SIMPLIFIED INTERIM INDIVIDUAL FINANCIAL STATEMENTS as of June 30th, 2019

drawn up in accordance with Regulation 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 Supervisory Authority of the Financial Instruments and Investments Sector

UNAUDITED

SIMPLIFIED INTERIM INDIVIDUAL FINANCIAL STATEMENTS as of June 30th, 2019

	page
Simplified interim individual statement of the profit or loss and of other items of the comprehensive income	1
Simplified interim individual statement of the financial position	2
Simplified interim individual statement of the changes in own equity	3 - 4
Simplified interim individual statement of treasury flows	5
Selected explanatory notes to simplified interim individual financial statements	6 - 45

Simplified interim individual statement of the profit or loss and of other items of the comprehensive income as of June 30th, 2019

In RON	Note	June 30th, 2019	June 30th, 2018
Incomes
Incomes from dividends	6	119,513,072	74,843,292
Incomes from interest		316,570	27,476
Other operating incomes	7	68,023	404,720
Net gain from exchange rate differences		6,338,830	11,704
Net gain from the sale of financial assets	8	-	4,448,637
Gain from financial assets at fair value through profit or loss account		523,405	-
Expenses
Fees and charges for administration and Supervisory	9	(1,081,573)	(987,254)
Incomes from the recovery of provisions for risks and expenses
Other operating expenses	10	(4,432,466)	(4,132,152)
Profit before taxation		121,245,861	74,616,423
Profit tax	11	(6,961,171)	(4,239,062)
Net gain from transactions recognized in retained earnings		114,284,690	70,377,361
Other elements of the comprehensive income
Change in the reassessment reserve of tangible assets, net of deferred tax		1,940,535	-
Net change in fair value of financial assets assessed through other elements of the comprehensive income		-	-
Fair value reserve of financial assets assessed through other ele ments of the comprehensive income, transferred to retained earn ings		229,218,645	10,164,119
The effect of related profit tax		-	(3,736,854)
Fair value reserve of financial assets assessed through other elements of the comprehensive income - hyperinflation		(2,019,153)	-
Total other elements of the comprehensive income		229,140,027	6,427,265
Total comprehensive income related to the period		343,424,717	76,804,626
The result per share
Basic	23	0.1970	0.1213
Diluted		0.1970	0.1213

The simplified interim individual financial statements were approved by the Board of Directors at the meeting on 12 August 2019 and were signed on its behalf by: Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD Bușu Cristian

Chairman/General Manager Vice-president/Deputy General Manager

Ec. Sichigea Elena Financial Manager

Simplified interim individual statement of the profit or loss and of other items of the comprehensive income as of June 30th, 2019

In RON	Note	June 30th, 2019	December 31st, 2018
Assets
Cash and cash equivalents	12	24,281,270	472,375,238
Deposits placed in banks	13	52,010,519	554,340
Financial assets assessed at the fair value through other elements of the comprehensive income	14	2,062,708,463	1,478,457,359
Financial assets assessed at the fair value through the profit or loss account	14	3,256,345	2,732,940
Credits and receivables	15	5,437,478	15,836,743
Tangible assets		11,695,179	11,965,182
Real estate investments		555,001	555,001
Other assets	16	206,871	134,574
Total assets		2,160,151,126	1,982,611,377
Liabilities
Dividends to pay	17	66,313,636	42,515,955
Fees and charges	18	2,302,278	97,715,503
Deferred tax liabilities	19	115,667,151	72,404,246
Other liabilities	20	6,296,874	9,855,891
Total liabilities		190,579,939	222,491,595
Own equity
Share capital	21	58,016,571	58,016,571
Reserves formed as a result of the implementation of Law 133/1996	21	144,636,073	144,636,073
Legal reserves	21	11,603,314	11,603,314
Reserves from the assessment of financial assets assessed at the fair value through other elements of the comprehensive income	21	574,979,280	347,779,788
Other reserves	22	519,445,822	555,210,270
Reserves from the reassessment of tangible assets		7,671,332	7,844,289
Own shares		(1,962,259)	-
The result carried forward except for the result carried forward arising from the adoption of IAS 29 for the first time		540,896,364	538,769,677
Current profit		114,284,690	96,259,800
Total own equity		1,969,571,187	1,760,119,782
Total liabilities and own equity		2,160,151,126	1,982,611,377

