SIF Moldova SA Board of Directors’ Report - 2015

1

Board Report

2015

OGMS

April 25/26, 2016

Item 2

SIF Moldova SA Board of Directors’ Report 2015

2

Dear Shareholders,

We hereby present you the results achieved by SIF Moldova in year 2015 and

the objectives for the following period, according to the “Investment Policies

Statement 2014 – 2018 and mandate awarded to the Board of Directors for

drawing up the 2016 Activity Report, based on the benchmarks presented in

EGMS on 13.01.2016.

Portfolio Structure

The Quoted Shares Portfolio is predominant (73,6%) in the total value of the managed assets, and we have

registered a significant increase of the unquoted shares component (15,0% in comparison to 4,2% in 2014)

based on the reorientation of the investment policy under the given market conditions. The financial and

energetic divisions have remained the main divisions in the portfolio structure (financial - 46,7% namely

energetic - 16,8%, reported to the total assets value). At the same time we have continued the process of

reducing the number of portfolio participants, with the recording of the exit of 5 issuers (in comparison to

2014) and the exposure increase per issuer, so that we can directly actuate positive influences on portfolio

performance.

Financial performance

The net profit achieved in accordance with RAS is 115.4 million RON (104% compared to the provisions of

2015 Budget under RAS). The net profit under IFRS is 100.3 million RON and includes the influences of

the restatement adjustments as a result of implementing IFRS accounting regulations as a basis of

accounting. The revenues from sales (IFRS) are of 215.1 million RON and the investments in equities were

of 161 million RON (95% of the 2015 target). The total assets under management were of 1,545 million

RON, up 10% compared to 2014.

Investment process

SIF Moldova considers that the exposure on direct investment in real economy through private equity type

investments in fields where Romania has proven experience and expertise, represent the answer to the

need to generate higher yields for shareholders. in the context of the continuous decrease of yields on

monetary or capital markets and the increase of volatility on these markets.

In this context, the sectorial development and diversification of the Majority Holdings Portfolio have been,

in agreement with the Investment Policy Statement 2014-2018 and 2015 Activity Program, the main

objective of 2015. The value increase of this portfolio is determined by the implementation of new projects

in various activity fields, business development through specialized companies and/or companies from the

Historic Portfolio of SIF Moldova. The research and investment process focus on fields with increase

potential such as the agricultural, hotel and real-estate sectors. The operational framework of these

companies is drafted through gradual capital increases. As the investment projects develop, we estimate

that finance resources will be drawn from the banking system and/or capital market. The selected

investments insure long and average-time value creation through the superior yield of the main capital

market indexes. The design of this portfolio considers the abidance by a set of conditions connected to the

setting of the investment policy within the prudential limitations defined by specific regulations, as well as

to the transparency in the communication with shareholders. The investment process will continue in 2016

along the coordinates approved by shareholders within EGMS of 13.01.2016.

We are convinced that the coherent undertaking of defining values – transparency, quality, performance

– significantly increases the management performance, for the final shareholders’ benefit.

Respectfully yours,

Costel Ceocea, PhD

President and CEO of SIF Moldova

SIF Moldova SA Board of Directors’ Report 2015

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Contents

1. Activity analysis

1.1. Description of the primary activity

1.2. General information

1.3. Evaluation of activity. Objectives. Performance.

1.4. Policy for the management of companies in the portfolio. SIF Moldova Group.

1.5. Status of the implementation of EGM decisions regarding the multiannual investment

strategy.

1.6. Risk management

2. Financial status

2.1. Status of assets, debts and equities

2.2. Profit and Loss Account

2.3. Expense Management

2.4. Performance Indicators

2.5. Cash flows

2.6. Achievement Degree of the Income and Expenses Budget

3. Company’s Corporate Assets

3.1. Placement and characteristics of the main corporate assets.

3.2. Potential problems connected to the ownership right on corporal assets.

4. The SIF2 Share on the Bucharest Stock Exchange

5. Promotion and protection of SIF Moldova interests

6. Shareholder relations

6.1. Dividend policy

6.2. Corporate events

6.2.1. Share capital increase

6.2.2. Purchase of own shares

7. Compliance insurance

7.1. Internal Audit Activity

7.2. Internal Control Activity

8. Corporate Governance

8.1. Corporate Governance Code

8.2. Internal Regulations

8.3. Human Resource management. Reorganisation process.

8.4. Social responsibility

9. Company Management

9.1. List of managers

9.1.1. CV (fist, last name, age, qualification, professional experience, position and

seniority)

9.1.2. Any agreement, understanding or family connection between that manager and

another individual due to whom the manager was appointed.

9.1.3. Manager’s participation to the company’s capital

9.1.4. List of company affiliated individuals. SIF Moldova Group.

9.2. Executive management member list

9.2.1. Term in which the individual is part of Executive Management

SIF Moldova SA Board of Directors’ Report 2015

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9.2.2. Any agreement, understanding or family connection between that manager and

another individual due to whom that person was appointed member of the

Executive Management

9.2.3. Participation of that person to the company’s capital.

9.3. For all people presented under 9.1 and 9.2, indication of the possible litigations or

administrative procedures they have been involved in over the last 5 years, regarding their

activity within the issuer, as well as those regarding the ability of that individual to fulfil his

attributions within the issuer.

10. Events occurred after the reporting date

***

Annexes:

1. Annex 1 Net Assets status on 31.12.2015

Annex 1.1. Assets and Debts status of SIF Moldova (Reg. ASF no. 15/2004- A16)

Annex 1.2. Status of assets and detailed status of investment of SIF Moldova (Reg. ASF no.

15/2004- A17)

2. Annex 2 Financial statements IFRS as of 31.12.2015

3. Annex 3 Litigations status as of 31.12.2015

4. Annex 4 BVB, ASF Reporting - 2015

5. Annex 5 Statement of conformity with the provisions of BVB Corporate Governance Code.

NOTE 1:

The structure of the report complies with the provisions of CNVM/ASF Regulation no. 1/2006

(Annex 32) regarding issuers and securities operations. For the comparability of information, SIF

Moldova maintains the same structure of the periodical reports on the trimestral/ quarterly level.

Additionally, the structure of the report abides by the provision of ASF Regulation no 39/2015

regarding the approval of Accounting Regulation according to the International Financial Reporting

Standards, applicable to certified entities, regulated and supervised by ASF.

NOTE 2:

Net asset as of 31.12.2015 is calculated with the active and passive elements assessed in accordance with

RAS. Net assets will be recalculated with the active and passive elements assessed in compliance

with ASF Norm no 39/28.12.2015 for the approval of Accounting Regulations under IFRS.

SIF Moldova SA Board of Directors’ Report 2015

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Activity analysis

Core activity

Legal framework - SIF Moldova SA is a closed-end financial investments

company setup according to the provisions of Law no. 133/1996 regarding

the transformation of Private Property Funds in Financial Investment

Companies, entered under the “Other Unterakings for Collective

Investments (AOPC) with a diversified investment policy” category, certified

by the National Committee for Transferable Securities / Finacnial

Supervision Authority with Certificate no. 258/14.12.2005

Purpose – value generation for the shareholders.

Object of activity:

The company’s main object of activity are financial investments. The main

object of activity of the Company (according to NACE) is: 6499 – Other

financial services not coded elsewhere – and consists in:

a) administration and management of financial instruments, derived

financial instruments and other instruments qualified as such by the

regulations of competent authorities;

b) administration and management of equities/bonds and other rights

derived from them in companies that are closed or not traded;

c) other auxiliary and connected activities, according to applicable

regulations.

General information

subscribed and paid capital: 103.817.917,6 lei

no. of issued shares: 1.038.179.176

nominal value: 0,1 lei/share

Shareholding structure: 100% private

free float: 100%

Regulated market on which the securities are traded:

Bucharest Stock Exchange

Premium Category

International identifiers: Bucharest Stock Exchange: SIF2

ISIN: ROSIFBACNOR0

Bloomberg: BBGID BG000BMN5F5

Reuters: SIF2.BX

1

TYPE OF INVESTMENT

COMPANY

SIF Moldova is an AOPC,

positioned mainly on the

Romanian market, as closed

fund with predominant share

investments with average risk

degree and temporary

liquidity investments in fixed –

rate instruments.

Informatii conexe in

Codul de Guvernanta

Corporativa

al SIF Moldova

Cap.2.Despre noi. Definirea

cadrului de functionare

The share capital has been

increased as per EGMS

Resolution no. 3/ 01.04.2015.

The share capital increase was

made in the account of all

holders registered in the

Shareholders’ Register by

09.06.2015, who were each

assigned a new share for each

share held, free of charge.

1.1.

1.2.

Related information in the

Corporate Governance

Code of SIF Moldova

Chapt.2. About us. Definition

of the Operational Framework

SIF Moldova SA Board of Directors’ Report 2015

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Activity evaluation. Objectives/Development. Performance.

1.3.1. Managed Assets

Assets value evolution (approach as per ASF1 regulations)

Note: * The modification of NAV and SIF2 market price determined by the registration of the share capital increase with

multiplier factor 2

** The number of shares used in the NAV calculation (1.029.076.548) was obtained by subtracting from the total shares

number, the shares purchased within the buy-back programme (according to applicable regulations).

NAV evolution / SIF2 Price / Discount (dec 2014 – dec 2015)*

* Note – Historical data have been reanalysed to insure their comparability to those recorded on 30.06.2015 (influenced by the

share capital increase – multiplication factor 2).

Evolution of Assets Structure

Assets’ structure (% of total assets value)

2013 2014 2015 ecart

2015 - 2014

Shares of which: 91,03 86,23 88,75 +2,52

- listed 86,46 81,98 73,69 -8,29

- unlisted 4,57 4,25 15,06 +10,81

AOPC + OPCVM Participation titles (fund units) 3,34 5,26 3,61 -1,65

Monetary instruments (deposits, cash) 2,99 5,94 5,93 -0,01

Bonds(municipal, corporate) 0,96 0,79 0,64 -0,15

Other assets 1,68 1,78 1,07 -0,71

Portfolio structure of assets types on 31.12.2015 (% of total assets value)

1 In Annex 1 to the Report, the following are presented: (1) net assets on 30.09.2015 (Annex 16) as well as (2) detailed assets of SIF Moldova status on 30.09.2015 (Annex 17) – drawn up according to the provisions of ASF Register no. 9/2014 and ASF Register no. 10/2015

0%

10%

20%

30%

40%

50%

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Dec '14 Ian Feb Mar Apr Mai Iun Iul Aug Sep Oct Nov Dec'15

VUAN (RON) Pret SIF2 (RON) Discount (%)

listed shares73.69%

unlisted shares15.06%

monetary instruments5.93%

other assets5.32%

Indicator (mil lei) 2013 2014 2015*

Total assets (mil lei) 1.339 1.403 1.545

Nat assets (mil lei) 1.275 1.343 1.486

NAV (lei) 2,45 2,59 1,44**

Market Price (lei) 1,47 1,59 0,78

Discount (%) Market price / NAV 40 39 46

1.3.

Objective:

Maintaining the

main share ratio,

namely listed

shares

+ 11 % reported to

2014

SIF Moldova SA Board of Directors’ Report 2015

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1.3.2. Share Portfolio

Evolution of the number of holdings

Evolution of sectorial exposure

Sectorial exposure (% of total assets value)

2013 2014 2015 ecart

2015 - 2014

Financial 44,48 40,15 46,74 +6,59

Energy 28,23 27,55 16,80 -10,75

Processing industry 8,97 10,06 11,38 +1,32

Trade 3,61 3,49 3,12 -0,37

Pharmaceutical 3,61 2,87 2,61 -0,26

Constructions 0,87 0,94 0,42 -0,52

Agriculture 0,63 0,30 0,29 -0,01

Other 0,63 0,88 7,39 +6,51

Sectorial exposure - 31.12.2015 (% of total assets value)

Top companies/holdings in the portfolio – 31.12.2015

Issuer % holding in the issuer’s share capital ratio > 1 % in of total assets value

BANCA TRANSILVANIA 8,26 39,33

SNTGN TRANSGAZ 2,27 4,80

REAL ESTATE ASSET* 100 4,39

OMV PETROM 0,38 4,04

AEROSTAR 14,80 3,97

FONDUL PROPRIETATEA 0,54 3,21

SIF OLTENIA 4,96 3,15

BIOFARM 13,62 2,45

TESATORIILE REUNITE* 100 2,31

SIF MUNTENIA 4,97 1,93

TRANSELECTRICA 1,39 1,92

SNGN ROMGAZ 0,24 1,67

OPPORTUNITY CAPITAL * 99,99 1,40

MECANICA CEAHLAU 60,81 1,22

RULMENTI BARLAD 6,00 1,20

TOTAL 76,99 * Companies within the SIF Moldova Group

122

93 89

2013 2014 2015

Financial 46.74%

Energy16.80%

Processing industry11.38%

Pharmaceutical 2.61%

Other sectors11.22%

Other Assets 11.25%

Objective:

Decrease in the number of

holding and increase of

exposure/issuer, so as to

directly generate positive

influences on the portfolio.

Objective:

Maintaining the financial and

energetic sector with an

important portfolio ratio

- 4 % reported to

2014

SIF Moldova SA Board of Directors’ Report 2015

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1.3.3. Operations

Indicator (mil lei) 2013 2014 2015

Investment in securities( shares) 141 276 161

The operations carried out between 1.01.2015 - 31.12.2015 abided by the coordinates presented in the

Investment Policies Statement 2014 – 2018 and the 2015 Activity Program 2015 (approved by

shareholders GSM /02.04.2015).

According to 2015 Activity Report “from the 2015 investment budget, the equivalent of maximum 20-25

mil EUR will be assigned to the “Majority Holdings” Portfolio, namely maxim 67& with the possibility of

recalibration depending on the opportunities offered by the market. The total sum of the above mentioned

investments shall not exceed 10% of the total managed assets”. For this purpose, investments made in the

Majority Holding Portfolio amounted to 107.6 mil lei, representing 66.5% (23.8 mil EUR) from the

investment program, namely 7% of managed assets.

The 33.5% difference was assigned to the CORE portfolio, the main investments being made in TLVs and

SIFs.

