S.I.F. OLTENIA S.A. - Bucharest Stock Exchange · Societatea de Investiţii Financiare Oltenia S.A. („The Company") was founded on 01.11.1996 in Craiova - Romania, based on the

S.I.F. OLTENIA S.A.

CONSOLIDATED FINANCIAL STATEMENTS

ON DECEMBER 31st 2015

PREPARED IN ACCORDANCE TO RULE No. 39/2015 FOR THE

APPROVAL OF ACCOUNTING REGULATIONS COMPLIANT WITH

INTERNATIONAL FINANCIAL REPORTING STANDARDS

APPLICABLE TO AUTHORIZED ENTITIES, SETTLED AND

SUPERVISED BY THE FINANCIAL SUPERVISION AUTHORITY

FROM THE SECTOR OF AUDITED FINANCIAL INSTRUMENTS

AND INVESTMENTS

Contents

pag.

Consolidated statement of the profit or loss and of other elements of the

comprehensive income ........................................................................................

1

Consolidated statement of the financial position ................................................. 2

Consolidated statement of changes in shareholders equity .................................. 3

Consolidated statement of the treasury flow....................................................... 4

Notes to consolidated financial statements........................................................... 5 - 59

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A.

Consolidated statement of the profit or loss and of other elements of the comprehensive income for the financial year ended on December 31st 2015

In RON Note31st December

201531st December

2014

Incomes

Incomes from dividends 7 28,373,226 42,817,687

Incomes from interests 8 821,549 1,510,310

Other operational incomes 9 324,326,238 206,972,338

Net profit from differences of exchange rate 10 773,930 862,119

Net profit from sale of financial assets 11 56,346,554 82,537,358

Expenses Commissions and administration and supervision fees 12 (3,336,746) (3,283,766)Incomes from restatement of commissions for risks and expenses 6,012,488 5,952,047

Other operational expenses 13 (248,124,285) (212,038,223)

Profit before taxation 165,192,954 125,329,870

Profit tax 14 (29,188,349) (26,446,421)

Net profit of the financial year 136,004,605 98,883,449

Other elements of the comprehensive income

Net modification of reserve from revaluation at fair value of financial assets available for sale and of tangible assets (114,109,908) (7,973,333)

Total comprehensive income for the period 21,894,697 90,910,116

Net profit for

Company shareholders 135,719,852 97,380,890

Minority interest 284,753 1,502,559

136,004,605 98,883,449

Comprehensive income for



21,894,697 90,910,116

Result per share 29

Basic 0.234 0.168

Diluted 0.234 0.168

The consolidated financial statements were approved by the Administration Board in the meetingfrom 20.07.2016 and were signed on its behalf by:

ADMINISTRATOR, PREPARED,

Last name and first name: Last name and first name:

associate professor PhD ec. Ciurezu Tudor Capacity: Chief Financial Officer

jr. Radu Anina SignatureSignature Unit seal

Notes from page 5 to page 59 are integral part of the consolidated financial statements.page 1


Consolidated statement of financial position for the financial year ended December 31st 2015

In RONNote

31st December 2015

31st December 2014

AssetsCash and cash equivalents 15 4,863,204 12,302,014Deposits placed in banks 16 61,980,088 78,560,292Financial assets available for sale 17 1,407,501,658 1,356,246,439

Financial assets at fair value by profit or loss 17 2,052,502 3,903,255

Credits and receivables 18 18,179,250 46,907,322Tangible assets 19 71,468,450 71,216,715Real estate investments 20 44,802,318 40,228,829Other assets 21 154,305,070 119,231,724Total assets 1,765,152,540 1,728,596,590LiabilitiesPayment dividends 22 81,787,050 66,601,125Taxes and fees 23 3,688,670 10,882,860Debts with deferred tax 24 114,701,623 109,069,343Other debts 25 115,336,099 94,309,369Total debts 315,513,442 280,862,697Own capitalsShare Capital 26 58,016,571 58,016,571Updating Share Capital 792,552,339 786,505,309Other elements of own capital 547,912,683 575,016,997Reserves from revaluation of tangible assets 33,189,781 30,870,481Legal and statutory reserves 27,743,775 27,734,413Other reserves 27 2,445,797,934 2,491,248,949Deferred result representing undistributed profit or uncovered loss (26,482,796) (32,581,568)Deferred result following the application of IAS 29 on the Share Capital and reserves (2,656,645,975) (2,656,645,975)Deferred result following the application of IAS less IAS29 63,157,614 37,410,942Current profit 135,719,852 97,380,890Total equity assignable to mother company 1,420,961,778 1,414,957,009Minority interest Of which: 28 28,677,320 32,776,884Profit or loss of the financial year related to interests which do not control 284,75 1,502,559Other own capitals 28,392,567 31,274,325Total capitals 1,449,639,098 1,447,733,893Total debts and equity 1,765,152,540 1,728,596,590

The consolidated financial statements were approved by the Administration Board in the meetingfrom 20.07.2016 and were signed on its behalf by:

ADMINISTRATOR, PREPARED,

Last name and first name: Last name and first name:

associate professor PhD ec. Ciurezu Tudor Capacity: Chief Financial Officer

jr. Radu Anina Signature

Signature Unit seal

Notes from page 5 to page 59 are integral part of the consolidated financial statements.page 2


Consolidated statement of equity modifications for the financial year ended December 31st 2015

- RON –

Name of the elementBalance on31.12.2014

INCREASES2015

REDUCTIONS2015

Balance at the endof the financial

year 2015

0 1 2 3 4

1. Share Capital 58,016,571 - - 58,016,571

2. Adjustment of Share Capital 786,505,309 6,047,030 0 792,552,339

3. Other elements of own capitals 575,016,997 293,073,427 320,177,741 547,912,683

4. Capital premiums - - - -

5. Reserves from revaluation 30,870,481 5,000,351 2,681,051 33,189,781

6. Legal reserves 21,555,691 9,362 - 21,565,053

7. Statutory or contractual reserves 6,178,722 - - 6,178,722

8. Reserves formed from value of financial assets acquired for free - 552,089 552,089 -

9. Deferred result representing excess obtained from revaluation reserves 7,841,455 2,532,051 2,767,215 7,606,291

10. Other reserves 2,483,594,105 166,437,076 204,221,729 2,445,809,452

11. Own shares - - - -

12. Gains connected to instruments of equity - - - -

13. Losses connected to instruments of equity (11,518) - - (11,518)

14. Deferred result representing undistributed profit or uncovered lossBalance C - - - -

Balance D (32,578,928) 101,405,860 95,226,632 (26,399,700)

15. Deferred result derived from the adoption for the first time of IAS less IAS 29Balance C 37,410,942 (10,247,129) (28,387,510) 55,551,323

Balance D - - - -

16. Deferred result derived from the correction of accounting errors Balance C - - - -

Balance D (2,640) (80,456) - (83,096)

17.Deferred result derived from the adoption for the first time of IAS 29

Balance C - - - -

Balance D (2,656,645,975) (2,656,645,975)

18. The result of the financial exercise Balance C 97,380,890 135,582,552 97,243,590 135,719,852

Balance D - - - -

19. Profit allocation (175,093) - (175,093) -

20. Total equity 1,414,957,009 700,312,213 694,307,444 1,420,961,778

ADMINISTRATOR, PREPARED,associate professor PhD ec. Ciurezu Tudor Last name and first name: ec. Sichigea ELENA jr. Radu Anina Capacity: Chief Financial OfficerSignature SignatureUnit seal

Notes from page 5 to page 59 are integral part of the consolidated financial statements.page3


Consolidated statement of treasury flowsfor the financial year ended on December 31st 2015

- RON-Name of the element Financial year

2015 2014

A 1 2

Treasury flows from operating activities

Cashes from customers, other cashes 262,547,052 234,665,492Cashes from sales of financial investments (securities) 131,569,022 214,409,196Payments to suppliers and employees, other payments (289,444,699) (273,391,587)

Interests paid (1,670,561) (2,797,569)

Corporate tax paid (15,575,535) (21,630,739)

Cashes from insurance against earthquakes -

Net treasury from operating activities 87,425,279 151,254,793

Treasury flows from investment activities:

Payments for acquisition of shares (102,692,455) (140,990,006)

Payments for acquisition of tangible assets (5,249,550) (1,756,614)

Cashes from sale of tangible assets 864,850 2,399,697

Interests cashed 814,990 1,544,282

Dividends cashed 25,943,744 38,355,066

Net treasury from investment activities (80,318,421) (100,447,575)

Treasury flows from financing activities:

Cashes from emission of shares -

Cashes from loans on short term 124,392,959 133,240,203

Reimbursement of loans on short term (97,700,495) (116,965,259)

Payment of debts related to financial leasing (20,835) (18,279)

Dividends paid (57,578,715) (73,523,174)

Net treasury from financing activities (30,907,086) (57,266,509)Net increase of Treasury and treasury equivalents (23,800,228) (6,459,291)Treasury and treasury equivalents at the beginning of the financial year 90,571,552 97,030,843Treasury and treasury equivalents at the end of the financial year 66,771,324 90,571,552

The structure of treasury and treasury equivalents includes balances of the following accounts: 508, 5121, 531, 532 (excluding accrued interest).

ADMINISTRATOR, PREPARED,Last name and first name:associate professor PhD ec. Ciurezu Tudor Last name and first name: ec. Sichigea ELENA

jr. Radu Anina Capacity: Chief Financial Officer Signature SignatureUnit seal

Notes from page 5 to page 59 are integral part of the consolidated financial statements.page4

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A.Notes to consolidated financial statements for financial year ended on December 31st 2015(all amounts are expressed in RON, unless otherwise stated)

1. THE REPORTING ENTITY

Societatea de Investiţii Financiare Oltenia S.A. („The Company") was founded on 01.11.1996 in Craiova- Romania, based on the provisions of Law no. 133/1996, law for the transformation of the PrivateProperty Funds into Companies of Financial Investments.The company was founded by thetransformation of the Private Property Fund V Oltenia.The company is a collective investment undertaking operating under Law no. 31/1990 on commercialcompanies and Law no. 297/2004 on capital market, with subsequent amendments and completions.The company has its registered office in Craiova, str. Tufănele, nr. 1, zip code 200767, Dolj county.The company is registered with:-The Chamber of Commerce and Industry Oltenia, registration number J16/1210/1993, Unique Registra-tion Code 4175676, fiscal attribute RO;- National Securities Commission as other Collective Investment Undertaking having a various policy inaccordance with Decision no. 1858/02.09.1999 and registered in the RNSC Register with no.PJR09SIIR/160003/14.02.2006. As of April 30, 2013, according to GEO no.93/Dec.2012, is establishedFinancial Supervisory Authority (FSA) which takes over the duties of National Securities Commission,Private Pension System Supervisory Commission and Insurance Supervisory Commission.- The Office of Securities according to the certificate no 419/07.09.1999.The shares of the company are registered at the quote of Bucharest Stock Exchange, category Premium,with the indicative SIF5 as of 01.11.1999.The evidence of shareholders and shares of the company is kept by SC DEPOZITARUL CENTRALS.A. Bucharest.The depositing activity provided by the legislation and RNSC/FSA regulations is assured Raiffeisen BankS.A. Bucharest Branch.According to the articles of incorporation, the company has the following object of activity: - The management and administration of shares in commercial companies for which own shares were is -sued, corresponding to the Ownership Certificates and the Nominative Privatization Coupons subscribedby citizens according to the provisions of art. 4 paragraph 6 of the Law no. 55/1995;- The administration of the own portfolio of securities and the fulfillment of investments in securities ac-cording to the regulations in force; - Other similar and adjacent activities, according to the regulations in force, as well as administration ofthe own assets; Subscribed and paid Share Capital is of 58,016,571 RON, divided in 580,165,714 shares having anominal value of 0,1 RON/share. The main characteristics of the shares issued by the company are:ordinary, indivisible, nominative, of equal value, issued in dematerialized form and grant equal rights totheir holders.The consolidated financial statements of the company for the year ended on 31st December 2015 includethe Company and its subsidiaries (further on named “the Group”).The Group's core activities are the financial investments activities conducted by the Company, and theactivities of the subsidiaries, which belong to various sectors of activity like: food, commerce, tourism,space rental, etc.

2. BASIS OF PREPARATIONa) Declaration of conformity The consolidated financial statements have been prepared in accordance with Regulation no. 39/2015 forthe approval of accounting regulations compliant with international financial reporting standards,applicable to authorized entities, settled and supervised by the Financial Supervisory Authority fromthe Sector of Financial Instruments and Investments. Under the provisions of the Regulations no. 1606/2002 of the European Parliament and the Council ofthe European Union of 19th July 2002, as well as of the RNSC Decision no. 1176/15.09.2010, thefinancial investments companies have to obligation to prepare and submit to RNSC (FSA) consolidated

page 5


2. BASIS OF PREPARATION (continuation)a) Declaration of conformity (continuation)

annual financial statements, in compliance with the International Financial Reporting Standards adoptedby the European Union, within 8 months from the end of the financial year. The consolidated financialstatements of the Group S.I.F. Oltenia S.A. on 31.12.2015 will be prepared, approved and made publicuntil 31.08.2016. They will be found on the Company site: www.sifolt.ro.

Accounting records of the Company are reflected in RON. The accounts presented resulted from therestatement of reports according to RCR as to reflect differences between RCR and IFRS. Accounts fromreports according to RCR were adjusted where necessary to harmonize these financial statements, insignificant aspects, with IFRS adopted by the European Union.

In addition to consolidation specific adjustments, major restatement of financial information presented inthe financial statements prepared under RCR, to align them to the requirements of IFRS adopted by theEuropean Union were: - Grouping multiple items into more comprehensive categories;- Fair value adjustments and for impairment of financial assets in accordance with IAS 39 “FinancialInstruments Recognition and Evaluation”;- Adjustments of equity and asset items in accordance with IAS 29 “Financial Reporting inHyperinflationary Economies” as the Romanian economy was a hyperinflationary economy until 31December 2003; - Adjustments of the profit or loss account to record income from dividends at the time of statement andat gross value; - Adjustments of real estate investments for their evaluation at fair value according to IAS 40 “Realestate investments”;- Adjustments for the recognition of receivables and debts regarding deferred corporate tax in accordancewith IAS 12 “Corporate Tax”;- presentation requirements according to IFRS.

b) Presentation of financial statementsThe consolidated financial statements are presented in accordance with IAS 1 “Presentation of FinancialStatements”.The Group has adopted a presentation based on liquidity in the consolidated statement of financialposition and income and expenditure presentation was made in relation to their nature in the consolidatedstatement of profit or loss and other elements of the comprehensive income. It was considered that thesemethods of presentation provide information that is more credible and relevant than other methodsallowed by IAS 1 “Presentation of Financial Statements”.

c) Functional and presentation currencyManagement of the Group believes that functional currency as it is defined by IAS 21 “The effects ofexchange rate fluctuations” is the Romanian RON. The present consolidated financial statements areprepared in RON, rounded to the nearest RON, the currency that the Group management chose as thepresentation currency.

d) Basis of evaluation The consolidated financial statements are prepared based on the fair value convention for derivativefinancial instruments, financial assets and liabilities at fair value through profit and loss account andfinancial assets available for sale, except those for which fair value can not be determined reliably.Other financial assets and liabilities and non-financial assets and liabilities are stated at amortized cost,measured value or historical cost.

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2. BASES OF PREPARATION (continuation)

e) Use of estimates and judgements Preparation of financial statements in accordance with IFRS requires the use by the manangement ofcertain estimates, judgements and assumptions that affect the application of accounting policies as well asthe reported value of assets, debts, revenues and expenditures. Judgements and assumptions associatedwith these estimates are based on historical experience as well as other factors considered reasonable inthe context of these estimates. The result of estimates forms the basis of judgements regarding theaccounting values of assets and liabilities that cannot be obtained from other sources of information. Theresults obtained may differ from the values of estimates. The estimates and assumptions underlying accounting records are reviewed periodically. Revisions toaccounting estimates are recognized in the period in which the estimate is revised, if the revision affectsonly that period or in the period in which the estimate is revised and future periods if the revision affectsboth the current period and future periods.The modification of estimates, by its nature, is not connected to previous periods and does not representthe correction of an error.

3. BASIS OF CONSOLIDATION

a) Subsidiaries Subsidiaries are entities controlled by the Company. Control exists when the company is exposed, or hasrights to variable incomes based on its participation in the entity in which was invested and the capacityto influence those incomes by its authority on the entity in which was invested.When assessing control,potential or convertible voting rights that are exercisable at that time must be taken into account.

The financial statements of subsidiaries are included in the consolidated financial statements from themoment they start to exercise control and until its termination. Group Accounting policies of subsidiarieshave been changed to align them with those of the Group.

The companies in which the Company holds more than 50% of the issuer`s share capital are 12 (twelve).

In the consolidation perimeter were included all those 12 (twelve) commercial companies in whichownership is over 50% of the voting rights, as follows:

Itemno.

Company name Address CUI Trade

Register No.

Percentageheld bySIF on

31.12.2015

Percentageheld bySIF on

31.12.2014

1S.C. ALIMENTARA S.A. SLATINA STR. ARINULUI NR.1, JUD. OLT

1513357 J28/62/1991 52.2352 51.9934

2S.C. TURISM S.A. PUCIOASA

STR. REPUBLICII NR.110 , JUD. DAMBOVITA

939827 J15/261/1991 69.2191 69.2191

3S.C. PROVITAS S.A. BUCURESTI

B-DUL UNIRII NR. 14, BL. 6C, SECT.4, BUCUREŞTI

7965688 J40/10717/1995 70.2780 70.2780

4S.C. UNIVERS S.A. RM.VALCEA

STR.REGINA MARIA NR.4, JUD. VALCEA

1469006 J38/108/1991 73.7494 73.7494

5S.C. CONSTRUCTII FEROVIARE S.A. CRAIOVA

ALEEA I BARIERA VALCII NR.28, JUD. DOLJ

2292068 J16/2209/1991 77.5001 77.5001

6S.C. FLAROS S.A. BUCURESTI

STR. ION MINULESCU 67-93 SECTOR 3, BUCUREŞTI

350944 J40/173/1991 81.0386 77.1058

7S.C. ARGUS S.A. CONSTANTA

STR. INDUSTRIALA NR. 1, JUD. CONSTANTA

1872644 J13/550/1991 86.2021 85.9592

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3. BASIS OF CONSOLIDATION (continuation)a) Subsidiaries (continuation)

8S.C. GEMINA TOUR S.A. RM.VILCEA

STR. STIRBEI VODA NR. 103, JUD. VALCEA

1477750 J38/876/1991 88.2866 88.2866

9S.C. MERCUR S.A. CRAIOVA

STR. CALEA UNIRII NR.14, JUD. DOLJ

2297960 J16/91/1991 93.3703 85.8533

10S.C. CONSTRUCTII MONTAJ 1 S.A. CRAIOVA

STR.M. KOGALNICEANU 20, JUD. DOLJ

2321996 J16/187/1991 96.5635 96.5635

11S.C. COMPLEX HOTELIERS.A. DAMBOVITA

B-DUL LIBERTATII NR. 1, JUD. DAMBOVITA

10108620 J15/11/1998 99.9427 75.4811

12S.C. VOLTALIM S.A. CRAIOVA

STR. SIMION STOILOV NR.18, BL. E12, JUD. DOLJ

12351498 J16/698/1999 99.9982 99.9987

The twelve companies included in the consolidation are accounted for 16.49% (2014: 11.46%) of the totalassets of the Company and respectively 17.36% (2014: 13.12%) in net assets and were consolidated bythe global integration method.The main activities undertaken by the Company and the companies included in the consolidation arefinancial investment activities carried by the Company and the activities carried by those companies,which are mainly represented by the sectors: food, commerce, tourism, spaces rental, etc.

