,006 thousand, which were not exposed to liquidity risk.

130 2014 Annual Report www.eximbank.ro 131 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Financial liabilities of the Group/Bank at the end of the financial year 2014, including future cash flows representing unrecognized interest in profit or loss account, and in the amortized cost of liabilities presented in the financial 39. Market risk position, respctively, are presented as follows:

31.12.2014 – The GROUP TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years FINANCIAL LIABILITIES (including future interest) A. Currency Risk Due to banks 488,861 488,861 - - - - The currency structure of financial assets and liabilities of the Group/Bank as at December 31, 2014 is as follows: State Funds 1,688,357 193,188 5,713 17,140 1,472,316 - Due to customers 647,477 349,037 106,374 185,399 5,696 971 31.12.2014 – The Group TOTAL RON EUR USD OTHERS Derivative liabilities 2,098 2,098 - - - - FINANCIAL ASSETS Other liabilities 80,616 80,616 - - - - Cash and cash equivalents 801 553 150 88 10 Accounts with the National Bank of Romania 74,055 66,853 7,202 - - 2,907,409 1,113,800 112,087 202,539 1,478,012 971 Due from banks 454,617 399,425 47,160 4,071 3,961 Derivatives 22 22 - - - 31.12.2014 – The BANK TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years Loans and advances to customers, net 1,680,930 1,521,367 130,963 28,600 - FINANCIAL LIABILITIES (including future interest) Available-for-sale investments 1,443,753 1,038,945 404,799 9 - Due to banks 488,861 488,861 - - - - Investments held to maturity 129,125 129,125 - - - State Funds 1,688,357 193,188 5,713 17,140 1,472,316 - Commissions receivable from the State 1,165 1,165 - - - Other assets 71,343 70,676 554 55 58 Due to customers 648,582 349,142 107,374 185,399 5,696 971 TOTAL FINANCIAL ASSETS 3,855,811 3,228,131 590,828 32,823 4,029 Derivative liabilities 2,098 2,098 - - - - FINANCIAL LIABILITIES Other liabilities 8,213 8,213 - - - - Due to banks 488,833 327,050 144,330 16,591 862 2,836,111 1,041,502 113,087 202,539 1,478,012 971 State Funds 1,593,188 1,593,188 - - - Derivative liabilities 2,098 2,098 - - - Due to customers 646,116 586,773 43,175 14,905 1,263 Financial liabilities of the Group/Bank at the end of the financial year 2013, including future cash flows representing Provisions 14,571 14,571 - - - unrecognized interest in profit and loss account, and in the amortized cost of liabilities presented in the financial Other liabilities 80,616 72,905 7,651 24 36 position, respctively,are presented as follows: TOTAL FINANCIAL LIABILITIES 2,825,422 2,596,585 195,156 31,520 2,161 NET FINANCIAL ASSETS - LIABILITIES 1,030,389 631,546 395,672 1,303 1,868 31.12.2013 – The GROUP TOTAL < 1 month 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years FINANCIAL LIABILITIES (including future interest) 31.12.2014 – The Bank TOTAL RON EUR USD OTHERS Due to banks 1,272,553 1,199,093 68,371 5,089 - - FINANCIAL ASSETS State Funds 1,596,458 - - - - 1,596,458 Cash and cash equivalents 774 531 145 88 10 Accounts with the National Bank of Romania 74,055 66,853 7,202 - - Due to customers 109,970 60,852 7,808 32,379 6,544 2,387 Due from banks 423,304 372,745 42,546 4,052 3,961 Derivative liabilities 64 64 - - - - Derivative assets 22 22 - - - Other liabilities 62,652 35,136 - - - 27,516 Loans and advances to customers, net 1,680,930 1,521,367 130,963 28,600 - 3,041,697 1,295,145 76,179 37,468 6,544 1,626,361 Available-for-sale investments 1,443,753 1,038,945 404,799 9 - Investments held to maturity 123,399 123,399 - - - 31.12.2013 – The BANK TOTAL < 1 month 1 – 3 months 3 - 12 months 1 - 5 years Over 5 years Commissions receivable from the State 1,165 1,165 - - - Other assets 23,746 23,507 126 55 58 FINANCIAL LIABILITIES (including future interest) TOTAL FINANCIAL ASSETS 3,770,526 3,147,912 585,781 32,804 4,029 Due to banks 1,272,553 1,199,093 68,371 5,089 - - FINANCIAL LIABILITIES State Funds 1,596,458 - - - - 1,596,458 Due to banks 488,833 327,050 144,330 16,591 862 Due to customers 109,970 60,852 7,808 32,379 6,544 2,387 State Funds 1,593,188 1,593,188 - - - Derivative liabilities 64 64 - - - - Derivatives 2,098 2,098 - - - Other liabilities 15,546 15,546 - - - - Due to customers 647,221 587,866 43,179 14,913 1,263 2,994,591 1,275,555 76,179 37,468 6,544 1,598,845 Provisions 11,571 11,571 - - - Other liabilities 8,213 6,242 1,911 24 36 TOTAL FINANCIAL LIABILITIES 2,751,186 2,528,077 189,420 31,528 2,161 NET FINANCIAL ASSETS - LIABILITIES 1,019,340 619,835 396,361 1,276 1,868