Sale operations were carried out for the purpose of capitalizing some opportunities (investments at

maturity) as well as to create resources for the investment programs. The issuers subjects of sales were de

TLV, FP, BRD, Carpatex SIFs. In TLV case, operations were carried out in the context of a quotation

increase that have targeted the maintaining the title weight in total portfolio of assets within the assumed

prudential limits.

In 2015 we have continued the reconfiguration of assets portfolio (Majority Holdings, CORE, SELL) with

the objective of increasing average and long term potential, according to the specifications of each portfolio

and the evolution of the macroeconomic environment.

Majority Holding Portfolio. SIF Moldova Group

In 2015, investments were made through the companies in SIF Moldova SA Group (ASF Decision no.

352/02.03.2015, ASF certificate no. 27/18.11.2015)

Nr Branch name % SIF Moldova holding 31.12.2015 Company type (closed/ listed)

1 Mecanica Ceahlau SA 60,814 BVB - REGS (MECF)

2 Regal Galati SA 93,021 BVB – ATS (REGL)

3 Tesatoriile Reunite SA 99,999 unlisted

4 Casa SA 99,026 unlisted

5 Asset Invest SA 99,997 unlisted

6 Agribusiness Capital SA 99,999 unlisted

7 Real Estate Asset SA 99,999 unlisted

8 Opportunity Capital SA 99,999 unlisted

9 Agrointens SRL direct holding through Agribusiness Capital SA holding 100% of share capital unlisted

10 Agroland Capital SA direct holding through Agribusiness Capital SA holding 99,992% of shr capital unlisted

11 Hotel Sport Cluj SA direct holding through Opportunity Capital SA holding 99,999% of shr capital unlisted

According to the 2014-2018 Investment Policies Statement and 2014 and 2015 Activity Program

(materials approved by GMS 2014 and 2015) SIF Moldova has an investment strategy for the development

of “Majority Holding” Portfolio, characterized by:

a) project implementation in various activity sectors and business development through specialized

companies (companies setup by SIF within the group) and/or on companies from SIF

Moldova Historic Portfolio

Indicator (mil lei) 2013 2014 2015

Revenue from transferred financial investments 203 385 215

Revenue from dividends 26 25 24

Revenue from interests 3 2 1,5

103% of the 2015 Budget

95% of the 2015 program

SIF Moldova SA Board of Directors’ Report 2015

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b) investment represent a “private equity” type approach that involves the development of

some already existent majority holdings( real estate, agricultural machines), as well as

new investments through specialized entities (hotel field, agricultural); investment

decisions have an average and long term maturity/impact on expected profits.

As investment projects are implemented and developed, we estimate the need of drawing available

financing resources from the banking system and/or capital market. The selected investment insure value

creation on average-ling term through high yields. This type of investments can be a viable alternative to

the low yields that the monetary market offers. The reality we life in, after the financial crisis, reality

characterized by interests at historic minimum levels, management risk for a monetary mass abruptly

increased through FED and ECB’s liquidity injections, sudden and non-sustainable inflation of some assets

classes (bonds, shares on certain markets), impose a rethinking of investment basics.

In this context, SIF Moldova considers that exposure on direct investments in real economy through

private equity type investment in sectors where Romania has proven experience and expertise , supported

by request and included in Romania’s National Development Strategy, represent the answer to generating

higher yields for shareholders in the context of the continuous decrease of yields on monetary and share

markets, or the increase of volatility on these markets.

Real Estate Asset S.A.

The investment project of REA consists in the construction and operation in association of Veranda Mall

Commercial Center in Bucharest, in Obor-Colentina area. The investment falls into the proximity malls

category, being located in a highly populated area, with commercial traffic. According to CBRE study –

Romania Special Report-How active is the Romanian Retail Market 2015, Romania ranks 22 of the 67

markets as attractive for future retailer extension. According to Eurostat Report on 3rd February 2016, in

Romania, in December 2015 retail volume has increased by 14,3% in comparison to December 2014, this

being the largest increase in the UE. Average increase of the indicator at the UE level has been of 2% in the

analysed period.

In order to implement the investment, SIF Moldova has subscribed to the increase of share capital of REA,

the amount of 65.566.529 lei of which it paid the amount of de 65.030.476 lei. REA has purchased a

number of 6.555.291 Prodplast Imobiliare shares (PPLI) worth 39.921.234,9 lei (for the price of 6,09

lei/share) and a number of 643.859 NORD shares (NORD) worth 4.828.942,5 lei (for the price of 7,5

lei/share). Through these purchases, REA has acquired shareholder status within PPLI and NORD

entering an Agreement regarding the protection of the minority shareholder’s rights, regarding:

a) appointment of Management Board Members within PPLI and Veranda;

b) dividend policy;

c) protection of PPLI and Veranda holdings against dilution;

d) implementation of the Agreement in the articles of incorporation of PPLI, NORD and Veranda.

Later, REA has subscribed to the capital increases made by PPLI and NORD to include the necessary

resources for project financing.

Agribusiness Capital S.A.

The company’s objective is the selection of projects from the agricultural field that would lead to the

achievement of profitability of business and capital increase indicators. The main activity of Agribusiness

Capital S.A. was carried out through Agrointens company. The purchase of a blueberry farm by Agrointens

company, aimed to obtain income through a specialized, professional management and later sale for higher

prices. The advantages of this type of crops are based on its long exploitation period (40 to 50 years), its

high tolerance to diseases and pests, raising external request, as well as high production yield.

The investment in the intensive blueberry culture was based on the average and long-time development

potential of this type of crop. In 2015 SIF Moldova participated to the increase of share capital with the

amount of 10.453.259 lei. Agribusiness Capital has financed the Blueberry Farm project, increasing the

share capital of Agrointens SRL. The results of the 2015 harvest campaign confirmed estimated results in

SIF Moldova SA Board of Directors’ Report 2015

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the financial estimates (income obtained on 30.09.2015: 3.083.367 lei namely a net profit of 1.182.717 lei).

The company’s management estimates an annual yield of 30%.

Opportunity Capital S.A.

Research was focused mainly on the Romanian hotel market, that is locations in mountain resorts with

high tourist attraction or large financial and business centres.

In 2015 SIF Moldova subscribed to the increase of the share capital of Opportunity Capital SA the amount

of 19.476.248 lei of which it paid up 15.471.248 lei, for the purpose of financing an investment in the hotel

business. A second investment in the same sector was not finalized, the investment procedures exceeding

the estimated period.

In a report published by Eurostat on 26.01.2016 it is shown that Romania has had the highest number of

tourist night accommodation, of 15,9% from the EU. (average increase in the EU was 3,2%). In comparison,

Bulgaria has registered a decrease of 1.1%. Recouped, Romania ranked first for the increase of non-

residents’ night accommodation (18,3%) and increase of number of residents’ night accommodation

(15,3%).

Asset Invest SA – has the following main action directions:

Management of the companies in its own portfolio, with the main objective of liquidizing these

investments- on 31.12.2015 it managed a portfolio of 48 companies (30.06.2015: 56

companies; 30.09.2015: 49 companies);.

Monitoring the information and events of the companies in SIF Moldova Portfolio;

GMS/BD representations in the companies from its own portfolio or SIF Moldova portfolio;

CASA SA – On 31.12.2015, the company managed real estate assets worth 7.074.614 lei. Its real

estate portfolio includes a number of 11 buildings located in various municipalities (Suceava,

Botosani, Piatra Neamt, Bacau, Iasi, Galati, Braila, Tulcea) managed for rental purposes.

Regal SA, (rental of space) Mecanica Ceahlau SA (manufacture of agriculture machinery and

equipment) – members of SIF Moldova “Group”– listed issuers that have fulfilled their

transparency/ reporting obligations according to applicable regulations.

We would like to mention that all companies in SIF Moldova Group have entered the consolidation area

corresponding to IFRS 2014 financial reports (with the exception of Agroland that has carried out no

activities over the analysed period)

In 2016 the restructuring process of SIF Moldova Group will continue in order to make efficient the activity

through new approaches that lead to the improvement of the financial performance of the portfolio of

projects under management.

CORE Portfolio

The weight of the financial-banking sector in total assets increased on 31.12.2015 to 46,74% (31.12.2014:

40,15%), following the evolution of quotations and sale and purchase operations on TLV and BRD issuers.

The operations carried out for TLV issuer have been:

purchase, with the objective of increasing the exposure of the issuer in total assets (39,33%:31.12.2015

in total assets, 29,68%:31.12.2014) in the context of positive estimated due to Volksbank purchase (in

the report of Q1 2015, Banca Transilvania has mentioned that the profit corresponding to Volskbank-

VBRO purchase is of 1,564 million RON). Given the high cash quantity and the cash equivalents held

by TLV and the increase of equity resulted from the profit registration of VBRO purchase, there could

be the premises of dividend distribution for year 2015.

SIF Moldova SA Board of Directors’ Report 2015

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sale, determined by the abidance by the prudential limitations in the assets management process (SIF

has implemented an internal decisional mechanism to make sale operations in case of quotation

increase).

"Average Return" Report for TLV and BETPlus index in 2015

Evolution of TLV compared to EUROSTOXX50 in the period 01.01.2015- 31.12.2015

(Source: Bloomberg)

From the above mentioned graphs we can observe that in 2015 TLV price over performed BVB indexes and

banks in the euro area.

The sale of BRD shares was continued for the purpose of obtaining liquidities, under high yield conditions,

needed to implement the 2015 Activity Program. BRD operations have led to the registration of a 37,7 mil.

Lei profit in 2015.

Trading operations were carried out on SIF titles, the more important as value on SIF3 (2.16% of share

capital), in case of SIF5 and SIF4 exposure approaching the maximum holding threshold of 5%.

We estimate the realisation of yields on these issuers as long as the legal holding limit will be raised,

allowing for higher accumulations than 5%. The major weight (in total assets value) of the participations

held by each of these SIFs on the main listed issuers, along with the market price discount in connection

to NAV, are elements that substantiate the long-term accumulation operations. SIF participations

cumulate 5.95% of total assets of 31.12.2015 (31.12.2014: 5.97%)

The weight of the energy and utilities sector in the total assets on 31.12.2015

has decreased to 16,80% (31.12.2014: 27,55%). The decrease of the sector’s

weight was mainly caused by FP sales (title assimilated to this sector due to

its exposures) and the decrease of SNP quotation, as a consequence of oil

price fall. The sale of FP titles has generated in 2015 a profit of 36 mil lei. At

the end of June SIF Moldova has received FP capital distributions worth 8,3

mil. lei.

Energy – utilities sector

SIF Moldova SA Board of Directors’ Report 2015

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Other investments were made on Aerostar (ARS), Electrica (EL) and

Catalyst titles. Sale operations, as effect of Law no. 151/2014 ref Rasdaq

status) were made on Brikston (CERE), Arcelor Mittal Tubular Products

(PTRO and TPRO), partial Indor issuers. Issuer Carpatex was sold from the

SELL Portfolio.

Weight modifications in the “CORE” as well as in the “Majority Holdings” Portfolio were made based on

the reassignment of liquidities generated by SELL sub-portfolio and existent cash. This process exactly

describes the above-mentioned strategy, that is assigning assets from the low yield classes (cash or historic

investments – minority, difficult to monitor, many of the companies being in various stage of the

insolvency/reorganization/ bankruptcy process) in the “CORE” classes (that insure dividend stability and

predictability” (that insure higher yields under controlled and assumed risk conditions).

The investment program run in 2015 was of 161 mil lei level, representing 95.3% of the 169 mil lei

budgeted level.

SIF has analysed and implemented investments (some are still in the project phase) that:

a) are according to the directions and principles presented in the 2015 Activity Program approved by

shareholders (OGMS on 02.04.2015).

b) have been presented to shareholders through the current, periodical reports (distinct section with

SIF Moldova Group) and through the notifications of the Balance General Meetings on 15.04.2014

and 02.04.2015)

c) have been periodically subjected to internal control, having control reports drawn up (for

01.04.2013-10.12.2014 and 01.01.2015-30.09.2015); the reports were approved by the Board of

Directors of SIF on 15.12.2014 and 28.10.2015

Portfolio Companies Management Policy

The activity of the companies in the Portfolio has been permanently monitored, the main objectives

targeted being:

Evaluation of the companies’ real potential;

Estimation of the investment needs for activity development;

Improvement of economic-financial results;

Promotion of an effective management;

Ascertains the ways to capitalize on participations;

Implementation of adequate corporate governance rules.

The status of SIF Moldova’s withdrawal process from the issuers coming under the incidence of the

provisions of Law no. 151/2014:

in case of ArcellorMital Tubular Product IASI (TPRO) and ArcellorMital Tubular Product Roman SA

(PTRO) the withdrawal procedures ended with the collection of the value of held shares.

in case of Brikston Construction Solutions SA (CERE), SIF Moldova has collected the value of the

shares corresponding to the withdrawal request, but legal endeavours continue in court, as the

company has not made the mandatory public offer for taking-over within the legal deadline.

in case of Genko Med Group (FAMO) and Indor (INDP), due to the fact that the payment deadline has

expired, SIF Moldova is currently in a mediation process with these companies in order to collect the

value of the shares.

in case of Vastex S.A. (VASX), that has not abided by the provisions of Law no. 151/2014 and has not

presented the share evaluation report, SIF Moldova has called the company before the court to

recover the value of the shares held.

1.4.

Other operations

SIF Moldova SA Board of Directors’ Report 2015

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Implementation stage for the GMS decisions concerning multiannual

investment strategy - see EGMS decision no. 6 of 13.01.2016 “Approves the

activity Report of the Board of Directors regarding the status of the

implementation of the multiannual strategy and investments made, in accordance

with the 2014-2018 Investment Policies Statement (OGMS decision no.

8/15.04.2014) and 2015 Activity Program (OGMS decision no. 7/02.04.2015).

Objectives undertaken

In 2015, SIF Moldova continued its investment policy oriented towards significant/ majority holdings with

a high average- and long-time yield potential.

