Vrancart : Current Report 28.07.2017

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ISO 9001 001

VRANCART S.A.

625100 Adjud-Vrancea. Romania, Str. Ecaterina Teodoroiu 17

RO 1454846, )39/239/1991

Capital social subscris ivarsat 103.168.354,70 RON

R054 RNCB 0268 00879340 0001 - BCR Adjud

R095 RZBR 0000 0600 0094 5306 - Raiffeisen Bank Adjud

T: 0237 64 08oo,F: 0237 64 17 20

office@vrancart.com, www.vrancart.ro

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Major events to report:

The company VRANCART S.A. Adjud informs its shareholders and investors that the transactions reported under art. 82of Law no. 24/2017,that were made between our company and Industrial Energy S.A. Bucharest under the electricity supply agreement, for the period between January l5t, 2017 -June 30th, 2017,fall under the category of regular transactions that take place between electricity suppliers and consumers, an opinion certified by the financial auditor, according to the additional half-yearly report enclosed hereto.

We enclose hereto the financial auditor's additional report, related to the transactions performed

with Industrial Energy S.A. Bucharest between January 15

2017 - June30th, 2017.

istrators,

KPMG Audit SRL

Victoria Business Park

DN1, Soseaua Bucuresti-Ploiesti nr. 69-71 Sector 1

P.O.Box 18-191 Bucharest 013685 Romania

Tel: +40 (21) 201 22 22

+40 (372) 377 800

Fax: +40 (21) 201 22 11

+40 (372) 377 700

www.kpmg.ro

Actual findings report

To the Board ofAd ministrators Vrancart S.A.

We performed the proced ures agreed through the services agreement concluded on Ju ly 7t11, 2017 between Vrancart S.A. (.,the Company'') and KPMG Aud it S.R.L. in relation tothe jurid ical deeds reported by the company to the Financial Supervisory A uthority and the Bucharest Stock Exchange, through the ,,Current report accord ing to the CN VM Regulation no. 1/2006 of CNVM" dated February 17th, 20 I 7; ,,Current report accord ing to the CN VM Regulation no. 1/2006 of CNV M'' dated May 315 2017; ,,Currentreport accord ingto the CNVM Regulation no. 1/2006 of CNVM" dated J une 1 6th, 201 7; ,,Current report accord ing to the CN Y M Regu lation no. I /2006of CNVM" dated June 261h, 201 7; (hereinafter referred to as ,,theCurrent reports") enclosed hereto.

The agreed-upon procedures wereperformed i n accordance with the International Standard on Related Services 4400 ,,Engagements to perform agreed-u pon proced ures rega rd ing financial information" (,JSRS 4400").

These proced ures were only conducted to assist the Com pany i n complyi ng with the reporti ng requ irements provided by the CNV M Regu lation no. 1/2006 regard ing related­ paity transactions reported through the Current reports. The su fficiencyof the proced u res is the exclusi ve responsi bi l ity of the specified users of th is report. Therefore, we wi l l not provide any representation on the su fficiency of the agreed proced ures cond ucted by us for the purpose that the report was issued or for anyother purpose. The proced ures performed are detai led below:

We performed the following proced ures:

I . obtaini ng the jurid ical deeds i ncl uded in the Current reports - the addenda no. 2-5/201 7 to the electricity supply agreement no. CO.FZ - 354/201 6 dated J une 281h,201 6.

1. the reconci l iation of the information presented in the Current reports: the parties that concluded the jurid ical deed, the date of conclusion and the type of deed, the descri ption of its subject-matter,the total val ue of the ju ridical deed, the m utual receiva bles, the

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   guarantees establ ished, the stipu lated penalties, the payment terms and modal ities wi th the provisions of the addenda obtained through the procedure mentioned i n item I .

2. obtaining from the Company the alternative offers req uested from electricity suppl iers, as part of the process conducted by the Compa ny to assign the company to be contracted to supply electricity, respectively to continue the contractual relations (mentioned i n item I).

Compari ng the price of electricity accord ing to the ju rid ical deeds i n the Current reports to the arithmetic average calculated based on the alternative offers that were supplied to us by the Company, and reporti ng whether these have any deviation that represents a dev iation percentage higher than ±3% compared to the arithmetic average of the prices i n the alternative offers.