The Company Management classified all securities of the portfolio activity in the category of financialassets available for sale.

b) Associated companiesAssociated companies are those companies in which the Group has significant influence, but not controlover financial and operating policies.Participations in which the Group holds between 20% and 50% of the voting rights but over which it doesnot exercise significant influence, are classified as financial assets available for sale.Following the analysis of quantitative and qualitative criteria set out in IAS 27 - “Individual financialstatements” and IFRS 10 – “Consolidated financial statements”, the Group has concluded that it does nothold investments in associates at 31st December 2015 and 2014.

c) Transactions eliminated on consolidation

Intragroup Settlements and transactions, as well as unrealized gains arising from intragroup transactions,are totally eliminated from the consolidated financial statements.

4. SIGNIFICANT ACCOUNTING POLICIES

Accounting policies represent principles, bases, conventions, rules and specific practices applied by theentity in the preparation and presentation of financial statements. The main accounting policies applied in preparing these consolidated financial statements are presentedbelow.

a) Transactions in foreign currency Transactions denominated in foreign currencies are initially recorded in RON at the official exchange rateon the date of transactions settlement. Monetary assets and liabilities registered in foreign currencies atthe date of preparation of the consolidated financial position are translated into the functional currency atthe exchange rate of that day. Gains or losses from their settlement and the conversion using the exchangerate at the end of financial year of monetary assets and liabilities denominated in foreign currencies arerecognized in the profit or loss account, except those that have been recognized in equity as a result ofregistration in accordance with hedge accounting.

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4. SIGNIFICANT ACCOUNTING POLICIES (continuation)a) Transactions in foreign currency (continuation)

Conversion differences on items such as holdings at fair value through profit or loss account arepresented as gains or losses from fair value. Conversion differences on items such as financialinstruments classified as available for sale are included in the reserve derived from the modification offair value of these financial instruments.Foreign currency exchange rates, relative to RON, used at the reporting date are:

Currency 31st December 2015

31st December 2014

Variation

EUR 4.5245 4.4821 +0.94USD 4.1477 3.6868 +12.50

b) Accounting the effect of hyperinflation According to IAS 29 “Financial Reporting in Hyperinflationary Economies”, the financial statements of acompany whose functional currency is the currency of a hyperinflationary economy should be stated interms of current purchasing power of the currency at the date of elaboration of the statement of financialposition, that is non monetary items are restated by the application of the general price index from thedate of purchase or contribution. IAS 29 states that an economy is considered hyperinflationary if, amongother factors, the cumulated inflation rate exceeds 100% over a period of three years.The continuous decline of inflation rate and other factors related to economic environment in Romania,indicate that the economy has ceased to be hyperinflationary, with effect on financial periods beginningfrom 1st January 2004. Thus, the provisions of IAS 29 have been adopted in preparing consolidatedfinancial statements until 31st December 2003. Thus, the amounts expressed in the measuring unit current on 31st December 2003 are treated as the basisfor the accounting values reported in these financial statements and do not represent measured values,replacement cost, or any other measure of the current value of assets or of prices at which transactionswould occur at this time. For the preparation of consolidated financial statements, the Group adjusted to be expressed in themeasuring unit of 31st December 2003 the following elements:

- Share capital and items such as reserves- Financial assets available for sale evaluated at cost for which no active market exists or the marketis not active.

c) Cash and cash equivalentsCash includes the cash available in the cash register, in banks and sight deposits. Cash equivalents are short-term investments, highly liquid, which are readily convertible to cash andwhich are subject to an insignificant risk of changes in value. When preparing the statement of treasury flows, the Group considers as cash and cash equivalents:effective cash, current accounts in banks and bank deposits with initial due time less than 90 days.

d) Financial assets and liabilities Classification

Financial instruments held by the Group are classified in the following categories:

Financial assets or liabilities measured at fair value through profit or loss accountIn this category are included financial assets or liabilities held for trading, derived financial instruments,structured and financial instruments classified at fair value through profit or loss account at the momentof initial recognition.

An asset or a liability is classified in this category if it was acquired mainly for speculative purpose or if itwas designated in this category by the Group management. Derivatives are classified as being held for trading if they do not represent the instruments used forhedge accounting.

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4. SIGNIFICANT ACCOUNTING POLICIES (continuation)d) Financial assets and liabilities (continuation)

Investments held until maturity Investments held until maturity represent non-derivative financial assets with fixed or determinablepayments, and with fixed maturity, which the Group has the positive intent and capacity to hold themuntil maturity. Investments held until maturity are measured at amortized cost by the effective interestmethod less impairment losses.

Credits and receivablesCredits and receivables are non-derivative financial assets, with fixed or determinable payments, that arenot quoted on an active market, other than those which the Group intends to sell immediately or in thenear future. Mainly in this category are included deposits placed in banks.

Financial assets available for sale Financial assets available for sale are those financial assets that are not classified as loans and receivables,investments held until maturity or financial assets at fair value through profit or loss. After initial recognition, these financial assets available for sale, for which there is an active market, aremeasured at fair value, and the differences toward it, other than impairment losses, as well as gains andlosses resulting from the exchange rate variations related to monetary elements available for sale aredirectly recognized in equity. On derecognition of the asset, the cumulated gain or loss is transferred inthe profit or loss account.

The company classified all holdings in the Share Capital of other issuers as financial assets available for sale.

Recognition Financial assets and liabilities are recognized on the date on which the Group becomes a contractual partyto the conditions of the respective instrument. Financial assets and liabilities are measured at the momentof initial recognition at fair value plus trading costs directly attributable, except for financial assets at fairvalue through profit or loss account and loss for which trading costs are not included in the instrumentvalue and investments in shares whose fair value could not be reliably determined and which are initiallyrecognized at cost.

Compensations Financial assets and liabilities are compensated, and the net result is presented in the consolidated statement offinancial position only when there is a legal right of compensation and there is the intention of their settlementon a net basis or if it is intended to realize the asset and to settle debt simultaneously. Incomes and expenses are presented in net manner only when permitted by accounting standards, or for profitand loss resulted from a group of similar transactions such as those from the trading activity of the Group.

Evaluation at amortized cost

The amortized cost of a financial asset or liability is the amount at which the financial asset or thefinancial debt is measured at initial recognition minus main repayments, plus or minus the cumulatedamortization until that moment using the effective interest method for each difference between the initialvalue and the value at maturity, and minus any reduction (direct or by using an adjustment account) forimpairment or impossibility of recovery.

Evaluation at fair value Fair value is the amount for which an asset could be traded or a liability settled in a normal transactionbetween market participants to the valuation date, or in the absence of main market, on the most advantageousmarket in which the Company has access on that date.The Company measures the fair value of a financial instrument using quoted prices in an active market for thatinstrument. A financial instrument has an active market if for that instrument are available quickly andregularly quoted prices. The company measures listed instruments in active markets using the closing price.

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A financial instrument is regarded as quoted on an active market when quoted prices are immediatelyavailable and regularly from an exchange, a dealer, a broker, an association of industry, a service forpricing or a regulatory agency, and these prices reflect real transactions occurring regularly, carried outin objective market conditions.

In the category of shares quoted on an active market are included all those shares admitted to trading onthe Bucharest Stock Exchange or on an alternative market and having frequent transactions. The criterionfor determining the active market should be set so as to ensure a stable portfolio of shares valued at fairvalue from one reporting period to another. The market price used to determine fair value is the marketclosing price of the last trading day prior to the evaluation date.

The fair value of financial instruments traded on an active market is measured as the product between thequoted price for the individual asset or liability and the amount owned.

Securities issued by collective investment bodies will be assessed at the last unitary value of the netasset calculated and published.

Financial assets available for sale for which there is no active market and for which it is not possible toreliably determine the fair value are measured at cost and are periodically tested for impairment.

Identification and evaluation of value impairment

Financial assets measured at amortized cost

If there is objective evidence that there has been an impairment loss on credits and receivables or oninvestments held until maturity recorded at amortized cost, the loss is measured as difference between theaccounting value of the asset and the updated value of future cash flows estimated (excluding futurelosses from the credit risk which were not paid), updated with the initial rate of the effective interest ofthe financial asset.

When such impairment loss appears, the accounting value of the asset is reduced by using an adjustmentaccount for impairment.

The value of the impairment loss is recognized in profit or loss.

In the event that, in a subsequent period, the amount of the impairment loss decreases and the decreasecan be objectively related to an event that occurred after being recognized the impairment, the impairmentloss previously recognized is reversed using an adjustment account for impairment.

Resumption may not result in an accounting value of the financial asset greater than the value that wouldhave formed the amortized cost if impairment had noy been recognized, at the date the impairment loss isreversed.

The amount of the reversal of impairment loss is recognized in profit or loss.

Financial assets available for sale

In the case of financial assets available for sale, when a decrease in the fair value of a financial assetavailable for sale was recognized directly in own equity and there is objective evidence that the asset isimpaired the cumulative loss that was directly recognized in own equity shall be retaken from theaccounts of own capitals and recognized in the profit or loss account even if the financial asset has notbeen yet derecognised.

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The amount of the cumulative loss that is repeated in own equity accounts in the profit or loss accountwill be the difference between the acquisition cost (net of any principal repayment and amortization) andcurrent fair value, less any impairment loss on that financial asset previously recognized in the profit orloss account. Losses from impairment of assets recognized in profit or loss account related to equity classified asavailable for sale are not reversed in profit or loss account. If, in a subsequent period, the fair value of animpaired equity increases, the recovery is recognized directly in other elements of global result.

If there is objective evidence of an impairment loss on unlisted shares which is not presented at fair valuebecause fair value can not be reliably measured, or regarding a derivative asset that is linked or to besettled by such an unquoted equity instrument, the amount of impairment loss is measured as thedifference between the accounting amount of the financial asset and the updated value of future cashflows using the current internal rate of return of the market for a similar financial asset. Such impairmentlosses are not restated in profit or loss account.

In order to determine whether an asset is impaired, the Company takes into account the loss-relevantevents, such as long-term and significant decrease in the fair value below cost; market conditions and ofthe activity field, to the extent that they influence the recoverable value of the asset; financial conditionand near-term prospects of the issuer, including any specific adverse events that may affect the operationscarried out by the issuer, the issuer's recent losses, qualified independent auditor's report on the mostrecent financial statements of the issuer, etc.

Derecognition The Group derecognizes a financial asset when the rights to receive cash flows from that financial assetexpire, or when the Group has transferred its rights to receive the contractual cash flows attributable tothat financial asset in a transaction that has transferred substantially all risks and rewards of ownershipright.On derecognition shares are detracted using the FIFO method (first in, first out).Any interest in transferred financial assets that is retained by the Group or created for the Group isrecognized as a separate asset or liability.

The Group derecognizes a financial liability when its contractual obligations ended or when thecontractual obligations are cancelled or expire.

Gains and losses Gains or losses arising from a change in fair value of a financial asset or financial liability that is not partof a covering relationship against risks are recognized as follows:- Gains or losses arising from financial assets or financial liabilities classified as being evaluated at fairvalue through profit or loss are recognized in profit or loss;- Gains or losses generated from a financial asset available for sale are recognized in other elements of theglobal result, except for impairment losses.When the asset is derecognised, the cumulative gain or loss previously recognized in other elements ofthe global result are reclassified from own equity to profit and loss.At the moment of impairment or derecognition of financial assets and financial liabilities accounted atamortized cost, and through the amortization thereof, a gain or loss in profit or loss account is recognized.

e) Other financial assets and liabilities Other financial assets and liabilities are measured at amortized cost using the effective interest methodless any impairment losses.

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4. SIGNIFICANT ACCOUNTING POLICIES (continuation)

f) Assets held for saleAn asset classified as "asset held for sale" is registered at the lower of carrying amount and fair value lesscosts to sell. An asset is considered as being “assetheld for sale" only if the sale is highly probable, andthe asset is available for immediate sale in its actual state. For a highly probable sale, there has to be avalid plan prepared by the management for the sale of assets, including the identification of possiblebuyers and the finalization of the sale process. Moreover, the asset must be active on the market, at aprice reflecting its fair value.

g) Tangible assets

Recognition and evaluation

Tangible assets recognized as assets are initially evaluated at acquisition cost (for those purchased againstpayment), at the value of contribution (for those received as contribution in kind to the establishment /capital increase) and respectively the fair value at the acquisition date for those received for free.The cost of an item of tangible assets comprises the purchase price, including non-recoverable taxes, afterdeducting any price discounts of commercial type and any costs directly attributable to bringing the assetto the location and condition necessary for it to be used to the goal set by management, such as: staffcosts arising directly from the construction or acquisition of assets, the cost of site preparation, initialdelivery and handling costs, installation and assembly costs, professional fees.Tangible assets are classified by the Group in the following asset classes of the same kind and withsimilar use:- Land and buildings;- Plant and machinery;- Other installations, equipment and furniture

Evaluation after recognition

For subsequent recognition, the Group adopted the revaluation model.After recognition as an asset, tangible assets items of the kind of lands and constructions, whose fair valuecan be reliably measured are accounted at a revalued amount, being the fair value at the date of therevaluation less any subsequent accumulated depreciation and any accumulated impairment losses.Revaluations shall be made with sufficient regularity to ensure that the accounting value does not differsignificantly from that which would be determined using fair value at the balance sheet date.If an item of tangible assets is revalued, then the entire group of tangible assets of which the item is part issubject to revaluation.If an asset accounting value is increased as a result of a revaluation, the increase is recognized in otherelements of global result and accumulated in own equity, with the title of revaluation excess.However, the increase shall be recognized in profit or loss to the extent that it reverses a revaluationdecrease of the same asset previously recognized in profit or loss.

If an asset accounting value is decreased as a result of a revaluation, the decrease is recognized in profitor loss.However, the reduction will be recognized in other elements of global result to the extent that therevaluation surplus presents a credit balance for that asset. Transfers from revaluation surplus to retainedearnings is not made through profit or loss.

Lands and buildings are stated at revalued amount, representing the fair value at the date of revaluationless accumulated depreciation and impairment losses. Revaluations are performed by evaluators membersof the National Association of Evaluators of Romania (ANEVAR). The revaluation frequency is dictatedby the dynamic of the markets to which the lands and buildings held by the Group belong to.

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g) Tangible assets (continuation)

Subsequent costs Expenditures with daily maintenance and repairs of fixed assets are not capitalized; they are recognizedas costs of the period in which they arise. These costs consisted primarily of costs of labor andconsumables, and may include the cost of components of little value.Expenses with maintenance and repairs of tangible assets are recorded in the profit and loss account whenthey occur, and significant improvements brought to tangible assets, that increase the value or life ofthem, or that significantly increase generation capacity of economic benefits by them, are capitalized.

Depreciation Depreciation is calculated at accounting value (acquisition cost or revalued amount minus residual value).Depreciation is recognized in profit or loss account using the straight-line method for the estimated usefullife of tangible assets (less lands and non-current assets in course of execution).

Depreciation is registered from the date they are available for use, for the activity they are designed for,this method reflecting more accurately the expected pattern of consumption of the economic benefitsembodied in the asset.Depreciation of an asset ceases at the earliest of the date the asset is classified as held for sale (or includedin a disposal group that is classified as held for sale) in accordance with IFRS 5 and the date that the assetis derecognised. Therefore depreciation does not cease when the asset is used or is retired from active useunless the asset is fully depreciated. The depreciation methods, useful life and residual values shall be reviewed by the Group`s managementon each reporting date.

If expectations differ from other previous estimates, the change shall be accounted for as a change in anaccounting estimate in accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimatesand Errors”.Estimated useful lives for the current and comparative periods are as follows:- buildings 12-75 years

- Technical installations and means of transport 2-20 years

- Other installations, equipment and furniture 2-15 years

At SC VOLTALIM SA Craiova are found normal period of use over those in legislation. Theseperiods were established after the construction works reassessment by evaluators.

ImpairmentAn asset is impaired when its accounting amount exceeds its recoverable value.At each reporting date, the Group shall determine whether there are indications of impairment of assets. Ifsuch indications are identified, the Group shall estimate the recoverable amount of the asset.If an asset accounting value is decreased as a result of a revaluation, this decrease shall be recognized inprofit or loss. However, the decrease shall be recognized in other elements of comprehensive income tothe extent that the revaluation surplus presents a credit balance for that asset. Reducing recognized inother elements of comprehensive income reduces the amount accumulated in own equity under theheading of revaluation surplus.Land is not depreciated. Impairment of other tangible assets is calculated using the straight-line method,allocating costs related to the residual value, according to the corresponding lifetime.

Derecognition The accounting value of an item of tangible assets is derecognised (eliminated from the consolidatedstatement of financial position) on disposal or when no future economic benefits are expected from its useor disposal.

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g) Tangible assets (continuation)

Tangible assets which are retired or sold are removed from the balance sheet with the correspondingaccumulated depreciation. Gains or losses resulting from the derecognition of a tangible asset element isincluded in the current profit or loss account when the element is derecognized.

LeasingTangible assets also include assets held under finance leases. Since the Group benefit from the risks andadvantages of ownership right, the assets have to be capitalized at the lower of present value of minimumlease payments and fair value. The depreciation policy for leased assets is consistent with that fordepreciable assets that are owned. If there is no reasonable certainty that they will obtain ownership bythe end of the lease term, the asset shall be fully depreciated over the shorter of the lease term and itsuseful life. Simultaneously it recognizes a liability equal to the amount capitalized and future lease payments aredivided into the finance charges and principal (repayment element). All leases that are not classified asfinance leases are treated as operating leases and related payments are included in the expenses of theperiod.

Financial leasingRentals are classified as financial leasing when the terms of the lease also transfer the risks and rewardsof ownership to the one who rents it. All other forms of rental are classified as operating leases. Assets held from financial leases are identified as assets of the company at their fair value at thebeginning of the lease or, if lower, the updated value of the minimum lease payments. The liabilities ofoffering property for rent are included in the balance sheet as a finance lease obligation. Payments for leasing Rates are divided into the finance charges and reduction of the lease liability toachieve a constant periodic rate of interest on the remaining balance of the liability for each period.Financing Interests are recorded as gain or loss, unless they are directly attributable to the long-termassets, in which case they are capitalized in accordance with the general policy of the company on thecost of borrowing.Lease rates are split between capital and interest components so that the interest on the payment to berecorded in the profit or loss account over the term of the lease and represents a constant proportion of thebalance of payment capital reimbursement. The capital part reduces the amount payable to the one whooffers rental.

Operational leasingLeases in which a significant part of the risks and benefits arising from ownership is retained by rentalgiver are classified as operational locations. Lease payments for operating leases are recognized in theprofit or loss account as a linear expense over the lease term.

h) Real estate investmentsReal estate investments are real estate properties (lands, buildings or parts of a building ) held by theGroup (as owner) for the purpose of rent or to increase value or both, and not: - to be used in the production or supply of goods or services or for administrative purposes; or - to be sold during the normal development of activity. Certain properties include one part which is held in order to be rented or with the purpose of increasingvalue and another part which is held for the purpose of producing assets, performing services or foradministrative purposes.If these parts can be sold separately (or rented separately based on a financial leasing contract), then theyare accounted separately. If the parts cannot be sold separately, the property is treated as real estateinvestment only if the part used for the purpose of producing goods, performing services or foradministrative purposes is insignificant.