2015 Activity Program (approved by shareholders in GSM /02.04.2015) was based on a resource

assignment strategy that would insure the sustainable development of SIF Moldova activity and the

satisfaction of shareholders’ interests, on the short, as well as on the long term.

The following main criteria were considered for the selection of investment projects:

a sustainable IRR through operation and or use;

a competent management to develop the purchased company;

risks associated to the project and field of activity;

This type of investment represents a viable alternative to the low return rates of the monetary markets.

What we have achieved.

The decisional process has taken into consideration the distribution of responsibilities within the

Board of Directors and on the level of the executive management, including the valuation of the

managers/directors’ complementary expertise in fields such as capital market, bank sector, business,

conformity, etc.

The consultative committees of the Board of Directors carry out their activity on the assigned fields,

namely : investment policies and strategies – The Investment Policy and Strategy Committee targets the

optimisation of organisational structures, human resources, remuneration- The Nomination Committee,

policies regarding financial reporting, internal/external audit and risk management – Audit Committee.

On the executive level we set up the Management Committee (CD) with clearly defined

responsibilities in the operational field:

President and CEO – overall and direct coordination of activities and of the support and compliance

departments;

Vice President and Deputy CEO – coordination of Investment Management Department – “CORE”,

“SELL” portfolios and Transactions activity;

Manager of the Management Committee – coordination of the Investment Management Department,

“Majority Holdings” Portfolio;

The responsibilities of the Head of the Investment Management Department (DAI) who is also president

of the Investment Committee (internal committee- on the executive level of SIF Moldova) are also enrolled

in the executive management.

Prior to the obtaining of ASF approval regarding the Manager of MC (ASF approval no. 81/11.03.2015) we

have initiated and carried out internal procedures for the reestablishment of the Management Committee

and the setting of the decisional flow in the investment process, based on the approval of the Board of

Directors (no. 14/17.12.2014) and the relevant dispositions of the CEO.

1.5.

SIF Moldova SA Board of Directors’ Report 2015

14

The selected / implemented investment projects are in accordance with the directions and principles

presented in 2015 Activity Program approved by shareholders (GMS on 02.04.2015).

Evolution of defined Portfolios (% of total assets value)

Dividend policy

The dividends that SIF Moldova has offered over the last years have largely exceeded the yields of bank

deposits, which registered a decreasing tendency due to the monetary relaxation policy adopted by BNR.

Therefore, in the context of the volatility of capital markets, The Board of Directors aims to find an

optimum balance between the need to insure the resources to sustain investment programs to be developed

in 2016, the short-term expectations of shareholders, namely dividend distribution and the long-term

expectations of shareholders, that is the increase of NAV and implicitly of the price.

Risk Management

In its activity, SIF Moldova is exposed to risks associated to the securities (shares, bonds) especially the

portfolio of financial instruments traded on capital market, these being the most important types of risks

the company faces.

The risks associated to the financial instruments traded on capital market are:

the market risk – represents that type of risk that is always present on any capital market and is

caused by various political or economic instability that once occurred can affect all issuers, irrespective

of their activity sector;

the issuer risk (company) – generated by previous issuer performance, and future perspectives;

the sectorial risk – is given by investing in companies belonging to the same economic branches, or

depending on a single branch. .

The market risk represents the loss risk for SIF Moldova stemming from the fluctuation of market value

of the SIF Moldova portfolio positions, fluctuation that can be attributed to the modification of market

variables: share price, currency exchange rate, interest rates, that might modify the value of the financial

instruments held or income of the company.

The market risk components SIF Moldova takes on are :

Price risk –is the risk that the value of a financial instrument might fluctuate as a result of market price

change, or due to issuer-specific factors, or factors that affect all instrument traded on the market;

Currency exchange rate – is the risk that the value of a financial instrument held in the portfolio be

negatively affected following a variation in currency rates. If the value of that particular assets increases

in the base currency, their value expressed in lei can decrease of that currency depreciates in relation

to the leu;

Interest rate risk – is the risk that the value of a financial instrument fluctuate due to the variation of

interest market rates.

CORE72.17%

Detineri majoritare

5.59%

SELL8.46%

alte active13.78%

01.01.2015

CORE68.99%

Detineri majoritare

11.73%

SELL8.03%

alte active 11.25%

31.12.2015

1.6.

SIF Moldova SA Board of Directors’ Report 2015

15

The market risk is often spread by other forms of financial risks, such as:

Credit / issuer risk represents the risk of financial loss occurring in case the other contracting party

fails to fulfil its obligations.

Failure of the debtor to (partially or entirely) fulfil its obligations can have two causes:

low degree of trust in the debtor (of the counterpart of the financial institution in financial

transactions) also called counterpart risk ( known as a short-time credit risk). This risk refers to

all contracts entered in the name of the company.

Payment incapacity of the issuer, also called bankruptcy risk (known to be a long-term credit risk).

Liquidity risk (also called financing risk) is the risk that an entity might meet with difficulties in

obtaining the funds necessary to fulfil the engagements corresponding to the financial instruments.

Liquidity risk can results from the incapacity to quickly sell a financial asset at a value close to the fair

one, namely from the lack of marketability of an investment that cannot be purchased or sold quick

enough to present or lower a loss.

Other risk categories connected to the investment activity:

Specific risk (non-systematic) is connected to the instruments of a certain issuer. In parallel with the

general financial market trends, events that specifically affect an issuer might affect the value of

investments. Diversification can reduce specific risk, but not even a very prudent selection of

investments cannot completely eliminate it.

Risk of law amendment represents the possibility that the legislation relevant for the activity carried

out by the company, change in such a way so as to produce negative effects on investment profitability.

The manager cannot have any influence on such a risk.

Reputational risk represent the current or future risk of negative influence on the profit of the company

caused by the unfavourable perception on the company’s image by shareholders, investors and

monitoring authority.

Strategic risk defined/understood as being the current or future risk of negative influence of profit and

capital caused by changes in the business environment or unfavourable business decisions, improper

implementation of decisions or lack of response to the changes in the business environment.

The decisional mechanism is formalized and includes the decision

substantiation stage, the selection and context updating. Investment limits

are permanently set in accordance with prudential holding limits and in

close connection of the achievement stage of the objectives pre-set in

investment policies.

The decisional process is set forth in procedures and answers to the optimum

time management of opportunities requirement. In substantiating

investment decisions an important role is played by the identification and

evaluation of potential risks, constantly rebalancing the portfolio according

to yield/ risk criteria. The evaluation of the probability and impact of the

market risk on investment objectives is made through an IT Risk

Management Application which provides measurements of the market risk

exposure of the financial instruments portfolio and allows the comparison of

the company’s own portfolio to a reference one.

Market risk exposure quantified through ISRR: 12.96%.

The Synthetic Risk and Rate of Return Indicator (ISRR) calculated based on the annualized volatility of

monthly BVS from the previous 3 years of existence, determines the inclusion of SIF Moldova in the

average risk profile (risk class 5). This indicator is a value growth and decrease measurements priory

registered by SIF Moldova’s net assets per share, on a scale from 1 to 7. The risk indicator presents certain

limitations, the prior historical data being no real guarantee of future results. The inclusion on risk classes

was made based on the table of annualized volatility intervals specified in CNVM/ASF no.5/2012 regarding

the form, content and presentation method of the document regarding key information for UCITS

investors.

According to the Significant

Risk Management Strategy in

SIF Moldova (revised), classes

1-2 have been entered as low

risk, classes 3-4 as average-low

risk, class 5 as average risk,

class 6 average-high and class 7

as high risk.

SIF Moldova sets and

permanently maintaing the risk

management function that is

carried out independently.

SIF Moldova SA Board of Directors’ Report 2015

16

The prudential limitation system

1. CNVM Regulation no.15/2004, art.188

a) Securities and instruments of the monetary market not admitted for trading - allowed

limit: 20% of total assets (closed shares, closed bonds, deposit certificates)

asset type Market value per asset category according to ASF

Reguation no. 9/2014 (lei Weight of total SIF Moldova

assets (%)

Shares held in closed-type issuers closed bonds

232.620.000 7.507.294

15,06 0,49

TOTAL 240.127.294 15,55

b) Securities (shares and bonds) and monetary market instruments (government

securities) registered or traded at Stock Exchange Value (on issuer level) – allowed limit:

10% of total assets, the limit can be increased up to a maximum of 40% provided that the total value

of holdings over 10% per issuer does not exceed 80% of total assets. SIF Moldova’s holdings of

securities and/or monetary market instruments issued by the same issuer, allowed or traded on a

regulated market, exceeding the allowed level of 10% of total assets, is reported for the following issuers:

Banca Transilvania – 39,33%.

c) Financial instruments issued by entities belonging to the same group - allowed limit: 50%

of total assets.

Group name Market value per asset category as per FSA regulation no .9/2014 (lei)

Weight in total SIF Moldova assets (%)

BANCA TRANSILVANIA 705.109.887 45,64

BRD-GSG 12.435.091 0,80

GLOBINVEST 27.278.687 1,77

ATLAS ASSET MANAGEMENT 14.313.390 0,93

STAR ASSET 3.378.621 0,22

BROKER 3.133.359 0,20

STK FINANCIAL 1.816.764 0,12

d) Financial instruments issued by entities belonging to the group that includes SAI (SIF

Moldova) - allowed limit: 40% of total assets.

Group name Market value per asset category according to FSA

no. 9/2014 (lei) Weight in total SIF Moldova

assets (%)

GRUP SIF MOLDOVA :

AGRIBUSINESS CAPITAL shares 12.813.816 0,83

ASSET INVEST shares 3.737.747 0,24

CASA shares 9.200.031 0,60

MECANICA CEAHLAU shares 18.893.844 1,22

OPPORTUNITY CAPITAL shares 21.577.286 1,40

REAL ESTATE ASSET shares 67.800.019 4,39

REGAL shares 11.575.595 0,75

TESATORIILE REUNITE shares 35.631.615 2,31

TOTAL SIF MOLDOVA Group 181.229.953 11,73

e) Exposure to counterpart risk with derivative financial instruments traded outside

regulated markets – not applicable.

f) Value of current accounts and cash – allowed limit: 10% of total assets. In the net assets

31.12.2015, the value of current accounts and cash is of 605.421 lei, representing 0,04% of assets value.

g) Bank deposits started and held at the same bank - allowed limit: 30% of total assets.

Bank name Deposit value (ASF regulation no .9/2014)

(lei) weight in total SIF Moldova assets (%)

Banca Transilvania 82.740.409 5,36

BRD - GSG 8.220.648 0,53

Total deposits 90.961.057 5,89

SIF Moldova SA Board of Directors’ Report 2015

17

h) Global exposure to derivative financial instruments – should not exceed the total value of net

assets – not applicable.

i) Holdings of NON-UCITS – allowed limit: 50% of total assets .

NON-UCITS Name asset caregory market value (ASF

regulation no.9/2014) (lei) weight in total SIF Moldova assets

(%)

Fondul Privat Comercial 19.086.374 1,24

FII HERMES 9.338.939 0,60

BT Invest 1 5.381.776 0,35

FII Multicapital Invest 2.134.517 0,14

FII BET-FI Index Invest 1.816.182 0,12

Fondul de Actiuni Privat Transilv 1.236.968 0,08

STK Emergent 945.664 0,06

TOTAL NON-UCITS (fund units) 39.940.421 2,59

2. ASF norm no. 14/08.11.2013, art.9, lit. a)

Exposure obtained through direct and indirect investments in monetary market

instruments of the promissory note type – allowed limit: 20% of total assets.

Direct investments in monetary market instruments similar to promissory notes - not applicable.

Indirect investments in monetary market instruments similar to promissory notes (PN) – not

applicable.

3. Law no. 297/28.06.2004-updated, art. 129 line (1)

No shareholder of a market operator will be able to hold, directly or together with the entities it acts

with, more than 20% of the total voting rights.

Issuer name no. of held shares total no of issuer’s shares Holding percentage in the

issuer ‘s share capital

Bursa de Valori Bucuresti 383.709 7.674.198 4,9999

Sibex Sibiu Stock Exchange 1.671.217 33.427.926 4,9994

4. Law no 297/28.06.2004-updated, art. 150 line (1)

Shareholders of the central depository may not hold more than 5% of the voting rights, with the

exception of market operators who may hold up to 75% of the voting rights, with the approval of

CNVM/ASF.

Issuer name no. of shares held total no. of shares holding percentage in the issuer’s share capital (%)

Depozitarul Central (Regisco) 7.396.029 252.919.526 2,9243

Depozitarul Sibex 6.480 229.500 2,8235

5. Law no. 297/28.06.2004-updated, art. 286^1

Investments in shares held by Financial Investment Companies resulted from the transformation of

Private Property Funds – allowed limit: maximum 5% of the share capital of the Financial Investment

Companies.

Name no. of shares held Total no. of issuer’s

shares holding percentage in the issuer’s share capital (%)

SIF Muntenia 40.160.859 807.036.515 4,9763

SIF Oltenia 28.775.041 580.165.714 4,9598

SIF Transilvania 47.278.720 2.184.286.664 2,1645

SIF Banat Crisana 317.604 548.849.268 0,0579

6. CNVM/ASF Regulation no.2/2009, art.2, letter h) Qualified investment- direct of indirect holding in a SSIF of an investment representing at least 10% of the

share capital or the voting rights, or that allows the exercise of a significant influence on the management

of a SSIF in which that given investment is held.

SIF Moldova SA Board of Directors’ Report 2015

18

Issuer name no of shares held total no. of issuer’s

shares Holding percentage in the

issuer’s share capital

SSIF BROKER 16.886.875 337.749.919 4,9998

7. Holding in the share capital of credit institutions – Banca Transilvania’s Articles of Incorporation, art. 11 point b (b) No shareholder may held 10% or more of the Bank’s share capital, unless:

(i) it has the approval of GSM and

(ii) according to all formalities requested by the law.

issuer name No. of shares held Total no. of issuer’s

shares Holding percentage in the issuer’s share capital (%)

Banca Transilvania 250.075.888 3.026.003.679 8,2642

***

The following have been subjected to the internal control missions of the conformity

departments (Internal control, Internal audit, Risk management):

1. Investments made in branches

Control reports covered the activity carried out between 2015

Conclusions:

there have been complied the legal regulations on making investments in subsidiaries

it was respected the investment strategy on the short and medium term, approved by the

shareholders for the adoption and implementation of investment decisions in subsidiaries

there have been compiled the provisions of the Memorandum of Association and Internal

Regulations of SIF Moldova regarding the adoption and implementation of decisions related

to investments in subsidiaries: justification, approval, implementation, reporting and

monitoring of the investments.

