300081 Timisoara11/A Gheorghe Lazar St. Phone: +40 256 201 370Fax: +40 256 294 753www.aquatim.ro Text: Loredana LeordeanGraphic concept & layout: Loredana TîrzioruPhoto: Aquatim, Alin ZelencoPrint: “Memory of Culture” Association

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Table of content

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Foreword

At a glance

Drinking water

Waste water

Financial report

Investment programs

Customer care

Research, innovation, development

Professional community

Social responsibility

Foreword

In 2015 the financing of large scale investment works through the Operational Program “Environment” of the European Union ended. This was a milestone for Aquatim, as well, since the company has committed itself to a long-term program meant to ensure the sustainable development of the water and waste water infrastructure in the region. Approaching the project closure, the outputs of the water company are good – 119 million Euro investment works throughout the county, with most of the contracts completed or during completion. The European grant was used, which is, in this case, an essential matter. All works still in progress will be completed in the first semester of 2016.

The company’s strategy of using European aid programs to ensure financing for its investment programs is known to be successful. For me, as a manager, it is crucial to carry on such projects. It is challenging to avoid waiting times when planning investment works, to start a large scale project upon completion of another one. It takes a lot of effort, but it is also rewarding. In this respect, starting a new large scale project, in 2015, including investments of around 200 million Euro is an achievement. This project will be funded through the Large Infrastructure Operational Program of the EU and is targeted to small and medium localities in the Timis County.

Another signinficant achivement and a confirmation that Aquatim has employed the right management strategies is the first place, occupied by the company in the National Top of the Companies, for the third year in a row. The assessment made by the National Chamber of Commerce and Industry is based on economic indicators, proving the efficiency and financial performance of the company.

In the following pages you will find relevant references to our business, as this report highlights the essentials of 2015 − key figures, achievements, events we joned etc. It is therefore a good opportunity to learn more about us and get to know us better!

Ilie Vlaicu, PhDGeneral Director

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At a glance

Area of supplyAquatim is a regional operating company since 2010. The operation throughout the county is coordinated by the 5 subsidiaries: Buziaș, Deta, Făget, Jimbolia and Sânnicolau Mare. The provision of services in several localities near Timișoara is managed by the company’s head departments overseeing the operation in the city.

At the end of 2014, the area of supply covered water supply systems in 101 de localities in the Timis County, including the city of Timişoara, 8 towns, 39 communes and 53 villages.In 2015 the administrative body of Cenad delegated to Aquatim the responsibility for the provision of their water and waste water services, on a contract basis.

Managing teamAt December 31, 2015 Aquatim had 900 employees.

The managing team: Ilie Vlaicu – General Director, Rozalia Giuchici – Economic Director, Nicolae Ghelsingher – Tehnical Director, Petru Hidiș – Operation Director and Gheorghe Stînean – Development Director.

The Board of Directors had the following componency: Carmen Popescu – Chairperson, Aurelia Junie, Iancu Canea, Georgiana Grigorie, Dan Necșa, Aurelian Novac, Voichiţa Matei, Ilie Vlaicu, Andrei Zorilă – members.

CertificationsAquatim is a licensed operator for the water and sewerage services in the Timiș County, as certified by the National Regulating Authority for Public Utility Community Services. The company has implemented since 2005 a quality, environment, health and occupational safety integrated management system, according to the provisions of ISO 9001, ISO 14001 and OHSAS 18001 specifications. In 2015, an audit of the Romanian Society for Quality Assurance recertified the integrated management system.

TariffsStarting with July 1, 2014, the tariffs for the supplied services in the entire area of operation are 2.85 lei/m3 for the water supply and 2.84 lei/m3 for the waste water collection and treatment, no VAT included, which is altogether approximately the equivalent of 1.3 Euro. The tariffs are the same in the entire area of operation and were not adjusted in 2015.

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Drinking water

Treatment and supplyThe drinking water comes from surface and ground sources. The company operates 259 drillings, 21 treatment plants and a supply network of 1,720 km. There are 62,606 household connections, out of which 95% are metered.

The population from the area of operation is around of 460,000 inhabitants, out of which 88% use centralized water supply services. In Timișoara almost 100% of the population have centralized water supply, while in the remaining area of supply, the percentage is of only 63%.