132 2014 Annual Report www.eximbank.ro 133 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The currency structure of financial assets and liabilities of the Group/Bank as at December 31, 2013 is as follows: The Group/Bank does not carry out activities to be currency position indicators. As it can be noticed, the included in the trading portfolio nor does it carry out Bank was in line with a low risk profile, the total currency 31.12.2013 – The Group TOTAL RON EUR USD OTHERS transactions with goods. In these circumstances, position remaining within established limits: from the category of market risk, the Group/Bank only FINANCIAL ASSETS n in 2013: ±2% of equity Cash and cash equivalents 1,470 1,069 326 33 42 measures the foreign currency risk for the entire activity of the Group/Bank. n in 2014: ±2% of equity, but starting December Accounts with the National Bank of Romania 175,591 160,283 4,319 10,989 0 2014 the relevant indicator was replaced with VaR To ensure the framework for measuring, monitoring Due from banks 300,997 278,920 13,329 6,297 2,451 indicator: VaR ≤ RON 0,45 million. and controlling of risks induced by the fluctuations of Derivative assets - - - - - the currencies traded by the Bank, it is used the daily The maximum VaR in 2014 was EUR – 149,6 thousand, Loans and advances to customers, net 1,178,448 1,077,878 66,872 33,698 - monitoring of individual currency position and total recorded in May. Available-for-sale investments 946,207 724,592 189,687 31,928 - Investments held to maturity 1,272,476 1,272,476 - - - Commissions receivable from the State 13,248 13,248 - - - The net foreign currency position at 31.12.2014, expressed in thousand RON, is presented below for each significant Other assets 56,340 45,928 10,228 133 51 currency in which the bank holds an open position: TOTAL FINANCIAL ASSETS 3,945,500 3,575,117 284,761 83,078 2,544 FINANCIAL LIABILITIES SPOT FORWARD Net open position Due to banks 1,203,654 1,094,673 28,254 80,727 - Currency Original RON equivalent Original RON equivalent Original RON equivalent State Funds 1,596,458 1,596,458 - - - amount amount amount (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) Derivative liabilities 64 - - 64 - EUR 99,510 446,013 (102,000) (457,174) (2,490) (11,162) Due to customers 103,100 51,975 43,244 7,868 13 USD 41 149 - - 41 149 Provisions 25,794 23,974 - 1,820 - GBP 39 224 - - 39 224 Other liabilities 63,512 53,690 9,198 568 56 CHF 138 513 - - 138 513 TOTAL FINANCIAL LIABILITIES 2,989,417 2,817,605 80,696 91,047 69 Others 369 - 369 NET FINANCIAL ASSETS - LIABILITIES 956,083 757,512 204,065 (7,969) 2,475 Net position (+)=long, 447,268 (457,174) (9,906) (-)=short

31.12.2013 – The Bank TOTAL RON EUR USD OTHERS FINANCIAL ASSETS By comparison, the situation at 31.12.2013 is shown in the table below: Cash and cash equivalents 1,387 1,027 285 33 42 Accounts with the National Bank of Romania 175,591 160,283 4,319 10,989 - SPOT FORWARD Net open position Due from banks 272,863 259,532 6,652 4,228 2,451 Currency Original RON equivalent Original RON equivalent Original RON equivalent Loans and advances to customers, net 1,178,448 1,077,878 66,872 33,698 - amount amount amount (thousands) (thousands) (thousands) (thousands) (thousands) (thousands) Available-for-sale investments 946,207 724,592 189,687 31,928 - EUR 24,120 108,172 (25,000) (112,118) (880) (3,946) Investments held to maturity 1,266,648 1,266,648 - - - USD 492 1,601 - - 492 1,601 Commissions receivable from the State 13,248 13,248 - - - GBP 155 836 - - 155 836 Other assets 24,945 24,398 392 104 51 CHF 64 233 - - 64 233 TOTAL FINANCIAL ASSETS 3,770,526 3,147,912 585,781 32,804 4,029 NOK 1,729 926 - - 1,729 926 FINANCIAL LIABILITIES Others - 467 - - 467 Due to banks 1,203,654 1,094,673 28,254 80,727 - Net position State Funds 1,596,458 1,596,458 - - - (+)=long, 112,235 (112,118) 118 (-)=short Derivatives 64 - - 64 - Due to customers 109,005 57,880 43,244 7,868 13 Provisions 22,971 21,151 - 1,820 - Other liabilities 15,546 15,247 241 2 56 TOTAL FINANCIAL ASSETS 2,751,186 2,528,077 189,420 31,528 2,161 NET FINANCIAL ASSETS - LIABILITIES 1,019,340 619,835 396,361 1,276 1,868

134 2014 Annual Report www.eximbank.ro 135 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The table below presents a sensitivity analysis of the Bank's profit or loss accoun for variations of +/- 10% or +/- 20% The Group’s/Bank’s average level of interest rates in 2014 and in 2013, respectively, for the main items of assets on the exchange rates against RON. The impact is determined according to the two levels of stress on exchange and liabilities denominated in RON, EUR and USD are presented in the table below: rate, hypothetically chosen. All amounts are expressed in thousand RON, unless otherwise stated. 2014 2013 Net open position Profit impact Equity impact Exchange RON EUR USD RON EUR USD Currency Original RON rate FINANCIAL ASSETS amount Equivalent 31.12.2014 +/- 10% +/- 20% +/- 10% +/- 20% (thousands) (thousands) Accounts with the National Bank of Romania 0.47% 0.21% 0.13% 0.88% n.a. 0.22% EUR (2,490) (11,162) 4.4821 (1,116) (2,232) (1,116) (2,232) Placements with banks 2.35% 0.12% 0.19% 3.76% 0.60% 0.14% USD 41 149 3.6868 15 30 15 30 Loans 6.20% 4.91% 3.64% 7.75% 4.85% 3.41% GBP 39 224 5.743 22 45 22 45 Fixed income 5.19% 3.45% 4.50% 5.68% 3.74% 4.38% CHF 138 513 3.7273 51 103 51 103 Total assets 5.42% 3.72% 2.30% 5.81% 4.01% 2.32% Others 369 - 37 74 37 74 FINANCIAL LIABILITIES Net position (9,906) +/- 991 +/- 1981 +/- 991 +/- 1981 Due to banks 2.13% 0.23% 0.33% 3.34% 0.33% 0.35% State Funds 2.93% n.a. n.a. 4.43% n.a. n.a. Due to customers 1.62% 0.23% 0.12% 2.59% 0.39% 0.12% By comparison, the net foreign currency position as at 31.12.2013 is presented below: Total liabilities 2.65% 0.23% 0.24% 4.06% 0.35% 0.21%

