SIF Oltenia S.A.

Quarterly Report • Nov 14, 2018

SIMPLIFIED INTERIM SEPARATE

FINANCIAL STATEMENTS

as of 30th September 2018

prepared in accordance with Norm no. 39/2015 for the approval of the Accounting Regulations in accordance with the International Financial Reporting Standards applicable to the entities authorized, regulated and supervised by the Financial Supervision Authority of the Financial Instruments and Investments Sector

UNAUDITED

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. SIMPLIFIED INTERIM SEPARATE FINANCIAL STATEMENTS as of 30th September 2018

Table of contents

	pag.
Simplified interim separate financial statement of profit or loss and of other items of the comprehensive income	1
Simplified interim separate financial statement of the financial position	2
Simplified interim separate financial statement of the changes in stockholders' equity	3 - 4
Simplified interim separate financial statement of the cash flows	5
Explanatory notes to simplified interim separate financial statements	6 - 24

Simplified interim separate financial statement of profit or loss and of other items of the comprehensive income as of 30th September 2018

In RON	Note	30 September 2018	30 September 2017
Income
Income from dividends	5	87,269,123	55,704,319
Income from interest		375,982	53,641
Other operating income	6	15,081,339	1,381,632
Net gain from exchange rate differences		13,695	(387,808)
Net gain of available-for-sale financial assets at fair value through other comprehensive income	7		3,363,434
Net gain on financial assets at fair value through profit or loss		206,272
Costs
Fees and charges for administration and supervision	8	(1,593,315)	(1,558,222)
Income from the reversal of provisions for risks and charges
Other operating costs	9	(6,072,559)	(5,521,260)
Profit before taxing		95,280,537	53,035,736
Profit tax	10	(7,027,681)	(2,710,748)
Net profit for the financial year		88,252,856	50,324,988
Gain from transactions recognized in balance carried forward according to IFRS 9		6,501,147
Other items of the comprehensive income
Changes in the revaluation reserve of property, plant and equipment, net of deferred tax
Net change in fair value of financial assets measured by other items of comprehensive income		218,649,044	79,695,484
Fair value reserve of financial assets measured by other comprehensive incomee, net of tax, transferred to the balance carried forward		(5,460,963)	(2,989,863)
Total other elements of the comprehensive income		213,188,081	76,705,621
Total comprehensive income for the period		307,942,084	127,030,609
The result per share
Basic	22	0.1521	0.0867

Simplified interim separate financial statements have been approved by the Board of Directors on 12 November 2018 and have been signed in its behalf, by:

Associate Professor PhD. Ec. Ciurezu Tudor	Associate Professor PhD. Bușu Cristian
Chairman/General Manager	Vicepresident/Deputy General Manager

Ec. Sichigea Elena Financial Manager

Simplified interim separate financial statement of the financial position as of 30 September 2018

In RON	Note	30 September 2018	31 December 2017
Assets
Cash and cash equivalents	11	4,752,325	3,020,367
Deposits placed with banks	12	48,080,464	792,848
Financial assets measured at fair value through other items of comprehensive income	13	2,079,032,958	1,798,097,017
Financial assets measured at fair value through profit or loss	13	2,995,766
Credits and receivables	14	1,154,620	2,755,702
Fixed tangible assets		10,552,978	10,871,348
Real estate investments		539,637	539,637
Other assets	15	155,214	367,939
Total assets		2,147,263,962	1,816,444,858
Liabilities
Dividends to pay	16	72,863,547	48,087,127
Fees and charges	17	2,410,445	4,997,330
Deferred tax liabilities	18	191,072,647	150,531,920
Other liabilities	19	7,096,833	6,349,864
Total liabilities		273,443,472	209,966,241
Stockholders' equity
Share capital	20	58,016,571	58,016,571
Reserves constituted following the application of Law 133/1996	20	144,636,073	144,636,073
Legal reserves	20	11,603,314	11,603,314
Reserves from valuation of financial assets measured at fair value through other items of comprehensive income	20	971,725,300	781,551,351
Other reserves	21	555,210,270	521,517,906
Reserves from revaluation of tangible assets		6,959,740	7,175,074
Balance carried forward except for the result carried forward arising from the adoption of IAS 29 for the
first time		37,416,366	7,674,364
Current profit		88,252,856	74,303,964
Total stockholders' equity		1,873,820,490	1,606,478,617
Total liabilities and stockholders' equity		2,147,263,962	1,816,444,858

Simplified interim separate financial statements have been approved by the Board of Directors on 12 November 2018 and have been signed in its behalf, by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD. Bușu Cristian Chairman/General Manager Vicepresident/Deputy General Manager

ec. Sichigea Elena Financial Manager

Simplified interim separate financial statements of the changes in stockholders' equity

as of 30th September 2018

In RON	Share capital	Reserves from the revaluation of fixed tangible assets	Legal reserves	Other reserves	Differences in the change in fair value of financial assets measured by other items of comprehensive income	Other stockholders' equity items	Accumulated Profit	TOTAL
BALANCE ON JANUARY 1st 2018	58,016,571	7,175,074	11,603,314	666,153,979	784,613,031	(3,061,680)	81,978,328	1,606,478,617
COMPREHENSIVE INCOME	-	-	-	-	-	-	-	-
Profit for the financial year	-	-	-	-	-	-	88,252,856	88,252,856
Other items of the comprehensive income	-	-	-	-	-	-	-	-
1. Change in the reserve from the revaluation of fixed tangible assets, net of deferred tax	-	(215,334)			-	-	215,334	-
2. Net change in the fair value reserve of financial assets measured at fair value through other comprehensive income	-	-	-	-	218,649,044	-	-	218,649,044
3. Gain / loss on financial assets measured at fair value through other items of comprehensive income, ceded	-	-	-	-	(5,460,963)	-	6,501,147	1,040,184
4. Transfer of the balance carried forward as a result of the transition to IFRS 9	-	-	-	-	(23,014,132)	-	23,014,132	0
TOTAL COMPREHENSIVE INCOME for the period	0	(215,334)	0	0	190,173,949	0	117,983,469	307,942,084
Deferred tax related to the result carried forward revaluation surplus unachieved taxed	-	-	-	-	-	-	11,389	11,389
Other reserves - own sources of funding	-	-	-	33,692,364	-	-	(33,692,364)	-
Other Reserves - Redemption of Shares	-	-	-	-	-	-	-	-
Transactions with shareholders directly recognized in equity	-	-	-	-	-	-	-	-
1. Dividends prescribed by law – transfer to the profit or loss account from other reserves	-	-	-	-	-	-	-	-
2. Dividends to pay for year 2017	-	-	-	-	-	-	(40,611,600)	(40,611,600)
TOTAL TRANSACTIONS WITH SHAREHOLDERS DIRECTLY RECOGNIZED IN EQUITY		0 0	0	0	0	0	(40,611,600)	(40,611,600)
BALANCE ON 30 SEPTEMBER 2018	58,016,571	6,959,740	11,603,314	699,846,343	974,786,980	(3,061,680)	125,669,222	1,873,820,490

Simplified interim separate financial statements have been approved by the Board of Directors on 12 November 2018 and have been signed in its behalf, by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD. Bușu Cristian

Chairman/General Manager Vicepresident/Deputy General Manager

ec. Sichigea Elena Financial Manager

Notes on pages 6 to 24 are an integral part of the simplified interim separate financial statements.