The reports and their conclusions (approved by the Board of Directors) have been presented to ASF

and financial auditor, Deloitte Audit

2. Monitoring the investment close to the legal and prudential limits and operational risk management

method.

Control reports targeted all issuers closing the holding limits (01.01-30.09.2015)

Conclusions :

the legal limits on the status reporting date have not been exceeded

for the passive exceeding of holding limits, a status that is not legally regulated, we have created

mechanisms and adopted internal management measures (example: TLV shareholding)

regarding SIFs holdings: 1. the legal limit has not been exceeded 2. holdings are managed from

the perspective of abiding by the 5% legal limit and the incidental provisions regarding

concentrated holding (art 2861 of Law 297/2004, CNVM instruction no.6/2012)

The reports and their conclusions (approved by the Board of Directors) have been presented to ASF

and the financial auditor, Deloitte Audit

SIF Moldova SA Board of Directors’ Report 2015

19

In synthesis, framing the value of the holdings and investments made in 2015 in the legal

and prudential limits of the activity program for 2015 (approved by the OGMS of April 02, 2015)

reveals the following developments:

A. Evolution of the framing within the

prudential limits of the assets/ categories

of assets (weight in total assets of SIF Moldova),

in the period Jan 1, 2015 – Dec 31, 2015 is

as follows:

Type of assets

% in total assets of SIF Moldova

Jan 2015

Feb 2015

Mar 2015

Apr 2015

May 2015

June 2015

July 2015

Aug 2015

Sept 2015

Oct 2015

Nov 2015

Dec 2015*

1. Article 188 of CNVM Regulation no. 15/2004

unlisted shares 5.11 5.21 5.44 5.10 5.62 5.85 5.41 10.06 13.40 14.98 15.69 15.55

TLV issuer 32.12 31.89 32.47 35.47 35.29 37.15 39.19 37.30 38.83 39.48 37.42 39.33

FP issuer 9.78 9.86 10.21 9.96 9.86 7.00 7.00 7.03 7.06 3.81 3.98 3.21

TLV group 38.96 38.59 39.32 41.12 41.65 41.33 42.56 38.81 39.80 43.40 42.15 45.64

SIF Moldova group

- 5.51 6.19 5.11 5.66 6.06 5.61 10.24 11.28 10.75 11.23 11.73

current accounts and cash

0.06 0.05 0.02 0.02 0.05 0.02 0.03 0.07 0.07 0.11 0.07 0.04

total bank deposits

5.92 5.78 5.94 4.75 5.82 5.07 5.89 3.48 2.59 5.62 6.73 5.89

Non-UCITS securities

3.30 3.21 3.21 2.91 2.75 2.81 2.75 2.77 2.71 2.57 2.66 2.59

2. Article 9 of ASF Norm no. 14 of Nov 8, 2013

direct investments in promissory notes

- - - - - - - - - - - -

indirect investments in promissory notes

0.25 0.23 0.17 0.17 - - - - - - - -

B. Evolution of the framing within the

prudential limits of SIF Moldova’s

exposure in the share capital of the

issuers, in the period Jan 1, 2015 – Dec 31,

2015 is as follows

Name of the issuer*

% in the share capital of the issuer

Jan 2015

Feb 2015

Mar 2015

Apr 2015

May 2015

June 2015

July 2015

Aug 2015

Sept 2015

Oct 2015

Nov 2015

Dec 2015

BVB 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000 5.000

SIBEX 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995 4.9995

REGISCO 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243 2.9243

DEPOZITARUL SIBEX

2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235 2.8235

SIF 1 0.0987 0.0869 0.0884 0.0696 0.0607 0.0704 0.0365 0.0397 0.0628 0.0743 0.0706 0.0579

SIF 4 4.9507 4.9512 4.9639 4.9640 4.9661 4.9700 4.9518 4.9408 4.9706 4.9757 4.9763 4.9763

SIF 5 4.9587 4.9561 4.957 4.9511 4.9514 4.9545 4.9128 4.9081 4.9558 4.9593 4.9598 4.9598

SIF 3 - - - - - - 0.3378 0.6358 1.1191 1.621 2.0000 2.1645

SSIF Broker 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9861 4.9998

TLV 8.3685 8.3685 8.3685 8.3685 8.3685 8.5256 8.5715 8.5715 8.5583 8.2452 8.0146 8.2642

*There are presented all the holdings that are subject to restrictions, including those where no investments has been made in 2015

C. Achieving the investment program approved by the 2015 activity program

Specification (RON) 2015 activity program Achieved as of Dec 31, 2015

Total investment program, of which: 169.000.000 161.086.810

“Majority Holdings” portfolio 113.230.000 107.634.074

“Core” portfolio, of which: - on long term

55.770.000 53.452.736 38.496.192

Conclusion: In the period Jan 1, 2015 –

Dec 31, 2015, reported to the total assets

monthly calculated, it has not been

exceeded the legal limits allowed.

Conclusion: In the period Jan 1, 2015 –

Dec 31, 2015, reported to the share capital

of the issuer, it has not been exceeded the

legal limits allowed.

SIF Moldova SA Board of Directors’ Report 2015

20

- on short term 14.956.544

Within the Majority Holdings portfolio, the situation of the investments made on the main

business lines (detailed in chapter 1.3.3.) is as follows:

Agribusiness Capital SA

Opportunity Capital SA

Real Estate Asset SA

Investments SIF2 of which: 13,09 million RON 22,11 million RON 68,20 million RON

Investment project blueberry farm hotel shopping center

- Cash contribution SIF2 10.45 million RON 15.5 million RON 65.0 million RON

Project implementation company Agrointens SRL Hotel Sport SA Veranda Obor SA

Project stage implemented Transaction made; it follows

investments in modernization

in implementation

Other investments made within the Majority Holdings portfolio:

Tesatoriile Reunite SA Mecanica Ceahlau SA CASA SA

Object Takeover bid Consolidation of ownership through equities acquisition

Consolidation of ownership through contribution in kind to the share capital

amount invested 1.8 million RON 1.4 million RON 1.0 million RON

Investments made in 2015:

fall within the total investment budget of 169 million RON approved by the 2015 activity

program

fall within the limits assigned through the 2015 activity program by portfolios:

1. “Majority Holdings”: program – 113.2 million RON, achieved – 107.6 million RON;

2. “CORE”: program – 55.8 million RON, achieved 53.5 million RON.

total amount of investments made in “Majority Holdings” portfolio represent 6.97% of

total assets as of December 31, 2015 and falls within the 10% limit established by the 2015

activity program.

SIF Moldova SA Board of Directors’ Report 2015

21

Financial status Status of assets, debts and equity

Individual financial statements are drafted according to the International Financial Reporting Standards

adopted by the European Union (”IFRS”) and meet the requirements of Norm no. 39/2015 for the approval

of Accounting Regulations according to the International Standards for Financial Reporting, applicable to

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

Financial Instruments and Investments (A.S.F.).

According to norm 39/2015, the International Financial Reporting standards, hereinafter referred to as

IFRS represents the standards adopted according to the procedure foreseen by (EC) Regulation

no.1606/2002 of the European Parliament and Council of 19th July 2002 regarding the application of

international accounting standards, with its later amendments and additions.

The most important modifications made on the accounting records drawn up according to Romanian

Accounting Regulations in order to align to the requirements of the International Financial Reporting

Standards adopted by the European Union are:

adjustment of assets elements, debts and equities according to IAS 29 – „Financial reporting in hyper

inflationist economies” as the Romanian economy has been hyper inflationist up to 31st December

2003;

fair value adjustments for the depreciation of financial assets value, according to IAS 39 – „Financial

instruments: identification and evaluation”;

adjustment of the global result status in order to records the dividend income at their gross value as

well as in order to recognise the earnings from the sale of financial assets available for sale;

adjustment of real estate investments for their evaluation at their fair value, according to IAS 40 „Real

estate investments”;

adjustments for the recognition of debs regarding deferred profit tax, according to IAS 12 „Profit Tax”;

Presentation requirements according to the International Financial Reporting Standard.

2

2.1.

SIF Moldova SA Board of Directors’ Report 2015

22

Balance sheet

(lei) 31-Dec-15 IFRS 31-Dec-15 RAS Difference

Assets

Cash and cash equivalents 613.851 613.851 -

Bank deposits 91.015.193 91.015.193 -

Financial assets at fair value through the Profit and Loss Account

112.215.485 111.083.315 1.132.169

Financial assets available for sale 1.227.266.927 866.876.258 360.390.669

Investment held up to maturity 9.593.199 9.593.199 -

Real estate investments 3.264.341 - 3.264.341

Intangible assets 293.905 293.905 -

Tangible assets 7.165.148 10.209.293 (3.044.145)

Other Assets 6.269.024 6.269.024 -

Total assets 1.457.697.072 1.095.954.038 361.743.034

Debts

Dividends to be paid (42.394.161) (42.394.161) -

Provisions for risks and expenses (3.306.214) (3.306.214) -

Debts with the deferred profit tax (57.339.461) (49.469.390) ( 7.870.071)

Other debts (18.706.256) (24.514.379) 5.808.123

Total debts (121.746.092) (119.684.145) ( 2.061.947)

Own capital

Share capital (539.720.149) (103.817.918) (435.902.231)

Reported result (322.711.115) (697.325.675) 374.614.560

Legal reserves (16.062.497) (16.944.687) 882.190

Reserves from the re-evaluation of tangible assets (7.677.304) (10.215.614) 2.538.310

Reserves from the re-evaluation of financial assets available for sale

(450.874.023) 74.346.494 (525.220.517)

Own redeemed shares 7.378.192 7.378.192 -

Other reserves (6.284.084) (229.690.685) 223.406.601

Total equity (1.335.950.980) (976.269.893) (359.681.087)

Total debts and equity (1.457.697.072) (1.095.954.038) (361.743.034)

The first set of IFRS financial reports of SIF Moldova drawn up according to IFRS requirements 1

Fist time use of IFRS was made available for shareholders, investors and regulation and supervision

authorities, starting with 29th June 2012 according to CNVM instruction no.6/15.12.2011, modified by the

order of CNVM measures no.14/21.06.2012. Transaction date has been January 1st, 2010 and complete

information has been presented for financial years concluded on 31st December 2010 and 31st December

2011.

IFRS does not recommend a standard presentation format for the financial report drawn up by the

company. IAS 1 Financial reports presentation foreseen the minimum elements that should be presented

in the report and the profit and loss account.

At the same time, the IFRS financial report preparation process requires the abidance by principles

referring to: activity continuity, accurate presentation, IFRS conformity, comparative information,

presentation consistency, compensation, significance and aggregation threshold, engagement accounting.

Accounting policies adopted by SIF Moldova in the process of preparing IFRS financial statements can be

consulted in detail under note 3 of financial statements published on the company’s site.

SIF Moldova SA Board of Directors’ Report 2015

23

Individual status of financial position

(lei) 31-Dec-13 31-Dec-14 31-Dec-15 2015/2014 (%)

Assets

Cash and cash equivalents 514.078 449.483 613.851 137

Bank deposits 40.236.874 83.267.920 91.015.193 109

Financial assets ar fair value through the Profit and Loss Account

16.380.227 109.252.840 112.215.485 103

Financial assets available for sale 1.160.962.399 1.092.294.843 1.227.266.927 112

Investment held up to maturity 11.778.602 10.879.244 9.593.199 88

Real estate investments 7.227.468 3.154.243 3.264.341 103

Intangible assets 889.060 799.030 293.905 37

Tangible assets 8.381.718 7.709.650 7.165.148 93

Other Assets 5.134.220 13.448.379 6.269.024 47

Total assets 1.251.504.646 1.321.255.631 1.457.697.072 110

Debts

Dividends to be paid 58.225.168 53.876.853 42.394.161 79

Provisions for risks and expenses 10.418.023 3.665.327 3.306.214 90

Debts with the deferred profit tax 69.166.968 47.786.904 57.339.461 120

Other debts 13.297.645 15.679.895 18.706.256 119

Total debts 151.107.804 121.008.980 121.746.092 101

Own capital

Share capital 487.811.190 487.811.190 539.720.149 111

Reported result 157.489.278 310.772.545 322.711.115 104

Legal reserves 10.381.792 10.381.792 16.062.497 155

Reserves from the re-evaluation of tangible assets

10.320.571 7.665.296 7.677.304 100

Reserves from the re-evaluation of financial assets available for sale

431.129.781 377.413.183 450.874.023 119

Own redeemed shares 3.264.230 6.202.645 6.284.084 101

Other reserves - (7.378.192) -

Total equity 1.100.396.842 1.200.246.651 1.335.950.980 111

Total debts and equity 1.251.504.646 1.321.255.631 1.457.697.072 110

Equities have increased in comparison to 01.01.2015 by 10%.

Financial assets available for sale have increased in comparison to 01.01.2015 by 12 %.

Financial assets at fair value through the profit or loss account have increased in comparison to

01.01.2015 by 3 %.

Profit and Loss account

(lei) 31-Dec-15 IFRS 31-Dec-15 RAS Difference

Revenue

revenue from dividends 27,712,560 24,117,658 3,594,902

Revenue from interest 1,563,181 1,563,181 -

Other operational revenue 795.363 36,074,310 (35.278.947)

Other revenue 240,513 240,513 -

Earnings from investments -

net earnings from assets sale 122,075,074 119,583,468 2,491,606

Net earnings from the re-evaluation of financial assets at fair value through the profit and loss account

(3,974,232) (4,319,452) 345,220

Expenses

Losses from assets depreciation 359.143 (13,520,500) 13.879.643

Expenses with provisions for risks and expenses 359.113 - 359.113

Other operational expenses (26.332.968) (26.984.135) 651.167

Other expenses (261.760) (261.760) -

Operational profit 122.535.988 136,493,285 (13.957.297)

Profit before taxation 122.535.988 136,493,285 (13.957.297)

Profit tax ( 22.195.661) (21,126,791) (1.068.870)

Net profit of financial year 100.340.327 115,366,494 (15.026.166)

2.2.