Our findi ngs are presented below:

1. Regard ing the I stproced ure, we obtained the jurid ical deeds i ncluded i n the Current reports - the electricity supply agreement no. CO.FZ -354/201 6 dated J une 28th, 201 6 and the addenda 2-5/201 7 thereto.

2. Regardi ng the second procedure, we have reconci led the information included i n the Current reports: the parties that concl uded the jurid ical deed, the date of concl usion and the type of deed, the description of its subject-matter, the total val ue of the juridical deed, the mutual receivables, the guarantees establ ished, the stipulated penalties, the payment terms and modal ities with the electricity supply agreement no. CO.FZ - 354/201 6 and the addenda no. 2-5/201 7 thereto. We found no other d i fferences/reconci l iation elements following this reconci l iation, except for the following:

3. The addend um no. 3/201 7 dated May 315

   201 7 to the agreement CO.FZ -354/201 6

   dated J une 281

   201 6 prov ides a unit price/M W h, andthe Current report dated May

   31si,201 7 provides a monthly value of the agreement estimated by the Company's executive management to EU R 222.000 without VAT. Accord ing to the statements of the executive management, this val ue was estimated based on a monthly consumption estimate.

4. The addendum no. 5/201 7 dated J une 26th, 201 7 to the agreement CO.FZ -354/201 6 dated J une 28th, 201 6 prov ides a supplementation of the electricity purchase for the work point in Calimane ti and the Current report dated June 26th, 201 7 prov ides a monthl y val ue of the agreement and of the supplementat ion estimated by the Company's executive management to EUR 226.000 without VAT. Accord ing to the statements of the executive management, this val ue was estimated based on a monthl y consum ption estimate.

5. 3. Regarding the third procedure:

   We obtained from the Company the 4 alternati ve offers req uested from d i fferent electricity suppl iers, as part of the process conducted by the Company to choose the company to be contracted for the supply of electricity, respecti vely for further contractual relations. We calcu lated the arithmetic average of the u nit prices per M W h from the alternative offers and compared this average to the u nit price per MWh in the addenda included i n the Current reports. We found that the uni t prices per M W h in the addenda included in the Currentreports do not have a deviation percentage higher than ±3% compared to the arithmetic average of the prices from the related alternati ve offers.

   Considering the fact that the conducted proced ures do not represent an aud i t, a rev iewing engagement or an assurance engagement conducted in accordance with the International Aud i t Standards, the International Standards on the Reviewing M issions or the International Standards on Assurance M issions, we do not express any assurance on the speci fied elements.

   I f we had conducted add itional procedures or if we had conducted an aud it, a rev iewing engagement or an assurance engagement conducted i n accordance with the International Aud it Standards, the International Standards on the Reviewi ng M issions or the International Standards on Assurance Missions, other aspects could have drawn our attention and wou ld have been reported to you. Our find ings represent the results of the appl icat ion ofthe abovementioned proced ures. We have no responsi bi lity to update our repo11 for events and circumstances that occurred after the date of this report.

   Moreover, this report refers only to the abovementioned elements and does not extend onto any of the financial statements of the Company in their entirety.

   This report is intended solely for the purpose descri bed i n the th i rd paragraph of the report and to the Company's Board of Admini strators, i n its assembly, and a copy hereof can be subm itted to the Financial Supervisory A uthority (ASF), respectivel y to the Bucharest Stock Exchange (BVB). ASF, respectivel y BVB are not part of our agreement for the conducti ng of the agreed procedures, therefore we assume no responsi bi l ity towards ASF, respectivel y towards BVB that might rely on this report, in which case they wi l l do at their own risk. ASF/BVB may assess the conducted proced ures and the reported findings and make thei r own conclusions. This report cannot be invoked by the Com pany or by ASF, respectivel y by BVB, for any other purpose, nor can i t be distributed to other parties. Th is report was drafted to be able to report to the Com pany's Board of Adm inistrators, as a whole, the aspects that we need to report i n an actual find ings report, and not for any other pu rposes. To the extent perm itted by law, we on ly accept and assume the responsi bi l ity for this report towards the Company and to its Board of Ad m inistrators, i n its enti rety.

   KPMG Aud it S.R.L.

   July 27th,201 7 Bucharest, Roman ia

   Appendices:

   ·'Current reports accord ing to the CNVM Regulation no. I /2006"dated February 1 7th, 201 7, May 3151,201 7, June 16th,201 7 and June 26th, 20 I 7.