At the end of 2015, the invoiced water amount was of 24,443,078 m3, out of which 82% was delivered in Timişoara.

The inhabitants of Timișoara, get two thirds of their tap water from the Bega River and one third from deep and medium-depth drills. The water is treated in the Bega, Urseni and Ronaţ treatment plants. All treatment plants are equipped with control systems, 80% of the process instrumentation is provided with automatic control . The treatment solution used in the Bega plant consists of coagulation-flocculation, sedimentation, filtration and disinfection. At the Urseni treatment plant, the technology is adapted to ground sources and includes aeration, removal of iron and manganese, filtration and disinfection. The specific energy consumption in 2015 was of 0.26 kWh/m3 of drinking water, and the domestic per capita consumption was of 111 l/day, in Timișoara.

The digital mapping of the water and sewerage networks in Timișoara is in progress. The implementation of the GIS (Geographic Information System), for the storage and subsequent processing of the geographical information, consists in the collection of the data from the field with land survey and measurement equipment and compilation into a digital format. Aquatim completed the data capture for the water pipes in Timișoara and started working at the implementation of the GIS in other localities from the area of supply. The next step the company intends to make is to develop advanced software tools for the computer modelling of the network operation.

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The preventive maintenance program of the supply system covered 68.6 km in Timișoara last year. The maintenance crews had around 2,900 interventions to fix pipe breaks.

Throughout the county, the water supply is mainly ensured from ground sources. The treatment plants use various technologies. In 2015 the construction works for two new water treatment plants were completed, in Sânnicolau Mare and Gătaia, as part of the regional investment project financed from the European Cohesion Fund, through the Operational Program Environment. The plants are provided with automatic process and instrumentation control systems. Within the same program, the investment works for new water supply networks were also completed in Timișoara, Gătaia and Ciacova.

Safe drinking waterAquatim has a water quality control lab working at high standards, certified by RENAR, the Romanian Accreditation Association, in 2011.

The water quality is consistently checked, from the treatment process up to the customers’ taps. In the laboratories, 22 quality parameters are tested on a daily basis, before the water is pumped into the city’s distribution network. Throughout the supply system, samples collected from several locations, commonly agreed upon with the Public Health Inspectorate, are also checked regularly. The summary of the monitoring program of the water quality is published monthly on the company’s website.

The average annual values of the monitored parameters are given in the following table.

Compliance with the drinking water quality standards, water distribution system, Timişoara

Aluminium 0.20 mg/l 0.05Ammonia 0.50 mg/l 0.05Free residual chlorine 0.1 ÷ 0.5 mg/l 0.4Conductivity 2,500 µS/cm 413Total hardness min. 5 ºG 8Iron 0.20 mg/l 0.03Manganese 0.05 mg/l 0.01Chemical oxygen demand 5 mg O2/l 1Nitrate 50 mg/l 2Nitrite 0.50 mg/l 0.01pH 6.5 ÷ 9.5 pH units 7.3Turbidity ≤ 5 NTU 1Total coliforms 0 no./100 ml 0Faecal streptococci 0 no./100 ml 0Escherichia coli 0 no./100 ml 0

Chemical and microbiological Accepted value, U.M. Average measured parameters as per regulations value, 2015

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Waste water collection and treatmentThe company operates around 815 km of waste water collection pipes, with approximately 26,300 connections, 16 waste water treatment plants and 73 waste water pumping stations. The population in the area of supply is of 460,000 inhabitants, out of which 73% use the sewerage services. In Timișoara the service coverage rate is nearly 100%, while in the remaining area of supply, the rate is only of 16%. A total amount of 40,549,352 cubic meter waste water was processed by the treatment plants in 2015, out of which 94% in Timişoara.

In Timișoara the combined sewerage system collects the waste water and storm water. Combined vacuum and jetting cleaners are used for the maintenance of the sewer lines. The maintenance program for Timișoara included the cleaning of 95 km network and more than 6,800 storm drains.

The data for the sewerage networks in Timișoara is entered into the GIS and the company started implementing digital mapping for other localities from the area of supply, as well

The Waste Water Treatment Plant from Timișoara was rehabilitated in 2011. The present technology includes a biological treatment phase with a nitrification-denitrification process and the chemical treatment for the removal of phosphor. Since its commissioning, the plant has always operated properly, ensuring the processing of the sewage to an effluent of adequate quality to be discharged into the Bega river. The specific power consumption for the waste water treatment was of 0.27 kWh/m3, in Timișoara.