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4. SIGNIFICANT ACCOUNTING POLICIES (continuation)h) Real estate investments (continuation)

Recognition A real estate investment is recognized as asset if, and only if:- It is probable that a future economic benefit associated to the real estate investment to enter the Group. - The asset cost can be determined in a credible way.

EvaluationInitial evaluation A real estate investment is initially measured at cost, inclusively trading costs. The cost of a real estateinvestment acquired is formed from its buying price plus any expenses directly assignable (for instanceprofessional fees for performance of legal services, transfer of ownership fees and other trading costs).

Further evaluation The accounting policy of the Group regarding further evaluation of real estate investments is that basedon the model of fair value. This policy is uniformly applied to all real estate investments. The assessment of the fair value of real estate investments is performed by assessors members ofANEVAR. The fair value is based on quotations of market prices, adjusted, as the case may be, so as toreflect differences connected to nature, location or conditions of the respective asset. These evaluationsare periodically revised by the Group management. Gains or losses resulting after the modification of fair value of real estate investments are recognized inthe profit and loss account of the period in which they are performed.The fair value of real estate investments reflects the market conditions on the date of balance sheet.

TransfersTransfers to or from real estate investments are made when and only when there is a modification in theuse of the respective asset, highlighted by:- Commencement of use by the Group - transfers from real estate investments to tangible assets used bythe Group;- Start planning process in anticipation of the sale - transfers from real estate investments to inventoriesaccounted for in accordance with IFRS 5;- Start planning process in anticipation of the sale – for transfers from real estate investments toinventories accounted for in accordance with IFRS 5;- Commencement of an operating lease with another party - for transfers from inventories to real estateinvestments.For the transfer of a real estate investment assessed at fair value in tangible assets, the implicit cost of theasset for the purpose of its further accounting will be its fair value from the modification date of use.

Derecognition The accounting value of a real estate investment is de-recognized upon cession or when the investment isdefinitely withdrawn from use and future economic benefits are no longer expected from its cession.Gains or losses resulting from cassation or sale of a real estate investment must be determined as thedifference between net cash from cession and the accounting value of the asset and must be recognized inthe profit and loss account when it is cassated or sold.

i) Intangible assetsIntangible assets are initially measured at cost. After initial recognition, an intangible asset is accounted atcost less accumulated depreciation and any accumulated impairment losses.

Subsequent expenditureSubsequent expenditure is capitalized only when they increase the value of future economic benefitsembodied in the asset to which they are intended. All other expenses, including expenses for depreciationof commercial fund and internally generated brands, are recognized in profit or loss account whenincurred.

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4. SIGNIFICANT ACCOUNTING POLICIES (continuation)i) Intangible assets (continuation)

Depreciation of intangible assetsDepreciation is calculated for the cost of the asset, or other amount substituted for cost, less its residualvalue. Depreciation is recognized in profit or loss using the straight-line method for the estimated usefullife of intangible assets from the date they are available for use, this method more accurately reflects theexpected pattern of consumption of the economic benefits embodied in the asset.Estimated useful lives for the current and comparative periods are as follows: Computer software - 3years.Depreciation methods, useful lives and residual values are reviewed at each financial year end andadjusted accordingly.

j) InventoriesInventories are assets held in order to be sold in the normal development of activity, assets in course ofproduction, which are to be sold in the normal development of activity, or assets in the form of rawmatters, materials and other consumables, which are to be used in the production process or forperformance of services.Inventories are assessed at the smallest value between cost and net accomplishable value. The cost ofinventories includes all costs related to acquisition and processing, as well as other costs borne in order tobring inventories in the form and place where they currently are. The net accomplishable value is the estimated sale price, which could be obtained within the normaldevelopment of activity, less estimated costs for finalization of the good and estimated costs in order tomake the sale. Cost of inventories that are not normally interchangeable and of goods or servicesproduced and intended for separate commands is determined by specific identification of individual costs.For fungible inventories output cost is determined using the “first in, first out” method (FIFO).

k) Impairment of assets other than financialThe accounting value of the Group assets that are not financial in nature, other than deferred tax assets isreviewed at each reporting date to identify the existence of impairment indicators. If such indicationexists, it is estimated the recoverable amount of the respective assets.An impairment loss is recognized when the accounting value of the asset or its cash generating unitexceeds the recoverable amount of the asset or cash-generating unit. A cash-generating unit is thesmallest identifiable group that generates cash and which is independent from other assets and othergroups of assets. Impairment losses are recognized in the profit or loss account.The recoverable amount of an asset or cash-generating unit is the maximum of its value in use and its fairvalue less costs to sell that asset or units. In assessing net value of use, future cash flows are updatedusing a pre-tax update rate that reflects current market conditions and the specific risks to the respectiveasset.Impairment losses recognized in prior periods are assessed at each reporting date to determine whetherthey decreased or no longer exist. Impairment loss is reversed if a change in the estimates used todetermine the recoverable amount occurred. An impairment loss is reversed only if the asset accountingvalue does not exceed the accounting value that would have been determined, net of depreciation andamortization, if no impairment loss had been recognized.

l) Share CapitalShare Capital consists of ordinary shares, indivisible, nominative, of equal value, issued in de-materialized form and grant equal rights to their holders.Incremental costs directly attributable to an issue of ordinary shares are deducted from equity, net ofeffects of taxation.

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m) ProvisionsProvisions are recognized in profit or loss account when the company has a present (legal or implicit)obligation as a result of past events and when it is probable that for the settlement of obligation to berequired an outflow of resources embodying economic benefits and a reliable estimate can be madeabout the amount of the obligation.To determine the provision, future cash flows are updated using a pre-tax update rate that reflects thecurrent market conditions and specific risks to the respective liability. The amount recognized asprovision is the best estimate of the expenditure required to settle the present obligation at the end of thereporting period.

Provisions shall be reviewed at the end of the reporting period and adjusted so as to reflect the currentbest estimate. If it is no longer probable an outflow of resources embodying economic benefits, theprovision should be cancelled.No provision is recognized for costs that are incurred for carrying the activity in the future.The Group records provisions for onerous contracts in cases where the expected benefits to be obtainedfrom a contract are lower than the inevitable costs associated with fulfilling contractual obligations.

n) Benefits of employees

Short term benefitsShort term benefits of employees include wages, premiums and contributions to social insurances.Obligations with short term benefits given to employees are not updated and are recognized in the profitand loss account as the related service is performed.Short-term employee benefits are recognized as expense when the services are rendered. A provision isrecognized for the amounts expected to be paid as cash premiums in short-term or schemes for staffparticipation in profit as the company has legal or implicit obligation to pay these amounts as a result ofpast services rendered by employees and if the respective obligation can be reliably estimated.Besides salaries and other indemnities, according to the company contract (articles of incorporation) andthe collective labour agreement, administrators, directors with mandate agreement and employees of thecompany are entitled to receive incentives from profit participation fund. This obligation is firstrecognized in the profit or loss account in the financial year in which the profit was realized in the form ofprovisions for the participation of employees to profit and premiums to be paid and will be distributedafter the approval by the general meeting of shareholders of the individual annual financial statements,prepared for the year in which was realized profit from where incentives are granted.

Plans of determined contributionsThe Group makes payments on behalf of their employees by the Romanian State pension scheme, health insurance and unemployment benefit in the normal course of conducting business. Also, all Group employees are members and have a legal obligation to contribute (through individual social contributions)to the Romanian State pension scheme. All related contributions are recognized in the profit or loss account in the period when incurred. The Group has no further obligations.The Group is not engaged in any independent pension scheme and therefore does not have any otherobligations in this respect. The Group has no obligation to provide further services to current or formeremployees.

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n) Benefits of employees (continuation)

Long term benefits of the employees The Group's net obligation in respect of benefits from long-term services is the amount of future benefitthat employees have earned in return for services rendered by them in the current and prior periods.Based on collective labor agreements in force retirees to pension and full seniority benefit onretirement of a compensation equal to the value of two wages at the date of retirement.

o) Payment dividendsDividends are treated as a profit distribution in the period when they were declared and approved by theOrdinary General Assembly of Shareholders. Available profit for assignment is the annual profitregistered in financial statements prepared according to IFRS.

p) Income recognitionIncomes are measured at the fair value of the consideration received or to be received. Incomes arereduced corresponding to the estimated value of goods returned by customers, rebates and other similaritems.

Incomes from the sale of goods and performance of services Incomes from sale of goods and performance of services are recorded net of trade discounts, VAT andother taxes related to turnover.Incomes from sale of goods is recognized in the profit or loss account when the significant risks andrewards of ownership of goods are transferred to the buyer, which happens most often in their delivery.Incomes from services is recognized in the profit or loss account according to their stage of completion.

Incomes from dividends Incomes from dividends are recognized in the profit and loss account at the time it is established the rightto receive these incomes. Dividend income is recorded at gross value including tax on dividends, which is recognized as currentexpense with profit tax. The actual calculation is done according to the fiscal provisions in force on thecalculation date. In case of dividends received in the form of shares as an alternative to cash payment, incomes fromdividends are recognized on cash level that would have been received in correspondence with the increasein participation related. The Group does not record incomes from dividends related to shares receivedwithout consideration in money when they are distributed proportionately to all shareholders.

Income and expenses with interestsInterest income and expenses are recognized in profit or loss account using the effective interest method.The effective interest rate is the rate that exactly discounts the expected cash receipts and payments infuture for the expected life of the asset or financial liability (or, where appropriate, a shorter period) to thecarrying amount of the financial asset or liability.

Income from rentsIncomes from rents are generated by real estate investments leased by the group in the form of operationalleasing agreements and are recognized in the linear profit or loss account throughout the entire period of theagreement.

r) Recognition of expensesExpenses are recorded during their performance, and their recognition in profit or loss account is subjectto the principle of independence of the year.Operating expenses are recognized in profit or loss account in the period in which they were made.Bank commission expenses are recorded as incurred.

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r) Recognition of expenses (continuation)

Expenses from transactions are recognized at the same time with the incomes from these operations, onthe transaction date for securities traded, respectively on the date of receipt of final instalment in case ofsale in instalments of the unlisted securities .On arrival, the cost of securities is represented by the acquisition cost, and at the balance sheet date, theacquisition cost is adjusted with established temporary impairments.

Expenses with management fees, rates and charges are recognized when they occur. Commission expenses related to transactions are recognized on trade date. Salary costs and related contributions are recognized when they occur, with the observance of theprinciple of independence of the year.

s) Gains and losses from exchange rate differences

Foreign currency transactions are recorded in the functional currency (RON), by converting foreigncurrency amounts at the official exchange rate communicated by the National Bank of Romania valid attrade date.At balance sheet date, monetary items expressed in foreign currencies are translated using the exchangerate on the last day of the currency auction of the year.Exchange differences arising during the settlement of monetary items or conversion of monetary items atdifferent rates from those at which they were translated on initial recognition (during the period) arerecognized as loss or gain in the period in which they arise.

t) Corporate tax Corporate tax related to the exercise includes current tax and postponed tax. Current Corporate taxincludes tax on incomes from dividends recognized at gross value.Corporate tax is recognized in profit or loss or in other elements of comprehensive income if the tax isrelated to capital elements.Current tax is the tax to be paid, related to profit obtained in the current period, determined based onpercentages applied on the reporting date and of all adjustments relating to previous periods.For the financial exercises concluded on 31st December 2015, the rate of Corporate taxwas of 16%. (2014:16%). The tax rate relating to incomes from taxable dividends was of 16% and zero (2014: 16% andzero).

Deferred tax is determined by using the balance sheet method for those temporary differences that appearbetween the tax fiscal calculation basis for assets and debts and their accounting value used for reportingin consolidated financial statements.Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill,the initial recognition of assets and liabilities arising from transactions which are not combinations ofenterprises and that affects neither the accounting profit nor tax and differences arising from investmentsin subsidiaries, provided that they will not reverse in the foreseeable future.Deferred tax is calculated using tax rates expected to apply to the resumption of temporary differencesbased on the laws in force at the reporting date. Deferred tax assets and liabilities are offset only if a legally enforceable right to offset current taxliabilities and claims exists and whether they are related to the tax collected by the same taxationauthority on the same entity subject to taxation or different fiscal authority but seeking to settle tax claimsand current liabilities using a net basis or related assets and liabilities will be realized simultaneously.The deferred tax claim is recognized only to the extent that it is probable the realization of future profitsthat can be used to cover the tax loss. The claim is reviewed at the end of each financial year and isreduced to the extent that the related tax benefit is unlikely to be realized. Additional taxes that arise fromthe distribution of dividends are recognized at the same time as the liability to pay the dividend.

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u) Result per shareThe Group presents the result per basic share and diluted for common shares. Basic result per share iscalculated by dividing profit or loss attributable to ordinary shareholders of the Group at the weightedaverage number of ordinary shares relating to the reporting period.Diluted result per share is determined by adjusting the profit or loss attributable to ordinary shareholdersand the weighted average number of ordinary shares with dilution effects resulting from potentialordinary shares.

v) Segment reporting A segment is a separate component of the Group which:

- is engaged in operational activities generating income and expenses (including income and expensearising from the interaction with other components of the same entity) ;

- whose results from activity are periodically by the main operational decision-making factor of the entityin order to make decisions relating the allocation of resources on segment and the evaluation of itsperformance

and

- for which distinct financial information is available.

On 31st December 2015 the activity developed by the Company together with the companies in theportfolio in which it holds more than 50% of the share capital, included in the consolidation, has beensegmented on the following main activities:

- financial investments activity

- space rental

- food industry

- retail trade in non-specialized stores, selling predominantly non-food products

- tourism

x) New standards and amendments

New standards, amendments and interpretations with application after 1st January 2015 and which were not adopted earlier

There are new standards, amendments and interpretations that apply for the annual periods beginningafter January 1st 2015 and which have not been applied in preparing these financial statements. None ofthe below is not expected to have a significant effect in the future on the financial statements.

The list below describes the standards/interpretations that have been issued and are applicable afterJanuary 1st 2015.

IFRS 9 “Financial instruments”

IFRS 9, published in July 2014, replaces IAS 39 “Financial instruments: Recognition and measurement”.IFRS 9 includes new guidance on the classification and measurement of financial instruments, a newmodel of expected credit losses for the calculation of impairment of financial assets and newrequirements regarding accounting for hedging (hedge). It maintains guidance on the recognition andderecognition of financial instruments of IAS 39.

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x) New standards and amendments (continuation)

IFRS 9 retains but simplifies, the mixed evaluation model and establishes three categories of primarymeasures for financial assets: amortized cost, fair value through comprehensive result and fair valuethrough the income statement. The classification basis depends on the business model of the entity andthe contractual cash flows of the financial asset.

IFRS 9 applies to annual reporting periods starting with January 2018, earlier application is permitted.

Based on initial assessment, a significant impact on the company is not provided.

Investments entities: the application of exception from consolidation (Amendments to IFRS10, IFRS 12 and IAS 28)

These amendments clarify the fact that an investments entity may provide services related to investmentsto third parties - even if these activities are significant for the entity – as long as the entity meets thedefinition of an investment entity.

Based on initial assessment, a significant impact on the company is not provided.

5. FINANCIAL RISKS MANAGEMENT

The Group, through the business it carries, is subject to various risks.

Risk management is an integral part of all decision-making and business processes within the group. TheGroup's management continuously evaluates the risks that may affect reaching the company's objectivesand takes appropriate action on any change in the conditions in which they operate.Group management pays special attention to risks identification. Group exposure to inherent risks in thebusiness, through daily operations and transactions (especially capital market operations) is identified andaggregated by risk management infrastructure implemented: Audit committee, Internal audit, internalcontrol, operational monitoring, hierarchical levels of authorization and validation of transactions.Risks monitoring is done on each hierarchical level, with supervision and approval procedures fordecision-making and trading limits.The internal reporting of risk exposure is continuously done on business lines, the company managementis permanently kept informed of the risks inherent in conducting business.The main risk factors identified in the Group are:

a) economic environment riskb) operational riskc) market risk (price risk, currency risk, interest rate risk)d) credit riske) liquidity riskf) tax risk

The company has implemented risks assessment policies to which it is exposed, policies approved by theBoard of Directors.

a) Economic environment riskThis risk is extremely important, by the direct effect on the Group's business and indirectly throughcompanies in which the Group holds interests.Romanian economy continues to exhibit the specific characteristics of emerging economies, and there is asignificant degree of uncertainty regarding the development of the political, economic and socialenvironment.From the Romanian economy point of view, 2015 was a good year, the growth registered by GDP beingof 3.7%, higher to the forecast level.

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5. FINANCIAL RISKS MANAGEMENT (continuation)

a) Economic environment risk (continuation)

Romanian economy is still fragile and dependent in particular of developments of the other economies,especially of the EU countries, which are the main business partners for our country.

The risks that the EU economy faces (for instance, Great Britain exit of the EU), as well as a moreaccentuated uncertainty of the growing rhythm of the Chinese economy – which may affect globaleconomy – are permanently monitored by the management, in order to anticipate the effects on theportfolio managed.

2016 will be a difficult year, with high risks due to international economic evolutions and especially thepolitical ones.

b) Operational risk

Operational risk is defined as the risk of registering certain losses or of not accomplishing the estimatedprofits due to internal factors, like inadequate development of internal activities, the existence ofinadequate personnel or systems, or due to external factors, like the change of economic conditions,legislative changes on the capital market, social-political events.

The main responsibility of developing and implementing controls connected to operational risk accrues tothe company management. The responsibility is supported by the development of the general companystandards for managing the operational risk on the following areas:

- demands to separate responsibility;

- alignment to the demands of the regulation frame;

- demands to report operational losses and proposals for their remedy;

- professional development and instruction;

- establishing ethic standards;

- documenting controls and procedures;

- preventing litigations risk.

Operational risks are inherent to the company activity.

The Group manages operational risk by the identification, estimation, monitoring and risks control.

It should be underlined that, in managing operational risk, not the models and techniques are the mostimportant, but the attitude towards risk, which is formed in time and is an aspect of organizational culture.

c) Market risk

Market risk represents the actual or future risk of negative affectation of profits, determined by thefluctuations on the market of prices of securities – regarding the activities belonging to the tradingportfolio – of the interest rate, as well as the fluctuations of the exchange rate for the entire activity of theGroup.

The efficient management of market risk is made through the use of fundamental analysis that gives anindication of the soundness of an investment as well as estimating potential of certain companies, andtaking into account forecasts on the evolution of economic sectors and financial markets. The main issues pursued in market risk analysis are: assessment of shares portfolio in terms ofprofitability and growth potential, strategic allocation of long term investments, identification of short-term investments in order to capitalize price fluctuations in the stock market, the establishment of assetconcentration limits in a particular economic sector.

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c) Market risk (continuation)

The Group is subject to fair value risk of financial instruments held which fluctuates as a result of

changes in market prices, being either caused by factors specific to the issuer`s activity or by factors

affecting all instruments traded on the market.

The Group is subject to market risk, mainly due to its trading activities. Taking into account the

particularities of the Company, the most relevant risks to the current activity are: share price risk,

interest rate risk, foreign exchange risk.

Price risk

The market value of the portfolio of listed shares (on BVB – settled market, BVB-AERO, SIBEX), on

31.12.2015, represents 63.92% (2014: 68.69%) of the total value of shares portfolio managed.