Simplified interim separate financial statements of the changes in stockholders' equity

as of 30 September 2018

In RON	Inflated social capital	Reserves from the revaluation of fixed tangible assets	Legal reserves	Other reserves	Reserves from the revaluation of the available-for-sale financial assets	Other stockholders' equity items	Balance carried forward as a result of applying IAS 29 to the social capital and reserves	Accumulated Profit	TOTAL
BALANCE ON	689,869,095	7,755,548	11,603,314	2,423,876,878	629,489,094	(3,061,680)	(2,438,631,885)	108,294,690	1,429,195,054
JANUARY 1st 2017
COMPREHENSIVE INCOME	-	-	-	-	-	-	-	-	-
Profit for the financial year	-	-	-	-	-	-	-	50,324,988	50,324,988
Other items of the comprehensive income	-	-	-	-	-	-	-	-	0
1. Change in the reserve from the revaluation of fixed tangible assets, net of deferred tax	-	(508,696)	-	-	-	-	-	508,696	0
2. Net change in the reserve from the change in the fair value of the available-for-sale financial assets	-	-	-	-	79,695,484	-	-	-	79,695,484
3. The reserve related to the difference from the change in the fair value of the available-for-sale financial assets transferred in profit or loss, net of tax	-	-	-	-	(2,989,863)	-	-	-	(2,989,863)
TOTAL COMPREHENSIVE INCOME for the period	0	(508,696)	0	0	76,705,621	0	0	50,833,684	127,030,609
Deferred tax related to the result carried forward revaluation surplus unachieved taxed	-	-	-	-	-	-	-	66,782	66,782
Other reserves – own sources of funding	-	-	-	49,056,462	-	-	-	(49,056,462)	0
Result coverage carried over from hyperinflation update	(631,852,524)	-	-	(1,806,779,361)	-	-	2,438,631,885	-	0
Transactions with shareholders directly recognized in equity	-	-	-	-	-	-	-	-	-
1. Dividends prescribed by law – transfer to the profit or loss account from other reserves	-	-	-	-	-	-	-	-	-
2. Dividends to pay for year 2016	-	-	-	-	-	-	-	(52,214,914)	(52,214,914)
TOTAL TRANSACTIONS WITH SHAREHOLDERS DIRECTLY RECOGNIZED IN EQUITY	0	0	0	0	0		0 0	(52,214,914)	(52,214,914)
BALANCE ON
30 SEPTEMBER 2017	58,016,571	7,246,852	11,603,314	666,153,979	706,194,715	(3,061,680)	0	57,923,780	1,504,077,531

Simplified interim separate financial statements have been approved by the Board of Directors on 12 November 2018 and have been signed in its behalf, by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD. Bușu Cristian

Chairman/General Manager Vicepresident/Deputy General Manager

ec. Sichigea Elena Financial Manager

Notes on pages 6 to 24 are an integral part of the simplified interim separate financial statements.

- lei –

Simplified interim separate financial statements of the cash flows prepared as of 30 September 2018

In RON

Item name	Reporting period
	30 September 2018	30 September 2017
A	1	2
Cash flows from operating activities
Returns from customers, other returns	851,066	503,789
Returns from sales of financial investments (shareholdings)	14,844,685	14,079,338
Payments for the purchase of shares	(37,086,184)	(35,016,626)
Payments to suppliers and employees, other payments	(5,563,121)	(5,140,117)
Payments to the state budget, social security budget and local budget	(1,856,016)	(2,065,007)
Interest received	304,825	42,036
Dividends received	83,081,098	53,315,249
Interest paid	-	-
Profit tax paid	(4,919,364)	(4,594,343)
Returns from earthquake insurance	-	-
Net cash from operating activities	49,656,989	21,124,319
Cash flows from investment activities:
Payments for the acquisition of fixed tangible assets	(10,980)	(266,097)
Returns from the sale of fixed tangible assets	-	586,888
Net cash from investment activities	(10,980)	320,791
Cash flows from financing activities:
Returns from the issue of shares	-	-
Returns from long-term loans	-	-
Payment of liabilities related to the financial leasing	-	-
Dividends paid	(227,879)	(811,279)
Amounts advanced to the Central Depositary for dividend payments	(43,244)	-
Dividend tax paid	(426,472)	(607,170)
Net cash from financing activities	(697,595)	(1,418,449)
Net increase in treasury and cash equivalents	48,948,414	20,026,661
Cash and cash equivalents at the beginning of the reporting period	3,813,119	27,973,366
Cash and cash equivalents at the end of the reporting period	52,761,532	48,000,027

Simplified interim separate financial statements have been approved by the Board of Directors on 12 November 2018 and have been signed in its behalf, by:

Associate Professor PhD. Ec. Ciurezu Tudor	Associate Professor PhD. Bușu Cristian
Chairman/General Manager	Vicepresident/Deputy General Manager

ec. Sichigea Elena Financial Manager

(all the amounts are expressed in RON, unless otherwise stated)

1. Reporting Entity

Societatea de Investiții Financiare Oltenia S.A. ("The Company") was established on November 1, 1996 in Craiova, Romania, is the successor of the Private Property Funds V Oltenia, reorganized and transformed in accordance with the provisions of Law No. 133/1996, law for transformation of Private Property Funds into companies for financial investments.

The company is classified as Alternative Investment Fund Manager (AIFM) authorized by the Financial Supervisory Authority with the number 45/15 February 2018 and operates in compliance with the provisions of Law no. 74/2015 regarding alternative investment fund managers, Law no. 24/2017 on Issuers of Financial Instruments and Market Operations, Law no. 297/2004 regarding the capital market, with subsequent amendments and completions, and Law no. 31/1990 on commercial companies.