Net open position Profit impact Equity impact Exchange Currency Original RON rate amount Equivalent 31.12.2013 +/- 10% +/- 20% +/- 10% +/- 20% (thousands) (thousands) EUR (880) (3,946) 4.4847 (395) (789) (395) (789) USD 492 1,601 3.2551 160 320 160 320 GBP 155 836 5.3812 84 167 84 167 CHF 64 233 3.6546 23 47 23 47 NOK 1,729 926 0.5355 93 185 93 185 Others 467 - 47 93.34 47 93 Net position 118 +/- 12 +/- 24 +/- 12 +/- 24

B. Interest Rate Risk

The Group addresses the interest rate risk for its entire denominated in RON, the main currency in which the activity, considering the fact that it does not hold a assets and liabilities of the Group are denominated. trading portfolio. This means that variations in interest The GAP analyses performed at 31.12.2014, and at rates may impact future profits or lower its economic 31.12.2013, present the Bank's balances of assets and value. liabilities, sensitive to interest rates, distributed depending In this respect, the Group uses a GAP analysis, to reflect on the moment of interest rates revision or their maturity, the sensitivity of annual financial results from interest to establish the differences between these assets and rate variation, as well as the standard methodology liabilities. The potential effects on profits, estimated on a amending the economic value as a result of interest rate yearly basis, were determined using two different linear changes, according to NBR Regulation No. 18/2009, growth scenarios with differentiated variation of interest in force at the end of 2014. rates for assets and liabilities, respectively: increase with + 100bp/ + 50bp and with +50bp/ + 100bp: The change of the economic value, as a result of applying standard shock on interest rate of 200 bps, represents 11.3% of the Group's own funds at 31.12.2014 (Note 2014 2013 40 Own Funds and Capital Adequacy), compared to Scenario 1: +100bp (assets) /+50pb (liabilities) 11,256 13,801 7.5% of own funds at 31.12.2013. This is generated by balance sheet items sensitive to the interest rate Scenario 2: +50bp (assets) /+100pb (liabilities) (14,758) (11,622)

136 2014 Annual Report www.eximbank.ro 137 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The table below presents interest bearing assets and liabilities of the Group into relevant re-pricing buckets as at The table below presents interest bearing assets and liabilities of the Group into relevant re-pricing groupings as at December 31, 2014. December 31, 2013.

31.12.2014 – The Group TOTAL < 1 1-3 3-12 1-5 years Over 5 No interest < 1 1-3 3-12 Over 5 month months months years 31.12.2013 – The Group TOTAL month months months 1-5 years years No interest FINANCIAL ASSETS FINANCIAL ASSETS Cash and cash equivalents 801 - - - - - 801 Cash and cash equivalents 1,470 - - - - - 1,470 Accounts with the National Bank of 74,055 74,055 - - - - - Accounts with the National Bank of Romania Romania 175,591 175,591 - - - - - Due from banks 454,617 425,750 19,175 - - 9,692 - Due from banks 300,997 272,089 17,578 11,330 - - - Derivative assets 22 - - - - - 22 Loans and advances to customers, net 1,178,448 289,881 668,849 166,327 49,001 4,390 - Loans and advances to customers, net 1,680,930 433,470 1,023,596 208,904 14,960 - - Available-for-sale investments 946,207 - - - 741,230 204,810 167 Available-for-sale investments 1,443,753 22,653 6,690 101,897 811,732 500,614 167 Investments held to maturity 1,272,476 583,873 323,632 242,579 122,392 - - Investments held to maturity 129,125 - - 14,788 112,854 1,483 - Commissions receivable from the State 13,248 - - - - - 13,248 Commissions receivable from the State 1,165 - - - - - 1,165 Other assets 56,340 - - - - - 56,340 Other assets 71,343 - - - - - 71,343 TOTAL FINANCIAL ASSETS 3,945,500 1,321,434 1,010,059 420,236 912,623 209,200 71,948 TOTAL FINANCIAL ASSETS 3,855,811 955,928 1,049,461 325,589 939,546 511,789 73,498 FINANCIAL LIABILITIES FINANCIAL LIABILITIES Due to banks 1,203,654 1,140,519 58,103 5,032 - - - Due to banks 488,833 488,833 - - - - - State Funds 1,596,458 960,532 454,218 1,673 130,000 50035 - State Funds 1,593,188 1,593,188 - - - - - Derivative liabilities 64 - - - - - 64 Derivative liabilities 2,098 - - - - - 2,098 Due to customers 103,100 59,150 1,925 34,509 5,226 2290 - Due to customers 646,116 348,977 106,255 184,429 5,569 886 - Other liabilities 80,616 - - - - - 80,616 Other liabilities 63,512 - - - - - 63,512 TOTAL FINANCIAL LIABILITIES 2,810,851 2,430,998 106,255 184,429 5,569 886 82,714 TOTAL FINANCIAL ASSETS 2,965,928 2,160,201 514,246 41,214 135,226 52,325 62,716 NET ASSETS 1,044,960 (1,475,070) 943,206 141,160 933,977 510,903 (9,216) NET ASSETS 979,572 (838,767) 495,813 379,022 777,397 156,875 9,232