In these conditions, the Group has a high risk – associated with price movements of financial assets in the

stock market.

In the managed portfolio a number of 8 issuers can be found, of the 10 that constitute the BET index of

Bucharest Stock Exchange.

Market value of the holdings in those 8 issuers, represents on 31.12.2015 81.49% (2014: 76.88%) of the

market value of shares held in listed companies. Thus, the risk associated with the BET index variation of

BVB is high.

The Management of the Group monitors market risk and grants powers regarding trading limits on the

capital market to the effective management of the company.

On 31st December 2015 the Group has the following structure of assets subject to price risk:

In RON No.

comp

anies

Market value

31.12.2015

No.

companies Market value

31.12.2014Capital investments

Companies listed 31 899,559,429 46 932,707,927Companies not

listed39 507,693,540 36 425,119,083

Fund units 4 2,301,191 5 2,322,684Total capital

investments74 1,409,554,160 87 1,360,149,694

Placements held in companies whose securities are listed and traded on the stock market in Romania, plus

placement owned in Romanian Commercial Bank represent on 31.12.2015 - 91.84% (2014: 92.24%) of

the fair value of investments.

The Group also monitors risk concentration on sectors of activity which is presented as follows:

page 24




Structure of portfolio IssuersTotal nominal value of

the packageTotal market value of

the packageEconomic sectors with weight in the value portfolio of SIF :

SCNo.

% (RON) % (RON) %

31st December 2015 74 100.00 489,540,375 100.00 1,409,554,160 100.00finances, banks, insurances 5 6.76 182,264,476 37.23 744,063,799 52.79oil resources and related services 1 1.35 71,130,693 14.53 206,279,009 14.63transport of energy and gas 2 2.70 41,301,620 8.44 165,269,200 11.72tourism, public food, recreation 4 5.41 44,687,362 9.13 53,454,766 3.79pharmaceutical industry 1 1.35 9,120,903 1.86 48,523,203 3.45electronic, electrotechnical industry 9 12.17 25,740,342 5.27 39,878,767 2.84gas resources 1 1.35 1,225,760 0.25 33,340,672 2.37metallurgical industry 3 4.05 21,045,051 4.30 27,264,318 1.93car manufacture industry, processing 11 14.87 34,240,821 6.99 23,503,981 1.68wood, cellulose, paper industry 1 1.35 17,004,670 3.47 12,038,772 0.85chemical industry 1 1.35 4,699,984 0.96 11,702,960 0.83financial markets management 2 2.70 3,984,695 0.81 10,453,597 0.74other financial intermediation 7 9.46 7,461,457 1.52 9,757,336 0.69glass, china, faience 1 1.35 4,799,887 0.98 9,627,292 0.68distribution, supply of electricity and energy services 1 1.35 4,439,490 0.91 5,416,178 0.38let and sublet of real estate goods 2 2.70 1,716,101 0.35 2,449,964 0.17food industry 3 4.05 2,980,128 0.61 2,098,135 0.15domestic trade 3 4.05 4,019,009 0.82 1,740,120 0.12constructions 4 5.41 927,934 0.19 - -other activities 8 10.81 4,249,975 0.87 390,900 0.03

TOTAL CAPITAL SECURITIES 70 94.59 487,040,358 99.49 1,407,252,969 99.84FUND UNITS 4 5.41 2,500,017 0.51 2,301,191 0.16




SCNo.

% (RON) % (RON) %

31st December 2014 87 100.00 509,801,840 100.00 1,360,149,694 100.00finances, banks, insurances 6 6.90 178,811,549 35.07 596.728.501 43.87oil resources and related services 2 2.30 69,892,922 13.71 283,023,371 20.81transport of energy and gas 2 2.30 45,684,650 8.96 176,555,989 12.98Pharmaceutical industry 1 1.15 8,362,234 1.64 48,919,067 3.60tourism, public food, recreation 4 4.60 36,579,815 7.18 42,753,097 3.14electronic, electrotechnical industry 10 11.48 25,591,758 5.02 39,871,807 2.93

page 25







SCNo.

% (RON) % (RON) %

Real estate development (promotion) 1 1.15 6,491,174 1.27 37,648,809 2.77

Other financial intermediation 8 9.20 10,493,669 2.06 24,410,008 1.79Car manufacture industry, processing 12 13.78 34,331,013 6.73 23,672,718 1.75Metallurgical industry 3 3.45 35,010,145 6.87 20,453,363 1.50Wood, cellulose, paper industry 3 3.45 21,186,639 4.16 13,085,551 0.96Financial markets management 2 2.30 3,984,795 0.78 13,108,448 0.96Chemical industry 1 1.15 4,682,466 0.92 11,237,918 0.83Glass, china, faience 1 1,15 4,799,887 0.94 9,627,292 0.71Distribution, supply of electricity and energy services 1 1,15 4,789,490 0.94 5,445,650 0.40Food industry 3 3,45 2,981,378 0,58 5,100,872 0.38Let and sublet of real estate goods 3 3,45 3,325,749 0.65 3,793,326 0.28Domestic trade 3 3,45 4,023,843 0.79 1,421,887 0.10constructions 5 5,75 1,559,827 0.31 - -Other activities 11 12,64 4,521,264 0.89 969,336 0.07

TOTAL CAPITAL SECURITIES 82 94,25 507,104,267 99.47 1,357,827,010 99.83FUND UNITS 5 5,75 2,697,573 0.53 2,322,684 0.17

From the analysis of the above data, on 31.12.2015 the Group mainly held shares operating in thefinance, banking, insurance field accounting for 52.79% of the total portfolio, up from 31.12.2014,when the same sector of activity recorded a weight of 43.87%.

Currency risk Currency risk is the risk that the value of a portfolio may be negatively affected as a result of variations in

exchange rates.

Since the majority of the Group's assets are denominated in the national currency exchange rate

fluctuations do not directly affect the Group's activity.

These fluctuations have influence in the case of assessing investments of the type of deposits in foreign

currency.

Currency available holdings represent, on 31.12.2015, 1.26% (2014: 0.88%) of total financial assets, so

that the currency risk is insignificant.

Due to the low share of assets expressed in foreign currency, the Group does not have a formalized policy

of covering foreign currency risk.

Investments in bank deposits in foreign currency are constantly monitored and action is taken for

investment, disinvestment, depending on the forecast evolution of the exchange rate.

page 26




Focusing of assets and liabilities on the types of currency is summarized in the table below:

In RON Accountingvalue

RON EUR USD

31st December 2015Financial assets Cash and cash equivalents 4,863,204 4,709,601 71,797 81,806Deposits placed in banks 61,980,088 41,318,073 1,046,913 19,615,102Financial assets available for sale 1,407,501,658 1,407,501,658 - -Financial assets measured at fair value through profit or loss 2,052,502 2,052,502 - -Credits and receivables 18,179,250 18,179,250 - -Other financial assets 154,305,070 154,305,070 - -Total financial assets 1,648,881,772 1,628,066,154 1,118,710 19,696,908

Financial debts Payment dividends 81,787,050 81,787,050 - -Other financial debts 115,336,099 115,336,099 - -Total financial debts 197,123,149 197,123,149 - -


RON EUR USD

31st December 2014Financial assets Cash and cash equivalents 12,302,014 11,861,540 239,346 201,128Deposits placed in banks 78,560,292 64,801,324 896,420 12,862,548Financial assets available for sale 1,356,246,439 1,356,246,439 - -Financial assets measured at fair value through profit or loss 3,903,255 3,903,255 - -Credits and receivables 46,907,322 46,907,322 - -Other financial assets 119,231,724 119,231,724 - -Total financial assets 1,617,151,046 1,602,951,604 1,135,766 13,063,676

Financial debts Payment dividends 66,601,125 66,601,125 - -Other financial debts 94,309,369 94,309,369 - -Total financial debts 160,910,494 160,910,494 - -

The exposure to this kind of risk is also due to holdings in commercial companies of the leasing field,with export activity etc., whose activity was influenced by the fluctuations of the exchange rate andwhose financial results are less predictable.

page 27




Interest risk rate

Interest rate risk is that the value of a portfolio will fluctuate due to changes in market interest rates. Factors

that define this type of market risk are a wide range of interest rates corresponding to a change in markets,

currencies and maturities for which the Group holds positions.

The interest rate directly influences revenues and expenses attached to financial assets and liabilities bearing

variable interest rates.

Most of the assets in the portfolio are not interest bearing. Consequently the Group is not significantly affected

by interest rate risk. The interest rates applied to cash and cash equivalents are short-term.

In order to benefit from interests volatility, for a greater flexibility in the policy for assigning money

reserves, it will be pursued that the investment of money reserves in monetary instruments be especially

made on short term, of 1-3 months.

The following table summarizes the Group's exposure to interest rate risk.

In RONAccounting

valueBelow 3months

Between3 and 12months With no interest

31st December 2015

Cash and cash equivalents 4,863,204 - - 4,863,204

Deposits placed in banks 61,980,088 43,652,176 18,327,912 -

Financial assets available for sale 1,407,501,658 - - 1,407,501,658

Financial assets measured at fair value through profit or loss 2,052,502 - - 2,052,502

Credits and receivables 18,179,250 - - 18,179,250

Other financial assets 154,305,070 - - 154,305,070

Total financial assets 1,648,881,772 43,652,176 18,327,912 1,586,901,684

Financial debts

Payment dividends 81,787,050 - - 81,787,050

Other financial debts 115,336,099 - - 115,336,099Total financial debts 197,123,149 - - 197,123,149

page 28




In RON

Accounting value Below 3 months

Between3 and 12months With no interest

31st December 2014Cash and cash equivalents 12,302,014 - - 12,302,014Deposits placed in banks 78,560,292 67,743,830 10,816,462 -Financial assets available for sale 1,356,246,439 - - 1,356,246,439Financial assets measured at fair value through profit or loss 3,903,255 - - 3,903,255


Other financial assets 119,231,724 - - 119,231,724


Financial debts

Payment dividends 66,601,125 - - 66,601,125

Other financial debts 94,309,369 - - 94,309,369

Total financial debts 160,910,494 - - 160,910,494

d) Credit risk

The credit risk represents the Group`s risk of recording losses as a consequence of the insolvency of itsdebtors.

For the Group, the credit risk is mostly determined by exposures on asset elements of the type of “shares”representing 79.85% of the assets managed, evaluated under legal provisions.

Credit risk evaluation is made in two stages, both before the accomplishment of investments operationsand after the approval and effective accomplishment of operations, supervising the assets evolution inorder to take adequate measures in case of emergence of elements that may lead to damaging thecompanies economic activity and, in extreme cases, to their entering in insolvency.

In accordance with legal provisions, the Group has not granted any type of loans or guarantees to thirdparties.The credit risk may affect indirectly the Company activity, being the case of commercial companies ofthe portfolio, which face financial difficulties in paying their obligations corresponding to dividends.

The Group may be exposed to credit risk through investments realized in bonds, of current accounts, bankdeposits as well as other receivables.

On 31st December 2015 the Group did not hold in portfolio bonds, real guarantees as insurance and didnot record outstanding financial assets.

page 29



d) Credit risk (continuation)

All buying – selling of shares transactions of the company are made through storage bank with whichthere was a custody – storage agreement under the law, so the risk of default of settlement obligations isminimal.

The maximum exposure to credit risk at 31st December 2015 is of 79,921,808 lei (2014: 119,786,671 lei)and can be analyzed in the following data.

In RON31st December

201531st December

2014

Deposits and accounts in banks 66,521,786 90,403,770

Other assets 13,400,022 29,382,901

TOTAL 79,921,808 119,786,671

Exposure on current accounts and deposits placed in banks

In RON31st December

201531st December

2014

Transilvania Bank 53,016,900 66,642,671

Raiffeisen Bank 5,651,682 9,812,092

ROMANIAN COMMERCIAL Bank 3,764,643 2,682,953

BRD – GSG Bnak 2,580,964 9,928,980

Treasury 822,906 65,021

Marfin Bank 362,350 668,816

CEC Bank 208,474 526,471

Credit Europe Bank 1,979 11,697

Unicredit Tiriac Bank 8,631 5,724

Garanti Bank 2,702 4,119

Other commercial banks 100,555 55,226

Total 66,521,786 90,403,770

page 30



d) Credit risk (continuation)

Other assets

In RON31st December

201531st December

2014

Dividends to cash 88,474 109,309

Other various debtors and commercial receivables 15,804,555 31,673,438

Adjustments formed for impairment of other financial assets (debtors) (2,493,007) (2,399,846)

Total 13,400,022 29,382,901

e) Liquidity risk

The Group pursues to maintain a liquidity level adequate to its support obligations, based on anassessment of relative liquidity of assets on the market, taking into account the period necessary forliquidation and the price or value at which the respective assets can be liquidated, as well as theirsensitivity to market risks or other external factors.

The Group must hold liquid assets, whose added value should cover the difference between outputs ofliquidities and inputs of liquidities in crisis situations, so as to be ensured the fact that the Groupmaintains levels of liquidity reserves that are adequate to allow it to face possible imbalances betweenliquidities inputs and outputs in crisis situations.

The liquidity risk is especially linked to holdings in commercial companies of “closed” type existing inthe managed portfolio. Thus, the sale of some holdings – in case of apparition of negative aspects in theireconomic-financial situation or in case it is pursued to obtain liquidities – is especially difficult, existingthe risk of not being possible to obtain a higher or at least equal price to that of holdings evaluation in thecalculation of net asset, according to F.S.A. regulations.

At the same time, the low liquidity of the capital market of Romania makes often difficult even tradingholdings in commercial companies listed.

Looking ahead to 2016, we anticipate the maintaining of a low liquidity level for the capital market,following uncertainties connected to Euro zone.

This aspect is permanently in the attention of leadership, seeking solutions to increase the liquidity ofmanaged portfolio.

The structure of assets and liabilities in terms of liquidity is analyzed in the following table:

page 31



e) Liquidity risk (continuation)


Below 3months

Between3 and 12months

Withoutpreestablished

maturity

31st December 2015

Financial assets


Deposits placed in banks 61,980,088 43,652,176 18,327,912



Credits and receivables 18,179,250 18,179,250


Financial debts

Payment dividends 81,787,050 81,787,050

Other financial debts 115,336,099 21,326,960 94,009,139

Total financial debts 197,123,149 103,114,010 94,009,139


Below 3months

Between3 and 12months

Withoutpreestablished

maturity

31st December 2014

Financial assets


Deposits placed in banks 78,560,292 69,840,250 8,720,042 -


Financial assets measured at fair value through profit or loss 3,903,255 -

-3,903,255



Financial debts

Payment dividends 66,601,125 66,601,125 - -

Other financial debts 94,309,369 83,920,298 10,389,071 -


page 32



f) Taxation risk

Starting with the date of Romania's accession to the European Union, the Group had to obey EU fiscalregulations and implement the changes brought by European legislation. The way the Group implementedthese changes remains open to tax audits for five years.The Group's management believes that it correctly interpreted the legislative provisions and recorded fairvalues for taxes, fees and other debts to the state but in these conditions, too, there is some risk attached.The tax system in Romania is subject to various interpretations and permanent changes. In some cases,the tax authorities may adopt different interpretations toward the group of some fiscal issues and cancalculate interests and penalties.Statements regarding taxes and duties may be subject to control and revision for a five years` period, ingeneral after their submission.

Romanian Government has a significant number of agencies authorized to audit companies operating onthe territory of Romania. These controls are similar to tax audits in other countries and can cover not onlyfiscal issues, but also other legal and regulatory issues of interest to these agencies. It is possible that theGroup will be subject to tax audits as the issue of new fiscal regulations occurs.

g) Capitals adequacy

The group has a policy of maintaining equity in order to develop the company and achieve the proposedgoals. The main objective of the company is activity continuity in order to provide profitability for itsshareholders.The equity of the Company consist of share capital, reserves created, the current result and retained result.On 31.12.2015 the equity of the Company was of 1.449.639.098 lei (31.12.2014: 1,447,733,893 lei).The Group is not subject to statutory capital adequacy requirements.

h) Use of estimates and reasoning

Determining the fair value of financial assets and liabilities for which no observable market priceexists, requires the use of valuation techniques which, in the absence of observable market data mayresult in a fair value less objective and requires levels of reasoning depending on liquidity,concentration , uncertainty of market factors, pricing assumptions and other specific risks affecting afinancial instrument.

6. FINANCIAL ASSETS AND LIABILITIESAccounting classifications and fair values

The accounting amounts and fair values of financial assets and liabilities are presented on 31.12.2015,as follows:

In RONTraded

Available forsale

Amortizedcost

Netaccounting

value

Fair value

Cash and cash equivalents - - 4,863,204 4,863,204 4,863,204

Deposits placed in banks - - 61,980,088 61,980,088 61,980,088

Financial assets available for sale - 1,407,501,658 - 1,407,501,658 1,407,501,658

page 33


6. FINANCIAL ASSETS AND LIABILITIES (continuation)

In RONTraded

Available forsale

Amortizedcost

Netaccounting

value

Fair value

Financial assets measured at fair value through profit or loss 2,052,502 - - 2,052,502 2,052,502

Investments held until maturity - - - - -

Other financial assets - - 172,484,320 172,484,320 172,484,320

Total financial assets 2,052,502 1,407,501,658 239,327,612 1,648,881,772 1,648,881,772

Payment dividends

Other financial debts - - 81,787,050 81,787,050 81,787,050

Investments held until maturity - - 115,336,099 115,336,099 115,336,099

Total financial debts - - 197,123,149 197,123,149 197,123,149

The accounting amounts and fair values of financial assets and liabilities are presented on 31.12.2014,as follows:

In RONTraded

Available forsale

Amortizedcost

Netaccounting

value

Fair value

Cash and cash equivalents - - 12,302,014 12,302,014 12,302,014

Deposits placed in banks - - 78,560,292 78,560,292 78,560,292

Financial assets available for sale - 1,356,246,439 - 1,356,246,439 1,356,246,439

Financial assets measured at fair value through profit or loss 3,903,255 - - 3,903,255 3,903,255

Investments held until maturity - - - - -

Other financial assets - - 166,139,046 166,139,046 166,139,046

Total financial assets 3,903,255 1,356,246,439 257,001,352 1,617,151,046 1,617,151,046

page 34


6. FINANCIAL ASSETS AND LIABILITIES (continuation)

In RONTraded

Available forsale

Amortizedcost

Netaccounting

value

Fair value

Payment dividends - - 66,601,125 66,601,125 66,601,125

Other financial debts - - 94,309,369 94,309,369 94,309,369

Total financial debts - - 160,910,494 160,910,494 160,910,494

7. INCOMES FROM DIVIDENDS

Incomes from dividends are recorded at gross value. Tax rates of dividends for the year ended on31.12.2015 were of 16% and zero (2014: 16% and zero).