The company self-administers and is headquartered in Craiova, Tufănele street no. 1, post code 200767, Dolj County.

The company is registered with the Trade Register Office attached to the Dolj Tribunal under number J16 / 1210/1993 and Unique Registration Code 4175676, fiscal attribute RO.

The shares of the Company are listed on the Bucharest Stock Exchange, the Premium category, with market symbol SIF 5, starting on 1 November 1999.

The record of the Company's shares and shareholders is held under the law by the Depozitarul Central S.A. Bucharest.

The deposit activity provided by the legislation and the regulations of CNVM / ASF is ensured by Raiffeisen Bank S.A. starting January 22, 2014, up to this that date the deposit activity was held by ING Bank NV Amsterdam - Bucharest Branch.

According to the articles of incorporation, the Company has the following scope of activity:

a) the administration and management of the shares in the commercial companies for which own shares were issued, corresponding to the Certificates of Ownership and Nominal Privatization Coupes subscribed by the citizens according to the provisions of art. 4 par. 6 of the Law no. 55/1995;

b) managing and managing its own securities portfolio and investing in securities in accordance with the regulations in force;

c) risk management;

d) other ancillary activities and adjacent to the collective management activity.

The subscribed and paid-up share capital is 58,016,571 lei, divided into 580,165,714 shares with a nominal value of 0.1 lei/share.

The main characteristics of the shares issued by the company are: ordinary, indivisible, nominative, of equal value, issued in dematerialized form and grant equal rights to their holders.

Simplified interim separate financial statements prepared as of 30 September 2018, are not audited.

2. Bases of preparation

a) Declaration of Conformity

According to the Norm no. 39/2015 issued by the Financial Supervisory Authority of the Financial Instruments and Investment Sector, entities authorized, regulated and supervised by the ASF of the Financial Instruments and Investments Sector, shall apply the international financial reporting standards adopted by the Union from the financial statements for the financial year 2015 ("IFRS") as official accounting regulations.

(all the amounts are expressed in RON, unless otherwise stated)

2. Basis of preparation (continuation)

a) Declaration of Conformity (continuation)

December 31, 2015 is the date of transition to IFRS as accounting basis, the date on which by restatement were made and recorded in accounting the operations determined by the transition from NSC Regulation no. 4/2011 to IFRS Accounting Regulations. Between 2011 and 2014, the Company prepared financial statements based on IFRS (restatement of statutory financial statements) that were audited and published.

Simplified interim separated financial statements prepared on 30 September 2018, were prepared in accordance with the requirements of IAS 34 "Interim Financial Statements" and should be read in conjunction with the separate financial statements for the year 2017 prepared in accordance with Standard no. 39/2015 for the approval of accounting regulations in accordance with International Financial Reporting Standards applicable to entities authorized, regulated and supervised by the Financial Supervision Authority of the Financial Instruments and Investments Sector.

In accordance with the provisions of Regulation no. No 1606/2002 of the European Parliament and of the Council of the European Union of 19 July 2002, Law no. 24/2017 - Issuers of Financial Instruments and Market Operations, the Company has the obligation to prepare and submit to ASF consolidated annual financial statements in accordance with IFRS no later than 4 months after the end of the financial year and ensure their availability for at least 10 years.

The consolidated financial statements of the S.I.F. Oltenia S.A. on 31 December 2017 were drafted, approved and made public on 25 April 2018. They can be consulted electronically on the company's website: www.sifolt.ro, section "Investors info / Reports / Periodical reports".

Also based on the same regulations, the Company prepares consolidated half-yearly accounting in accordance with IFRSs and ensures its availability for at least 10 years.

The consolidated half-yearly accounting report shall be prepared and submitted to ASF no later than 3 months after the end of the semester. It was drafted, approved by the Board of Directors and published on 28 September 2018 and can be consulted electronically on the company's website: www www.sifolt.ro, section "Investors info / Reports / Periodical reports".

The Company's accounting records are reflected in RON.

b) Presentation of financial statements

The presentation adopted by the Company is based on the liquidity within the simplified interim separated statement of the financial position, and the disclosure of the income and costs has been made in relation to their nature within the simplified interim separated statement of profit or loss and other items of the comprehensive income. The Company considers that such disclosures provide information that is more credible and relevant than what would have been disclosed under other methods permitted by IAS 1 "Presentation of Financial Statements".

c) Functional and Presentation Currency

The Company's management believes that the functional currency, as defined by IAS 21 "The Effects of Foreign Exchange Rates Variation", is the Romanian currency (RON or lei). The simplified interim separated financial statements are presented in RON, rounded to the nearest RON, the currency that the Company's management chose to be the presentation currency.

(all the amounts are expressed in RON, unless otherwise stated)

2. Basis of preparation (continuation)

d) Basis of valuation

The simplified interim separated financial statements are prepared based on the fair value convention for derived financial instruments, financial assets and liabilities at fair value through the profit or loss account, and the available-for-sale financial assets, except for those for which fair value cannot be determined in a credible way.

Other financial assets and liabilities as well as non-financial assets and liabilities are presented at amortized cost, re-measured or historical cost.

e) Using Estimates and Judgments

The preparation of the simplified interim separated financial statements in accordance with IFRS implies the management's use of estimates, judgments and assumptions that affect the application of the accounting policies as well as the reported amount of assets, liabilities, income and expenses.

The estimates and assumptions associated with these judgments are based on historical experience as well as on other factors considered to be reasonable in the context of these estimates. The result of such estimates forms the basis of the judgments relating to the carrying amounts of assets and liabilities that cannot be obtained from other sources of information. The results obtained may differ from the estimates amounts.

The Company periodically reviews the estimates and assumptions underlying the accounting records. The revisions of the accounting estimates are recognized in the period in which the estimate is reviewed, if the review affects only that period, or in the period in which the estimate is reviewed and the future periods, if the review affects both the current period and future periods.

f) Changes in Accounting Policies

The accounting policies adopted are consistent with those used, modified in accordance with IFRS 9 "Financial Instruments" applicable from January 1, 2018.

3. Significant Accounting Policies

The accounting policies applied to these simplified interim separated financial statements are consistent with those from the financial statements prepared as of 31 decembrie 2017, amended by the provisions of IFRS 9 "Financial Instruments", effective from January 1, 2018.

