C.N.T.E.E. Transelectrica

Audit Report / Information • Jul 31, 2019

To the: Bucharest Stock Exchange – Department of Operations Issuers Regulated Markets

Financial Supervision Authority - General Directorate Supervision - Issuers Division

Current report according to the provisions of Law 24/2017, ASF Regulation 5/2018 and the BVB Code Date of the report: July 31, 2019 Name of Issuer Company: CNTEE TRANSELECTRICA SA, company managed under Two-tier System Headquarters: Bucharest 1, Blvd. Magheru no. 33 Working location: Bucharest 3, Str. Olteni no. 2-4 Phone / fax numbers: 4021 3035 611 / 4021 3035 610 Single registration code: 13328043 LEI Code: 254900OLXCOUQC90M036 Number in the Commercial Register: J40/8060/2000 Share capital subscribed and paid: 733,031,420 Lei Regulated market where the issued securities are transacted: Bucharest Stock Exchange

Communiqué – Report in accordance with art. 144 lit. B par. (4) of the ASF Regulation no. 5/2018

The National Power Grid Company "Transelectrica" SA informs the interested public about the fact that the Company's external auditor, BDO Audit SRL, issued the Limited Independent Insurance Report on the transactions reported by the Company during the first half of 2019, according to the provisions of art. 82, Law no. 24/2017.

The limited insurance independent report of BDO Audit SRL, attached to this release, registered in Company with number 32544/30.07.2019, is also available online on Transelectrica's website, www.transelectrica.ro, Investor Relations - Current Reports section, respectively https://www.transelectrica.ro/en/web/tel/raportaricurente

Marius – Dănuț CARAȘOL Alina - Elena TEODORU

Executive Director General Directorate Chairman

Directorate Member

LANGUAGE DISCLAIMER: This document represents the English version of the original official Romanian document filed with the Financial Supervisory Authority ASF. The English version has been created for English readers' convenience. Reasonable efforts have been made to provide an accurate translation, however, discrepancies may occur. The Romanian version of this document is the original official document. Any discrepancies or differences created in the translation are not binding. If any questions arise related to the accuracy of the information contained in the English version, please refer to the Romanian version of the document which is the official version.

Tel: +40-21-319 9476 Fax: +40-21-319 9477 www.bdo.ro

Victory Business Center Str. Invingatorilor 24 Bucuresti - 3 Romania 030922

INDEPENDENT REPORT OF LIMITED ASSURANCE ON THE INFORMATION INCLUDED IN THE CURRENT REPORTS ISSUED BY THE COMPANY IN ACCORDANCE WITH THE PROVISIONS OF LAW NO. 24/2017 (ARTICLE 82) AND REGULATION NO. 5/2018 ISSUED BY THE FINANCIAL SUPERVISORY AUTHORITY

To the Directors, C.N.T.E.E. Transelectrica S.A.

Purpose of the Independent auditor's report

We have been appointed by C.N.T.E.E. Transelectrica S.A. ("the Company") to report on the information included in the Current Reports dated 10 January 2019, 16 April 2019 and 16 May 2019 ("Reports" on "Current Reports"), issued by the Company in accordance with the provisions of the Issuers of financial instments and market operations law no. 24/2017 ("Law no. 24/2017") and of the Regulation no. 5/2018 on issuers of financial instruments and market operations issued by the Financial Supervisory Authority ("ASF")

The Current Reports have been prepared by the Company's management for the purpose to report to ASF in accordance with the provisions of art. 82 from Law no. 24/2017 and Regulation no. 5/2018.

Management's Responsibility

Management is responsible for the preparation and fair presentation of the Current Reports and for the transactions reported included in the Current Reports, in accordance with art. 82 from Law no. 24/2017 and Regulation no. 5/2018, and for the information presented in the Reports.

This responsibility includes: designing, implementing and maintaining an internal control relevant to the preparation and presentation of the Current Reports that is free of material missatement, due to fraud or error. Also, this responsibility includes keeping adequate supporting documents regarding the Current Reports. Management is responsible for preventing and detecting fraud and ensuring compliance with the legislation and regulations in force.

Auditor's responsibility

Our responsibility is to analyze the reported transactions included by the Company in the Current Reports and to report in the form of an independent conclusion of limited assurance, based on the evidence obtained. We conducted the engagement in accordance with International Standard on Assurance Engagements ("ISAE") 3000 as adopted by the Chamber of Financial Auditors of Romania regarding the assurance engagements, other than Audits or Reviews of Historical Financial Information. This standard requires that we comply with ethical requirements, including independence requirements, and plan and perform our procedures in order to obtain a limited assurance level of whether the transactions included in the Current Reports is in accordance, in all material respects, with art. 82 of Law no. 24/2017 and of Regulation no. 5/2018.