Incomes from dividends, mainly on contributors are as follows:

In RON 31st December 2015

31st December2014

C.N.T.E.E. TRANSELECTRICA S.A. 11,645,203 11,854,257

OMV PETROM Bucharest 7,970,994 21,507,842

SNTGN TRANSGAZ SA Medias 3,953,574 5,379,542

S.C. ANTIBIOTICE S.A. Iaşi 2,099,791 1,848,302

S.C. ELECTROMAGNETICA S.A. 680,585 605,950

BUCHAREST STOCK EXCHANGE 559,409 451,894

SC TURISM FELIX SA Baile Felix 328,280 351,422

ELECTRICA SA BUCHAREST 320,398 -

S.I.F. MOLDOVA S.A. 122,879 275,946

IAMU BLAJ SA 263,800 -

SIF BANAT-CRISANA 59,803 -

SC VOLTINVEST SA Craiova 20,146 33,596

Others 348,364 508,936

TOTAL 28,373,226 42,817,687

page 35


8. INCOMES FROM INTERESTS

In RON 31ST December2015

31ST December 2014

Incomes from interests related to bank deposits

811,388 1,474,922

Incomes from interests of current bank accounts

10,161 35,388

Total 821,549 1,510,310

9. OTHER OPERATIONAL INCOMES

In RON 31ST December 2015

31ST December2014

Financial income from adjustments for value losses of financial assets 14,838,171 5,046,671Income from provisions for impairment of current assets 1,283,307 2,695,554

Income from sold production 200,688,984 175,907,385

Income from rents 12,759,006 13,354,750

Income from sales of merchandise 8,908,192 2,959,578

Other operating income 85,821,697 3,868,539

Other financial income 26,881 2,339,861

Income from deferred corporate tax - 800,000

Total 324,326,238 206,972,338

10. NET PROFIT FROM DIFFERENCES OF EXCHANGE RATE


31ST December 2014

Income from differences of exchange rate 2,225,935 1,774,997

Expenses from differences of exchange rate 1,452,005 912,878Net profit from differences of exchange rate

773,930 862,119

11. NET PROFIT FROM FINANCIAL ASSETS SALE


31ST December2014

Income from sale of financial assets available for sale

131,610,044 214,526,924

Accounting value of financial assets available for transferred sale

75,263,490 131,989,566

Net profit from the sale of financial assets 56,346,554 82,537,358

page 36


12. ADMINISTRATION AND SUPERVISION COMMISSIONS AND FEES

In RON 31ST December

2015

31ST December

2014

Expenses regarding commissions due to SSIF for shares transactions

353,093 602,201

Expenses regarding commissions due for services of shareholders register

163,712 164,154

Expenses regarding commissions with deposit company

318,957 338,310

BVB expenses 32,644 26,401Expenses regarding fees due to entities from the capital market (ASF)

1,458,867 1,619,462

Expenses regarding audit fee 250,771 302,041Other expenses regarding commissions, feesand levies

758,702 231,197

Total 3,336,746 3,283,766

13. OTHER OPERATIONAL EXPENSES

In RON 31ST December 2015

31ST December 2014

Expenses with raw matters and materials 170,176,762 138,979,812

Expenses with taxes and fees2,177,074 2,376,221

Expenses with the personnel 25,651,616 25,972,987

Expenses with taxes of IFRS dividends 12,033,074 13,740,605

Expenses with depreciation and provisions 38,085,759 30,968,598

Total 248,124,285 212,038,223

In other operational expenses are summarized expenses with raw matters and materials, expenses withstaff, expenses with other taxes and charges, expenses with amortization and provisions, expenses withexternal services. The average number of employees for the year ended on 31.12.2015 was of 483(31.12.2014: 498).

The indemnities given in the fiscal year 2015 to the administration bodies, effective and supervisorymanagement, representing salary rights, as well as incentives from the participation fund to profit,summarize 6,234,569 lei (2014: 5,768,962 lei).

The Group makes payments to the Romanian state institutions in the account of his employees` pensions.All employees are members of the pensions plan of the Romanian state. The Group does not operate anyother plan of pensions or benefits after retirement and, so, has no kind of other obligations regardingpensions.

Moreover, the Group is not obliged to offer further benefits to employees after retirement.

The Group did not give advances or credits to the members of the Administration Board, directors duringthe reporting period, except for advances for travels for work, justified with the legal term, so that at theend of the period no amount of this kind is due.

page 37


14. CORPORATE TAX

In RON 31st December2015

31st December2014

Current corporate tax 25,244,064 19,269,215

Tax on dividends 3,944,285 6,377,206

Deferred corporate tax - 800,000

Total corporate tax 29,188,349 26,446,421

Reconciliation of profit before taxation, with expense regarding Corporate tax in profit or loss account:


31st December2014


Loss (2,518,504) (817,526)

Tax under statutory tax rate of 16%26,833,833 20,183,583

Effect on Corporate tax of:


31st December2014

Non taxable incomes (11,819,448) (4,528,959)

Dividends deduction rate 3,944,285 6,377,206

Non-deductible expenses 10,238,679 4,434,759

Amounts representing sponsorship within legal frame (9,000) (20,168)

Corporate tax

Non taxable incomes 29,188,349 26,446,421

15. CASH AND CASH EQUIVALENTS


31st December 2014

Cash on hand 159,346 120,387

Current accounts in banks 4,613,666 12,134,232

Cash equivalents 90,192 47,395

Total cash and cash equivalents 4,863,204 12,302,014

page 38


16. DEPOSITS PLACED IN BANKS


31st December 2014

Bank deposits at sight 61,908,120 78,269,538

Receivables attached 71,968 290,754

Total deposits placed in banks 61,980,088 78,560,292

17. FINANCIAL ASSETS

Financial assets available for sale On 31st December 2015 the structure of the Group’s portfolio according to the market where it was tradedwas the following:

In RON

Name Acquisitionvalue

Fair or marketvalue

Differences+/-

- Securities admitted or traded on a regulated market in Romania; 635,757,020 877,403,933 241,646,913

- Securities admitted or traded on an alternative market in Romania; 24,543,913 20,102,994 (4,440,919)

- Securities not admitted to trading on a regulated market or in an alternative trading system; 208,118,036 507,693,540 299,575,504

- Securities of AOPC/OPCVM 2,500,017 2,301,191 (198,826)

Total 870,918,986 1,407,501,658 536,582,672

-

On 31st December 2014 the structure of the Group’s portfolio according to the market where it was tradedwas the following:

in RON


Fair or marketvalue

Differences+/-

- Securities admitted or traded on a regulated market in Romania; 556,880,443 890,117,037 333,236,594

- Securities admitted or traded on an alternative market in Romania; 30,107,146 38,687,638 8,580,492

- Securities not admitted to trading on a regulated market or in an alternative trading system; 128,642,462 425,119,080 296,476,618

- Securities of AOPC/OPCVM 2,697,573 2,322,684 (374,889)

Total 718,327,624 1,356,246,439 637,918,815

page 39


17. FINANCIAL ASSETS (continuation)

On 31.12.2015 and 31.12.2014 in the category of shares measured at fair value, is mainly included, thevalue of shares held in the following issuers : OMV PETROM SA Bucharest, BRD - Groupe SocieteGenerale, CNTEE TRANSELECTRICA SA Bucharest, BANCA TRANSILVANIA SA Cluj Napoca, SCANTIBIOTICE SA Iasi, SNTGN TRANSGAZ SA Medias, and SC ELETROMAGNETICA SABucharest.

Financial assets available for sale In RON 31st December

2015

31st December 2014

Shares evaluated at fair value 1,388,831,819 1,337,939,835Shares evaluated at cost 16,368,648 15,983,920Fund units at fair value 2,301,191 2,322,684Total 1,407,501,658 1,356,246,439

The movement of financial assets available for sale in the fiscal years ended on 31.12.2015 and31.12.2014 is presented in the following table:

In RONShares evaluated at

fair value

Sharesevaluated at

cost Fund units Total

01st January 2014 1,543,851,285 - 2,251,971 1,546,103,256

Net variation during the period

(32,844,438) - - (32,844,438)

Losses from impairment - - - -

Modification of fair value (6,400,445) (405,688) 70,713 (6,735,420)

Transfers between categories

(16,389,608) 16,389,608 - -

Reclassifications 2014 (150,276,959) - - (150,276,959)

In RONShares evaluated at

fair value

Sharesevaluated at

cost Fund units Total

31st December 2014 1,337,939,835 15,983,920 2,322,684 1,356,246,439

Net variation during the period

2,532,919 (20,960) (197,556) 2,314,403

Losses from impairment - - - -

Modification of fair value (101,917,894) 405,688 176,063 (101,336,143)

Transfers between categories

- - - -

Reclassifications 2015 150,276,959 - - 150,276,959

31st December 2015 1,388,831,819 16,368,648 2,301,191 1,407,501,658

page 40


17. FINANCIAL ASSETS (continuation)

Financial assets at fair value through profit or loss account

Financial assets at fair value through profit or loss account at the end of 2015 appear as follows:

In RON


Fair or marketvalue

Differences+/-

- Securities admitted or traded on a regulated market in Romania 2,870,583 2,052,502 (818,081)

Financial assets at fair value through profit or loss account at the end of 2014 appear as follows:

In RON


Fair or marketvalue

Differences+/-

- Securities admitted or traded on a regulated market in Romania 5,557,650 3,903,255 (1,654,395)

Hierarchy of fair valuesFor the calculation of fair value, the Group uses the following hierarchy of methods : - Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities - Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset orliability, either directly (i.e. prices) or indirectly (i.e. derived from prices). - Level 3: Valuation techniques based largely on unobservable elements. This category includes allinstruments where the valuation technique includes items that are not based on observable data and for whichunobservable input parameters may have a significant effect on the assessment instrument. This categoryincludes instruments that are valued based on quoted prices for similar instruments but requiring adjustmentsbased largely on unobservable data or estimates to reflect the difference between the two instruments.


31st December 2014

Nivelul 1 876,611,574 844,619,509

Nivelul 2 21,674,340 90,411,105

Nivelul 3 511,268,246 425,119,080

Total 1,409,554,160 1,360,149,694

Fair value measurement of holdings on 31.12.2015 was carried out as follows:

- For securities quoted and traded in 2015, the market value was determined by taking into account thequotation of the last trading day; (closing quotation on the main market of capital for level 1, and for level2 the quotations for shares traded in the 30 trading days were taken into consideration);

- For quoted securities which have not been traded in the last 30 trading days of the year 2015, and forunlisted securities, the market value was determined based on issuers equity;

- For related securities of companies in insolvency proceedings or reorganization, valuation is zero; - For units in OPCVM taken into account was the last net asset value calculated and published.

page 41


18. CREDITS AND RECEIVABLES


31st December 2014

Commercial receivables 13,875,588 29,626,231

Debtors 2,017,441 2,156,516

Receivables related to state budget and social insurances budget

4,748,933 17,258,966

Other receivables 30,295 265,455

Adjustments of receivables impairment (debtors)

(2,493,007) (2,399,846)

TOTAL 18,179,250 46,907,322

19. TANGIBLE ASSETS

In RON

Lands andbuildings

Technicalinstallation

s andmachines

Otherinstallation

sequipment

s andfurniture

Advancesand tangible

assets inprogress

Total

31st December 2013 76,826,515 64,248,754 1,736,595 2,895,248 145,707,112

Increases 4,050,545 983,230 253,848 353,179 5,640,802

Reductions (4,512,750) (1,204,668) (18,375) (493,732) (6,229,525)

31st December 2014 76,364,310 64,027,316 1,972,068 2,754,695 145,118,389

Increases 4,457,337 1,094,495 266,888 1,199,814 7,018,534

Reductions (2,593,776) (2,368,104) (629,382) (1,112,498) (6,703,760)

31st December 2015 78,227,871 62,753,707 1,609,574 2,842,011 145,433,163

Accumulated depreciation

31st December 2013 18,006,783 52,720,245 1,202,586 1,289,400 73,219,014

Depreciation registered during the year 1,986,394 2,130,691 142,175 - 4,259,260

Reductions or retaking (2,391,220) (1,167,005) (18,375) - (3,576,600)

31st December 2014 17,601,957 53,683,931 1,326,386 1,289,400 73,901,674

Depreciation registered during the year 2,665,555 1,975,024 188,978 - 4,829,557

Reductions or retaking (1,909,319) (2,260,657) (581,120) (15,422) (4,766,518)

31st December 2015 18,358,193 53,398,298 934,244 1,273,978 73,964,713

Net accounting value on 31st December 2013

58,819,732 11,528,509 534,009 1,605,848 72,488,098


58,762,353 10,343,385 645,682 1,465,295 71,216,715


59,869,678 9,355,409 675,330 1,568,033 71,468,450

page 42


20. REAL ESTATE INVESTMENTS

In RON31st December

201531st December

2014

Balance on 01st January 40,228,829 37,813,159

Modifications of fair value 4,963,241 (107,231)

Reclassifications from the category of tangible assets 710,990 2,522,901

Reclassifications in the category of tangible assets (504,469) -

Sales real estate investments (596,273) -

Balance on 31st December 44,802,318 40,228,829

21. OTHER ASSETS

In RON31st December

201531st December

2014

Intangible assets 45,770,335 37,295,817

Other fixed receivables 17,652,252 17,960,054

Inventories 90,467,656 63,730,540

Expenditures in advance 414,827 245,313

TOTAL 154,305,070 119,231,724

22. PAYMENT DIVIDENDS In RON

31st December 2015

31st December 2014

Payment dividends related to the year 2014 16,830,067 -Payment dividends related to the year 2013 22,220,621 23,166,577Payment dividends related to the year 2012 16,459,824 16,768,856Payment dividends related to the year 2011 16,264,986 16,515,932Payment dividends related to the year 2010 9,781,811 9,918,948Payment dividends related to previous years 229,741 230,812Total payment dividends 81,787,050 66,601,125

23. TAXES AND DUTIES


31st December 2014

Debts related to Social Insurance Budget 658,212 695,308

Debts related to State Budget 2,865,931 10,014,721

Other taxes and duties 164,527 172,831

Total 3,688,670 10,882,860

page 43


24. LIABILITIES REGARDING DEFERRED CORPORATE TAX

Liabilities regarding deferred Corporate tax are determined by the following elements:

In RON Assets Liabilities Net Tax31st December 2015Evaluation at fair value of financial assets available for sale 551,422,151 - 551,422,151 88,227,544Financial assets available for sale received for free 107,283,313 27,541 107,255,772 17,160,924Revaluation of tangible assets 9,720,105 - 9,720,105 1,555,216Result retained representing reserves from revaluation of tangible assets 24,029,883 923 24,028,960 3,844,633Fixed assets adjustments 4,274,175 826,902 3,447,273 551,563Provisions for litigations and other provisions 92,994 301,421 (208,427) (33,349)Other reserves – fiscally facilitated 21,306,417 87,092 21,219,325 3,395,092TOTAL 718,129,038 1,243,879 716,885,159 114,701,623

In RON Assets Liabilities Net Tax31st December 2014Evaluation at fair value of financial assets available for sale 650,831,526 - 650,831,526 104,133,044Financial assets available for sale received for free 887,303 27,541 859,762 137,563Revaluation of tangible assets 14,113,238 - 14,113,238 2,258,119Excess from revaluations of tangible assets 19,745,742 923 19,744,819 3,159,170Fixed assets adjustments 2,602,891 49,163 2,553,728 408,596Provisions for litigations and other provisions 11,325 8,601,929 (8,590,604) (1,374,496)Other reserves – fiscal facilities 2,170,917 - 2,170,917 347,347TOTAL 690,362,942 8,679,556 681,683,386 109,069,343

25. OTHER DEBTS


31st December 2014

Debts with the personnel 2,071,803 2,205,863Commercial debts 7,938,531 12,509,992Bank credits and other assimilated debts (leasing) 94,023,237 67,510,330Guarantees received 1,026,800 738,311Various creditors 1,160,345 955,802Incomes in advance 231,561 556,033Provisions for risks and expenses 8,883,822 9,833,038Total other debts 115,336,099 94,309,369

page 44


25. OTHER DEBTS (continuation)

On 31.12.2015, the loans of the Group are traced mainly on banking units as follows :

In RON Company Bank Currency Interest

rateFinal due

termBalance on

31st

December2015

S.C ARGUS S.A. Constanta Transilvania Bank LEI variable 30.06.2016 94,000,000

Total 94,000,000

On 31.12.2014, the loans of the Group are traced mainly on banking units as follows:

In RON Company Bank Currency Interest

rateFinal due

termBalance on

31st

December2015

S.C ARGUS S.A. Constanta Transilvania Bank LEI variable 31.07.2015 67,500,000

Total 67,500,000

26. CAPITAL AND RESERVES

Share Capital

Subscribed and paid up share capital of the Company is 58,016,571 lei, divided into 580,165,714 shares

with a nominal value of 0.1 lei / share. Shares are ordinary, indivisible, nominative, of equal value, issued

in dematerialized form and give equal rights to their holders. On 31.12.2015 the number of the

Company's shareholders was 5,761,728 (2014: 5,772,217).

Company's shares are listed on the Bucharest Stock Exchange, the Premium category, with the indicative

SIF 5 from 01.11.1999.

The record of shareholders and the Company's shares is held by S.C. DEPOZITARUL CENTRAL S.A.

Bucharest.

The structure of the Company share capital is presented below.

page 45


26. CAPITAL AND RESERVES (continuation)

Number ofshareholders

Number ofshares

Amount (RON) (%)

31st December 2015

Resident individuals 5,759,633 244,987,869 24,498,787 42.23

Non resident individuals 1,756 3,358,142 335,814 0.58

Total individuals 5,761,389 248,346,011 24,834,601 42.81

Resident legal entities 279 215,771,544 21,577,154 37.19

Non resident legal entities 60 116,048,159 11,604,816 20.00

Total legal entities 339 331,819,703 33,181,970 57.19

Total 2015 5,761,728 580,165,714 58,016,571 100.00

Number ofshareholders

Number ofshares

Amount (RON) (%)

31st December 2014

Resident individuals 5,770,139 250,059,040 25,005,904 43.10

Non resident individuals 1,726 3,292,506 329,250 0.57

Total individuals 5,771,865 253,351,546 25,335,154 43.67

Resident legal entities 293 226,660,089 22,666,009 39.07

Non resident legal entities 59 100,154,079 10,015,408 17.26

Total legal entities 352 326,814,168 32,681,417 56.33

Total 2014 5,772,217 580,165,714 58,016,571 100.00

În RON31st December

201531st December

2014

Share Capital 58,016,571 58,016,571The effect of applying IAS 29 on the sharecapital 631,852,524 631,852,524

Total capital 689,869,095 689,869,095

page 46


26. CAPITAL AND RESERVES (continuation)

Legal reservesLegal reserves are established in accordance with legal requirements in the amount of 5% of profitobtained, until the amount representing 20% of the value of share capital. Legal reserves can not bedistributed to shareholders.

DividendsDuring 2015 the Group declared payment dividends amounting to 84,644,591 RON (2014: 95,439,901RON).

Reserves from revaluation of financial assets available for sale The reserve includes net changes in fair values of financial assets classified in this category, from the dateof their classification up to their derecognition. Deferred tax related to these reserves is recorded in ownequity and deducted from reserves of evaluation of financial assets available for sale.

27. OTHER RESERVES


31st December2014

Reserves formed from adjustments for value losses related to financial assets

- (17,599,620)

Reserves representing excess obtained from revaluation reserves

6,065,675 7,841,458

The effect of IAS 29 application on other reserves

1,806,072,898 1,806,072,898

Own financing sources 458,844,661 409,471,629

Other reserves 174,814,700 285,462,584

Total 2,445,797,934 2,491,248,949

28. MINORITY INTEREST

Minority interest in equity of the companies included in consolidation appears as follows:


31st December2014

Profit or loss of the financial yearrelated to non controllinginterests 284,753 1,502,559

Other equity 28,392,567 31,274,325

Total 28,677,320 32,776,884page 47


29. RESULT PER SHARE

In RON 31st December

2015

31st December

2014

Profit attributable to ordinary shareholders 135,719,852 97,380,890

Weighted average number of ordinary shares 580,165,714 580,165,714

Result per basic share 0.234 0.168

Diluted result per share equals the result per basic share because the group did not record potentialordinary shares.