SIF Moldova SA Board of Directors’ Report 2015

24

Individual status of global result

(lei) 2013 2014 2015 2015/2014 (%)

Revenue

revenue from dividends 30.404.896 28.732.053 27,712,560 96

Revenue from interest 3.319.267 2.146.817 1,563,181 73

Other operational revenue 7.544.386 1.591.836 795.363 50

Other revenue 1.427.249 10.015.832 240,513 2

Earnings from investments

net earnings from assets sale 57.865.300 199.130.716 122,075,074 61

Net earnings from the reevaluation of financial assets at fair value through the profit and loss account

556.823 (15.815.758) (3,974,232) 25

Expenses

Losses from assets depreciation 5.979.071 10.922.040 359.143 3

Expenses with provisions for risks and expenses 14.777.932 7.260.779 359.113 5

Other operational expenses (23.537.543) (28.954.911) (26.332.968) 91

Other expenses (11.760) (944.681) (261,760) 28

Operational profit 98.325.621 214.084.722 122.535.988 57

Profit before taxation 98.325.621 214.084.722 122.535.988 57

Profit tax (19.350.979) (35.702.735) ( 22.195.661) 62

Net profit of financial year 78.974.642 178.381.987 100.340.327 56

Other global result elements

Increases/ (decreases) of the reserve from the re-evaluation of tangible assets

1.074.698 (2.655.275) 90.395 103

Transfer of the reserve from the re-evaluation to the reported result following the sale of tangible assets

(22.332) - (78.387)

Re-evaluation of financial assets available for sale at fair value, net of deferred tax.

159.952.485 (257.370.552) (37.172.763) 14

Reserve decrease following the sale of financial assets available for sale

(65.525.438) 203.653.954 110.633.603 54

Other global result elements 95.479.413 (56.371.873) 73.472.848 230

Total global result corresponding to the period 174.454.055 122.010.114 173.813.175 142

Net earnings from assets sale decreased by 39% in comparison to 2014.

Operational expenses decreased by 9% in comparison to 2014.

Expenses Management

TOTAL EXPENSES (A+B+C+D+E+F) 166.799.551

A. Financial expenses 115.805.164

1. Expenses with ceded financial investments 95.922.393

2. Expenses with transaction commissions 458.768

3. Expenses with currency rate differences 69.600

4. Expenses with banking services 28.559

5. Other financial expenses 19.325.844

B. Expenses with ceded assets 3.931

C. Expenses with depreciations, provisions, losses from receivables and various debtors 24.055.813

D. Expenses with commissions and fees imposed by applicable regulations 2.181.575

E. Expenses with external services not related to management 2.402.921

F. Expenses with taxes imposed by fiscal authorities (taxes and associated disbursements) 220.211

G. Overhead 12.415.177

1. Expenses with materials 248.755

2. Expenses with electricity and water 249.109

3. Expenses with the staff, of which: 9.683.379

wages and indemnities 8.048.391

expenses with insurance and social security 1.487.048

Expenses with professional training 147.940

4. Expenses for external services corresponding to the management action 2.233.935

H. Expenses compensated by revenue from provisions (not affecting the financial result of the period) 9.714.759

TOTAL ASSETS according to CNVM/ASF regulation no. 15/2004 1.545.061.332

2.3.

SIF Moldova SA Board of Directors’ Report 2015

25

The financial expenses account for 69.5% of total expenses. These include the expenses

directly connected to the investment/disinvestment activity in the reporting period and those

generated by the holdings in financial instruments of SIF Moldova.

o in the financial expenses the weight is held by the expenses with ceded financial investments

amounting to 95,922,393 RON, namely 82.8%;

o expenses with the exchange rate differences amount to 69,600 RON, namely 0.1% of financial

expenses. Exchange rate differences are mainly generated by are mainly generated by foreign

currency liquidities holdings and are partially compensated by the revenue from exchange rate

differences attained (amounting to 42,131 RON);

o commissions from transactions paid to financial investment services companies amount to 458,768

lei, namely 0.40% of financial expenses;

o other financial expenses include the negative price differences related to short-term financial

investments, amounting to 19,325,844 RON, namely 16.7% of financial expenses. These expenses

are compensated from the positive price difference corresponding to the short-term financial

investments, amounting to 15,021,661 lei;

o expenses with banking services and similar services amount to 28,559 RON and are presented by

commissions paid to banking companies for the operations carried out through bank accounts.

Expenses with depreciations, provisions, losses from receivables and various

receivables, represent 14.4% of total expenses.

Expenses with commissions and fees imposed by the applicable regulations, represent

1.30% of total expenses. These expenses are imposed through regulations which are applicable to

financial investment companies and are undertaken for the purpose of implementing corporate

obligations. The value of these expenses cannot be optimized through internal decisions and has a

direct influence on performance indicators.

Expenses with external services not related to management represent 1.4% of total

expenses and mainly comprise legal assistance and litigations costs, professional consulting,

advertising and expenses regarding the organization of GSM.

Expenses with taxes imposed by tax authorities (taxes and similar disbursements) represent 0.1%

of total expenses.

Management expenses represent 7.5% of total expenses and comprise expenses directly

connected to the carrying out of the company’s current activity.

o in the management expenses, the main weight is held by expenses with the staff (wages,

indemnities, social insurance and professional training) amounting to 9,683,379 lei, namely 78%

of the total management expenses;

o expenses with external services, related to the management amount to 2,233,935 lei namely 18%

of the management expenses for the period. These include expenses with: maintenance and

repairs, insurance premiums, protocol travel, postal expenses and subscriptions, rent, royalties

fees, concessions, companies’ monitoring, management of real estate, other expenses

o Expenses with materials, electricity and water amount to 497,864 RON - representing 4% of the

management expenses of the period. Expenses with energy and water are party recovered

through revenue realized as a consequence of re-invoicing them towards tenants, for rented

property;

Expenses compensated by revenue from provisions amount to 9,714,759 RON and

represent 5.80% of total expenses. These are represented by expenses that have affected the

result of the previous fiscal years. in the reporting period, with the registration of expenses, related

provisions were re-entered as revenue, so that the result of the current fiscal year is not affected.

In the reporting period, the average monthly percentage of

management expenses represents 0.07% of total assets, being lower

that the commissions paid to the management companies by investment

funds (0.10% - 0.40%) (Sources: public documents of the main investments funds on the domestic market,

pension fund management companies, professional organizations- AAF).

The average monthly

percentage of management

expenses represents 0.06%, of

total assets value

SIF Moldova SA Board of Directors’ Report 2015

26

Performance Indicators

2013 2014 2015

Current liquidity indicator= current assets/ current liabilities 0.87 2.97 3.44

Quick ratio = (current assets - inventories)/current liabilities 0.87 2.97 3.44

non-current assets turnover = revenues from current activity / non-current assets 0.22 0.34 0.23

Total assets turnover = revenues from current activity/ total assets 0.21 0.29 0.20

Trade receivables turnover =average receivable balance/turnover x no. days corresponding to the reporting period 5 9 11

Return on working capital = average receivables balance / turnover x no. of days in the reporting period *100 (%) 8.94 17.84 9.17

Result per share (lei/share) 0.152 0.344 0.129* Earnings per share recorded in 2015 was influenced by the doubling of the number of shares as a result of the share capital increase (allocation

of bonus shares for every share held)

Cash flows Explanations/period January - December 2014 January-December 2015

net cash resulted from exploitation activities 41.704.563 68.115.956

Net cash used in investment activities 3.515.245 (418.762)

Net cash used in financing activities (29.160.319) (42.294.792)

Net cash increase and cash equivalents 16.059.489 25.402.402

Cash and cash equivalents on January 1st 40.094.276 56.153.765

Cash and cash equivalents on December 31st 56.153.765 81.556.167

Reconciliation of cash and cash equivalents with the accounting balance

Explanation / period January- December 2014 January –December 2015

Cash and cash equivalents 449.483 613.851

Bank deposits 83.267.920 91.015.193

Less deposits with maturity over 3 months and blocked deposits (27.563.638) (10.072.876)

Cash and cash equivalence in the cash flow statements 56.153.765 81.556.167

Achievement Degree of Revenue and Expense Budget Budgeted for

2015 Realized 2015

RAS R/P (%)

Realized 2015 IFRS

reapproach differences

A. Total revenue 267.391.131 304,623,585 114 289.335.540 (15.288.045)

B. Financial revenue 235.022.422 258,358,229 110 264,789,957 6,431,728

- revenue from financial investments (dividends) 25.000.000 24,118,972 96 27,713,874 3,594,902

- revenue from receivable (bank interests + bonds)

1.000.000 1,563,181 156 1,563,181 -

- revenue from ceded financial investments 208.522.422 212,613,118 102 215.133.896 2.520.778

- revenue from exchange rate differences 0 42,131 - 42,131 -

- revenue from provisions 0 2,152,178 - 2.123.006 (29.172)

- other financial revenues 500.000 17,868,649 3574 18,213,869 345,220

C. Revenue from operations 32.368.709 46,265,356 143 24.545.583 (21.719.773)

- revenue from rents and associated activities 744.000 783,996 105 783,996 -

- revenue from provisions 9.824.709 10,190,153 104 10,190,153 -

- other revenue from current operations 21.800.000 35,291,207 162 13.571.434 (21.719.773)

D. Total expenses 135.513.895 168,130,300 124 166.799.552 (1.330.748)

E. Financial expenses 92.699.969 130,745,094 141 130,424,625 (320,469)

- expenses from ceded financial investments 91.549.969 95,922,393 105 95,922,393 -

- transaction commission expenses 800.000 458,768 57 458,768 -

- expenses related to exchange rate differences 0 69,600 - 69,600 -

- expenses related to banking services 50.000 28,559 57 28,559 -

- expenses related to provisions 14,939,930 - 14,619,461 (320,469)

- other financial expenses 300.000 19,325,844 6442 19,325,844 -

F. Expenses with current activities 42.813.926 37,385,206 87 36.374.926 (1.010.280)

G. Gross profit 131.877.236 136,493,285 104 122.535.988 (13.957.297)

H. Taxable profit 134.265.937 137,279,763 102 106.605.126 (30.674.636)

I. Profit tax 20.784.851 21,126,791 102 19.813.751 (1.313.040)

J. Deferred profit tax - - - 2.381.910 (2.381.910)

K. Net profit 111.092.385 115,366,494 104 100.340.327 (15.026.167)

The net profit achieved in accordance with RAS is 115.4 million RON (104% compared to the

provisions of 2015 Budget under RAS)

The net profit under IFRS is 100.3 million RON and includes the influences of the restatement

adjustments as a result of implementing IFRS accounting regulations as a basis of accounting.

2.5.

2.6.

2.4.

SIF Moldova SA Board of Directors’ Report 2015

27

Company’s tangible assets

3.1. Location and characteristics of the main tangible assets of the company

On 31.12.2015, SIF Moldova holds in its patrimony tangible assets to carry out its activity with a gross value

of 9,6 mil lei, namely a net value of 7,4 mil lei, comprising the following:

Fixed assets category Value (lei)

Gross Net

Lands 393.370 393.370

Constructions 6.507.003 5.923.694

Technical equipment of which: 2.436.849 927.439

technologic equipment 1.025.067 256.500

transportation means 1.411.782 670.939

Other fixed assets 126.352 40.800

TOTAL 9.463.574 7.285.303

The main tangible assets held by the company are buildings. The company holds a number of 5 buildings

with the following location: :

ASSET Address Description

Headquarters 94C Pictor Aman street building S + GF + 3 stories

Bucharest 6 Splaiul Unirii, sector 4 Block P + M

Bucharest Nerva Traian street, no. 12, bloc 1437, sector 3 block P

Iasi Grigore Ureche street, no. 3, bloc Gh. Sontu Block P

Vaslui 8 Miron Costin street building

3.2. Potential problems connected to the property right on the tangible assets

The land corresponding to Vaslui office is used by SIF Moldova, and the land exceeding the built area has

been returned to the former owner based on Law no. 10/2001 and is object of some legal actions in order

to set the access way. For Vaslui office, property of SIF Moldova, depreciation adjustments were

constituted, so that it is presented in financial statements with 0 value.

3

SIF Moldova SA Board of Directors’ Report 2015

28

SIF 2 share on BVB (Bucharest Stock Exchange)

Market on which SIF 2 shares are traded: Bucharest Stock Exchange,

Premium category, since de 01.11.1999.

The register of shares and shareholders is maintained according to

legal provisions by SC Depozitarul Central SA.

*Share capital increase – the operation was carried for all shareholders registered in the Company’s Shareholders Register on

09.06.2015, who were awarded a new share for each share held,free of charge (current report 06.07.2015)

Evolution of SIF2 share between 01.01.2015 – 31.12.2015

Yileds: SIF 2 share, VUAN SIF 2, BET-FI

rates of return as of 31.12.2015 (%) SIF2 share BET FI VUAN SIF2

1 month -2,24/2,45* -0,34 1,11

3 months -2,84/5,80* -0,85 2,96

6 months 0,51/4,10* 2,12 6,27

12 months -1,19 -0,02 11,62

* Note: including dividend rate of return in 2014.

Mention: The historical price series and NAV taken into consideration for the

calculation of the rate of return/risk indicators are adjusted with the corporate

events of the issuers.