The simplified interim individual financial statements were approved by the Board of Directors at the meeting on 12 August 2019 and were signed on its behalf by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD Bușu Cristian Chairman/General Manager Vice-president/Deputy General Manager

Ec. Sichigea Elena Financial Manager

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Simplified interim individual statement of the changes in own equity as of June 30th, 2019

In RON	Share capital Own shares		Reserves from the reassessment of tangible assets	Legal reserves Other reserves		Differences from the change of fair value in financial assets assessed through other elements of the comprehensive income	Other elements Cumulated of own equities profit	TOTAL
BALANCE AT JANUARY 1ST, 2019	58,016,571		7,844,289	11,603,314	699,846,343	350,841,468	(3,061,680) 635,029,477	1,760,119,782
COMPREHENSIVE INCOME
Profit of financial year	-	-	-	-	-	-	- 114,284,690	114,284,690
Other elements of the comprehensive income
1. Reserve variation from the reassessment of the tangible assets	-	-	(172,957)	-	-	-	- 172,957	0
2. Variation of the reserve from the fair value modification of financial assets assessed at fair value through other elements of the comprehensive income	-	-	-	-	-	229,218,648	(3)	229,218,645
3. Fair value reserve of the financial assets assessed at fair value through other elements of the comprehensive income, assigned	-	-	-	-	-	(2,019,153)	1,940,535	(78,618)
4. Related profit tax	0		(172,957) 0	0	0	227,199,495	(3) 116,398,182 343,424,717
5. Transfer of reserve to retained earnings as a result of passing to IFRS 9	-	-	-	-	-	-	- 13,196	13,196
6. Fair value reserve of the financial assets assessed through other elements of the comprehensive income - hyperinflation	-	-	-	-	-	-	- -	0
TOTAL COMPREHENSIVE INCOME related to the period	-	-	-	-	(35,764,448)	-	-	(12,178,332) (47,942,780)
Deferred tax related to the result carried forward reassessment surplus unachieved taxed	-	(1,962,259)	-	-	-	-	- -	(1,962,259)
Other reserves – own sources of funding	-	-	-	-	-	-	- -	0
Other reserves – share repurchase	-	-	-	-	-	-	- -	0
Deferred tax related to the result carried forward reassessment surplus unachieved taxed	-	-	-	-	-	-	-	(84,081,469) (84,081,469)
Transactions with shareholders directly recognized in equity	0		0 0	0	0	0	0 (84,081,469) (84,081,469)
BALANCE AT JUNE 30TH, 2019	58,016,571	(1,962,259)	7,671,332	11,603,314	664,081,895	578,040,963	(3,061,683) 655,181,054	1,969,571,187

The simplified interim individual financial statements were approved by the Board of Directors at the meeting on 12 August 2019 and were signed on its behalf by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD Bușu Cristian Chairman/General Manager Vice-president/Deputy General Manager

Ec. Sichigea Elena Financial Manager

Notes from page 6 to page 45 are integral part of the simplified interim individual financial statements.

Simplified interim individual statement of the changes in own equity as of June 30th, 2019

In RON	Share Capital	Reserves from the reassessment of tangible assets		Legal reserves Other reserves	Differences from the change of fair value in financial assets assessed through other elements of the comprehensive income	Other elements of own equities	Cumulated profit	TOTAL
BALANCE AT 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 of financial year	-	-	-	-	-	-	70,377,361	70,377,361
Other elements of the comprehensive income	-	-	-	-	-	-	-	-
1. Change in the reserve from the reassessment of fixed tangible assets, net of deferred tax	-	(143,556)	-	-	-	-	143,556	-
2. Net change in the fair value reserve of financial assets measured at fair value through other elements of the comprehensive income	-	-	-	-	10,164,119	-	-	10,164,119
3. Reserve relating to the difference in the change in the fair value of financial assets measured at fair value through other elements of the comprehensive income transferred to profit or loss net of tax.	-	-	-	-	(3,736,854)	-	-	(3,736,854)
TOTAL COMPREHENSIVE INCOME related to the period	-	-	-	-	(22,928,231)	-	22,928,231	-
Deferred tax related to the result carried forward reassessment surplus unachieved taxed	-	(143,556)	-	-	(16,500,966)	-	93,449,148	76,804,626
Other reserves – own sources of funding	-	-	-	-	-	-	7,592	7,592
Other reserves – share repurchase	-	-	-	33,692,364	-	-	(33,692,364)	-
Reported result coming from the passage to IFRS 9	-	-	-	-	-	-	-	-
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	-	-	-	-	-	-	(40,611,600)	(40,611,600)
BALANCE AT JUNE 30TH, 2018	58,016,571	7,031,518	11,603,314	699,846,343	768,112,065	(3,061,680)	101,131,104	1,642,679,235