< 1 1-3 3-12 Over 5 31.12.2013 – The Bank TOTAL < 1 1-3 3-12 1-5 years Over 5 No interest 31.12.2014 – The Bank TOTAL month months months 1-5 years years No interest month months months years FINANCIAL ASSETS FINANCIAL ASSETS Cash and cash equivalents 774 - - - - - 774 Cash and cash equivalents 1,387 - - - - - 1,387 Accounts with the National Bank of Accounts with the National Bank of 175,591 175,591 - - - - - Romania 74,055 74,055 - - - - - Romania Due from banks 423,304 394,437 19,175 - - 9,692 - Due from banks 272,863 243,955 17,578 11,330 - - - Derivative assets 22 - - - - - 22 Loans and advances to customers, net 1,178,448 289,881 668,849 166,327 49,001 4,390 - Loans and advances to customers, net 1,680,930 433,470 1,023,596 208,904 14,960 - - Available-for-sale investments 946,207 - - - 741,230 204,810 167 Available-for-sale investments 1,443,753 22,653 6,690 101,897 811,732 500,614 167 Investments held to maturity 1,266,648 578,045 323,632 242,579 122,392 - - Investments held to maturity 123,399 - - 13,305 108,611 1,483 - Commissions receivable from the State 13,248 - - - - - 13,248 Commissions receivable from the State 1,165 - - - - - 1,165 Other assets 24,945 - - - - - 24,945 Other assets 23,746 - - - - - 23,746 TOTAL FINANCIAL ASSETS 3,945,500 1,321,434 1,010,059 420,236 912,623 209,200 71,948 TOTAL FINANCIAL ASSETS 3,771,148 924,615 1,049,461 324,106 935,303 511,789 25874 FINANCIAL LIABILITIES FINANCIAL LIABILITIES Due to banks 1,203,654 1,140,519 58,103 5,032 - - - Due to banks 488,833 488,833 - - - - - State Funds 1,596,458 960,532 454,218 1,673 130,000 50035 - State Funds 1,593,188 1,593,188 - - - - - Due to customers 64 - - - - - 64 Derivative liabilities 2,098 - - - - - 2,098 Derivative liabilities 103,100 59,150 1,925 34,509 5,226 2290 - Due to customers 647,221 350,082 106,255 184,429 5,569 886 - Other liabilities 63,512 - - - - - 63,512 Other liabilities 8,213 - - - - - 8,213 TOTAL FINANCIAL LIABILITIES 2,965,928 2,160,201 514,246 41,214 135,226 52,325 62,716 TOTAL FINANCIAL ASSETS 2,739,553 2,432,103 106,255 184,429 5,569 886 10,311 NET ASSETS 979,572 (838,767) 495,813 379,022 777,397 156,875 9,232 NET ASSETS 1,031,595 (1,507,488) 943,206 139,677 929,734 510,903 15,563

The items are distributed on time buckets, based on the residual maturity for those with fixed interest rates, or the The items are distributed on time buckets, based on the residual maturity for those with fixed interest rates, or the earlier interest rate re-pricing date, for those items with a floating interest rate. earlier interest rate re-pricing date, for those items with a floating interest rate.

138 2014 Annual Report www.eximbank.ro 139 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

EXIMBANK S.A’s Equity tier 1 (common and total) is at of Romania in accordance with Regulation 6/2012 40. Own funds the bank’s disposal with the purpose of covering risks regarding the classification of loans and investments, and losses as soon as they occur, containing only own as well as the use and determination of prudential value capital of the Bank adjusted in accordance with the adjustments. Own funds and solvency are determined in accordance with the National Bank of Romania regulations and in provisions of Regulation (EU) no. 575/2013 and NBR At 31.12.2014 and 31.12.2013 (restated) EXIMBANK accordance with the provisions of Regulation (EU) No. 575/2013. At 31.12.2014, the capital’s adequacy rate was Regulation no. 5/2013. SA does not deduct from own funds the significant 62.14% (2013, Basel II% : 77.89%). EXIMBANK S.A’s Equity tier 2 consists only of transitory investment made in the EXIMASIG subsidiary, in gross adjustments of Equity tier 1, respectively 45% of the amount of RON 41,366 thousand, neither the deferred 31-Dec-14 31-Dec-13 following equity components fully deducted from Equity tax assets, which are based on future profitability and tier 1: the revaluation reserve of property, plant and result from temporary differences (Note 10, 2014: RON Bank * Restated equipment before tax, and the unrealized gain from the 2,072 thousand, 2013: RON 3,702 thousand), taking EQUITY TIER 1 revaluation reserve of available for sale financial assets into account the fact that their aggregate value is below Common Equity tier 1: 991,812 945,331 before tax. the minimum threshold imposed by Regulation (EU) no. 575/2013 and NBR Regulation no. 5/2013. Total Equity of which: 1,092,962 1,016,629 At 31.12.2014 and 31.12.2013 EXIMBANK SA had Unrealized loss from the revaluation of available-for-sale financial assets (321) (1,213) no prudential filters applicable within the meaning of At 31.12.2014 and 31.12.2013 (not applicable), Unrealized gain from the revaluation of available-for-sale financial assets 44,593 15,738 Regulation 5/2013, article 656, the adjustments for EXIMBANK does not calculate or apply capital buffer in Fiscal adjustments and deductions (31,343) (30,242) loans and receivables impairment being higher than accordance with (UE) no. 575/2013 and in accordance credit risk provisions established by the National Bank with NBR Regulation no. 5/2013. Non-distributable reserve (23,076) (21,050) Intangible Assets Deductions 100% (8,167) (9,192) Transitory adjustments for Common Equity tier 1 (69,907) (41,056) Revaluation reserve for property, plant and equipment (100%) (25,314) (25,318) 41. Capital requirements Unrealized gains from available for trade financial assets (100%) (44,593) (15,738) Additional Equity tier 1 - - The Bank maintains an adequate capital base which In order to determine the capital adequacy the faloowing Total Equity tier 1 991,812 945,331 is actively monitored to cover inherent risks from its are taken into account: the impact of credit risk, market EQUITY TIER 2 operations. risk and other risks to which the Bank is exposed. The Asset revaluation reserve (45%) 11,391 11,393 Bank determines the required capital based on the The capital adequacy of the Bank is monitored in type of risks and potential impact of these risks, so as Unrealized available-for-sale profit (45%) 20,067 7,082 accordance with the requirements of Regulation to maintain it over the minimum required level and be Other BASEL II adjustments (EU) No. 575/2013, applicable to Romanian credit able to deal with undesired consequences. Total Equity tier 2 31,458 18,475 institutions, with some options being exercised by the Total Equity (Tier 1 + Tier 2) 1,023,270 963,806 National Bank of Romania in Regulation no. 5/2013, The Bank has complied with required capital adequacy *restated according to the provisions of the Regulation (EU) no. 575/2013 and of the NBR Regulation no. 5/2013 as well as with the European Directive no. 36/2013, indicators (during 2014: by maintaining a total capital *restated according to note 2 jj Correction of Accounting Errors transposed in national law through Government ratio of at least 8%, a Tier 1 capital ratio of 6% and a Decision no. 99/2006 and NBR Regulation no.5/2013. Common Equity Tier 1 capital ratio of 4.5 % whereas in 2013 the Bank maintained a total capital ratio of at Capital adequacy implies maintaining an adequate capital least 8%). According to the applicable regulations at 31.12.2013 (BASEL II), the value of the Bank’s own funds at the end of level depending on the nature and risk profile of the Bank. the previous year was 929,565 thousand RON, as follows:

31-Dec-13 Capital requirements computation RON thousands EQUITY TIER 1 The BANK 31-12-2014 31-12-2013 Common Equity tier 1: 927,268 Total capital requirements, of which: 126,318 95,469 Total Equity consisting of: 1,020,496 Capital requirements covering credit risk, of which: 91,767 59,859 Fiscal adjustments and deductions (89,362) Counterparty risk 73 18 Additional Equity tier 1 - Capital requirements covering market risk – foreign exchange risk - - Total Equity tier 1 927,268 Capital requirements related to operational risk 34,491 35,610 Total Equity tier 2 2,297 Capital requirements related to credit valuation adjustment risk 60 n/a Total Equity (Tier 1 + Tier 2) 929,565 Total own funds 1,023,270 929,565 Total capital ratio 64.8% 77.9% Tier 1 capital ratio 62.8% 77.7%

140 2014 Annual Report www.eximbank.ro 141 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

The Bank computes own funds requirements using The Financial Supervisory Authority ("ASF”) establishes The next table presents the Group’s financial assets and liabilities at their fair value, based on the hierarchy used the following methods: the standardized approach for and monitors minimum capital requirements, enforcing to determine it, as well as the property, plant and equipment valued at fair value (constructions, lands, investment credit risk, the basic indicator approach for operational insurers to have an available solvency margin on a property, the bank): risk and the simple approach to mitigate credit risk. permanent basis, corresponding to the level of their activities, equal to at least the minimum solvency The Bank does not have a trading-book business The Group - December 31, 2014 Tier 1 Tier 2 Tier 3 Fair Value Book Value margin and exceeding the value of the safety fund. and does not trade commodities or securities, Financial assets consequently, the Bank only computes own fund The available solvency margin refers to all elements of Accounts with the National Bank of Romania - - 74,055 74,055 74,055 requirements resulting from the foreign exchange risk, assets free of charge, except for intangible assets, and as this is the sole applicable component of market risk. includes the share capital, share premiums, retained Due from banks - - 454,617 454,617 454,617 earnings, legal and statutory reserves, other reserves Loans and advances to customers, net - - 1,680,930 1,680,930 1,680,930 The Bank uses the current market value to determine and other regulated adjustments, as elements included Available-for-sale investments 1,364,957 78,796 - 1,443,753 1,443,753 capital requirements related to counterparty credit in own funds, but which have a different treatment in risk, according to which the exposure is equal to the Investments held to maturity 136,636 - - 136,636 129,125 terms of capital adequacy. sum of net current replacement cost plus potential Total financial assets 1,501,593 78,796 2,209,602 3,789,991 3,782,480 future credit exposure. Thus, the derivatives exposure The minimum margin for general insurance is Property and land - - 9,310 9,310 9,310 computed as at 31.12.2014 in accordance with calculated as the maximum value of the outcome Investment property - - 33,586 33,586 33,586 Regulation (EU) No. 575/2013 amounts to RON 4,574 obtained through the premiums method (reporting Total - - 42,896 42,896 42,896 thousands, resulting in a capital requirement of RON the value of the gross written premiums subscribed 73 thousands. in the last 12 months preceding the date of reporting, Financial liabilities or the amount of contributions in the last 12 months Due to banks - - 488,833 488,833 488,833 The Bank sets up counterparty credit limits on an annual prior to reporting date) and through the claims method basis (or as required) in order to manage effectively State funds - - 1,593,188 1,593,188 1,593,188 (reporting the average annual gross claims paid in the the counterparty credit risk. The Managing Committee Derivative liabilities - - 2,098 2,098 2,098 last 36/84 months prior to reporting). approves new counterparty credit limits, any increase, Due to customers customers - - 646,116 646,116 646,116 decrease or cancellation of existing limits. The Risk As at December 31, 2014, the subsidiary EximAsig Total financial liabilities - - 2,730,235 2,730,235 2,730,235 department is responsible for monitoring these limits recorded an available solvency margin of RON 16,531 and submitting related reportings to the management thousands (2013: RON 19,997 thousands) and a of the Bank. minimum solvency margin of RON 3,326 thousands (2013: RON 3,326 thousands). The safety fund The Group - December 31, 2013 Tier 1 Tier 2 Tier 3 Fair value Book value The capital requirement of the subsidiary of the Bank amounted to RON 16,322 thousands (2013: RON Financial assets – EximAsig was computed based on the statutory 1,109 thousands), thus complying with ASF minimum financial statements. Accounts with the National Bank of Romania - - 175,591 175,591 175,591 capital requirements. Due from banks - - 300,997 300,997 300,997 Loans and advances to customers, net - - 1,178,448 1,178,448 1,178,448 Available-for-sale investments 872,033 74,174 - 946,207 946,207 42. Fair value of financial instruments Investments held to maturity 1,284,400 5,289 - 1,289,689 1,272,476 Total financial assets 2,156,433 79,463 1,655,036 3,890,932 3,873,719 Property and land - - 9,535 9,535 9,535