Potential polluters closely watchedAquatim carried on its monitoring program of the waste water coming from industry and discharged into the sewerage system. 43 companies from Timișoara and Timis County were monitored last year. 199 cases of failure to comply with the discharge limits laid down by the NTPA 002/2005 specifications were recorded and 29 penalties were issued to the companies in question.

Waste water

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Financial report

Profit Loss Account

RON 2013 2014 2015

RON 2013 2014 2015

Fixed assets 221,748,978 315,650,412 458,309,762Current assets 140,584,204 179,061,590 141,559,305Net current assets 117,485,022 153,663,049 113,397,247Amounts due after more than 24,783,658 26,762,687 18,825,3651 year (EBRD loan)

Total capital 156,368,377 182,628,849 203,879,642A. Own capital, out of which: 156,368,377 182,628,849 203,879,642

Patrimony 85,193,100 85,193,100 85,193,100Reevaluation reserve 4,826,790 4,507,129 4,204,337Reserves 46,411,921 68,399,915 93,070,854Income 21,314,807 26,260,471 21,250,792

B. Public patrimony 0 0 0

Operating revenues 126,733,809 141,395,853 149,105,506Operating expenses 101,132,678 108,928,511 121,456,111Operating income 25,601,131 32,467,342 27,649,395Financial revenues 3,046,105 1,787,056 1,954,938Financial expenses 3,182,410 1,789,082 2,459,892Financial income -136,305 -2,026 -504,954Total revenues 129,779,914 143,182,909 151,060,444Total expenses 104,315,088 110,717,593 123,916,003Income before tax 25,464,826 32,465,316 27,144,441Income tax 4,150,019 6,204,845 5,893,649Net income 21,314,817 26,260,471 21,250,792

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Large scale investment program – SOP ENVIn 2011 the company obtained financing from the European Sectoral Operational Program Environment (SOP ENV), for the development of the water infrastructure in the region with the project Extension and upgrading of the water supply and sewerage systems in the Timiş County. Information and key figures related to this project are presented as follows:

• Project value: 509.63 million lei (119 milion Euro)• Financing sources, as illustrated on the following page:

o The European Union, a Cohesion Fund grant – 73.93%,o Aquatim – 13.04%,o The state budget – 11.30%,o The local authorities – 1.73%.

• The investment works in the Timis County include:o the extension and rehabilitation of 200 km waste water networks and 100 km

water supply networks;o the construction of seven WWTPs and three water treatment in 12 locations in the

Timis County. • The localities included in the project are: Buziaș, Ciacova, Deta, Făget, Gătaia, Jimbolia,

Recaș, Săcălaz, Sânmihaiu Român, Sânnicolau Mare, Timișoara and Utvin.

Investment programs

New WWTP in Deta, built through SOP ENV

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In 2015 the above mentioned investment works continued. The construction works and installation of equipment were completed for the waste water treatment plants from Deta and Sânnicolau Mare and the water treatment plants from Sânnicolau Mare and Gătaia were. The water and sewerage systems from Gătaia and Ciacova (6.2 km extension and rehabilitation of the water systems and 18.3 km extension and rehabilitation of the sewerage systems) and Timișoara (9.7 km extension and rehabilitation of the water systems and 26.7 km extension and rehabilitation of the sewerage systems) were also completed.

At the end of 2014, the physical progress for the entire project was of 87%. Three contracts of works, for water and sewerage systems in Deta, Jimbolia and Recaș were phased and the financing of these investments from EU grants was transferred to the next program, the Large Infrastructure Operational Program.

In May 2015, Aquatim signed the Technical Assistance contract for the preparation of the financing application and the tender documents for the investment works to be financed from LIOP. The contract was awarded to the consortium Tractebel Engineering SA, Luca Way SRL, Acciona Ingenieria SA and Romcapital Invest SA. All activities necessary to support the preparation of the project, such as feasibility studies, preliminary design review and engineering, works supervision and management are covered by this contract. By this project, Aquatim plans to invest around 200 million Euro in the water and waste water systems of small and medium localities, with a minimum of 2,000 inhabitants.