Risk analisys (1Y, daily series): SIF 2 share / BET-FI

Indicator SIF 2 share BET-FI

Volatility (%)” 18,95 13,57

Beta** 1,15 1

* Volatility (12L) = annualized volatility

** Beta = price sensitivity to market movement

Share no: 1.038.179.176

Nominal value: 0,1 lei

share capital: 103.817.917,6 lei

Capitalization: 816.008.832 lei

(180 mil euro)

Price: 0,78 lei, EPS: 0,11 lei, PER: 7,1;

52 m: 0,62 lei; 52 M: 1,77 lei

(influence of the share capital increase

operation )

0 operatiunii de majorare a capitalului

social*)

4

Related information in the

SIF Moldova Corporate

Governance Code

Ch.16. Evaluation of

company performance and

performance of SIF2 share

(Sursa: Bloomberg Finance)

SIF Moldova SA Board of Directors’ Report 2015

29

Promoting and Protecting the Interests of SIF

Moldova

The activity of assistance, advice and legal representation of the rights and legitimate interests of SIF

Moldova SA stands out during 2015 through the following:

promition of new litigations with the object of annulling some illegal GMS decisions for the companies

in the portfolio, concerning aspects generated by the coming into force of Law no. 151/2014 regarding

the clarification of the legal status of shares traded on RASDAQ market or on the unlisted securities

market. Initiation of legal endeavours was made in close connection with the valuation and support of

SIF Moldova’s right to withdraw based on Law no. 151/2014. Most of the solutions pronounced by

Courts have been in favour of SIF Moldova.

Elaboration of documents and appearances necessary to protect the interests of SIF Moldova while

endorsing the proposed strategies by cooperating lawyers, in the pending cases in the Courts. It is

noticed the obtaining of favorable solutions in most cases where our Company is the Defendant, against

AAAS Bucharest, and other Petitioners.

intensification of assistance and legal advice on the various projects envisaged by the Company, finding

an increase in the number of files covering the advice and/or issuing legal licenses.

collection in 2015 of the amount of 2.846.987 lei corresponding to the legal transaction entered

by our Company with Textila Oltul S.A. and corresponding addenda.

the amount of 356.732 lei was collected in the enforcement proceedings concerning the

debtor Authority for the Recovery if the State Assets, sequence to the own validation in the

execution.

in other judicial and extra-judicial procedures with the object of recovering some debts from

various debtors, during the reporting period the collection of a total amount of 57.600 lei is

registered.

Status of litigations on 31.12.2015 can be summarized as follows:``

A. Litigations in which SIF Moldova is a Plaintiff

1. Litigations having as object the annulment of the unlawful decisions of

GMS from SIF Moldova's portfolio companies - 12 cases pending.

2. Litigations having as object monetary claims - 71 cases pending in

various procedural stages (of which a total of 65 disputes are

inconsistent with AAAS Bucharest).Most cases are in the enforcement

phase.

3. Litigations involving the insolvency procedure - 13 pending cases, most

companies being in bankruptcy.

4. Litigations with various objects - four pending cases (of which a file in

contradiction with AAAS Bucharest).

5. Criminal Litigation - 3 cases pending.

6. Definitively solved litigations - 34.

B. Litigations in which SIF Moldova is a Defendent; Total litigations = 110

cases of which: 62 cases pending in various procedural stages; 50

cases were finalized.

1. Litigations having as goal claims and various objects - 27 cases, of which

24 cases pending before Courts in different procedural stages, 3 cases

finalized.

2. Litigations having as goal complaints on execution - 38 pending cases

promoted by AAAS because of foreclosures conducted by SIF Moldova

sequence to litigations involving the Court costs and return of the

foreclosure vs. AAAS Bucharest. Up to 31.12.2015 a total of 47 cases

involving execution appeals. Most solutions delivered in the execution

appeals are in the benefit of our Company.

5

Total litigations - 137 cases

of which: 103 cases are

pending in various trial

stages and 34 cases are

completed.

The value of litigations in

court: 70.395.995 lei

(claims and insolvency

proceedings).

Note – details regarding each

category/case are presented

in Annex no. 3.

Total litigations = 112

cases of which: 62 cases

are pending in various

procedural stages; 50

cases were completed.

Value of litigations in

court: 3.830.566 lei in

claim cases; 19.879.361 lei

– execution appeals

against AAAS.

SIF Moldova SA Board of Directors’ Report 2015

30

Relationship with Shareholders and Capital Market

Institutions. Dividend Policy. Corporate Events

In the reporting period there were respected and ensured the

transparency requirements and obligations, information and

reporting, through press releases, mandatory reports publishing and

conducting an extensive correspondence with the shareholders. There were

made available to shareholders/investors additional data, some with a

periodic character (monthly newsletter), designed to provide up to date

information on the Company performance.

According to the "Corporate Governance Code" Regulations, the regular and

relevant continue information was simultaneously disseminated both in

Romanian and English. An important component of the relationship with the

shareholders is the direct communication activity: the written

correspondence (letters, e-mails); telephone communication

6.1. Dividend Policy

Shareholders structure on 31.12.2015

Residents non-residents Total

Shareholders %SC Shareholders % SC % SC

Individuals (I) 5.773.464 44,0 1.739 0,4 44,4

Legal persons (LP) 257 37.5 49 18,1 55,6

TOTAL 5.773.721 81,5 1.788 18,5 100,0

Evolution of Shareholders structure (% owned from the share capital)

Dividends payment:

Dividend payments on 31.12.2015 Dividend 2012 Dividend 2013 Dividend 2014

0,24 lei/act 0,066 lei/act 0,1012 lei/act

Total dividend payment (lei) 124.581.501 34.259.913 52.531.866

Total payments up to 31.12.2015 (lei) 100.717.681 27.215.319 41.046.119

% paid on 31.12.2015 80,84 79,44 78.14

Method of payment of dividends, observing the legal incident provisions (Article 146 paragraph (5 ^

1) of Law 297/2004 and Article 106 ^ 15 of ASF Regulation No.1 / 2006) - provides for the payment

by the central depository, as follows:

f a shareholder who has opened a securities account at a broker participant to the clearing-

settlement and register of the Central Depository, the dividend payment is made through the Central

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2012 2013 2014 2015

PF rezidenti

PF nerezidenti

PJ rezidenti

PJ nerezidenti

6

Information Subsidiary in the

Corporate Governance

Code

of SIF Moldova

Chapter.3. General Meeting of

Shareholders

Chapter.4.

Shareholders’ Rights

Note - details of each category of reports made during the reporting period are shown in Annex no. 4

SIF Moldova SA Board of Directors’ Report 2015

31

Depository and participants to the clearing-settlement and registry of the central

depository.

If a shareholder does not open a securities account at a broker participant to the clearing-

settlement and register of the Central Depository, the dividend payment is made by the central

depository through Banca Transilvania (paying agent appointed by SIF Moldova).

Payment methods – type of shareholders: dividend 2014 2014 - %

LP - total, of which: 29.671.899,14 56,48

1. LP – payments to participants 29.040.419.80 55,28

2. LP – transfer on request 631.479,34 1,20

I - total, of which: 9.195.138,28 17,50

3. PF - payments to participants 6.824.228,41 12,99

4. PF - transfer on request 576.383,55 1,10

5. PF - payment at the counter, paying agent 1.794.526,32 3,42

6. Tax corresponding to dividends unpaid on 31.12.2015 2.179.081,59 4.15

Total dividend 2014 paid on 31.12.2015 (1+2+3+4+5+6) 41.046.119,01 78,14

6.2. Corporate Events

6.2.1. Completion of the capital increase process - according to AGEA Resolution No.

3/01.04.2015. SIF Moldova informed the shareholders regarding the registration in the register of the

company's shareholders on 06.07. 2015 the share capital increase with a total of 519.089.588 shares with

a nominal value of 0.10 LEI / share, from the value LEI 51,908,958 80 (divided into 519.089.588 shares)

to LEI 103,817,917.60 lei (divided into 1,038,179,176 shares). The capital increase was made on

behalf of all shareholders registered in the register of shareholders of the company on

09.06.2015, which were allocated one free new share for each share held. (Current Report

06/07/2015)

6.2.2. Completion of SIF2 share buy-back program - between 06.08.2015 – 08.02.2016 we ran the

own shares redemption program, according to EGMS of SIF Moldova no. 4/01.04.2015*. (current report

of: 05.08.2015 – stage I, 18.11.2015 – stage II, 09.02.2016 – stage III). The cumulated results of the

operations ran through SSIF BT Securities, are the following:

No. of bought shares: 10.381.775 (0,9999% of capital)

Average price: 0,7939 lei

Total share value: 8.242.350 lei

*EGMS decision no.4/01.04.2015 (Official Gazette volume IV, no.2207/30.04.2015) regarding the buy-

back program:” (…) The purchase of a maximum no. of shares: a) 1% of capital, representing 10.381.791

shares; b) the minimum purchase price will be the BVB market price at the time the purchase is made,

and the maximum purchase price will be of 1,25 lei/share; c) maximum run-time of the buy-back

program is by 30.10.2016; d) program purpose: assignment of shares to company managers and

employees, according to the law.”

SIF Moldova SA Board of Directors’ Report 2015

32

Compliance

Internal Audit

Internal audit is an independent activity for objective insurance and

counselling destined to add value and improve the company’s operations. It

helps the company reach its objectives through a systematic and methodical

approach and improves the efficiency of the risk management, control and

governance processes.

Internal audit activity is carried out according to the procedures drawn up for activity guidance. The

procedures have been updated according to the International Standards for the Professional Practice of

Internal Audit, and the recommendations made by Deloitte Audit SRL during the evaluation of the internal

audit activity made at the end of 2014.

Internal audit activity is carried out based on the Audit Plan drawn up based on the evaluation of risk

documentation, in order to determine internal audit priorities. The Audit plan is in accordance with the

Company’s objectives.

The internal audit activities plan and necessary resources are approved by the Audit Committee and Board

of Directors. At the same time, significant amendments occurred later are also submitted for approval. For

each internal audit mission, a plan is drawn up to include the objectives of the mission, coverage, calendar

and resource assignment.

The objectives are set for each mission, in order to identify the risks associated to the reviewed activity.

The risks are evaluated and the objectives of the mission reflect the results of this evaluation. In order to

fulfil the mission objectives, work programs are drawn up and documented.

Internal audit is carried out as under the following forms :

compliance (regularity) audit – that has the objective of verifying the compliance with the laws,

regulations, policies and procedures applicable;

performance (operational) audit – that has the objective of verifying the quality and adequate nature

of systems and procedures, critical analysis of organizational structure, the evaluation of method

adequacy, resources and achievement of results in relation to the objectives set;

corporate governance system audit- has the objective of evaluating the way in which the management

position is exercised in order to reach company objectives.

financial audit – has the objective of verifying the accuracy of the accounting records and financial

reports.

The internal audit missions carried out in year 2015 targeted:

payment of dividends for SIF Moldova shareholders

internal control system of SIF Moldova

corporate governance

human resources and remuneration

meeting the compliance obligations, documentation, initiation of transactions, performance

monitoring and the transparency obligations for investments carried out for issuers that are closing

allowed investments limits between 01.01-05.08.2015

7

7.1.

SIF Moldova establishes and

maintains permanently and

effectively the internal audit

function, which runs

independently

SIF Moldova SA Board of Directors’ Report 2015

33

analysis of the investments closing legal and prudential limits and management method for operational

risks for investments carried out (period 06.08.2015 – 30.09.2015)

meeting the compliance obligations for investments made by SIF Moldova in branches, between 01.01-

30.09.2015

meeting the conformity obligations for investments made by SIF Moldova in branches between 01.10-

31.12.2015 and management of operational risks corresponding to financial instruments investments

of issuers that are closing legal and prudential limits.

update of document flow within SIF Moldova

verification of the recommendations made by the internal audit during the run of the audit missions

participation within the financial auditor selection process, in order to have it appointed and set the

duration of the financial audit contract by the ordinary general meeting on 01/02.04.2015

participation within the work committees/groups appointed by the Board of Directors or directors for

the implementation of some projects.

verification of some compliance aspects, at the request of the Board of directors, or directors

making analysis and drawing up opinions at the request of managers and directors.

Internal auditors inform the manager, the Audit Committee and Board of

Directors about the objectives and purpose of the engagement,

conclusions, recommendations and applicable action plans. Notifications

are made through internal audit reports, at the end of each mission.

Internal control

The internal control activity was carried out mainly through permanent

control of a pro-active nature, carried out through the continuous

supervision and monitoring of the activities that fall into internal control

area of competence, in order to prevent the occurrence of legal and internal

non-compliance cases, and increase the efficiency of the internal

control function.

The activities specific for year 2015 that have undergone the

verification/approval of internal control:

1. Organisation/ carrying out 4 General Meetings of Shareholders

OGMS -9/10.02.2015; EGMS 01/02.04.2015; OGMS 01/02.04.2015;

EGMS 13/14.01.2016

2. Carrying out the corporal activities approved by EGMS on

01.04.2015 and EGMS 13.01.2016:

Increase of capital; share buy-back; nominal value consolidation operation for SIF2 shares (operation still

running)

3. Obtaining ASF approvals/ decisions; notifications to ASF:

(a) approval of the manager elected by GSM of 10.02.2015- Mr. Albu Gheorghe (ASF approval no.

82/11.03.2015); approval by the manager appointed by BD- Mr. Iancu Catalin (ASF approval no.

81/11.03.2015)

(b) approval of the modification of the Articles of Incorporation of SIF Moldova, following Law no.

10/2015 – ASF approval no. 33/04.02.2015 and EGMS of 01.04.2015- ASF approval

no.217/17.06.2015

(c) approval of “SIF Moldova Internal regulations”- ASF approval no. 238/16.07.2015

(d) registration“ SIF Moldova Group”-Decision no.352/02.03.2015; certificate no.27/18.11.2015

7.2.

There have been no cases of

residual risk acceptance

considered unacceptable for

the company

The invernal control

department insures the

supervision of SIF Moldova

and its employees’ adbidance

by current applicable to the

capital market and intern

procedures.

SIF Moldova sets and maintais

the internval control position

permanenty and operatively,

position that is exercised

independently

SIF Moldova SA Board of Directors’ Report 2015

34

(e) ASF notification for the conclusion of Company Monitoring Agreement Asset Invest, branch SIF

Moldova Group; notification update of the list of individuals entered in SIF Moldova Group.

4. Conflict of interest policy

(a) the internal procedure concerning conflict of interest has been revised through the identification and

entry of new situations that might indicate a conflict of interest.