The Bank uses the following hierarchy for determining Tier 3: Valuation techniques based on data which is Investment property - - 32,351 32,351 32,351 and disclosing the fair value of financial instruments not observed in the market. This category includes all Total - - 41,886 41,886 41,886 through valuation technique: instruments whose valuation method does not include Financial liabilities observable data, and whose unobservable data has a Tier 1: Quoted prices in active markets for identical Due to banks - - 1,203,654 1,203,654 1,203,654 significant influence over the valuation of the instrument. assets or liabilities State funds - - 1,596,458 1,596,458 1,596,458 This category includes instruments which are valuated Derivative liabilities - - 64 64 64 Tier 2: Valuation techniques based on observable based on market quotes for similar instruments, market data. This category includes instruments valued where unobservable adjustments or presumptions Due to customers - - 103,100 103,100 103,100 using: quotes on active markets for similar instruments; are necessary to reflect the difference between those Total financial liabilities - - 2,903,276 2,903,276 2,903,276 quotes for similar instruments on markets considered instruments. less active; or valuation techniques where significant data can be directly or indirectly observed in market data.

142 2014 Annual Report www.eximbank.ro 143 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

At the Bank level, the fair value of financial assets and liabilities is as follows:

The following methods and assumptions were used investments are measured at fair value, based on the The Bank - December 31, 2014 Tier 1 Tier 2 Tier 3 Fair Value Book Value to estimate the fair value of the Bank’s financial market price of listed investments. To determine the fair Financial assets instruments: value of investments where no quotes are available on Accounts with the National Bank of Romania - - 74,055 74,055 74,055 the market, the Bank uses valuation methods based on Financial Assets Due from banks - - 423,304 423,304 423,304 directly observed data entries. For loans and advances to banks, the amortized Loans and advances to customers, net - - 1,691,646 1,691,646 1,680,930 Financial Liabilities cost is estimated as the approximation of fair value, Available-for-sale investments 1,364,957 78,796 - 1,443,753 1,443,753 representing short term deposits with interest rates The amortized cost of deposits, loans and Investments held to maturity 130,816 - - 130,816 123,399 which reflect current market conditions, and no advancements granted to customers is considered Total financial assets 1,495,773 78,796 2,189,005 3,763,574 3,745,441 transaction costs. The amortized cost of owned to be close to their fair value because these elements Property and land - - 9,310 9,310 9,310 treasury bills held until maturity was not significantly have short terms for price changes, they have interest Investment property - - 33,586 33,586 33,586 different form the quoted rate. Taking into account rates that reflect market conditions, and are performed the fact that the Bank’s loan portfolio has a variable without significant transaction costs. Financial liabilities Total - - 42,896 42,896 42,896 interest, linked to EURIBOR/ROBOR 3M/6M, its are calculated on short term, the Bank estimating that Financial liabilities book value represents a good estimation of fair value. their fair value is very close to the book value. Due to banks - - 488,833 488,833 488,833 Available-for-sale investments, or held until maturity State funds - - 1,593,188 1,593,188 1,593,188 Derivative liabilities - - 2,098 2,098 2,098 Due to customers - - 647,221 647,221 647,221 Total financial liabilities - - 2,731,340 2,731,340 2,731,340

The Bank - December 31, 2013 Tier 1 Tier 2 Tier 3 Fair Value Book Value Financial assets Accounts with the National Bank of Romania - - 175,591 175,591 175,591 Due from banks - - 272,863 272,863 272,863 Loans and advances to customers, net - - 1,178,448 1,178,448 1,178,448 Available-for-sale investments 872,033 74,174 - 946,207 946,207 Investments held to maturity 1,278,494 5,289 - 1,283,783 1,266,648 Total financial assets 2,150,527 79,463 1,626,902 3,856,892 3,839,757 Property and land - - 9,535 9,535 9,535 Investment property - - 32,351 32,351 32,351 Total - - 41,886 41,886 41,886 Financial liabilities Due to banks - - 1,203,654 1,203,654 1,203,654 State funds - - 1,596,458 1,596,458 1,596,458 Derivative liabilities - - 64 64 64 Due to customers - - 109,005 109,005 109,005 Total financial liabilities - - 2,909,181 2,909,181 2,909,181

No transfers between tiers took place in the analyzed period.