30. GUARANTIES GIVEN

Besides the guarantees given to obtain bank loans, the Group has no type of guarantees given .

31. CONTINGENTS ABOUT THE ENVIRONMENT

The Group has not recorded any provision for future costs regarding elements of the environment. TheGroup's management does not consider the costs associated with these elements as significant.

32. TRANSFER PRICE

Romania tax legislation contains rules on transfer pricing between related parties since 2000. Thecurrent legislative framework defines the "market value" principle for transactions between relatedparties and the methods of transfer pricing establishment. As a result, it is expected that the taxauthorities to initiate thorough check of transfer pricing, to ensure that the tax result and / or thecustoms value of imported goods are not distorted by the effect of prices used in relationships withaffiliates. The Company can not assess the outcome of such review.

33. CONCENTRATION OF EXPOSURE

Financial assets

On 31st December 2015 the Group held a portfolio totalizing 1,409,554,160 RON. Companies with ashare of total portfolio in which the Group holds securities are:

page 48


33. CONCENTRATION OF EXPOSURE (continuation)

Itemno.

Company Percentage oftotal- % -

Market value on 31st

December 2015- RON -

1 ROMANIAN COMMERCIAL BANK BUCHAREST 28.03 395,046,018

2 B.R.D.-GROUPE SOCIETE GENERALE BUCHAREST 16.23 228,803,631

3 OMV PETROM BUCHAREST 14.63 206,279,0094 C.N.T.E.E. TRANSELECTRICA BUCHAREST 8.17 115,116,4115 TRANSILVANIA CLUJ BANK 5.93 83,573,6396 S.N.T.G.N. TRANSGAZ MEDIAS 3.56 50,152,7897 ANTIBIOTICE IASI 3.44 48,523,2038 EXIMBANK IMPORT EXPORT BANK OF

ROMANIA BUCHAREST 2.60 36,640,5119 ELECTROMAGNETICA BUCHAREST 2.42 34,138,17410 S.N.G.N. ROMGAZ SA 2.37 33,340,672

Total 87.38 1,231,614,057

Financial assets

On 31st December 2014 the Group held a portfolio totalizing 1,360,149,694 RON. Companies with ashare of total portfolio in which the Group holds securities are:

Itemno.

Company Percentage oftotal- % -

Market value on 31st

December 2014- RON -


2 OMV PETROM BUCHAREST 20.81 283,006,4563 B.R.D.-GROUPE SOCIETE GENERALE

BUCHAREST 13.52 183,868,6504 C.N.T.E.E. TRANSELECTRICA BUCHAREST 9.44 128,350,5605 TRANSILVANIA CLUJ BANK 4,05 55,125,7986 ANTIBIOTICE IASI 3.60 48,919,0677 S.N.T.G.N. TRANSGAZ MEDIAS 3.54 48,205,4298 PRODPLAST IMOBILIARE BUCHAREST 2.77 37,648,8099 EXIMBANK IMPORT EXPORT BANK OF

ROMANIA BUCHAREST 2.63 35,739,93110 ELECTROMAGNETICA BUCHAREST 2.48 33,706,377

Total 86,51 1,176,557,575

page 49


34. TRANSACTIONS AND BALANCES WITH PARTIES IN SPECIAL RELATIONSHIPS

Subsidiaries of the Company

In accordance with legislation in force, the Company holds control in a total of 12 issuers on

31.12.2015 (2014: 13 issuers). All Company subsidiaries on 31.12.2015 and 31.12.2014 are

based in Romania. For this the Company ownership percentage is not different from the

percentage of the number of votes held.

Company name

Percentage held by

SIFon 31.12.2015

- % -

Percentage held by

SIF on 31.12.2014

- % -S.C. ALIMENTARA S.A. SLATINA 52.24 51.99S.C. TURISM PUCIOASA S.A. DAMBOVITA 69.22 69.22S.C. PROVITAS S.A BUCHAREST 70.28 70.28S.C. UNIVERS S.A. RM VALCEA 73.75 73.75S.C. CONSTRUCTII FEROVIARE S.A.

CRAIOVA77.50 77.50

S.C. FLAROS S.A. BUCHAREST 81.04 77.11S.C. ARGUS S.A. Constanta 86.20 85.96S.C. GEMINA TOUR S.A. RM VALCEA 88.29 88.29S.C. MERCUR S.A. CRAIOVA 93.37 85.85S.C. CONSTRUCTII MONTAJ 1 S.A.

CRAIOVA96.56 96.56

S.C. COMPLEX HOTELIER DAMBOVITA S.A.

TARGOVISTE99.94 75.48

S.C. VOLTALIM S.A. CRAIOVA 99.99 99.99S.C. MAGAL S.A. CRAIOVA - 99.99

Increasing the stake of the Company in the share capital of companies is determined by the acquisition

during 2015 of new stakes.

The disappearance of shareholdings in S.C. MAGAL S.A. Craiova is determined by the merger through

absorption during 2015 of this company by S.C. VOLTALIM S.A. Craiova.

Associated entities of the company

On 31.12.2015 the Company held more than 20% stakes but not more than 50% of the share

capital to a total of 10 issuers (2014: 12 issuers). All entities associated to the Company are

based in Romania. For this the percentage of ownership by the company is not different from the

percentage of the number of votes held.

page 50


34. TRANSACTIONS AND BAL ANCES WITH PARTIES IN SPECIAL RELATIONSHIPS

(continuation)

Company namePercentage held by

SIFon 31.12.2015- % -

Percentage held bySIF on 31.12.2014

- % -

S.C. SANTIERUL NAVAL ORSOVA S.A. 21.13 18.08

S.C. MIRFO TRADING S.A. TG. JIU 22.01 22.01

S.C. ELECTROMAGNETICA S.A. 25.25 24.93

S.C. MAT S.A. CRAIOVA 25.71 25.71

S.C. TURISM LOTUS FELIX S.A. BAILE FELIX 25.76 26.16

S.C. PRODPLAST S.A. BUCHAREST 27.53 27.43

S.C. MOBILA S.A. RADAUTI - 29.17

S.C. ELECTRO TOTAL S.A. BOTOSANI 29.86 29.86

S.C. PRODPLAST IMOBILIARE S.A. BUCHAREST - 31.11

S.C. SINTEROM S.A. CLUJ-NAPOCA 31.63 31.63

S.C. LEMCOR S.A. CRAIOVA 34.69 35.08

S.C. LACTATE NATURA S.A. TARGOVISTE 39.70 39.72

S.C. CITEX S.A. TG. JIU - 40.13

During 2015 new acquisitions of shares on the stock market were performed in: SC SANTIERULNAVAL SA Orsova and SC ELECTROMAGNETICA SA Bucharest, which determined the increasingstake in these companies.

Also, in case of: SC TURISM LOTUS FELIX S.A. Baile Felix and S.C. LEMCOR S.A. Craiova therehas been a decrease of the Company stake following the increase operations of their share capital withoutthe proportional participation of the Company.

In all companies in which the Company holds stakes below the level of the control threshold a significantinfluence in their management act is not achieved by the Company because it is either not represented inthe Administration Board (the Supervisory Board), in case of companies: S.C. MIRFO TRADING S.A.Tg. Jiu and S.C. ELECTRO TOTAL S.A. Botosani or the existence of a higher number of representativesof the majority shareholder in the Administration Board (the Supervisory Board), of the companiesconcerned: SC SANTIERUL NAVAL SA Orsova, SC ELECTROMAGNETICA SA Bucharest, S.C.MAT S.A. Craiova, SC TURISM LOTUS FELIX S.A. Baile Felix, S.C. PRODPLAST S.A. Bucharest,S.C. SINTEROM S.A. Cluj-Napoca, S.C. LACTATE NATURA S.A. Targoviste pursuing theaccomplishment of the majority shaholder`s policy.

We also mention that the stakes held in the companies: S.C. MOBILA S.A. Radauti, S.C. PRODPLASTIMOBILIARE S.A. Bucharest were disposed of during 2015.

Also, the stake held in S.C. CITEX S.A. Tg. Jiu was derecognized due to closing of the bankruptcyproceedings in this company.

We mention that S.C. ELECTRO TOTAL S.A. Botosani was in the insolvency proceedings under Lawno. 85/2006 and is evaluated in the Company records with zero value.

page 51


34. TRANSACTIONS AND BAL ANCES WITH PARTIES IN SPECIAL RELATIONSHIPS

(continuation)

In conclusion, due to Company lack of capacity to influence the revenues of companies in which stakesare held below the control threshold, by its authority on them, the companies in question were not includdin the consolidation perimeter.

35. MANAGEMENT KEY PERSONNEL

31st December 2015

Members of the Board of Directors: Tudor Ciurezu – President, Anina Radu - Vice President, CristianBusu, Victor Capitanu, Nicolae Stoian, Carmen Popa, Paul-George Prodan.

31st December 2014

Members of the Board of Directors: Tudor Ciurezu – President, Anina Radu - Vice President , CristianBusu, Victor Capitanu, Nicolae Stoian, Carmen Popa, Iulius-Grigore Postolache.

Effective management:

31st December 2015Tudor Ciurezu – General Director, Anina Radu - Deputy General Director.

31st December 2014Tudor Ciurezu – General Director, Anina Radu - Deputy General Director.

Executive management:

31st December 2015

Elena Sichigea – Economic Department Director, Elena Caliţoiu – Director of Investments and RiskManagement, Dan Voiculescu – Director of Monitoring Portfolio Department, Vasilica Bucur – LegalDepartment Director, Ion Patrichi – Director of Human Resources – Logistics Department.

31st December 2014

Elena Sichigea – Economic Department Director, Elena Caliţoiu – Director of Investments and RiskManagement, Dan Voiculescu – Director of Monitoring Portfolio Department, Vasilica Bucur – LegalDepartment Director.

page 52


36. SEGMENTS REPORTING

Segment reporting is the segmentation of the activities envisaged in the branch of activity of which the

main object of the company is part in the scope of consolidation. Company with portfolio companies in

which it holds more than 50% and are included in the consolidation perimeter operates the following

main business segments:

- Financial Investments

- Rental of premises

- Food industry

- Retail in non-specialized stores selling predominantly non food products.

- Tourism

page 53

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A.Notes to consolidated financial statements for financial year ended on December 31st 2015(all amounts are expressed in RON, unless otherwise stated)36. SEGMENTS REPORTING (continuation)

We present below the reference indicators for the purpose of a possible analysis:

IndicatorsTrade Rental Food industry Tourism Financial activity TOTAL

2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014Fixed assets 160,599 3,435,925 68,012,102 83,261,643 56,643,966 56,018,368 13,772,279 13,969,204 1,399,194,550 1,384,579,074 1,537,783,496 1,541,264,214Current assets 61,999 371,879 41,597,308 20,248,007 126,270,428 107,730,625 2,001,472 1,723,816 57,011,622 57,012,736 226,942,829 187,087,063Expenses in advance - 2,738 261,586 19,727

50,798 114,245 26,706 17,32887,125 91,275 426,215 245,313

Debts 75,517 235,224 9,950,078 7,741,952 100,331,737 80,734,401 598,497 487,317 195,472,080 181,274,732 306,427,909 270,473,626Income in advance - - 93,216 465,906 4,011 4,179 18,644 8,427 - 77,521 115,871 556,033Provisions - 120,395 322,696 372,361 409,729 1,061,666 38,408 67,085 8,198,829 8,211,531 8,969,662 9,833,038Minority interests - - - - - - - - 28,677,320 32,776,884 28,677,320 32,776,884Equity 147,081 3,454,923 99,505,006 94,949,158 82,219,715 82,062,992 15,144,908 15,147,519 1,223,945,068 1,219,342,417 1,420,961,778 1,414,957,009

Total income 999,919 1,804,290 18,424,332 19,933,578 207,078,821 175,463,769 4,290,071 4,330,610 185,861,842 133,167,565 416,654,985 334,699,812Total expenses 1,376,719 1,776,692 15,408,351 15,855,166 208,658,814 171,961,917 4,103,026 3,957,365 25,858,406 22,196,008 255,405,316 215,747,148Gross result (376,800) 27,598 3,015,981 4,078,412 (1,579,993) 3,501,852 187,045 373,245 160,003,436 110,971,557 161,249,669 118,952,664Net result (376,800) 23,182 2,397,083 3,153,924 (1,579,993) 3,501,852 138,345 327,157 135,425,970 91,877,334 136,004,605 98,883,449

The indicators presented were derived from the separate financial statements of the Company and of the companies in the consolidation.In the fixed assets held on 31.12.2015 by the Group a share of 90.98% is held by financial investment assets represented by the portfolio of financialassets, respectively 89.83% on 31.12.2014.The high level of debt is due mainly to registration of deferred corporate tax related to reserves from measurement at fair value of the portfolio on31.12.2015 with a share of 37.43% (31.12.2014: 40.33%) in total debt.Also, the net result on 31.12.2015 made by financial investments has a share of 99.57 %, well above the result obtained by the companies included inconsolidation, respectively of 92.91% on 31.12.2014.

page54


37. CONTINGENT COMMITMENTS AND LIABILITIES

Court actions

The Group has a number of legal actions arising from the normal course of business. The Group's

management believes that these actions will not have a significant impact on the financial statements.

On 31.12.2015, appeared recorded a number of 160 pending cases, of which:

- 102 cases as plaintiff;

- 28 cases as defendant;

- 1 case as intervener;

- 29 cases in insolvency proceedings.

According to their object, cases are structured as follows:

- 59 commercial cases;

- 10 cases – cancellation of GAS decisions, in which it holds the capacity of plaintiff;

- 30 cases in insolvency proceedings: in 29 cases as unsecured creditor and in 1 case as intake

creditor

- 61 - other cases.

The total of 160 cases is structured as follows:

122 cases are found in companies included in the consolidation perimeter as follows:

83 cases as plaintiff for the amount of 6,292,896 RON;

18 cases as defendant for the amount of 3,965,738 RON ;

21 cases in insolvency proceedings for the amount of 8,612,532 RON.

38 cases belong to the company and are structured as follows:

19 cases as plaintiff

10 cases as defendant

1 case as intervener

8 cases in insolvency proceedings.

According to their object, cases are structured as follows:

- 8 cases – companies in insolvency proceedings, as follows:

7 cases in which S.I.F. Oltenia S.A. holds the quality of unsecured creditor;

1 case as intake creditor.

- 6 cases - cancellation of GAS decisions/suspension of GAS operations with shares, in which it

holds the capacity of plaintiff;

- 24 – other cases.

page55

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A.Notes to consolidated financial statements for financial year ended on December 31st 2015(all amounts are expressed in RON, unless otherwise stated)37. CONTINGENT COMMITMENTS AND LIABILITIES (continuation)

In the bankruptcy files, the most important receivables as value are recorded towards the debtors S.C.

ARO S.A. – 217,921 lei, representing mainly dividends 1995, 1996 and S.C. BIOSIN S.A. – 194,120 lei,

representing mainly counter value package of shares following the exercise of thr withdrawal right from

the company.

Regarding the actions in which S.I.F. Oltenia S.A. holds the capacity of plaintiff, having as object the

cancellation of G.A.S. decisions , they have mainly as object: modifications of the articles of

incorporation, the establishment of new companies with contributions in kind, acquisition of shares,

operations with shares, among the defendand companies being S.C. COREALIS S.A., S.C.

PRODPLAST S.A., S.C. CONTACTOARE S.A.

In the chapter “other causes”, in which S.I.F. Oltenia S.A. holds the quality of plaintiff, are recorded files

having diversified object: criminal complaints, enforcements, claims-damages, among which we

exemplify:

- a case of enforcement having as object the recovery of damage in the amount of 603,516 RON,

representing civil damages granted by Criminal Court Decision in the file no. 11108/2/2007 - theft of

shares performed by Goga Dan Octavian, Panaitescu Miron Victor, Negruţiu Claudiu Marius, jointly

liable to compensation. During 2015, in the enforcement, a building owned by Panaitescu Miron Victor

was redeemed. S.I.F. Oltenia S.A. cashed, being in competition with other creditors as well, the amount

of 35,987.33 RON. It continues the enforcement proceedings for the recovery of the debt or closing for

lack of assets.

- a case of enforcement against the debtor AVAS. (currently A.A.A.S.) for the recovery of the amount of

633,567 RON, according to the civil Sentence no. 1581/21.10.2010, file no. 19477/3/2010, representing

the amount due by A.V.A.S. to S.C. RETIZOH S.A., respectively 70 % of the value of a building

returned to the former owners. The respective company executed this amount still from the account of

S.I.F. Oltenia S.A., using the provisions applicable to joint liability. In the case is recorded as pending

before the court in state of trial appeals promoted by A.A.A.S. against any attempt of the bailiff to recover

the debt of S.I.F. Oltenia S.A.

- actions having as object damages for failing the development obligation of mandatory public offering

of shares in the application of the provisions of art. 203 of Law 297/2004 (regarding the shares SC

MOBILA RĂDĂUŢI SA, SC LACTA SA Giurgiu); The file regarding the shares of S.C. MOBILA S.A.

Rădăuţi was irrevocably solved. During the trial, S.I.F. Oltenia S.A. capitalized the shareholding in the

respective issuer. Currently, steps are carried out for the enforcement of the claims resulting from the

execution titles produced. In the case concerning the shares of the issuer S.C. MOBILA RĂDĂUŢI S.A.

The file regarding the shares of S.C. LACTA S.A. are suiting in the appeal filed by the defendant

companies, with trial date 13.09.2016.

page56


- in the files having as object damages, under art. 210 of the Law 297/2004, against the majority

shareholders of the issuers SC SINTEROM SA and SC CONTACTOARE SA. Cases are pending, not

settled irrevocably. In the file no. 4395/114/2012, concerning the obligation of damage on S.C.

CONTACTOARE S.A. as a majority shareholder of S.C. SINTEROM S.A., was admitted by the High

Court of Cassation and Justice the appeal filed by S.I.F. Oltenia S.A., the case being referred back to

the Court of Appeal Ploieşti, with the term 07.09.2019. In the case no. 5756/279/2012, having as object

the obligation to damages of S.C. SERVICIILE COMERCIALE ROMÂNE S.A. as majority shareholder

of S.C. CONTACTOARE S.A., at first instance judgment the action was dismissed, S.I.F. Oltenia S.A.

promoting appeal.

The 10 files in which S.I.F. Oltenia S.A. holds the capacity of defendant have the following situation:

- 4 actions, having as object money claims arising from the capacity of Director şi / or administrators of

S.I.F. Oltenia S.A. promoted by Buzatu Florian Teodor and Popescu Carmen Ioana.

Currently, the situation in the 4 cases is as follows:

File 6583/63/2014, plaintiff Buzatu Florian Teodor, having as object monetary claims in the

amount of 895,567 RON, rights related to the Mandate Contract. Dolj Law Court by the

Sentece no. 257/07.07.2015 partly admitted the application forcing SIF Oltenia SA to pay the

amount of 505,567 RON damages interests and 13,869.4 RON trial costs. The solution

remained final being maintained by the Court of Appeal Craiova by rejecting the appeal filed

by SIF Oltenia SA according to Decision no. 54/28.01.2016. Since the court decision could

not be appealed in accordance with the transitional provisions for the implementation of the

New Code of Civil Procedure, SIF Oltenia SA has paid the obligation to pay withheld by the

court, stripping away the debt through tender procedure actual payment made by executor in

court on 05.02.2016.