73.93%

11.30%

13.04%1.73%

Financing sources for the water and sewerage investment project in the Timiş County

EU, a Cohesion Fund grant Aquatim The state budget The local authorities

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Improvement of the water and sewerage systems from the company’s fundsThe company spends most of its funds allocated for investments and development for the improvement of the public utility water systems. Asset maintenance, repair and refurbishment works are also accounted for in this program.The breakdown of the investment works for the upgrading of the water supply and sewerage system in Timișoara is presented as follows:

• Works for the improvement of the water supply system, in amount of 5,371,562 lei, covering 5,167 m pipes.

• Works for the improvement of the sewerage system, in amount of 1,538,697 lei, covering 3,492 m sewerage pipes.

The upgrading works of the public utility structures carried over at the company’s subsidiaries are summarized as follows:

• Buziaș: the rehabilitation of 4,700 m water lines, in Buziaș, Lugojel, Racoviţa, Petroasa Mare and Sinersig and the extension of the water networks with 3,950 m, in Silagiu, Petroasa Mare, Boldur and Sinersig;

• Deta: the extension of water networks covering 1,408 m and of the sewerage networks covering 6,609 m;

• Jimbolia: the rehabilitation of 7,969 m water pipes in Cenei and Checea;• Sânnicolau Mare: a 2,720 m extension of the water network;• Făget: the rehabilitation of 550 m water lines and the extension of the sewerage network

with 500 m.

New water treatment plant in Gătaia, built through SOP ENV

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Aquatim planned to replace the traditional water meters in the entire city of Timișoara with smart devices equipped with radio modules for automatic reading of the consumption data. In 2015 this program was completed with the installation of the last 9,500 such devices on the house connections to the public water supply network. The water company purchased and installed the automatic reading meters gradually, starting with 2008 and allocating a specific amount for each year. The program is considered to be “the second metering” of the city. At present, only newly built homes or facilities recently connected to the public water supply do not have a smart water meter, but these will also be provided with automatic reading devices in 2016, as soon as possible.

Remote reading water meters in Timișoara

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The customer care department manages all customer inquiries or complaints, received by e-mail, phone or presented to the customer relations clerks at their desks. The inquiries are then forwarded to the departments in charge for handling and solving the reported issues. The customer care department will answer the inquiries and complaints in maximum 10 days upon receival, which is also a performance indicator for the service and in maximum 30 days for other types of customer requests.

832 written customer complaints, out of which 432 justified, were received in 2015, and they were all fixed in due time. Most frequently the customers reported clogged sewer lines and storm water inlets, low water pressure at the tap, damaged water supply connections and water meter visiting manholes.

A wide range of payment options for the water bill Aquatim offered a range of payment options to its customers, in order to make paying the bill as convenient as possible, without having to support additional fees. The water bill can be paid at the company’s cashiers, by bank transfers, at bank offices, gas stations, ATMs, PayPoint retailers, post offices and postal workers, various payment terminals, such as Rompay Solutions, Mobile Distribution, Westaco Express available in OMV petrol stations etc. The company also introduced the on-line payment from its website. The payment can be made by debit or credit card, through a user account. The customers can visualize the history of their household consumption, invoices, overdue amounts etc. and send their suggestions or complaints through their accounts, as well.

Customer care

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Applied research The company’s applied research projects aim to improve the water quality, the environmental safety and to upgrade the processes while cutting back on the operation costs. The studies for the optimization of the water and waste water treatment have been among the company’s priorities. The applied research dedicated department studied the efficiency of the coagulants used, the correlation of the water source quality with the applied treatment procedure and the conditioning of the sludge resulted from the waste water treatment. The testing of various filtration systems to reduce the amount of arsenic from ground waters in several regions from the area of supply was also on the agenda.

Research, innovation, development

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WATUSER, a national research projectThe Integrated System for Reducing Environmental and Human-Related Impacts and Risks in the Water Use Cycle (WATUSER) project is carried over within the National Program for Research, Development and Innovation II 2007-2012. The project coordinator is the Tehnical University “Gheorghe Asachi” from Iaşi, and the partners are Aquatim, the “Politehnica” University from Timişoara and Apavital, the water company from Iaşi. In 2015 the pretreatment and filtration module of the pilot plant was completed and the electro-oxidation module was designed. Upon project completion, the pilot plant can be easily adapted to test various water treatment methods, suitable for small communities from the Aquatim’s area of supply. WATUSER will be completed in 2016.