According to the Norm no. 39/2015 for the approval of the Accounting Regulations in accordance with International Financial Reporting Standards applicable to entities authorized, regulated and supervised by the Financial Supervision Authority of the Financial Instruments and Investment Sector, starting with the annual financial statements for the financial year 2015, the Company applies the International Reporting Standards Financials adopted by the European Union as official accounting regulations.

During 2017, the Company prepared interim financial reports in accordance with the requirements of IAS 34 "Interim Financial Statements".

IFRS 9 Financial Instruments and Liabilities

The date of January 1, 2018 is the date of transition to the application of IFRS 9 "Financial Instruments". It replaces the existing IAS 39 "Financial Instruments: Recognition and Measurement" provisions.

The main changes in accounting policies resulting from the application of IFRS 9 "Financial Instruments" are:

(all the amounts are expressed in RON, unless otherwise stated)

3. Significant Accounting Policies (continuation)

• Financial assets are classified into three measurement categories: those that will subsequently be measured at amortized cost, those that are subsequently measured at fair value through other comprehensive income (FIFs) and those that will be subsequently measured at fair value through profit or loss (FVTPL);

• Classification of debt instruments is determined by the entity's business model for managing financial assets and contractual cash flows that represent only principal and interest payments (SPPI). If a debt instrument is held to be cashed, it can be measured at the amortized cost if it also meets the SPPI requirement. Debt instruments that meet the requirement of SPPI, held in a portfolio by an entity, both to collect asset cash flows and to sell assets, can be classified as FIVI. Financial assets that do not contain cash flows that are SPPIs should be measured at FVTPL (eg: derivatives). Embedded derivatives are no longer separated from financial assets but will be included in the assessment of the SPPI status;

• Investments in equity instruments are measured at fair value. In initial recognition, management may make an irrevocable choice to present fair value changes in other comprehensive income, provided that the instrument is not held for trading. If the equity instrument is held for trading, changes in fair value are presented in profit or loss;

• Elimination of impairment testing of equity instruments (shares);

• Recognized in the balance carried forward of earnings on sale of shares, measured at fair value through other elements of the comprehensive income;

• Most of the requirements in IAS 39 for Classification and Measurement of Financial Liabilities have been carried forward unchanged in IFRS 9. The key change is that an entity should disclose the effects of changes in the credit risk of financial liabilities designated at fair value through profit or loss other elements of the comprehensive income;

• Dividends are recognized in profit or loss only when:

• the entity's entitlement to receive the dividend payment is settled;

• it is likely that the economic benefits associated with the dividend are generated for the entity;
• the amount of the dividend can be measured reliably.

As of 31 December 2017, most of the Company's financial assets consisted of equity instruments in the form of shareholdings in the various issuers that constituted the Company's (equity) portfolio. Under IAS 39, these assets were classified as available-for-sale financial assets, whose valuation differences at the end of the period were accounted for by other comprehensive income.

On 31 December 2017, the Company held the following types of financial instruments that are subject to IFRS 9: equity instruments (equity), debt instruments (fund units), other financial assets and liabilities.

Following the analysis for compliance with IFRS 9, the Company has decided for the subsequent valuation of the following classification of financial instruments:

• equity instruments (shares) are measured at fair value through other comprehensive income (FIV);

• debt instruments (fund units) are measured at fair value through profit or loss (FVTPL).

The rest of the financial assets and liabilities are stated at amortized cost.

The option to classify as equity instruments (shares) measured at fair value through other items of comprehensive income is reflected in both IAS 39 and IFRS 9.

(all the amounts are expressed in RON, unless otherwise stated)

3. Significant Accounting Policies (continuation)

Thus, the classification of these instruments at fair value through other items of comprehensive income will not be affected by the new standard. Value differences will continue to be recorded in other elements of the comprehensive income.

Impairment adjustments made through the profit and loss account for financial assets available for sale in BALANCE on 31 December 2017 that were transferred to assets measured at fair value through other comprehensive income, were transferred to the "Balance carried forward from adoption IFRS 9 "by diminishing the fair value reserve.

Following the adoption of IFRS 9 as of 1 January 2018, the fair value reserve relating to availablefor-sale financial assets (fund units) was recognized in the balance carried forward.

Starting January 1, 2018, the Company applies IFRS 9 "Financial Instruments". This Standard provides that if an entity prepares interim financial statements in accordance with IAS 34 "Interim Financial Reporting", it is not necessary for the entity to apply the provisions of this Standard for interim periods prior to the date of initial application if this is impracticable IAS 8).

In accordance with the transitional provisions of IFRS 9, the Company has decided not to reverse prior periods.

This was not the case for changes in fair values when adopting IFRS 9.

Changes in classification and measurement of financial instruments as compared to 2017 as a result of the adoption of IFRS 9 as of 1 January 2018 are as follows:

		Classification of financial assets according to:	Final balance at 31	Initial Balance at 1
Financial asset category	IAS 39 at 31 IFRS 9 starting December 2017 January 1, 2018		December 2017 (IAS 39)	January 2018 (IFRS 9)
Cash and cash equivalents (including bank deposits)	Amortized cost	Amortized cost	3,813,215	3,813,215
Debt instruments (Fond units)	Available-for sale financial assets (AFS)	Financial assets at fair value through profit or loss (FVTPL)	2,789,494	2,789,494
Total debt instruments			6,602,709	6,602,709
Capital instruments	Available-for sale financial assets (AFS)	Financial assets measured at fair value through other comprehensive income (FVOCI)	1,795,307,523	1,795,307,523
Total capital instruments			1,795,307,523	1,795,307,523
Other financial assets	Amortized cost	Amortized cost	3,123,641	3,123,641
Total other financial assets			3,123,641	3,123,641
Total financial assets			1,805,033,873	1,805,033,873

(all the amounts are expressed in RON, unless otherwise stated)

4. Financial Assets and Liabilities

Accounting Classifications and Fair Values

The carrying amounts and fair values of financial assets and liabilities are presented as at 30 September 2018 as follows:

In RON	The fair value through other elements of the comprehensive income	Fair value through profit or loss	Amortized cost	Net accounting value	Fair value
Cash and cash equivalents			4,752,325	4,752,325	4,752,325
Deposits placed with banks			48,080,464	48,080,464	48,080,464
Financial assets measured at fair value through other items of comprehensive income	2,079,032,958			2,079,032,958	2,079,032,958
Financial assets measured at fair value through profit or loss Investments held up to		2,995,766		2,995,766	2,995,766
maturity Other financial assets			1,309,834	1,309,834	1,309,834
Total financial assets	2,079,032,958	2,995,766	54,142,623	2,136,171,347	2,136,171,347
Dividends to pay			72,863,547	72,863,547	72,863,547
Other financial liabilities			7,096,833	7,096,833	7,096,833
Total financial liabilities			79,960,380	79,960,380	79,960,380