File no. 6584/63/2014, plaintiff Buzatu Florian Teodor, having as object monetary claims in

the amount of 1,758,550 RON and moral damages in the amount of 40,000 RON, motivated

by the fact that he was dismissed from the position of administrator in AGOA SIF Oltenia SA

from 29.04.2011. Dolj Court by sentence no. 128/31.03.2015 rejected the summons. The

applicant appealed, upheld by Decision 667/01.10.2015 of the Craiova Court of Appeal, the

court annulled the court of first instance ruling and refer the case back featuring the same

court. SIF Oltenia SA appealed, registered in the High Court of Cassation and Justice, the

trial date 04.10.2016.

page57


File 12919/215/2015, plaintiff Popescu Carmen Ioana, having as object the obligation ,,to do”,

respectively the obligation of SIF Oltenia SA to refund the material warranty constituted

according to the Articles of Incorporation of SIF Oltenia SA for the performance of the function

of member in the Administration Board, following the revocation from this office by the General

Meeting of SIF Oltenia SA Shareholders from 29.04.2011. With Sentence no. 337/15.01.2016,

Craiova Court rejected the request. Popescu Carmen Ioana appealed, the file pending before Dolj

Law Court with hearding on 13.09.2016.

File no. 22552/215/2015, plaintiff Popescu Carmen Ioana, having as object monetary claims

in the amount of 48,000 RON, representing participation to profit during the period

01.01.2011-29.04.2011 (date when she was revoked by AGOA SIF Oltenia SA frm the office

of Administrator). By Sentence no. 14446/20.11.2015, Craiova Court partly upheld the

request forcing SIF Oltenia SA to pay the amount of 17,969 lei. In the case appealed both

SIF Oltenia SA and Popescu Carmen Ioana, the file pending before Dolj Law Court with

hearing on 22.09.2016.

- 6 requests with different objects: tax refund, objections to execution, recovery of trial costs, insignificant

for the company`s financial statements.

None of the commercial companies included in the consolidation area are not covered by the OMFP no.

881/25.06.2012, respectively it is not required to prepare and report financial statements in terms of IFRS.

They lead accounting records according to OMPF 1802/2014 regulations for approval of accounting

regulations on individual annual financial statements and annual consolidated financial statements.

For the consolidation, they prepare the second set of financial statements in terms of IFRS. The financial

statements prepared in terms of IFRS result by restating financial statements prepared under OMFP

1802/2014.

Consolidated financial statements were prepared in accordance with Rule no. 39/2015 for the approval of

accounting regulations in accordance with International Financial Reporting Standards, applicable to

entities authorized, regulated and supervised by the Financial Supervisory Authority in the Sector of

Financial Instruments and Investments.

page58


According to RNSC Decision no. 1176/15.09.2010, he financial investment companies are required to

prepare and submit to RNSC (FSA) annual consolidated financial statements in accordance with

International Financial Reporting Standards adopted by the European Union, within 8 months from the

closing of the financial year .

These financial statements are intended solely for use by the Group, its shareholders and FSA and do not

generate changed in the shareholders` rights regarding dividends.

Administrator Chief Financial Officer

associate professor PhD ec. Ciurezu Tudor Sichigea Elena

jr. Radu Anina

page59

pag 1

REPORT of

Board of Directors of S.I.F. Oltenia S.A.

on Consolidated Financial Statements concluded on 31.12.2015

Societatea de Investiţii Financiare OLTENIA S.A. (“The Company”) – Romanian legal entity – established as a joint stock company on 01.11.1996 under Law no. 133/1996 is a collective investment undertaking which operates under Law no. 31/1990 on commercial companies and Law no. 297/2004 on the capital market, with subsequent amendments and additions.

According to the Articles of Incorporation, the Company has the following object of activity:

- Administration and management of shares in companies for which own shares were issued corresponding to Certificates of Ownership and Nominative Privatization Coupons subscribed by citizens in accordance with Art.4 paragraph 6 of Law no. 55/1995;

- Own securities portfolio management and investments in securities in accordance with the regulations in force;

- Other similar and adjacent activities, according to regulations in force and management of own assets.

Subscribed and paid Share Capital of the Company is of 58,016,571 RON,

divided in 580,165,714 shares having a nominal value of 0.1 RON/share. Shares

are: ordinary, indivisible, nominative, of equal value, issued in dematerialized form

and give equal rights to their holders.

On 31.12.2015 the number of Company shareholders was of 5,761,728.

The Company shares are subscribed with the quote of Bucharest Stock

Exchange, Premium category, with the indicative SIF 5, as of 01.11.1999.

Report of Board of Directors of S.I.F. Oltenia S.A. on Consolidated Financial Statements ended on 31.12.2015

pag 2

During the reporting period, the Company has worked observing the legal

provisions contained in: - Law no. 31/1990 R, with subsequent amendments and additions; - Law no. 297/2004, with subsequent amendments and additions; - RNSC/FSA Regulation no. 15/2004, with subsequent amendments and

additions; - F.S.A. Regulation No. 9/16.06.2014 regarding the authorization and

operation of S.A.I., UCITS and depositories of UCITS - RNSC/FSA Regulation no. 1/2006, with subsequent amendments and

additions;

- Code of Bucharest Stock Exchange; - Corporate Governance Code of the Bucharest Stock Exchange; - Other regulations on the matter;

And - Articles of Incorporation (the Statute and Memorandum of Association).

Making depository activities provided for by law and FSA regulations in the period analyzed was provided by RAIFFEISEN BANK S.A. – Bucharest branch.

The record of Company's shareholders is held by S.C. DEPOZITARUL CENTRAL S.A. Bucharest.


pag 3

I. GENERAL INFORMATION


pag 4

Consolidated financial statements on 31.12.2015 have been prepared in accordance with Rule no. 39/2015 for the approval of accounting regulations compliant with international financial reporting standards, applicable to authorized entities, settled and supervised by the Financial Supervisory Authority in the Sector of Financial Instruments and Investments.

In accordance with RNSC Decision no. 1176/15.09.2010, the Company shall prepare and submit to FSA Annual Consolidated Financial Statements in accordance with IFRS as adopted by the European Union, within 8 months from the closing of the financial year.

The consolidated financial statements of the Group comprise the Company and its subsidiaries (hereinafter the Group). The Group's core activities are the financial investment activities undertaken by the Company and the activities of subsidiaries, belonging to different sectors as: food, trade, tourism, rental of premises, etc.

The financial statements of subsidiaries are included in the consolidated financial statements since the start of controlling and until its termination. Accounting policies of Group’s subsidiaries have been changed to align with those of the Group.

In addition to the specific consolidation adjustments, the main restatement of the financial information presented in financial statements prepared in accordance with RCR (Romanian Accounting Regulations) to align them to the requirements of IFRS as adopted by the European Union, consist of:

� group multiple items into more comprehensive categories; � fair value adjustments and for impairment of financial assets under IAS

39 “Financial Instruments Recognition and Measurement”; � adjustments of assets and equity in accordance with IAS 29 “Financial

reporting in hyperinflationary economies” because the Romanian economy was a hyperinflationary economy until 31 December 2003;

� adjustments in profit or loss account to record dividend income at the moment of declaration and gross value;

� adjustments of investment properties to assess their fair value in accordance with IAS 40 “Investment Property”;

� adjustments for recognition of liabilities and debts on deferred tax under IAS 12 “Income Taxes”;

� disclosure requirements under IFRS.


pag 5

The Group has adopted a presentation based on liquidity in the consolidated statement of financial position, and presentation of income and expenses was made in respect of their nature in the consolidated statement of profit or loss, and of other elements of comprehensive income, considering that these methods of presentation provide information that is reliable and more relevant than other methods allowed by IAS 1 “Presentation of Financial Statements”.

It was used the going concern assumption, which assumes that the Company and its portfolio companies in the foreseeable future will be able to have sufficient assets to continue operations and meet obligations during operational activity.

The financial statements are prepared using the fair value for: derivative financial instruments, financial assets and liabilities at fair value through profit or loss account and financial assets available for sale, except those for which fair value cannot be determined reliably.

Other financial assets and liabilities and non-financial assets and liabilities are stated at amortized cost, revalued amount or historical cost.

Group uses the following hierarchy of methods:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets

and liabilities;

- Level 2: Inputs other than quoted prices included within Level 1 that are

observable for the asset or liability, either directly (ie prices) or indirectly (ie

derived from prices);

- Level 3: valuation techniques largely based on non observable elements.

This category includes all instruments where the valuation technique includes

items that are not based on observable data and for which unobservable input

parameters can have a significant effect on the instrument assessment. This

category includes instruments that are valued based on quoted prices for

similar instruments but which are subject to adjustments based largely on

unobservable data or estimates to reflect the difference between the two

instruments.

Fair value measurement of shareholdings on 31.12.2015 was performed as follows:

� for securities listed and traded in 2015, the market value was determined by

taking into consideration the quotation on the last trading day (the closing

quotation of the main market of capital for level 1, and for level 2 the


pag 6

quotations for shares traded in the last 30 trading days were taken into

consideration);

� for securities listed that had no transactions in the last 30 trading days of

2015, and for unlisted securities, the market value was determined based on

equity of issuers;

� for related securities of companies in the insolvency proceedings or

reorganization, valuation is zero;

� for units in UCITS, the value taken into account was the last net asset value,

calculated and published.


pag 7

Synthetic structure of the portfolio

held by the Group on 31.12.2015 – IFRS

- consolidated statement-

Issuers Total nominal value of the package

Total market value of the package

SC No

% (RON) % (RON) % Economic sectors with

percentage in SIF value portfolio

74 100.00 489,540,375 100.00 1,409,554,160 100,00

finance, banking, insurance 5 6.76 182,264,476 37.23 744,063,799 52.79 oil resources and related services 1 1.35 71,130,693 14.53 206,279,009 14.63 power and gas transport 2 2.70 41,301,620 8.44 165,269,200 11.72 tourism, catering, entertainment 4 5.41 44,687,362 9.13 53,454,766 3.79 pharmaceutical industry 1 1.35 9,120,903 1.86 48,523,203 3.45 electronic, electrotechnical industry 9 12.17 25,740,342 5.27 39,878,767 2.84 gas resources 1 1.35 1,225,760 0.25 33,340,672 2.37 metallurgical industry 3 4.05 21,045,051 4.30 27,264,318 1.93 machinery industry, processing 11 14.87 34,240,821 6.99 23,503,981 1.68 wood, cellulose, paper 1 1.35 17,004,670 3.47 12,038,772 0.85 chemical industry 1 1.35 4,699,984 0.96 11,702,960 0.83 administration of financial markets 2 2.70 3,984,695 0.81 10,453,597 0.74 other financial service 7 9.46 7,461,457 1.52 9,757,336 0.69 glass, porcelain, earthenware industry 1 1.35 4,799,887 0.98 9,627,292 0.68 distribution, supply of electricity and energy services 1 1.35 4,439,490 0.91 5,416,178 0.38 lease and sublease of real estate 2 2.70 1,716,101 0.35 2,449,964 0.17 food industry 3 4.05 2,980,128 0.61 2,098,135 0.15 domestic trade 3 4.05 4,019,009 0.82 1,740,120 0.12 constructions 4 5.41 927,934 0.19 - -

other activities 8 10.81 4,249,975 0.87 390,900 0.03 TOTAL EQUITY SECURITIES 70 94.59 487,040,358 99.49 1,407,252,969 99.84

FUND UNITS 4 5.41 2,500,017 0.51 2,301,191 0.16


pag 8


pag 9

Total value of portfolio managed by the Group is 1,409,554,160 RON, in it being found titles to 4 investment funds amounting to 2,301,191 RON (0.16% of the market value of the portfolio managed).

On 31.12.2015 Group held shares primarily in companies acting in the finance, banking, insurance area, accounting for 52.79% of total market value of the portfolio, up from 31.12.2014, when the same activity sector recorded a share of 43.87%.

On 31st December 2015 the Group has the following structure of financial assets:

In RON Co. No.

Market value 31.12.2015

Co. No.


Capital investments

Listed companies

31 899,559,429 46 932,707,927

Unlisted companies 39 507,693,540 36 425,119,083

Fund units 4 2,301,191 5 2,322,684 Total financial assets 74 1,409,554,160 87 1,360,149,694

The placements held in companies whose securities are listed and traded on the capital market in Romania, plus placement owned in Romanian Commercial Bank, on 31.12.2015, represent 91.84% of the fair value of investments.

In the consolidation scope was included a total of 12 companies in which ownership is over 50% of the voting rights, which were consolidated by the global integration method.

The 12 companies represent a share of 16.49% of the total assets of the Company and 17.36% respectively of net assets.

Basic activities conducted by the Company and the companies included in the consolidation scope are the financial investment activities conducted by the Company and the activities of the respective companies.


pag 10

Settlements and transactions within the Group, as well as unrealized gains arising from intragroup transactions, are totally eliminated from the consolidated financial statements.

In the consolidation scope were included the following 12 companies:

Net asset 1,622,765,774 RON Total asset 1,708,098,544 RON

Ct.no. Issuer Symbol

Percentage in the share capital of

issuer on 31.12.2015

Percentage in the share capital of

issuer on 31.12.2014

Trading market

1 ALIMENTARA SLATINA

ALRV 52.2352 51.9934

BVB/ATS

AeRO Standard

2 TURISM PUCIOASA

69.2191 69.2191 unlisted

3 PROVITAS BUCHAREST

70.2780 70.2780 unlisted

4 UNIVERS RM.VALCEA

UNVR 73.7494 73.7494

BVB/ATS

AeRO Standard

5 CONSTRUCTII FEROVIARE CRAIOVA

CFED 77.5001 77.5001

BVB/ATS

AeRO Standard

6 FLAROS BUCHAREST

FLAO 81.0386 77.1058

BVB/ATS

AeRO Premium

7 ARGUS CONSTANTA

UARG 86.2021 85.9592

BVB/ATS

AeRO Premium

8 GEMINA TOUR RM.VILCEA

88.2866 88.2866 unlisted

9 MERCUR CRAIOVA

MRDO 93.3703 85.8533

BVB/ATS

AeRO Premium

10 CONSTRUCTII MONTAJ 1 CRAIOVA

96.5635 96.5635

unlisted

11 COMPLEX HOTELIER DAMBOVITA

99.9427 75.4811

unlisted

12 VOLTALIM CRAIOVA

99.9982 99.9987 unlisted

Management of the Company has classified all securities of portfolio activity in the category of financial assets available for sale.


pag 11

Increasing the stake held by the Company in the share capital of the companies included in the consolidation scope is driven by the acquisition during 2015 of new stakes.

In 2014, in the consolidation scope were 13 companies.

On 31.12.2015 in the consolidation scope were included 12 companies due to the fact that during 2015, S.C. MAGAL S.A. Craiova merged through absorption with S.C. VOLTALIM S.A. Craiova.


pag 12

II. ECONOMIC DATA

II. 1. CONSOLIDATED

STATEMENT OF

COMPREHENSIVE INCOME


pag 13

În RON 31st December

2015 31st December

2014

Incomes

Incomes from dividends 28,373,226 42,817,687

Incomes from interests 821,549 1,510,310

Other operational incomes 324,326,238 206,972,338 Net profit from differences of exchange rate 773,930 862,119

Net profit from sale of financial assets 56,346,554 82,537,358

Expenses Commissions and administration and supervision fees (3,336,746) (3,283,766) Incomes from restatement of commissions for risks and expenses 6,012,488 5,952,047

Other operational expenses (248,124,285) (212,038,223)


Corporate tax (29,188,349) (26,446,421)

Net profit of the financial year 136,004,605 98,883,449

Other elements of the comprehensive income Net modification of reserve from revaluation at fair value of financial assets available for sale and of tangible assets (114,109,908) (7,973,333) Total comprehensive income for the period 21,894,697 90,910,116

Net profit for



136,004,605 98,883,449

Comprehensive income for



21,894,697 90,910,116

Result per share

Basic 0.234 0.168

Diluted 0.234 0.168

Net profit of 136,004,605 lei is up by 37.54% compared to 31.12.2014.


pag 14

Segment Reporting

Trade Rental Food industry Tourism Financial activity TOTAL

Indicators 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014

Fixed assets 160,599 3,435,925 68,012,102 83,261,643 56,643,966 56,018,368 13,772,279 13,969,204 1,399,194,550 1,384,579,074 1,537,783,496 1,541,264,214

Current assets 61,999 371,879 41,597,308 20,248,007 126,270,428 107,730,625 2,001,472 1,723,816 57,011,622 57,012,736 226,942,829 187,087,063

Expenses in advance

- 2,738 261,586 19,727 50,798 114,245 26,706 17,328 87,125 91,275 426,215 245,313

Debts 75,517 235,224 9,950,078 7,741,952 100,331,737 80,734,401 598,497 487,317 195,472,080 181,274,732 306,427,909 270,473,626

Income in advance

- - 93,216 465,906 4,011 4,179 18,644 8,427 - 77,521 115,871 556,033

Provisions - 120,395 322,696 372,361 409,729 1,061,666 38,408 67,085 8,198,829 8,211,531 8,969,662 9,833,038

Minority interests - - - - - - - - 28,677,320 32,776,884 28,677,320 32,776,884

Equity 147,081 3,454,923 99,505,006 94,949,158 82,219,715 82,062,992 15,144,908 15,147,519 1,223,945,068 1,219,342,417 1,420,961,778 1,414,957,009

Total income 999,919 1,804,290 18,424,332 19,933,578 207,078,821 175,463,769 4,290,071 4,330,610 185,861,842 133,167,565 416,654,985 334,699,812

Total expenses 1,376,719 1,776,692 15,408,351 15,855,166 208,658,814 171,961,917 4,103,026 3,957,365 25,858,406 22,196,008 255,405,316 215,747,148

Gross result (376,800) 27,598 3,015,981 4,078,412 (1,579,993) 3,501,852 187,045 373,245 160,003,436 110,971,557 161,249,669 118,952,664

Total income (376,800) 23,182 2,397,083 3,153,924 (1,579,993) 3,501,852 138,345 327,157 135,425,970 91,877,334 136,004,605 98,883,449


pag 15

Segment reporting

Segment reporting is the segmentation of the activities envisaged in the branch of activity of which the main object of the company is part in the perimeter of consolidation.

Company with portfolio companies in which it holds more than 50% and are included in the consolidation perimeter operates the following main business segments:

- Financial Investments - Rental of premises - Food industry - Retail in non-specialized stores selling predominantly non food products.

- Tourism

The indicators presented were derived from the separate financial statements of the Company and of the companies in the consolidation.

In the fixed assets held on 31.12.2015 by the Group a share of 90.98% is held by financial investment assets represented by the portfolio of financial assets respectively 89.83% on 31.12.2014.

The high level of debt is due mainly to registration of deferred corporate tax related to reserves from measurement at fair value of the portfolio on 31.12.2015 with a share of 37.43% (31.12.2014: 40,33%) in total debt.