(b) the policy regarding conflict of interest has been the object of ADF correspondence regarding: political

exposure regarding conflict of interests within SIF Moldova Group, presentation of reasons that have

led to the review of the “Procedure”; submittal of “SIF Moldova Internal Regulations” for approval –

Chapter 6 „Internal rules and regulations concerning the avoidance of conflict of interest within SIF

including those regarding personal transactions”.

5. Compliance policy within SIF Moldova Group – update, consolidation, communication and

follow-up of the branches’ meeting their legal reporting and information obligations towards the

mother-company.

6. Remuneration policy – setting the remuneration benchmarks and policy according to

AFIA/DAFIA and ASF regulation 14/2015 (ASF regulated entity)

7. Approval of monthly net asset calculation and statistic reports;

8. Control regarding the investment activity of SIF Moldova

9. Institutional reports of SIF Moldova and its branches, carried out based on legal terms

: current reports regarding own activity and current reports of the mother-company on behalf of the

branches (shareholders agreements, investment); current reports regarding transactions according ot

art. 225 Law no. 297/2004; approval of quarterly /half-hear activity reports of the Board of Directors;

10. Update of some committees requested by express legal provisions and communication to

competent authorities: Commission for the “Supervision of the appliance of international sanction on

the capital market”; Committee for the prevention and fight against money laundering and the finance

of terrorism acts through capital market.

11. Notifications towards capital market institutions regarding matters of interest for SIF Moldova

or its field of activity : official interpretation request for OPP application, for ATS ; setting the

prudential limits mechanisms for the cases when these are passivly exceeded, notifications regarding

the failure to abide by legal provisions (ex. withdrawal procedure according to Law no. 151/2014, OPP;

social share increase, etc ); negotiation of dividend payment commissions and direct share transfer.

12. Participation to the drawing up of some requests/ recommendations/ observations for

legal projects in public consultation procedure

13. Internal compliance activity comprised : compliance approvals for DAI investment notes,

signing of contract with institutions and entities on the capital market, drawing up monthly risk reports

together with CMR ( in applying the conflict of interest procedure) ; setting and control of the

implementation for the legal and prudential limits monitoring mechanisms and reports concerning the

measures adopted in order to avid passive exceeding of holding limits; approval of work procedure

revises; notifications for employees, leaders and managers of SIF Moldova and its branches (when

necessary) regarding legislative novelties applicable to the company’s activity.

Conclusions regarding SIF Moldova’s activity in year 2015 from CCI perspective:

1. In the control activity carried out in 2015 there have been no legal non-compliance recorded.

2. Internal non-compliance such as the revise of some regulations have been submitted to the

departments in question and the fulfilment of set measures is monitored.

3. situations identified as possible conflicts of interest have been managed according to specific

procedure. ide

4. SIF Moldova’s investments in its branches and the investments bordering legal and prudential limits

have been made abiding by legal and internal regulation and with the proper management of risks.

5. Shareholders’ requests have been managed abiding by the procedure set through ASF regulation no.

.9/2015.

SIF Moldova SA Board of Directors’ Report 2015

35

***

The following have been subjected to the internal control missions of the conformity

departments (Internal control, Internal audit, Risk management):

1. Investments made in branches

Control reports covered the activity carried out between 2015

Conclusions:

there have been complied the legal regulations on making investments in subsidiaries

it was respected the investment strategy on the short and medium term, approved by the

shareholders for the adoption and implementation of investment decisions in subsidiaries

there have been compiled the provisions of the Memorandum of Association and Internal

Regulations of SIF Moldova regarding the adoption and implementation of decisions related

to investments in subsidiaries: justification, approval, implementation, reporting and

monitoring of the investments.

2. Monitoring the investment close to the legal and prudential limits and operational risk management

method.

Control reports targeted all issuers closing the holding limits (01.01-30.09.2015)

Conclusions :

the legal limits on the status reporting date have not been exceeded

for the passive exceeding of holding limits, a status that is not legally regulated, we have created

mechanisms and adopted internal management measures (example: TLV shareholding)

regarding SIFs holdings: 1. the legal limit has not been exceeded 2. holdings are managed from

the perspective of abiding by the 5% legal limit and the incidental provisions regarding

concentrated holding (art 2861 of Law 297/2004, CNVM instruction no.6/2012)

The reports and their conclusions (approved by the Board of

Directors) were communicated to ASF and to the financial

auditor Deloitte Audit.

In EGMS of January 13, 2016 there

were presented the reports prepared on

these issues during 2013-31.12.2015

(current report of January 12, 2016)

SIF Moldova SA Board of Directors’ Report 2015

36

Corporate Governance

Internal Regulations - harmonization with the directions of organizational

development and applicable law

An extensive process of aligning the internal rules and procedures in the Regulation of ASF No.9/2014 and

its application Guide was covered. The changes resulted mainly from the correlation of Internal

Regulations with the Articles of Association of SIF Moldova, approved by AGEA/01.04.2015 (ASF approval

137/28.04.2015) and with the changes in the composition and management of the company (ASF approval

No. 81/11.03 .2015). The process was completed by the receipt of ASF approval No. 238/16.07.2015

(current report of 17.07.2015).

***

Corporate Governance Code – compliance status with the provisions of the Corporal

Governance Code of BVB (current report 12.01.2016). SIF Moldova abides by 40 of the total 41

recommendations of BVB. Non-compliance / explanations:

The number of members in the Audit Committee is two not three;

The Board of Directors has taken on the number of members of the Consultative Committees for

2015/1016 motivated by the taken on investment priorities approved by GMS on 02.04.2015 and the

drafting of SIF Moldova’s regulation, from the perspective of Law no. 74/2015 (AFIA)

Statement of the compliance with the provisions of BVB Corporate Governance Code – Annex 5

***

We should mention that dualist management in the unitary management structure have been assimilated

through the control of Executive Management, including, through the activity of the Consultative

Committees and Board of directors on assigned fields:

Investment Policies Committee – Strategies : comprised of four non-executive members; President -

Ciorcila Horia (Current report 12.03.2015, 07.09.2015)

Appointment Committee: comprised of two non-executive members; President - Radu Octavian

(current report 12.03.2015)

Audit Committee- comprised of two non-executive members; President - Albu Gheorghe (BD decision

of 12.01.2016)

The Board of Directors has approved the maintaining of the current status of remuneration for the

members of the consultative committees set through BD decision no.1/07.09.2015 (current report

07.09.2015, 12.01.2016) for the period of financial year 2016, namely a monthly fund of 105.257 lei. The

assignment of the monthly fund will be made depending on the number of committees in which each

manager works.

The Management Committee operates on the level of the executive management; it is comprised of

President CEO – Costel Ceocea, Vice-president Deputy CEO – Claudiu Doros and President of the

Management Committee – Catalin Iancu, as well as the Investment Committee chaired by Liana Marin –

Investment Management Department Director.

The consultative committees of the Board of Directors (CPIS, Audit Committee, Appointment Committee)

according to the « Internal Regulations of SIF Moldova » (ASF approval no. 238/16.07.2015 ) and

“Corporate Governance Code“, have their own organisation and functioning regulations, using the

professional expertise of each member and insuring the division of management and

control tasks.

8

8.1.

SIF Moldova SA Board of Directors’ Report 2015

37

Human Resource Management. Reorganisation Process.

The efficiency process of the organizational structure, in agreement with SIF

Moldova objectives and principles of the Code of Corporate Governance is a

dynamic process conducted both at the administration and at the executive

level. In the current work, it is ensured a clear division of responsibilities for

surveillance and control against the duties of the executive management.

At the executive level a special attention is given to the human resources in order to ensure continuity of

the professional training programs in order to maintain the experience acquired over many years of

specialization. The staff training in various fields of activity (accounting, tax, risk management, IFRS, etc.)

aims to ensure the increase of the reaction capacity of the organization in the substantiation of investment

decisions in conditions of uncertainty. In the first nine months of 2015 the amount of about LEI 133 370

was assigned for the staff training in the areas outlined. Meanwhile, the staff is periodically assessed both

in terms of performance and the specific knowledge.

As a result of developing the optimization process of the organizational structure, the number of employees

registered the following evolution:

Reorganisation process - drafted for year 2016

Objective 1: implementation of the multiannual strategy / investment programs with impact

on portfolio restructure and insuring the premises for future performance increase

Principles:

1) separation of business lines from the conformity and support activity ;

2) maintaining the specialization/ competences of employees on activity groups- - business / control

/ support activities;

3) maintaining the advantages of prior restructuring – reduction of hierarchic levels and some

management positions;

4) Drawing up the Position Roll : setting the number of positions and employment based on

complexity and responsibility, abiding by the assigned expenses budges ( corresponding to the

remuneration policy);

5) Remunartion policy drawn up according to the regulation and principles of AFIA- to consider the

specifics of the responsibilities/complexity of the positions and to be different for the „business”

positions and the control and support

6) The assignment of some BD and CPIS competencies towards the CEO and BD Director, such as :

analysis of some investment opportunities, approval of representation mandated for GMS for

issuers in the portfolio, involvement in the selectio and appointing process for the representatives

in the Board of Directors of portfolio issuers, selection and appointment of executives in the issuers

for which SIF has majority holding, etc.

228

119

8145 45 37 33

anteriormandatului 2009

- 2013

la startulprogramului derestructurare

2011 2012 2013 2014 2015

Additiona information in

Corporate Governance

Code of

SIF Moldova

Cap.5. Board of Directors

8.2.

SIF Moldova SA Board of Directors’ Report 2015

38

Objective 2: compliance insurance for the decision, supervision and control of current

activity processes

Principles:

1) Redefining the entire architecture of decision foundamentation and implementation, with the

proper amendment of the Internal Regulations, system procedures, operational and work

procedures;

2) Individualization of specific, collective and individual objectives, on conformity activity groups ;

3) Explicite definition of the key positions, with supervision and control attributions, as well as

insuring their independence (under the direct supervision of BD and only administrative, under

the supervision of PDG) ; the control positions defined by the law : risk management, conformity

and internal audit ;

4) insuring the separation of the administrative function for the management of operational position

risks;

5) Insuring the independence, from the functional point of vire, of the asset evaluation position and

portfolio management, thus insuring the limitation of conflicts of interest;

Objective 3: insuring IFRS implementation in the drawing up of financial reports;

calcualtion of net assets; management of support infromation for continuous analysis

(inclusing the use of SII IT applications).

Principles:

1) Assigned competencies regarding the negotiation, signing of some contracts (utilities, bank

operations, expense account, etc)

2) Responsibilities specific for the compliance officer position, for the prevention and sanction of

money laundering

3) Responsibilities regarding the implementation of support data and operations needed for specific

SIF/FIA reporting in the SII.

Objective 4: protection of SIF Moldova’s patrimony interests through the documentation

and promotion of opinions with legal and compliance opinions: assignment of financial and

human resources that allow complementary documentation for the legal department.

Alignment to the professional training /specialization requirements imposed by FIA

applicable legislation - Required certifications resulting from the content of Regulation 10/2015:

1. Higher management (management) – “possible certification held, for example CFA, FRM, PRM

certifications” – according to point.5 Annex 2

2. Compliance officer – “to have taken/to take training courses and to have passed/ to pass the test for

current legislation organised by ASF certified professional training bodies within max 6 months from

the authorisation date– according to art.13 line (1) letter c)

3. The people employed on execution positions closely connected to the portfolio management or risk

management activities- “has a continuous experience of 12 months in specialized departments

(exclusively economic/ informatics and administrative/logistic/ human resources), in an A.F.I.A.,

S.A.I., S.S.I.F. type-institution, financial investment company (S.I.F.), F.I.A./O.P.C.V.M. depository

or in other similar entities under the supervision of competent authorities in the field of capital

market from other EU member states and have graduated a specialized course organized by

specialized authorities in the field of professional training, international or national, certifing the

acquirement of knowledge in the field of investment management or risk management that would

allow the fulfilment of the responsibilities of the position held”. (According to art. (5) letter a).

4. Person responsible for risk management– “proof of obtaining the certification foreseen under article

9 line (1)” – according to art.13 line (10) letter f). According to art.19 line (1), the validation process for

risk measurement models and models used for the evaluation of F.I.A assets, set on the level of

A.F.I.A., is insured by a person who meets the requirements foreseen by art. 8 line (5), the

specialization course being, in this case, one organized by one of the following institutions: CFA

SIF Moldova SA Board of Directors’ Report 2015

39

Institute, Professional Risk Managers’ International Association or Global Association of Risk

Professionals.

5. The individuals that insure the validation process for risk measurement models and models used for

assets evaluation, setup on the internal level– “is covered by an individual who meets the

requirements of art..8 line (5), the specialization course, in this case, being organized by one of the

following institutions: CFA Institute, Professional Risk Managers’ International Association or

Global Association of Risk Professionals” – according to art.19 line (1). Article 19 line (2) foresees:

“alternately, the specialization course, mentioned in line (1) can be organized by another institution

recognized on the national or international level, only in case ASF has been previously notified and the

equivalence of the courses organized by those organizations with one of the three organisations

mentioned in line (1).

Social responsibility

According to the Governance Code, SIF Moldova permanently carried out activities regarding the

company’s social responsibility, directly supporting, or through specialized foundations/ associations, the

under-privileged categories in the community it carries out its activity or supports scientific, cultural,

sporting, medical, educational, environmental actions, local or national interest events. SIF Moldova uses

the tax facilities that can be used for sponsoring activities, assigning the amount of 837.970 lei in year

2015.

8.3.

SIF Moldova SA Board of Directors’ Report 2015

40

Company Management 9.1. List of Managers (31.12.2015)

9.1.1. CV (first and last name, qualification, professional experience, position and seniority)

Nr First and last name

Age

Qualification Experienta

profesionala

Functia actuala in CA SIF Moldova

Vechime in functie

1 Ceocea Costel

59

Higher education

PhD in the field of industrial engineering, with thesis “Risk in Management Activity”

MBA – Business Management and Administration.

Economist – Specialization: Economy of industry, constructions and transport Capital market specialisations:

Investment consultant

Business management

SC assessor

SC liquidator

Purchase manager

Accounting expert

Project management

Internal control

Economist, CCI Bacau, FPP II Moldova

Head of SIF Moldova dept.