The carrying amounts and fair values of financial assets and liabilities are presented as of 31 December 2017 as follows:

In RON	Available for sale	Amortized Cost	Net carrying amount	Fair value
Cash and cash equivalents		3,020,367	3,020,367	3,020,367
Deposits placed with banks		792,848	792,848	792,848
Available-for-sale financial assets	1,798,097,017		1,798,097,017	1,798,097,017
Investments held up to maturity
Other financial assets		3,123,641	3,123,641	3,123,641
Total financial assets	1,798,097,017	6,936,856	1,805,033,873	1,805,033,873
Dividends to pay		48,087,127	48,087,127	48,087,127
Other financial liabilities		6,349,864	6,349,864	6,349,864
Total financial liabilities		54,436,991	54,436,991	54,436,991

(all the amounts are expressed in RON, unless otherwise stated)

5. Income from dividends

Dividend income is recorded at gross value. Dividend tax rates for the period ended 30 September 2018 were 5% and zero (2017: 5% and zero). Income from dividends, mainly on contributors, is as follows:

In RON 30 September 2018 30 September 2017 BRD-GROUPE SOCIETE GENERALE S.A. Bucharest 24,329,621 11,203,197 BANCA COMERCIALĂ ROMÂNĂ S.A. 14,365,762 OMV PETROM S.A. Bucharest 14,362,006 10,582,504 S.N.T.G.N. TRANSGAZ S.A. Mediaș 8,770,593 8,518,836 S.N.G.N. ROMGAZ S.A. 7,902,808 5,927,605 BANCA TRANSILVANIA S.A. 6,683,453 2,458,861 ANTIBIOTICE S.A. 2,616,639 3,690,653 B.T. ASSET MANAGEMENT S.A. 1,999,969 1,999,969 UNIVERS S.A. Rm.Vâlcea 1,010,533 1,862,435 MERCUR S.A. Craiova 978,336 284,192 FLAROS S.A. Bucharest 810,386 475,799 BURSA DE VALORI BUCHAREST S.A. 647,010 353,120 TURISM FELIX S.A. Băile Felix 646,886 488,211 IAMU Blaj 546,444 320,329 ȘANTIERUL NAVAL Orșova 512,054 581,463 EXIMBANK S.A. Bucharest 405,825 164,693 S.I.F. MOLDOVA S.A. 200,957 842 ELBA S.A. Timisoara 131,850 80,212 TURISM S.A. Pucioasa 101,060 101,060 PROVITAS S.A. Bucharest 91,361 82,577 S.E. ELECTRICA S.A. Bucharest 89,535 70,248 DEPOZITARUL CENTRAL S.A. Bucharest 52,961 59,271 RELEE S.A. Mediaș 13,074 24,696 C.N.T.E.E. TRANSELECTICA S.A. 6,346,251 CONTACTOARE S.A. Buzău 27,295 TOTAL 87,269,123 55,704,319

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

6. Other operating income

In RON	30 September 2018	30 September 2017
Financial income from adjustments for impairment of financial assets		196,796
Income from provisions for depreciation of current assets		1,845
Other operating income	15,049,133	1,164,995
Other financial income	32,206	17,996
Income from deferred income tax
Total	15,081,339	1,381,632

7. Net gain from the sale of financial assets

In RON	30 September 2018	30 September 2017
Gain from the sale of financial assets measured at fair value through other items of comprehensive income		15,344,014
The carrying amount of financial assets measured at fair value through other items of the ceded comprehensive income		11,980,580
Net gain from sale of financial assets	0	3,363,434

8. Fees and charges for administration and supervision

In RON	30 September 2018	30 September 2017
Costs on fees due to SSIF for share transactions	33,458	7,452
Costs on fees due for shareholder register services	107,100	107,345
Costs on fees with the depositary company	236,346	227,902
BSE Costs	24,990	24,990
Costs on taxes due to capital market entities (ASF)	1,137,412	1,095,022
Costs on the audit fee
Other costs on commissions, fees and dues	54,009	95,511
Total	1,593,315	1,558,222

9. Other operating costs

In RON	30 September 2018	30 September 2017
Costs on fees and taxes	154,682	169,973
Costs on salaries and other staff costs	4,901,114	4,132,477
Costs on amortization, provisions and value adjustments	328,696	325,428
Costs on external benefits	688,067	893,382
Total	6,072,559	5,521,260

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

9. Other operating costs (continuation)

Costs on salaries and assimilated costs

In RON	30 September 2018	30 September 2017
Costs on salaries	4,738,410	3,296,262
Costs on insurance and social protection	162,704	836,215
Total	4,901,114	4,132,477
	30 September 2018	30 September 2017
Staff with mandate contract	2	2
Employees with higher education	29	33
Employees with secondary education	12	12
Employees with general education	3	4
Total	46	51

Other operating expenses include staff costs, other taxes and charges, depreciation expense, provisions and value adjustments, external service charges.

In the period ending on 30 September 2018, the average number of employees was 45 (30 September 2017: 48) and the number of employees registered on 30 September 2018 was 44 (30 September 2017: 49).

The company makes payments to the Romanian state institutions for the pensions of its employees.

All employees are members of the Romanian state's pension plan. The Company does not operate any other retirement or retirement benefit plans and therefore has no other pension obligations. Moreover, the Company is not obliged to provide additional benefits to employees after retirement.