Also, the net result on 31.12.2015 made by financial investments has a share of 99.57%, well above the result obtained by the companies included in consolidation, respectively of 92.91% on 31.12.2014.


pag 16

II.2. CONSOLIDATED

STATEMENT OF FINANCIAL

POSITION


pag 17


31st December 2014

Assets Cash and cash equivalents 4,863,204 12,302,014

Deposits placed in banks 61,980,088 78,560,292 Financial assets available for sale 1,407,501,658 1,356,246,439

Financial assets at fair value by profit or loss 2,052,502 3,903,255

Credits and receivables 18,179,250 46,907,322 Tangible assets 71,468,450 71,216,715 Real estate investments 44,802,318 40,228,829 Other assets 154,305,070 119,231,724 Total assets 1,765,152,540 1,728,596,590 Liabilities Payment dividends 81,787,050 66,601,125 Taxes and fees 3,688,670 10,882,860 Debts with deferred tax 114,701,623 109,069,343 Other debts 115,336,099 94,309,369 Total debts 315,513,442 280,862,697 Own capitals

Share Capital 58,016,571 58,016,571 Updating Share Capital 792,552,339 786,505,309 Reserves from revaluation of tangible assets 547,912,683 575,016,997 Payment dividends 33,189,781 30,870,481 Legal and statutory reserves 27,743,775 27,734,413 Other reserves 2,445,797,934 2,491,248,949 Deferred result representing undistributed profit or uncovered loss (26,482,796) (32,581,568) Deferred result following the application of IAS 29 on the Share Capital and reserves (2,656,645,975) (2,656,645,975) Deferred result following the application of IAS less IAS 29 63,157,614 37,410,942 Current profit 135,719,852 97,380,890 Total equity assignable to mother company 1,420,961,778 1,414,957,009 Minority interest Of which: 28,677,320 32,776,884 Profit or loss of the financial year related to interests which do not control 284,753 1,502,559 Other own capitals 28,392,567 31,274,325 Total capitals 1,449,639,098 1,447,733,893 Total debts and equity 1,765,152,540 1,728,596,590


pag 18

On 31.12.2015 the Group holds a portfolio amounting to 1,409,554,160 lei

representing 79.85% of total assets, registering a slight increase of 3.63%

compared to 31.12.2014.

Companies with share in total portfolio are the following:

Ct. No.

Company Percentage of total - % -

Market value on 31st December 2015

- lei -


2 B.R.D.-GROUPE SOCIETE GENERALE BUCHAREST 16.23 228,803,631

3 OMV PETROM BUCHAREST 14.63 206,279,009

4 C.N.T.E.E. TRANSELECTRICA BUCHAREST 8.17 115,116,411

5 BANCA TRANSILVANIA CLUJ 5.93 83,573,639

6 S.N.T.G.N. TRANSGAZ MEDIAS 3.56 50,152,789

7 ANTIBIOTICE IASI 3.44 48,523,203

8 EXIMBANK BANCA DE EXPORT IMPORT A ROMANIEI BUCHAREST 2.60 36,640,511

9 ELECTROMAGNETICA BUCHAREST 2.42 34,138,174

10 S.N.G.N. ROMGAZ SA 2.37 33,340,672

Total 87.38 1,231,614,057

Deposits with banks have a value of 61,980,088 lei, decreasing by 21.11%

compared to 31.12.2014.

Total liabilities amount to 315,513,442 lei, increasing by 12.34% compared

to 31.12.2014.

Deferred tax liabilities represent 36.35% of the total liabilities.


pag 19

III. EVALUATING THE COMPANY’S

BUSINESS ON RISK MANAGEMENT


pag 20

The group, with its complexity business carried out, is subject to various risks.

Risk management is an integral part of all decision-making and business processes within the Group.

Group Management continuously evaluates the risks that may affect the achievement of its objectives and takes appropriate action on any change in operating conditions.

The Group's management pays particular attention to risk identification. Exposure to risks inherent in its business by daily operations and transactions (especially operations on the stock market) is identified and aggregated through risk management infrastructure implemented: audit committee, internal auditor, internal control, operational monitoring, hierarchical levels of authorization and transaction validation. Risk Monitoring is performed on each hierarchical level, with approval and supervisory procedures of decision-making and trading limits.

Internal reporting of risk exposure is continuously done on business lines; management is kept informed about the risks inherent in conducting business.

The main risk factors identified by the Group are: a) Economic environment risk b) Operational risk c) Market risk (price risk, currency risk, interest rate risk) d) Credit risk e) Liquidity risk f) Tax risk

The Group has implemented policies to assess risks posed, policies approved by the Board of Directors.

a) Economic environment risk This risk is extremely important, by the direct effect on the Group`s business

and indirectly through companies in which the Group holds interests. Romanian economy continues to exhibit the specific characteristics of

emerging economies, and there is a significant degree of uncertainty regarding the development of the political, economic and social environment.

From the Romanian economy point of view, 2015 was a good year, the growth registered by GDP being of 3.7%, higher to the forecast level.

Romanian economy is still fragile and dependent in particular of developments of the other economies, especially of the EU countries, which are the main business partners for our country.


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The risks that the EU economy faces (for instance, Great Britain exit of the EU), as well as a more accentuated uncertainty of the growing rhythm of the Chinese economy – which may affect global economy – are permanently monitored by the management, in order to anticipate the effects on the portfolio managed.

2016 will be a difficult year, with high risks due to international economic evolutions and especially the political ones.

b) Operational risk

Operational risk is defined as the risk of registering certain losses or of not accomplishing the estimated profits due to internal factors, like inadequate development of internal activities, the existence of inadequate personnel or systems, or due to external factors, like the change of economic conditions, legislative changes on the capital market, social-political events.

The main responsibility of developing and implementing controls connected to operational risk accrues to the company management. The responsibility is supported by the development of the general company standards for managing the operational risk on the following areas:

- demands to separate responsibility;

- alignment to the demands of the regulation frame;

- demands to report operational losses and proposals for their remedy;

- professional development and instruction;

- establishing ethic standards;

- documenting controls and procedures;

- preventing litigations risk.

Operational risks are inherent to the company activity.

The Group manages operational risk by the identification, estimation, monitoring and risks control.

It should be underlined that, in managing operational risk, not the models and techniques are the most important, but the attitude towards risk, which is formed in time and is an aspect of organizational culture.


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c) Market risk

Market risk represents the actual or future risk of negative affectation of profits, determined by the fluctuations on the market of prices of securities – regarding the activities belonging to the trading portfolio – of the interest rate, as well as the fluctuations of the exchange rate for the entire activity of the Group.

The efficient management of market risk is made through the use of fundamental analysis that gives an indication of the soundness of an investment as well as estimating potential of certain companies, and taking into account forecasts on the evolution of economic sectors and financial markets. The main issues pursued in market risk analysis are: assessment of shares portfolio in terms of profitability and growth potential, strategic allocation of long term investments, identification of short-term investments in order to capitalize price fluctuations in the stock market, the establishment of asset concentration limits in a particular economic sector.

The Group is subject to fair value risk of financial instruments held which fluctuates as a result of changes in market prices.

Price risk

The market value of the portfolio of listed shares (on BVB – settled market, BVB-AERO, SIBEX), on 31.12.2015, represents 63.92% (2014: 68.69%) of the total value of shares portfolio managed. In these conditions, the Group has a medium risk – associated with price movements of financial assets in the stock market. In the managed portfolio a number of 8 issuers can be found, of the 10 that constitute the BET index of Bucharest Stock Exchange. Market value of the holdings in those 8 issuers, represents on 31.12.2015 81.49% (2014: 76.88%) of the market value of shares held in listed companies. The Management of the Group monitors market risk and grants powers regarding trading limits on the capital market to the effective management of the company.

On 31st December 2015 the Group has the following structure of assets subject to price risk:

In RON No. companies


No. companies Market value

31.12.2014

Capital investments

Companies listed 31 899,559,429 46 932,707,927

Companies not listed 39 507,693,540 36 425,119,083


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Fund units 4 2,301,191 5 2,322,684

Total capital investments

74 1,409,554,160 87 1,360,149,694

Placements held in companies whose securities are listed and traded on the stock market in Romania, plus placement owned in Romanian Commercial Bank represent on 31,12,2015 - 91.84% (2014: 92.24%) of the fair value of investments.

On 31.12.2015 the Group mainly held shares activating in the finance,

banks, insurance field accounting for 52.79% of the total portfolio, up from

31.12.2014, when the same activity sector recorded a share of 43.87%.

Currency risk Currency risk is the risk that the value of a portfolio may be negatively affected as a result of variations in exchange rates. Since the majority of the Group's assets are denominated in the national currency exchange rate fluctuations do not directly affect the Group's activity. These fluctuations have influence in the case of assessing investments of the type of deposits in foreign currency.

Currency available holdings represent, on 31.12.2015, 1.26% of total financial assets, so that the currency risk is insignificant. Due to the low share of assets expressed in foreign currency, the Group does not have a formalized policy of covering foreign currency risk. Investments in bank deposits in foreign currency are constantly monitored and action is taken for investment, disinvestment, depending on the forecast evolution of the exchange rate.

Focusing of assets and liabilities on the types of currency is summarized in the table below:

- in RON- Accounting value RON EUR USD

31st December 2015

Financial assets

Cash and cash equivalents 4,863,204 4,709,601 71,797 81,806

Deposits placed in banks 61,980,088 41,318,073 1,046,913 19,615,102

Financial assets available for sale 1,407,501,658 1,407,501,658 - -

Financial assets measured at fair value through profit or loss 2,052,502 2,052,502 - -


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Credits and receivables 18,179,250 18,179,250 - -

Other financial assets 154,305,070 154,305,070 - -

Total financial assets 1,648,881,772 1,628,066,154 1,118,710 19,696,908

Financial debts

Payment dividends 81,787,050 81,787,050 - -

Other financial debts 115,336,099 115,336,099 - -

Total financial debts 197,123,149 197,123,149 - -

Interest risk rate

Interest rate risk is that the value of a portfolio will fluctuate due to changes in market interest rates. Factors that define this type of market risk are a wide range of interest rates corresponding to a change in markets, currencies and maturities for which the Group holds positions. The interest rate directly influences revenues and expenses attached to financial assets and liabilities bearing variable interest rates.

Most of the assets in the portfolio are not interest bearing. Consequently the Group is not significantly affected by interest rate risk. The interest rates applied to cash and cash equivalents are short-term.

In order to benefit from interests volatility, for a greater flexibility in the policy for assigning money reserves, it will be pursued that the investment of money reserves in monetary instruments be especially made on short term, of 1-3 months.

d) Credit risk

The credit risk represents the Group`s risk of recording losses as a consequence of insolvability of its debtors.

For the Group, the credit risk is mostly determined by exposures on asset elements of the type of “shares” representing 79.85% of the assets managed, evaluated under legal provisions.

Credit risk evaluation is made in two stages, both before the accomplishment of investments operations and after the approval and effective accomplishment of operations, supervising the assets evolution in order to take adequate measures in case of emergence of elements that may lead to damaging the companies economic activity and, in extreme cases, to their entering in insolvency.

In accordance with legal provisions, the Group has not granted any type of loans or guarantees to third parties.


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The credit risk may affect indirectly the Company activity, being the case of commercial companies of the portfolio, which face financial difficulties in paying their obligations corresponding to dividends.

The Group may be exposed to credit risk through investments realized in bonds, of current accounts, bank deposits as well as other receivables.

On 31st December 2015 the Group did not hold in portfolio bonds, real guarantees as insurance and did not record outstanding financial assets. All buying – selling of shares transactions of the company are made through storage bank with which there was a custody – storage agreement under the law, so the risk of default of settlement obligations is minimal.

The maximum exposure to credit risk at 31st December 2015 is of 79,921,808 lei.

Exposure to credit risk:

In RON 31st December

2015 31st December

2014

Deposits and accounts in banks 66,521,786 90,403,770

Other assets 13,400,022 29,382,901

TOTAL 79,921,808 119,786,671

e) Liquidity risk

Liquidity is the capacity of the Group to assure its necessary funds in order to fulfil all its direct or indirect payment obligations, at a reasonable price, at any time.

Liquidity risk is the actual or potential risk to which the corporate profits could be subject to from its inability to meet payment obligations when due.

Liquidity risk can arise from: � Inability to manage unplanned decreases in volume or significant changes in

the structure of funding resources; � The Group's inability to recognize changes in market conditions that may

affect the ability to liquidate certain assets in very short time and with minimum loss of value.

The Group pursues to maintain a liquidity level adequate to its support obligations, based on an assessment of relative liquidity of assets on the market, taking into account the period necessary for liquidation and the price or value at which the


pag 26

respective assets can be liquidated, as well as their sensitivity to market risks or other external factors.

The Group must hold liquid assets, whose added value should cover the difference between outputs of liquidities and inputs of liquidities in crisis situations, so as to be ensured the fact that the Group maintains levels of liquidity reserves that are adequate to allow it to face possible imbalances between liquidities inputs and outputs in crisis situations.

The liquidity risk is especially linked to holdings in commercial companies of “closed” type existing in the managed portfolio. Thus, the sale of some holdings – in case of apparition of negative aspects in their economic-financial situation or in case it is pursued to obtain liquidities – is especially difficult, existing the risk of not being possible to obtain a higher or at least equal price to that of holdings evaluation in the calculation of net asset, according to F.S.A. regulations.

At the same time, the low liquidity of the capital market of Romania makes often difficult even trading holdings in commercial companies listed.

Looking ahead to 2016, we anticipate the maintaining of a low liquidity level for the capital market, following uncertainties connected to Euro zone.

The structure of assets and liabilities in terms of liquidity is analyzed in the following table:

In RON Accounting

value Below 3 months

Between 3 and 12 months

Without preestablished

maturity

31st December 2015

Financial assets


Deposits placed in banks 61,980,088 43,652,176 18,327,912



Credits and receivables 18,179,250 18,179,250


Financial debts


pag 27

Payment dividends 81,787,050 81,787,050

Other financial debts 115,336,099 21,326,960 94,009,139


f) Taxation risk Starting with the date of Romania's accession to the European Union, the Group had to obey EU fiscal regulations and implement the changes brought by European legislation. The way the Group implemented these changes remains open to tax audits for five years. The Group's management believes that it correctly interpreted the legislative provisions and recorded fair values for taxes, fees and other debts to the state but in these conditions, too, there is some risk attached. The tax system in Romania is subject to various interpretations and permanent changes. In some cases, the tax authorities may adopt different interpretations toward the group of some fiscal issues and can calculate interests and penalties. Statements regarding taxes and duties may be subject to control and revision for a five years` period, in general after their submission. Romanian Government has a significant number of agencies authorized to audit companies operating on the territory of Romania. These controls are similar to tax audits in other countries and can cover not only fiscal issues, but also other legal and regulatory issues of interest to these agencies. It is possible that the Group will be subject to tax audits as the issue of new fiscal regulations occurs.


pag 28

IV. CHANGES IN COMPANY

MANAGEMENT


pag 29

In accordance with the Articles of Incorporation, the Company is managed as a single unit.

The Board of Directors of the Company consists of seven members elected by the General Assembly for a period of 4 years, with the possibility of being reelected.

Most board members – five members – are non-executive. Of these, three administrators are independent and represent the Audit

Committee. Management structure is as follows: 31st Decmber 2015

Board of Directors Members: Tudor Ciurezu - President, Anina Radu - Vice President, Cristian Busu, Victor Capitanu, Nicolae Stoian, Carmen Popa, Paul-George Prodan.

Effective Management: Tudor Ciurezu (General Director), Anina Radu (Deputy General Director).

Executive Management: Elena Sichigea - Economic Department Director, Elena Caliţoiu - Director of Investments and Risk Management, Dan Voiculescu - Director of Portfolio Monitoring Department, Vasilica Bucur - Legal Department Director, Ion Patrichi – Director of Human Resources – Logistics Department.

31st December 2014

Board of Directors Members: Tudor Ciurezu - President, Anina Radu - Vice President, Cristian Busu, Victor Capitanu, Nicolae Stoian, Carmen Popa, Iulius Grigore Postolache

Effective Management: Tudor Ciurezu (General Director), Anina Radu (Deputy General Director).

Executive Management: Elena Sichigea - Economic Department Director, Elena Caliţoiu - Director of Investments and Risk Management, Dan Voiculescu - Director of Portfolio Monitoring Department, Vasilica Bucur - Legal Department Director.

On 04.02.2015 Mister Iulius-Grigore Postolache advanced his resignation from the position of administrator of S.I.F. Oltenia S.A., being appointed for the position of General Director of Allianz-Ţiriac Private Pensions – Management Company for Private Pensions Funds S.A. The Administration Board of S.I.F. Oltenia S.A. decided, following these events, to directly elect a definitive administrator by the Ordinary General Meeting of Shareholders for the presentation and approval of the financial statements of 2014. The Ordinary General Meeting of S.I.F. OLTENIA S.A.


pag 30

Shareholders, reunited in a second convocation on 29.04.2015, elected, in the position of administrator, with majority of votes cast, for a mandate period equal to that of the Administration Board of S.I.F. Oltenia S.A. in operation (elected in A.G.O.A. of 20.04.2013), Mister Paul-George Prodan.

As of 23.04.2015, Mister Ion Patrichi was appointed in the position of Director of Human Resources Department.

None of the companies included in the consolidation is covered by OMFP no. 881 / 25.06.2012, respectively shall not be required to prepare and report financial statements in terms of IFRS.

They lead accounting records according to OMPF 1802/2014 regulations for approval of accounting regulations on individual annual financial statements and annual consolidated financial statements.

For the consolidation, they prepare the second set of financial statements in terms of IFRS. The financial statements prepared in terms of IFRS result by restating financial statements prepared under OMFP 1802/2014.

Consolidated financial statements were prepared in accordance with Rule no. 39/2015 for the approval of accounting regulations in accordance with International Financial Reporting Standards, applicable to entities authorized, regulated and supervised by the Financial Supervisory Authority in the Sector of Financial Instruments and Investments.

According to RNSC Decision no. 1176/15.09.2010, he financial investment companies are required to prepare and submit to RNSC (FSA) annual consolidated financial statements in accordance with International Financial Reporting Standards adopted by the European Union, within 8 months from the closing of the financial year .

These financial statements are intended solely for use by the Group, its shareholders and FSA and do not generate changed in the shareholders` rights regarding dividends.

associate professor PhD ec. Tudor CIUREZU Anina RADU ec. Elena SICHIGEA

President / General Director Vicepresident / Deputy General Director Financial Officer

STATEMENT

In accordance with the provisions of Law no. 297/2004 and RNSC Regulation No. 1/2006, as further amended and supplemented we declare the following:

a) The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

b) The Group does not prepare consolidated financial statements in accordance with Romanian Accounting Regulations ("RCR").

c) We do not know at the time of this statement about other information, events, circumstances that significantly alter the above statements.

We mention that the consolidated financial statements have been prepared according to Rule no. 39/2015, approving the Accounting Regulations compliant with International Financial Reporting Standards, applicable to entities authorized, regulated and supervised by the Financial Supervisory Authority in the Financial Instruments and Investments Sector. In accordance with R.N.S.C. Decision No. 1176/15.09.2010, the financial investment companies have the obligation to prepare and submit to RNSC (FSA) annual consolidated financial statements in accordance with International Financial Reporting Standards adopted by the European Union, within 8 months from the end of the financial year.

These financial statements are exclusively intended to be used by the Group, its shareholders and F.S.A. and do not generate changes in the shareholders’ rights regarding dividends.

Associate Prof. PhD E. Tudor CIUREZU Anina RADU Ec.Elena SICHIGEA

Chairman / General Director Vice-president / Deputy General Director CFO

Documents

S.I.F. OLTENIA S.A. - Bucharest Stock Exchange · Societatea de Investiţii Financiare Oltenia S.A. („The Company") was founded on 01.11.1996 in Craiova - Romania, based on the