144 2014 Annual Report www.eximbank.ro 145 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

43. Related party transactions Management Public National 31.12.2014 - Group and Key Finance Company CEC Bank Bucharest TOTAL personnel Ministry Imprimeria SA SA Treasury Loans and advances to banks - - - 155,004 20,665 - The EximBank Group has analyzed the following criteria (f) The party is a controlled entity, under the joint control, regarding the identification of related parties: significantly under the influence or has a significant Branch investments ------voting power, directly or indirectly, by any person State commission receivable - 1,165 - - - 1,165 (a) Directly or indirectly through one or more mentioned at points (d) or (e), or TOTAL ASSETS - 1,165 - 155,004 20,665 1,165 intermediaries, the party: g) The party is a post-employment benefits plan for the State funds - 1,593,188 - - - 1,593,188 (i) controls, is controlled by or is under the joint Bank’s employees, or for any entity that is a related Deposits from customers - total - 0 62 - - - control of the Group or Bank (including parent party of the Bank. companies and branches) TOTAL LIABILITIES - 1,593,188 62 - - 1,593,188 The related parties are as follows: Interest income - - - 446 1 447 (ii) has a common interest in the Group or Bank, Interest expense - (46,482) - (376) - (46,858) which offers a significant influence over the Bank n The Insurance - Reinsurance Company EximAsig, the subsidiary of EximBank Commission income - 13,945 30 - - 13,975 (iii) has a joint control over the Group or Bank Commission expense ------n The Ministry of Public Finance, as main shareholder (b) The party is a Bank/Group associate (in accordance with Short term benefits (15,274) - - - - (15,274) n the IAS 28 Investments in associate entities definition) National Company Imprimeria SA, CEC BANK, (15,274) (32,537) 30 70 1 (47,710) Bucharest Treasury, as entities controlled by the (c) The party is in a joint venture where the Bank/Group main shareholder is one of the participants (please see IAS 31 Interests in joint ventures) n Executive and non-executive members, as well as Management Public National CEC Bank Bucharest the identified key personnel 31.12.2013 - Group and Key Finance Company TOTAL (d) The party is a key management member of the personnel Ministry Imprimeria SA SA Treasury Bank/Group The key personnel consists in members whose Loans and advances to banks - - - 20,056 998 - positions grant them a significant influence in the (e) The party is a close relative of any person from Branch investments ------coordination of EximBank, without being members of points (a) – (d) the Board of Directors. State commission receivable - 13,248 - - - 13,248 TOTAL ASSETS - 13,248 0 20,056 998 13,248 State funds - 1,596,458 - - - - Key personnel in EximBank consist in members of the following categories/departments: Deposits from customers - total 307 - 24 - - 307 Members of the Board of Directors Director – Credit Risk Department TOTAL LIABILITIES 614 1,596,458 24 - - 307 Executive Director – Treasury and Financial Markets Division Financial Director – Finance and Accounting Department Interest income - - - 1,690 - 1,690 Executive Director – Corporate Division Director – Conformity Department Interest expense (4) (74,866) - (284) - (75,154) Executive Director – Risk Division Director – Legal Department Commission income - - 1,881 - - 1,881 Executive Director – Financial and Operations Division Manager – Internal Audit Department Commission expense 1 22,460 - - - 22,461 Director – Treasury and Financial Markets Department Regional Director Short term benefits (11,000) - - - - (11,000) Director – Customers Department Branch Director/Deputy Director (11,003) -52,406 1,881 1,406 - (60,122) Director – Strategic Customers and Project Funding Department Agency Director

All transactions with related parties were concluded on market terms, by taking into account interest rates and commissions charged for transactions with non-related parties.

146 2014 Annual Report www.eximbank.ro 147 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated) (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