(all the amounts are expressed in RON, unless otherwise stated)

10. Profit tax

Reconciliation of profit before taxing with the profit tax cost in the profit or loss account

In RON	30 September 2018	30 September 2017
Current income tax	3,030,565	322,478
Dividends tax	3,997,116	2,388,270
Cost on the deferred profit tax	-	-
Total profit tax recognized in the fiscal year result	7,027,681	2,710,748
Profit before taxing	95,280,537	53,035,736
Tax according to statutory rate of 16%	15,244,886	8,485,718
The effect on profit tax of:
Non-deductible costs	1,015,024	1,242,795
Non-taxable incomes	(14,352,930)	(9,403,535)
Items similar to income	1,151,374
Items similar to costs	(25,289)
Dividend taxation rate	3,997,116	2,388,270
Amounts representing sponsorship under the law	(2,500)	(2,500)
Records and resumption of temporary differences	-	-
Profit tax	7,027,681	2,710,748

11. Cash and cash equivalents

In RON	30 September 2018	31 December 2017
Cash at the cash desk	4,080	5,952
Current accounts at banks	4,728,021	3,001,842
Cash equivalents	20,224	12,573
Total cash and cash equivalents	4,752,325	3,020,367

12. Deposits placed with banks

In RON	30 September 2018	31 December 2017
Bank deposits at sight	48,009,208	792,752
Attached receivables	71,256	96
Total deposits placed with banks	48,080,464	792,848

(all the amounts are expressed in RON, unless otherwise stated)

13. Financial assets

On 30 September 2018, the Company has the following structure of financial assets:

In RON	Nr. soc.	Market value on 30 September 2018	Nr. soc.	Market value on 31 December 2017
Capital investments
Listed companies	32	1,267,810,179	32	1,186,552,577
Unlisted companies	18	811,222,779	19	608,754,946
Fund units	4	2,995,766	4	2,789,494
Total capital investments	54	2,082,028,724	55	1,798,097,017

◦ Financial assets measured at fair value through other items of comprehensive income

In RON	30 September 2018	31 decembrie 2017
Shares measured at fair value	2,079,032,958	1,788,585,977
Shares measured at cost	-	6,721,546
Fund units at fair value	-	2,789,494
Total	2,079,032,958	1,798,097,017

◦ Financial assets measured at fair value through profit or loss

In RON	30 September	31 December
	2018	2017
Fund units at fair value	2,995,766	-
Total	2,995,766

The movement of financial assets in the reporting periods ended on 30 September 2018 and 31 December 2017 is presented in the following table:

In RON	Shares meadured at fair value	Shares measured at cost	Fund units	Total
JANUARY 1st 2017	1,569,695,067	6,721,546	2,386,705	1,578,803,318
Reclassifications 2017
Net change during the period	38,451,117			38,451,117
Impairment losses	(5,366,831)			(5,366,831)
Change in fair value	185,806,624		402,789	186,209,413
31 December 2017	1,788,585,977	6,721,546	2,789,494	1,798,097,017
Transfer from shares measured at cost to shares measured at fair value through other comprehensive income	6,721,546	(6,721,546)
Net change during the period	28,522,615			28,522,615
Impairment losses
Change in fair value	255,202,820		206,272	255,409,092
30 September 2018	2,079,032,958		2,995,766	2,082,028,724

(all the amounts are expressed in RON, unless otherwise stated)

13. Financial assets (continuation)

On 30 September 2018 and 31 December 2017, shares measured at fair value include mainly the value of shares held by the following issuers: OMV Petrom SA Bucharest, BRD - Groupe Societe Generale, Banca Transilvania SA Cluj Napoca, CNTEE Transelectrica SA Bucharest, SNTGN Transgaz SA Mediaș, SC Argus SA Constanța, SC Antibiotice SA Iași, etc..

• The hierarchy of fair values

For the calculation of fair value, the Company uses the following hierarchy of methods:

• Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities.

• Level 2: entries other than the quoted prices included in Level 1 that are observable for assets or liabilities, either directly (e.g., prices) or indirectly (e.g., derived from prices).

• Level 3: evaluation techniques largely based on unobservable items. This category includes all instruments for which the evaluation technique includes elements that are not based on observable data and for which the unobservable input parameters can have a significant effect on the instrument evaluation.

In RON	30 September	31 December
	2018	2017
Level 1	989,652,342	866,393,528
Level 2	259,305,243	314,181,351
Level 3	833,071,139	617,522,138
Total	2,082,028,724	1,798,097,017

The fair value evaluation of the equity shares held on 30 September 2018 was carried out as follows:

• for quoted and traded securities during the reporting period, the market value was determined by taking into account the quotation from the last trading day (capital quote on the main market for those listed on the regulated market - BSE, ie the reference price for the alternative system - AERO for level 1 and for level 2 the quotes for the shares traded during the last 30 trading days);

• for quoted securities that did not have transactions in the last 30 days of the reporting period and for unlisted securities, market value was determined as derived from the entity's last annual financial statement;

• for securities not admitted to trading on a regulated market or in an alternative trading system in Romania issued by issuers in which holdings of over 33% of the share capital are held, they are valued exclusively in accordance with the International Measurement Standards on the basis of a report updated at least annually;

• for securities of companies in insolvency or reorganization, the measurement is made at zero value;

• for equity securities issued by the OPC, the value taken into account was the last unit value of the net asset, calculated and published.

Explanatory notes to the simplified interim separate financial statements

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

14. Credits and receivables

In RON	30 September 2018	31 December 2017
Commercial receivables	594,234	1,545,845
Debtors	927,078	1,137,911
Receivables related to the state budget and social security budget	364,976	805,842
Other receivables	3,622	1,394
Adjustments for impairment of receivables	(735,290)	(735,290)
TOTAL	1,154,620	2,755,702

15. Other assets

	30 September	31 December
In RON	2018	2017
Intangible assets	2,832	2,087
Other fixed assets	42,208	277,582
Stocks	13,726	14,830
Prepayments	96,448	73,440
TOTAL	155,214	367,939

16. Dividends to pay

	30 September	31 December
In RON	2018	2017
Dividend payments related to the year 2013	644,780	644,780
Dividend payments related to the year 2014	484,398	15,584,820
Dividend payments related to the year 2015	18,157,120	18,446,071
Dividend payments related to the year 2016	12,965,649	13,411,456
Dividend payments related to the year 2017	40,611,600	-
Total dividends to pay	72,863,547	48,087,127

17. Taxes and fees

In RON	30 September	31 December
	2018	2017
Debts in connection with the Social Insurance Budget	212,534	175,664
Debts in connection with the State Budget	2,197,911	4,679,691
Other taxes and fees	-	141,975
Total	2,410,445	4,997,330
		pag 18

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

18. Deferred tax liabilities

Deferred tax liabilities are determined by the following items:

In RON	Assets	Liabilities	Net	Tax
30 September 2018
Fair value measurement of financial assets measured at fair value through other items of comprehensive income	1,056,288,036		1,056,288,036	169,006,086
Revaluation of tangible assets	8,285,405		8,285,405	1,325,665
Balance carried forward representing revaluation reserves achieved unimpaired	1,772,247		1,772,247	283,560
Balance carried forward representing unrealized unachieved revaluation reserves	4,190,462		4,190,462	670,472
Balance carried forward representing unachieved revaluation reserves - real estate investments	359,751		359,751	57,560
Differences in fair value changes in financial assets at fair value through other comprehensive income - free of charge shares
in balance	104,172,654		104,172,654	16,667,624
Legal reserves	11,603,314		11,603,314	1,856,530
Other reserves - dividends prescribed under the OGMS decision of 23 April 2005	6,551,528		6,551,528	1,048,244
Other reserves	980,658		980,658	156,906
TOTAL	1,194,204,055		1,194,204,055	191,072,647
In RON	Active	Datorii	Net	Impozit
31 December 2017
Fair value measurement of available for sale financial assets	801,374,693		801,374,693	128,219,951
Revaluation of tangible assets	8,541,755		8,541,755	1,366,681
Balance carried forward representing revaluation reserves achieved unimpaired	1,772,247		1,772,247	283,560
Balance carried forward representing unachieved revaluation reserves	4,005,273		4,005,273	640,844
Balance carried forward representing unachieved revaluation reserves - real estate investments	359,751		359,751	57,560
Differences in fair value changes in financial assets at fair value through other comprehensive income - free of charge
shares in balance	105,635,279		105,635,279	16,901,644
Legal reserves	11,603,314		11,603,314	1,856,530
Other reserves - dividends prescribed under the OGMS decision of 23 April 2005	6,551,528		6,551,528	1,048,244
Other reserves	980,658		980,658	156,906
TOTAL	940,824,498		940,824,498	150,531,920

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

19. Other liabilities

In RON	30 September 2018	31 December 2017
Staff liabilities	251,094	616,117
Commercial liabilities	1,356,263	230,534
Guarantees received	-	-
Various creditors	193,496	205,958
Income recorded in advance	7,080	8,355
Provisions for employees Benefits	5,016,250	5,016,250
Provisions for litigation	272,650	272,650
Total other liabilities	7,096,833	6,349,864

20. Capital and reserves

Share capital

The share capital according to the Articles of Incorporation of the Company is 58,016,571 lei, divided into 580,165,714 shares with a nominal value of 0.1 lei / share and is the result of direct subscriptions made to the share capital of the Company through the transformation into shares of the amounts due as dividends under Law no. 55/1995 and by the effect of Law no. 133/1996.

The shares of the Company are ordinary, indivisible, nominative, of equal value, issued in the dematerialized form and grant equal rights to their holders. All shares were subscribed and paid in full on 30 September 2018 and 31 December 2017.

The right to hold shares is limited to 5% of the share capital, respectively 29,008,285 shares.

During 2018 there were no changes in the number of shares issued.

Shares issued by the Company are traded on the Bucharest Stock Exchange, the Premium category on 01 September 1999 with market symbol SIF5.

Listing of shares and shareholders is held by the Depozitarul Central S.A. Bucharest.

The share capital according to the articles of incorporation is presented in the following table:

In RON	30 September 2018	31 December 2017
Statutory share capital	58,016,571	58,016,571
Share capital	58,016,571	58,016,571

On 30 September 2018, the number of shareholders was 5,743,542 (2017: 5,748,221) which is structured as follows:

	Number of shareholders	Number of shares	Amount (RON)	(%)
30 September 2018
Resident natural person	5,741,441	235,070,574	23,507,057	40.52
Non-resident natural person	1,836	1,847,800	184,780	0.32
Total natural person	5,743,277	236,918,374	23,691,837	40.84
Resident legal persons	224	252,944,005	25,294,400	43.60
Non-resident legal person	41	90,303,335	9,030,334	15.56
Total legal person	265	343,247,340	34,324,734	59.16
Total 30 September 2018	5,743,542	580,165,714	58,016,571	100.00

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

20. Capital and reserves (continuation)

Total 2017	5,748,221	580,165,714	58,016,571	100.00
Total legal person	262	346,553,676	34,655,368	59.74
Non-resident legal person	46	106,433,438	10,643,344	18.35
Resident legal person	216	240,120,238	24,012,024	41.39
Total natural person	5,747,959	233,612,038	23,361,203	40.26
Non-resident natural person	1,812	2,221,396	222,139	0.38
Resident natural person	5,746,147	231,390,642	23,139,064	39.88
31 December 2017

Reserve constituted according to Law no. 133/1996

The reserve for the initial portfolio was created following the application of Law no. 133/1996, as the difference between the value of the portfolio and the value of the share capital subscribed to the Company.

Reserve constituted according to Law no. 133/1996 is presented in the following table:

In RON	30 September 2018	31 December 2017
Reserves constituted following the application of Law no. 133/1996	144,636,073	144,636,073
Reserves constituted following the application of Law no. 133/1996	144,636,073	144,636,073

Legal reserves

The legal reserves are constituted according to the legal requirements in the amount of 5% of the profit registered according to the applicable accounting regulations up to the level of 20% of the share capital, according to the constitutive act. The amount of the legal reserve at 30 September 2018 is 11,603,314 lei (31 December 2017: 11,603,314 lei). On 30 September 2018 and in 2017 the Company did not constitute statutory reserves from profit, reaching the ceiling of 20% of the share capital, according to the constitutive act.

Legal reserves can not be distributed to shareholders.

Dividends

1) The Ordinary General Meeting of the Shareholders, held on 25 April 2018, decided the distribution of the net profit for the financial year 2017 in the amount of RON 74,303,964 for the following destinations:

• dividends: RON 40,611,600 (54.66% of net profit), which ensures a gross dividend per share of RON 0.07.

• other reserves (own sources of financing): 33,692,364 lei (45.34% of the net profit).

The proposed dividend ensures a share remuneration of 3.70% calculated at the average price of the shares in 2017 (1.8900 lei / share) and 3.21% calculated at the closing price for 2017 (2.1800 lei /action).

2) The Extraordinary General Meeting of Shareholders, held on April 25, 2018, decided:

• a company's redemption schedule of its own shares is approved in accordance with the applicable legal provisions under the following conditions:

a) the size of the program - maximum 32,704,308 shares with a nominal value of 0.10 lei / share representing a maximum of 5.637% of the share capital;

(all the amounts are expressed in RON, unless otherwise stated)

20. Capital and reserves (continuation)

b) the acquisition price of shares - the minimum price will be RON 1.50 / share and the maximum price will be 2.50 lei / share;

c) the duration of the program - the maximum period of 12 months from the date of publication of the decision of the EGMS in the Official Gazette of Romania Part IV;

d) payment of the redeemed shares and the amount of the corresponding fund - of the available reserves, the maximum amount of the redemption amounting to 49,056,462 lei, according to the decision of the OGM no.3 from 06.09.2017;

e) program destination - reduction of the share capital.