The procedures selected by us depend on our understanding of the Current Reports and of other circumstances of the engagement, as well as our considerations on areas where material misstatements may occur. In developing our understanding on the Current Reports and on the transactions reported in the current Reports we took into consideration the Company's internal control relevant to the prepression and presentation of the Current Reports in accordance with the provisions of art. 82 of Law no. 24/2017 and Regulation no. 5/2018 in order to establish the procedures that are appropriate in these circumstances, but not for the purpose of expressing a conclusion on the effectiveness of internal control for the preparation and fair presentation of the Company's Current Reports and transactions presented in the Current Reports.

Limited assurance is narrower than absolute or reasonable assurance. The procedures for obtaining evidence for a limited assurance engagement are more restricted than in a reasonable assurance engagement, and therefore the level of assurance obtained is lower than in a reasonable assurance engagement.

As part of this engagement, we have not performed audit or review procedures on the Current Reports and on the transactions included in the Current Reports in accordance with International Standards on Avditting or International Standards on Review Engagements adopted by the Chamber of Financial Auditors of Romania, nor on the sources from which the Current Reports and transactions included in the Current Reports were extracted. Our procedures were only performed in connection with the Current Reports. We have not performed other additional procedures to verliy whether the Company reported all contracts with managers, employees, shareholders, as well as their affiliated entities to be reported according to Art. 82 of Law no. 24/2017 with subsequent amendments for the period January 1 - June 30, 2019.

Criteria

The criteria used in this engagement were as follows:

• · for the legal acts included in Current Reports dated 10 January 2019 and 16 May 2019, we have obtained and examined the offers received by the Company within the acquisition procedures organized according to the Law no. 99/2016 on sectorial acquisitions, GD 394/2016 approving Methodological Norms for applying the provisions related to the award of sectorial contract as per Law no. 99/2016, Law 101/2016 on remedies in the matter of awarding public procurement contracts, sectorial contracts and concession contracts for works and services concession, as well as for the organization and functioning of the National Council for Solving Complaints, the reports of the acquisition procedures, as well as the contracts mentioned in the Current Reports.
• · for the legal act included in the Current Report dated 16 April 2019 we obtained and examined the addendum no. 1 to the contract 136/2018 concluded by the Company with Teletrans S.A., the contract 136/2018 and memo no. 2404 / 15 January 2019 regarding the need to conclude the addendum, as well as the report prepared by the previous auditor, issued on 25 July 2018, regarding the analysis of the price for the contract no. 136/2018.

Our conclusion was formed on the basis and in connection with the aspects presented in this report. We believe that the evidence we have obtained is sufficient and appropriate to form the basis of our qualified conclusion of limited assurance.

Basis for qualified conclusion

Regarding the contract 136/2018 concluded between the Company and Teletrans S.A., the conclusion of the previous auditor was that there is not sufficient information to determine if the value of the contract, corroborated with the rights and obligations assumed by the parties, is adequate as compared to other offers existing on the market. Also, regarding the increase in the value of the contract 136/2018 by the addendum no. 1, there is not sufficient information to determine if the value of the increase, corroborated with the rights and obligations assumed by the parties, is adequate as compared to other offers existing on the market.

Qualified conclusion

Based on the procedures performed and the evidence obtained, except for the possible effects of the aspects mentioned in the previous paragraph, nothing has come to our attention that causes us to believe that the transactions reported in the Current Reports from 10 January 2019, 16 April 2019 and 16 May 2019 are not in accordance, in all material aspects, with art. 82 of Law no. 24/2017 and Regulation no. 5/2018.

Other matters

Our report is solely issued for the purpose stated in the first paragraph hereof and for the Company's Directoration and for the priormation of Bucharest Stock Exchange (BVB) and ASF, and is not to be used for any other purpose. Our report should not be regarded as suitable for use by any party wishing to acquire rights against us other than the Company for any purpose or in any context. Any party other than the Company that obtains access to our report or a copy of the report and chooses to rely on our report (or part thereof), should do so at their own risk. Our engagement was performed in order to report to the Directorate of the Company on those aspects that need to be reported in an independent report of limited assurance, and for no other purpose. Our report relates only to the Current Reports mentioned above and does not extend to any other reports of the Company.

For and behalf of BDO Audit SRL	Autoritatea pentru Supravegherea Publică
Registered in the Public Electronic Registry of financial auditors and audit firms with no. FA18	a Activităţii de Audit Stascipr (ASPAAS) Firma de Augh: BBO AUDIT SRL Registrul Public Electronic: FA18
Partner's name: Vasile Bulata
Registered in the Public Electronic Registry of financial auditors and audit firms with no. AF1480 Bucharest, Romania	0 July 2010

30 July 2019

Autoritatea pentru Supravegherea Publică a Activităţii de Audit Statutar (ASPAAS)

Auditor financiar: VASILE BULATA Registrul Public Electronic: AF1480