Manager in SIF Moldova Management Committee

Vice-president – Adj CEO SIF Moldova

Associate professor –Vasile Alecsandri Bacau University

President CEO

BD member 2001-

present

2 Doros Liviu

Claudiu 45

Higher Education

MBA – Business Management and Administration

Economist, specialization: Economy of services Capital Market specializations:

investment consultant

Specialist in technical analysis and trading strategies

Agent for financial investment services

project management

internal control

Economist

Broker

Management SC

Consulting

Vice-president- Adj

CEO

BD Member 2006-

present

3 Iancu

Catalin –Jianu- Dan

39

Graduation certificate from Stanford University, Graduate School of Business

MBA in management, Rotterdam School of Management

Bachelor degree studies - Bachelor of Economy – Academy of Economic Studies of Bucharest– Faculty of Economic Studies in foreign language

Training courses with Morgan Stanley, Standard Bank, Barclays Capital

Management “OTP Management Academy

Investment management, consultant, capital market

Member of the Financial Markets of Romaina Association

Manager of the

Management Committee

BD Member 2013 - present

4 Ciorcila Horia

52 Cluj Napoca Polytechnics Institute, Faculty of Electronics, Specialization Automation and Computers

BD president – Banca Transilvania

Member of CA BT Asset Management SAI

Independent manager

CPIS president

BD member 2013 - present

5 Hanga Radu

44

Bachelor degree Education - Cluj Napoca Technical University, Faculty of Electroncis

academic postgraduate studies - Cluj Napoca Technical University, Scoala de Studii Academice Postuniversitare

academic postgraduate studies - Babes Bolyai University, European Institute for Enterprise Management

MBA – National Institute for Economic Development – INDE

Actual manager of BT Asset Management SAI SA

Independent Manager

BD member 2013 - present

6 Radu

Octavian Claudiu

54 FernUniversitaet Hagen – Betriebswirtschaftlehre

Bachelor studies – Bachelor of Economics- Academy of Economic Studies Bucharest – Trade Faculty

Business consultant

Marketing

Management

Independent manager

president of CN

BD Member 2013 - present

7 Albu

Gheorghe 61

Higher Education

PhD in Economics – Academy of Economic Studies of Bucharest - specialization Trade- Services

Bachelor Studies

Bachelor of Economic Sciences – Academy of Economic Studies of Bucharest- specialization: Trade

Specializations,

Capital Market

Trade, Tourism

Insurance

Deputy(1992 – 2012)

State Secretary – Trade and Tourism

CNVM Commissar

ASF member

ASE Associate professor

Parlament councillor

Independent manager

President of the Audit

Committee

BD Member

feb. 2015 - present

9

SIF Moldova SA Board of Directors’ Report 2015

41

The managers have been approved by ASF through approval no. 20/29.04.2013 and ASF approval

no.82/11.03.2015. The General Meeting of Shareholders on 10.02.2015 has completed the Board of

Directors with Mr. ALBU Gheorghe, for the remainder of the 2013-2017 mandate, following the

withdrawal of Mr. Hrebenciuc Andrei

Consultative committees of the Board of Directors

Three consultative committees function on the level of the Board of Directors, on main activity directions

and the application of corporal governance principles: Investment Policies Committee – Strategies, Audit

Committee and Appointing Committee (details presented in chapter 8 and subchapter 8.1)

9.1.2. Any agreement, understanding or family relationship between the manager and another

person due to whom that manager was appointed – not the case.

9.1.3. Participation of the manager to the company’s capital (direct and indirect holdings on

31.12.2015)

Nr. crt. Family name Given name holding % CS

1 Ceocea Costel 360.836 0,03

2 Doros Liviu Claudiu 10.400.000 1,00

3 Hanga Radu 147.481 0,01

4 Radu Octavian Claudiu 0 0,00

5 Ciorcila Horia 2.000 0,00

6 Iancu Catalin Jianu Dan 379.410 0,04

7 Albu Gheorghe 0 0,00

9.1.4. List of individuals affiliated to the company. SIF Moldova Group (31.12.2015) – detailed

presentation under Chapter 1.4.

9.2. List of Executive Management members

Board of Directors of SIF Moldova, met in the meeting on 09/10.02.2015 adopted the following decisions:

1. “Approved the setup of the Management Committee, according to legal provisions (Law no. 31/1990,

art. 143^1) and statutory ones (Articles of Incorporation, art.7 (17)) and Committee members,

comprised of three members selected from among the manager: President CEO, Vice-president

Deputy CEO, Manager of the Management Committee.

2. Approved the election of Mr. Catalin Iancu, manager of SIF Moldova, for the Management

Committee Manager (…)”

Thus, the management of the company is insured by 3 managers, selected from among the members of the

Management Committee, who have been approved by ASF (approval no. 81/11.03.2015), namely:

1. Ceocea Costel – President CEO

2. Doros Liviu Claudiu – Vice-president Deputy CEO

3. Iancu Catalin Jianu Dan – Manager of the Management Committee

9.2.1. Term on which the person is part of executive management.

The CEO, adjunct CEO and Manager of the Management Committee have entered management contracts

for a period of 4 years for the CEO and adj. CEO, namely until de end of the 2013-2017 mandate for the

Manager of the Management Committee, as approved by Decision no. 16 AGAO/05.04.2013.

9.2.2. Any agreement, understanding or family relationship between that individual and

another individual due to whom the former has been employed as member of executive

management – not the case

9.2.3. Participation of that individual to the company’s capital – see the list presented under

point 9.1.3.

9.3. For all individuals presented under 9.1. and 9.2. mention of possible litigations

or administrative procedures in which they have been involved in the last 5 years concerning their

activity in the issuer, as well as those that regard the ability of that person to fulfil his obligations in the

issuer – not the case.

SIF Moldova SA Board of Directors’ Report 2015

42

Events occurred after the reporting date

Extraordinary General Meeting of Shareholders of SIF Moldova on 13th January 2016 at

first call; Adopted decisions

(current report of 13.01.2016)

Decision 1

Approves the election of the secretariat of the Extraordinary General Meeting comprised of the 3

individuals entered on the voting forms, selected from the shareholders of the company, according to art

129, line. (2) of Law no. 31/1990 regarding Companies.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

1 – EGMS secretariat

1.Nicolaescu Catalin 315,753,613 308,878,018 97.8225 0 0 1,100,000 0.3484 5,775,595 1.8291

2.Puscas Michaela 315,753,613 308,878,018 97.8225 0 0 1,100,000 0.3484 5,775,595 1.8291

3.Sofian Virginia 315,753,613 308,878,018 97.8225 0 0 1,100,000 0.3484 5,775,595 1.8291

Decision 2. Approves the consolidation of the nominal value of a SIF Moldova share 0,1 lei/share to 2,5

lei/share – increase of nominal value at the same time with the reduction of the total number of shares. In

order to abide by the requirements of art. 102 index 1 of Companies Law no. 31/1990, approves the

incorporation in the share capital of the amount of 2,4 lei from reserves in order to complete one share,

with the consequence of modifying the share capital from 103.817.917,60 lei, to 103.817.920,00 lei.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

2 315,753,613 315,747,583 99.9981 6,030 0.0019 0 0 0 0

Decision. 3. Approves the modification of art. 3, line. (1) and line (5) of „SIF Moldova Articles of

Incorporation” (ASF approval no. 217/17.06.2015), as follows:

“Art. 3. Capital . Shares

(1) The share capital is 103.817.920,00 lei and is divided into 41.527.168 shares.

(5) The nominal value of one share is 2,5 lei.”

Decision no no. votes For against Abstention Annulled

No. % No. % No. % No. %

3 315,753,613 315,747,583 99.9981% 6,030 0.0019 0 0 0 0

Decision. 4. Approves the Procedure for the consolidation of share nominal value, with the awarding of

the right of all shareholders to opt between completing the number of shares up to one consolidated share,

through cash contribution or restitution of share capital, according to the terms and conditions for

exercising this right, with the following characteristics:

a) In order to determine the contribution value, or the restitution of share capital of SIF Moldova, the

price of an unconsolidated share is equal to the nominal value (0,1 lei).

b) Cash contribution, representing the value to be deposited by a SIF Moldova shareholder exercising his

option is ascertained as follows: contribution value (lei) = 2,5 –N*0,1 (where N=no. of shares that

cannot be consolidated: not a multiple of 25 0,1 =former nominal value).

c) Contribution restitution, representing the amount to be returned to a SIF Moldova SA Shareholder

exercising his option, is ascertained as follows : Contribution restitution value (lei) = N*0,1 (where

N=no. of shares that cannot be consolidated: not multiple of 25; 0,1 =former nominal value).

d) The company shall bear the commissions for the restitution of share capital contribution.

e) The operation will run based on a Circular approved by the Financial Supervision Authority according

to CE regulation no. 809/2004. The period to exercise the Cash Contribution/Contribution restitution

10

SIF Moldova SA Board of Directors’ Report 2015

43

options is 30 days; the beginning of the period will be set in the Circular for the consolidation operation

approved by the Financial Supervision Authority.

f) Approves on 15.02.2016 the „first registration date” („ex-date” 12.02.2016) for the identification of

shareholders who have the right to exercise their Cash Contribution/Contribution Restitution options.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

4 315,753,613 315,747,583 99.9981% 6,030 0.0019 0 0 0 0

Decision. 5. Approves the mandate of the Board of Directors for the implementation of the nominal value

consolidation procedure.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

5 315,753,613 315,747,583 99.9981% 6,030 0.0019 0 0 0 0

Decision. 6. Approves the activity report of the Board of Directors regarding the status of the multiannual

strategy implementation and investments carried out, according to the 2014 - 2018Investment Policies

Statement, (EGMS decision no. 8/15.04.2014) and 2015 Activity Program (EGMS decision no.

7/02.04.2015).

Decision no

no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

6 315,753,613 300,654,859 95.2182 0 0 15,098,754 4.7818 0 0

Decision 7. Following the process of consulting the shareholders. mandates the Board of Directors to

draw of the 2016 Activity Program based on the benchmarks presented in the EGMS.

Decision no

no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

7 315,753,613 301,754,859 95.5666 0 0 13,998,754 4.4334 0 0

Decision. 8. Approves the power of attorney for the Board of Directors to fulfil EGMS decisions and

mandates the CEO and /or vice-president CEO to sign the decisions adopted by EGMS, as well as to carry

out all necessary formalities for the registration, publication, opposability and execution of the adopted

decisions.

Decision no

no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

8 315,753,613 304,465,886 96.4251 0 0 11,287,727 3.5749 0 0

Decision no. 9. Approves the date of 30.03.2016 as “second registration date” (“ex-date” 29.03.2016)

for the identification of shareholders affected by the decisions adopted by the Extraordinary General

Meeting including the shareholders who have exercised their Cash contribution/Contribution restitution

options, based on which the result of the consolidation operation is determined.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

9 315,753,613 315,753,613 100 0 0 0 0 0 0

Decision no 10. Approves the date of 15.04.2016 as “payment date” – date when the registration is made

in the accounts of financial instruments holders with the new characteristics and the payment of the money

representing Contribution Restitution, corresponding to the express or tacit restitution as per Circular.

Decision no no. votes For against Abstention Annulled

Nr. % Nr. % Nr. % Nr. %

10 315,753,613 315,747,583 99.9981 0 0 6,030 0.0019 0 0

SIF Moldova SA Board of Directors’ Report 2015

44

Implementation of the consolidation of SIF2 share nominal value approved through EGMS

decision of 13.01.2016

Status of litigations regarding the decisions of the Extraordinary General Meeting of Shareholders on

13.01.2016 (see also current reports of : 18.01, 19.01, 03.02, 12.02, 17.02, 24.02, 26.02, 02.03, 14.03)

The application to intervene concerning SIF Moldova request of submission and mention at Bacau Trade

Register and publication in the Official Gazette, Part IV, of the EGMS resolutions of January 13, 2016 (file

no. 191/110/2016): it was granted term for the date of March 30, 2016.

Suspension of the effects of EGMS resolutions of January 13, 2016 (file no. 722/110/2016 - "presidential

ordinance"): it has been noted the waiver to the judgment (current report of March 14, 2016).

As an effect of the status presented under A1, we ascertain the impossibility to complete the legally set

documentation to submit for ASF approval the a “Circular drawn up in order to consolidate the

nominal value of shares issued by SIF Moldova SA”, with the proof of publication of EGMS

decisions of 13.01.2016 in Romania’s Official Gazette (art.17 line. 1^1 CNVM regulation no.1/2006), within

a deadline that would allow the abidance by the second registration date set by EGMS on 13.01.2016.

Consequently, up to the present, the “Circular” has not received ASF approval, thus we ascertain that, the

current calendar cannot be respected and the SIF2 share value consolidation operation

cannot be concluded abiding by the deadlines approved by shareholders through EGMS

decisions no.4 letter e and no. 9 (period for the exercise of Cash Contribution/Contribution

Restitution option of 30 days, the final date being the second registration date, the date of 30.03.2016).

Given the binding nature of the EGMS resolutions of January 13, 2016 for carrying out the

mandate given by the shareholders, the management of SIF Moldova proposes the adoption

of resolutions in the EGMS of April 25 / 26, 2016 for the completion of the consolidation of

the nominal value of the share SIF2 ( item 3 on the agenda of the EGMS).

***

Annexes

1. Annex 1 Net Assets status on 31.12.2015

Annex 1.1. Assets and Debts status of SIF Moldova (Reg. ASF no. 15/2004- A16)

Annex 1.2. Status of assets and detailed status of investment of SIF Moldova (Reg. ASF no.

15/2004- A17)

2. Annex 2 Financial statements as of December 31, 2015

3. Annex 3 Litigations status as of 31.12.2015

4. Annex 4 BVB, ASF Reporting - 2015

5. Annex 5 Statement of conformity with the provisions of BVB Corporate Governance Code

***

Approved in the meeting of the Board of Directors of 18.03.2016

Draft resolution:

Approves the Board Report for 2015, including the presentation of implementation

status of the multi-annual strategy 2014 – 2018 and investments made.

President & CEO

Costel CEOCEA, PhD

Michaela Puscas

Internal Control