Reserves from measurement of financial assets measured at fair value through other items of comprehensive income

The reserve includes the cumulative net changes in fair values of financial assets measured at fair value through other comprehensive income, from the date of classification in this category to the derecognition thereof.

Reserves from measurement of financial assets measured at fair value through other items of comprehensive income are recorded at the net value of related deferred tax.

Deferred tax on these reserves is recognized in equity and deducted from the fair value reserve at fair value through other comprehensive income.

21. Other reserves

In RON	30 September 2018	31 December 2017
Other reserves	521,517,906	472,461,444
- Inputs	33,692,364	49,056,462
Total	555,210,270	521,517,906

Mainly these consist of reserves representing own funding sources and share redemtion reserves.

22. Result per share

In RON	30 September 2018	30 September 2017
Profit attributable to ordinary shareholders	88,252,856	50,324,988
Weighted average number of ordinary shares	580,165,714	580,165,714
Basic income per share	0.1521	0.0867

23. Guarantees given

The Company has no guarantees given.

as of 30 September 2018

(all the amounts are expressed in RON, unless otherwise stated)

24. Transactions and balances with parties in special relationships

The Company identified in the course of its business the following parts in special relationships:

Subsidiaries

Under the current legislation, the Company holds control of 11 issuers on 30 September 2018 (31 December 2017: 11 issuers). All the Company's subsidiaries on 30 September 2018 and 31 December 2017 are based in Romania. For these, the percentage of ownership is not different from the percentage of votes held.

Holdings in subsidiaries are as follows:

Company name	Percentage held on 30 September 2018 - % -	Percentage held on 30 September 2017 - % -
COMPLEX HOTELIER DAMBOVITA S.A. TARGOVIȘTE	99.94	99.94
VOLTALIM S.A. CRAIOVA	99.19	99.19
MERCUR S.A. CRAIOVA	97.86	97.86
GEMINA TOUR S.A. RM. VÂLCEA	88.29	88.29
ARGUS S.A. CONSTANȚA	86.40	86.34
FLAROS S.A. BUCHAREST	81.04	81.04
CONSTRUCȚII FEROVIARE S.A. CRAIOVA	77.50	77.50
UNIVERS S.A. RM. VÂLCEA	73.75	73.75
PROVITAS S.A BUCHAREST	70.28	70.28
TURISM PUCIOASA S.A. DÂMBOVIȚA	69.22	69.22
ALIMENTARA S.A. SLATINA	52.24	52.24

Associated entities

On 30 September 2018, the Company held holdings of over 20% but no more than 50% of the share capital in 8 issuers (31 December 2017: 9 issuers). All of them are based in Romania. For these issuers, the percentage of ownership is not different from the percentage of votes held.

Holdings in these issuers were not qualified as associates due to the fact that the Company does not exercise significant influence in these companies.

The Company does not have associated entities on 30 September 2018 and 31 December 2017.

Issuers holding more than 20% but not more than 50% are as follows:

Company name	Percentage held on 30 September 2018 - % -	Percentage held on 30 September 2017 - % -
LACTATE NATURA S.A. TÂRGOVIȘTE	40.38	39.70
SINTEROM S.A. CLUJ-NAPOCA	31.88	31.88
ELECTRO TOTAL S.A. BOTOȘANI	29.86	29.86
TURISM FELIX S.A. BĂILE FELIX	28.97	28.97
ȘANTIERUL NAVAL ORȘOVA S.A.	28.02	28.02
PRODPLAST S.A. BUCHAREST	27.55	27.55
TURISM LOTUS FELIX S.A. BĂILE FELIX	27.46	27.46
ELECTROMAGNETICA S.A.	25.40	25.40
MAT S.A. CRAIOVA	0.00	25.83

Explanatory notes to the simplified interim separate financial statements

as of 30 September 2018 (all the amounts are expressed in RON, unless otherwise stated)

24. Transactions and balances with parties in special relationships (continuation)

Key management staff

30 September 2018

Members of the Board of Directors: Tudor Ciurezu - Chairman, Cristian Bușu - Vicepresident, Anina Radu, Radu Hanga, Ana – Barbara Bobirca, Nicolae Stoian, Carmen Popa.

Senior management: Tudor Ciurezu - General Manager, Cristian Bușu - Deputy General Manager.

31 December 2017

Members of the Board of Directors: Tudor Ciurezu - Chairman, Cristian Bușu - Vicepresident, Anina Radu, Radu Hanga, Ana – Barbara Bobirca, Nicolae Stoian, Carmen Popa.

Senior management: Tudor Ciurezu - General Manager, Cristian Bușu - Deputy General Manager.

The Company has no contracted obligations regarding the payment of pensions to former members of the Board of Directors and management and therefore does not have accruals of this kind.

The Company has not provided credits or advances (except for legally justified travel expenses in the interest of the service) to the members of the Board of Directors and management and has no accruals of this kind.

The company did not receive and did not provide guarantees in favor of any affiliated party.

25. Commitments and contingent liabilities

Actions in court

On 30 September 2018 there are 28 litigations in court. The company was active in 15 litigation cases, passive in seven litigation cases, in one case it has the capacity to intervene, in 2 cases it is summoned as guarantor, 3 are in insolvency proceedings.

In most of the disputes in which the Company has the status of plaintiff, the subject of litigation is the annulment / declaration of nullity of some decisions of the general shareholders' meetings in the companies in the portfolio.

Environmental contingencies

The Company has not recorded any provision for future cost on environmental items. Management does not consider the costs associated with these items to be significant.

Transfer price

Romanian tax legislation contains rules on transfer pricing between affiliates since 2000.

The current legislative framework defines the "market value" principle for affiliate transactions as well as the methods for setting transfer pricing. As a result, the tax authorities are expected to initiate thorough transfer pricing checks to ensure that the tax outcome is not distorted by the effect of the prices charged in relation to affiliated persons.

The company can not quantify the outcome of such verification.

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD. Bușu Cristian Chairman/General Manager Vicepresident/Deputy General Manager

ec. Sichigea Elena Financial Manager