New entries on the R&D agenda In 2015 the national program Promotion, identification and establishment of partnerships for the transfer of know-how in the field of industrial ecology was launched by the National Research-Development Institute for Industrial Ecology– ECOIND Bucharest. Aquatim is a partner in this project. Another international research project, with partners from 5 European countries, that Aquatim joined, is under evaluation, within the European Commission – Research – HORIZON 2020 program. In the latter, the water company will be involved in the dissemination of the results.

ICe WATER, the monitorization of the network with smart technologiesIn 2015 Aquatim hosted the biannual meeting within the collaborative innovation project called ICT Solutions for Efficient Water Resources Management (ICe Water) started in 2012 and completed in 2015. With an overall budget amounting to 4.7 million Euros, out of which 3 million is a grant, the project aimed to prove that smart communication technologies can add value to the water management process. In this project, Aquatim joined a large team of companies and research institutes, including Siemens AG (Germany), Toshiba Research Europe Limited (Great Britain), Consorzio Milano Ricerche (Italy), Italdata SPA (Italy), Unesco-IHE (Netherlands), Institute of Communication and Computer Systems (Greece), K&S GmbH Projektmanagement (Germany) and the Milano water company, Metropolitana Milanese.

Wireless sensors were installed on the water pipes in a pilot zone which is also a district metering area, in Timișoara, including 12 streets with houses and four storey apartment buildings and 3.6 km pipes. The sensor send data on consumption, water flow and pressure. From analyzing these data, the company can have a better understanding of its network and can easily take measures to adjust the water supply to the actual demand.

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Expo Apa 2015

Aquatim participated, in June 2015, at the Expo Apa event, organized by the Romanian Water Association. The company representatives had two contributions in papers – the presentation European funds for the regional development in the Timis County and the paper Case study for the prelocation of the water leaks with noise loggers presented at the IWA Conference - Water Loss Management 2015. The company had also a presentation stand in the water operators sector and Ilie Vlaicu, General Director of Aquatim, chaired the seminar on the implementation of European funded programs.

Eco-Impuls 2015

The fourth edition of the international conference Eco-Impuls, with the topic Large Infrastructure Projects, took place in Timișoara, during October 1-2. The conference was organized by Aquatim, the Aquademica Foundation, the Politehnica University from Timişoara and the West Committee of the Romanian Water Association. The event attracted specialists from the waste management and water industry, representatives of the regional water operators, equipment suppliers. The conference also included a successful professional competition dedicated to workers from the water companies.

Professional community

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Friends of WaterDuring March and April 2015, around 260 primary and secondary school graders participated at ecological lessons within the educational program Frieds of Water. The objective of the program was to teach children about the importance of water and environment and how to keep them clean. The prevention of the sewers pollution and the environmental investment works carried over by Aquatim were also topics discussed. On March 22nd, the World Water Day, Aquatim opened the doors of the Bega treatment plant from Timişoara that received more than 500 visitors in a day, mostly pupils of schools from Timișoara and the neighboring localities.

Open Doors in April, at the WWTPOn April 7th, the Waste Water Treatment Plant opened its doors to young students and teachers, joining the educational program “Şcoala altfel”, set up by the Ministry of Education. The Open Doors event was organized by Aquatim and the Aquademica Foundation. 500 pupils from more than 10 schools made a tour of the WWTP and found out how the sewage is treated to be later safely discharged into a water body.

Public Services DayOn October 3rd, Aquatim attended the Public Services Day, organized by the Municipality of Timișoara. At the water company’s tent, the people of the city learned in more detail about the water supply services, the development strategy and the projects of the company. In the same day, the company launched its new logo, during a press conference. For those who enjoy sport and outdoor activities, Aquatim and Smartfit Studio also organized a Zumba class, in the square hosting the public event.

Social responsibility

300081 Timisoara11/A Gheorghe Lazar St. Phone: +40 256 201 370Fax: +40 256 294 753www.aquatim.ro Text: Loredana LeordeanGraphic concept & layout: Loredana TîrzioruPhoto: Aquatim, Alin ZelencoPrint: “Memory of Culture” Association

2015annual repor t