Management Insurance - Public National CEC 44. The economic environment in which the Bank/ 31.12.2014 - Bank and Key Reinsurance Finance Company Bank Bucharest TOTAL personnel EXIMASIG SA Ministry Imprimeria SA SA Treasury Group operates Loans and advances to banks - - - - 155,004 20,665 - Investment in subsidiary - 41,366 - - - - 41,366 In 2014, Romania recorded an economic growth of Foreign direct investments, net, were in amount of 2.5 State commission receivable - - 1,165 - - - 1,165 2.9%. This growth rate is slightly lower than the previous bn EUR, slightly decreasing as compared to 2013 (2.9 TOTAL ASSETS - 41,366 1,165 0 155,004 20,665 42,531 year’s growth rate (of 3.4%) in the context of 2013 bn EUR). State funds - - 1,593,188 - - - 1,593,188 being an exceptional year for the agricultural sector, Fiscal consolidation continued in 2014, the budgetary which recorded a real growth of 29.2% representing Deposits from customers - total - 1,105 - 62 - - 1,105 deficit reaching 1.9% of the GDP compared to 2.5% a contribution of 1.4% to the GDP real growth. So, TOTAL LIABILITIES - 1,105 1,593,188 62 - - 1,594,293 of the GDP in 2013. This adjustment took place as a excluding the volatile contribution of agriculture, the Interest income - - - - 446 1 447 result of a slight increase in the proportion of budgetary GDP’s real growth rate was 2.8% in 2014, compared income in the GDP (to 31.7% from 31.3%) and of a Interest expense - (50) (46,482) - (376) - (46,908) to 2.0% in 2013, which indicates an improvement in slight reduction in the proportion of budgetary expense Commission income - 4 13,945 30 - - 13,979 other sectors’ economic activity. in the GDP (33.6%, from 33.8%). Commission expense ------The economic sectors with a positive contribution to Maintaining the demand deficit, the descending Short term benefits (13,165) - - - - - (13,165) the economic growth were the industry and certain adjustment of inflation expectations, the reduction of (13,165) (46) (32,537) 30 70 1 (45,647) services, supported by external demand as well as external inflation, the significant reduction of oil prices, the improvement in consumption, especially private a good agricultural production in the region, as well as consumption. So, the industry, which represents 24% the favorable evolution of certain administrative prices, of the GDP, remains the main engine of economic have all determined extremely reduced level for the growth, recording an advance of 3.5% and contributing Management Insurance - Public National CEC annual inflation rate, for the best part of the year being Bucharest with 0,9% to the GDP growth. Regarding the services 31.12.2013 - Bank and Key Reinsurance Finance Company Bank Treasury TOTAL under the lower limit of the +/-1 interval of NBR’s target. personnel EXIMASIG SA Ministry Imprimeria SA SA sector, the most notable contributions to the GDP In 2014 the average inflation was 1.1%, way under the growth were by information and communication Loans and advances to banks - - - - 20,056 998 - average of 2013 of 4.0%. (+11%), real estate transactions (+3.5%), professional, Investment in subsidiary - 41,366 - - - - 41,366 scientific and technical activities (+4.1%) as well as In this context, the Central Bank continued the process State commission receivable - 0 13,248 - - - 13,248 wholesale and retail commerce (+2.2%). However, the of relaxing the monetary policy by gradually reducing TOTAL ASSETS - 41,366 13,248 0 20,056 998 54,614 constructions sector which represents 6.3% of the GDP the monetary policy interest rate (from 4.0% to 2.75% State funds - - 1,596,458 - - - - partially stagnated (+0.2%) due to weak investments. in November 2014, continuing the process at the start of the year through two interest cuts at 22.25% Deposits from customers – total 307 5,905 - 24 - - 6,212 Regarding the GDP use, an improvement can in February 2015), the reduction of minimum required TOTAL LIABILITIES 614 5,905 1,596,458 24 - - 6,212 be observed in public administration and private reserves applicable to RON liabilities and bank currency Interest income - - - - 1,690 - 1,690 consumption, the latter representing an important (from 15% to 10% for RON, and from 20% to 14% for proportion of the GDP structure (60.9%). Unlike the Interest expense (2) (99) (74,866) - (284) - (75,251) currency), as well as through changes if interest rates previous two years, when the net export of goods and Commission income - 11 - 1,881 - - 1,892 for permanent facilities (loan and deposit) offered to services brought positive contributions to the GDP, in Commission expense - - 22,460 - - - 22,460 commercial banks (narrowing the symmetric corridor 2014 the contribution was zero because the increase formed by the interest rates of permanent facilities over Short term benefits (9,221) - - - - - (9,221) in exports was followed by a close increase in imports. the monetary policy interest rate from +/- 3.0 % to +/- (9,223 -88 (52,406) 1,881 1,406 - (58,430) An unfavorable element recorded for the second 2.0%). consecutive year was the negative contribution of GDP investments, which in 2014 decreased by 3.6%. Interest rates on the monetary interbank market have also followed a decreasing trend over the duration of The current payment balance account deficit continued 2014, as a consequence of a liquidity surplus in the to adjust, being reduced from 0.8% of the GDP (1.2 banking system. bn EUR) to 0.5% of the GDP (0.7 bn EUR), the main improvement taking place in the service balance (its positive balance growing by 25% to 5.9 bn EUR). A favorable evolution was also recorded in the primary income balance, its deficit being reduced by 7.8% until 2.9 bn EUR. Regarding the commercial goods deficit, it has deepened for the first time in the last four years (+1.4% to 5.5 bn EUR), in the context of the deceleration of good exports growth rate and the acceleration of good imports growth rate.

148 2014 Annual Report www.eximbank.ro 149 EXPORT – IMPORT BANK OF ROMANIA – EXIMBANK S.A. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS for the year ended at December 31, 2014 (all amounts are expressed in thousands Romanian Lei (“RON’000”), unless otherwise indicated)

We have the following ROBOR rate evolution for 2014:

ROBOR ROBOR ROBOR ROBOR ROBOR Date 1 month 3 months 6 months 9 months 12 months 31.12.2013 1.88 2.44 2.99 3.10 3.15 31.12.2014 0.91 1.70 2.01 2.02 2.02

Regarding the evolution of EUR/RON exchange rate, The government securities market dynamics in 2014 in 2014 the volatility was low, the exchange rate varied continued to be situated at a high level when reported in a 4.10% interval (4.800/4.600). Moreover, the values to their high demand. If in 2013, the inclusion in at which EUR/RON transactions took place in the last the JP Morgan Chase and Barclays indexes had a day of 2014 were almost identical to those of the year very important role in the increase of interest to buy 2013 (around 4.4800). It is worth mentioning that EUR/ Romanian government securities, the continuation of RON was the least volatile currency pair of the region, this trend was derived mostly because of the existing alongside EUR/CZK. Moreover, RON appreciated correlation with regional/emergent markets which compared to all the currencies in the region (PLN, HUF, absorbed funds in order to achieve better yields CZK) during 2014. compared to those existing in developed economies.

The obvious descending trend of the government security yields can be observed below:

Date 3 years (%) MID 5 years (%) MID 10 years (%) MID 31.12.2013 3.91 4.65 5.27 31.12.2014 2.285 2.64 3.61

Source: www.bnr.ro; www.insse.ro

45. Subsequent Events

Starting with March 2015, for the purpose of implementing Law 29/2015, stating that in case of a bank being administered by a one-tier board the president of the Board of Directors must not simultaneously hold the position of General Director in the same bank, Mr. Traian Halalai quit his position as President of the Board of Directors, which was taken over by Mr. Vasile Secares. The Deva agency was closed in February 2015. No other significant subsequent events took place.

www.eximbank.ro

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150 2014 Annual Report