Simplified interim individual financial statements were approved by the Administration Board in the meeting from 12 August 2019 and were signed on its behalf by:

Associate Professor PhD. Ec. Ciurezu Tudor Associate Professor PhD. Ec. Bușu Cristian Chairman/ General Manager Vice-president/ Deputy General Manager

ec. Sichigea Elena Financial Manager

Notes from page 6 to page 45 are integral part of the current simplified interim individual financial statements.

Simplified interim individual statement of treasury flows prepared on June 30th, 2019

In RON

Element name Reporting period
	June 30th, 2019	June 30th, 2018
A	1	2
Treasury flows from operating activities
Cashes from customers, other cashes	7,061,759	617,390
Cashes from sales of financial investments (securities)	44,140,279	5,156,993
Payments for the purchase of shares	(358,888,942)	(3,763,015)
Payments to suppliers and employees, other payments	(4,167,612)	(3,693,543)
Payments to the state budget, social security budget and local budget	(1,698,669)	(1,601,071)
Interest received	297,678	1,479
Dividends received	108,496,843	62,358,238
Interests paid	-	-
Profit tax paid	(98,156,346)	(4,716,643)
Cashes from insurance against earthquakes	-	-
Net treasury from operating activities	(302,915,010)	54,359,828
Treasury flows from investment activities:
Payments for acquisition of tangible assets	(13,720)	(5,742)
Cashes from sale of tangible assets	-	-
Net treasury from investment activities	(13,720)	(5,742)
Treasury flows from financing activities:
Cashes from emission of shares	-	-
Cashes from loans on long term	-	-
Payment of debts related to financial leasing	-	-
Dividends paid	(35,181,343)	-
Downpayments to the Central Deposit for dividends payments	(58,216,075)	(52,343)
Tax on payed dividends	-	-
Net treasury from financing activities	(330,532)	(426,472)
Payment of debts related to financial leasing	(93,727,950)	(478,815)
Net increase of treasury and cash equivalents	(396,656,680)	53,875,271
Treasury and cash equivalents at the beginning of the reporting period	472,928,957	3,813,119
Treasury and cash equivalents at the end of the reporting period	76,272,277	57,688,390

The simplified interim individual financial statements were approved by the Board of Directors at the meeting on 12 August 2019 and were signed on its behalf by:

Chairman/General Manager Vice-president/Deputy General Manager

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

Ec. Sichigea Elena Financial Manager

1. REPORTING ENTITY

Societatea de Investiţii Financiare Oltenia S.A. ("The Company") was founded on 01st November 1996 in Craiova – Romania, being the under successor of V Oltenia Private Property Fund, reorganized and transformed according to the provisions of Law No. 133/1996, a law for the transformation of the Private Property Funds into financial investment companies.

The company is classified in the category of Alternative Investment Fund Administrators (AIFM) authorized by the Financial Supervisory Authority with the number 45/15th of 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 transactions, Law no. 297/2004 regarding the capital market, as subsequently amended and supplemented and Law no. 31/1990 on companies.

The Company is self-administered and has its registered office in Craiova, no. 1, Tufănele Street, postal code 200767, Dolj County.

The Company is registered at the Trade Register Office attached to Dolj Court, under the Registration Number J16/1210/1993, Taxpayer Identification Number 4175676, fiscal attribute RO.

The shares of the Company are listed according to the Bucharest Stock Exchange, the Premium category, with market symbol SIF 5, as from the 1st of November 1999.

The Company's shareholders and shares records are kept according to law by the Depozitarul Central S.A. Bucharest.

The depositing activity provided by legislation and R.N.S.C./F.S.A. regulations is provided by Raiffeisen Bank S.A. as from the 22nd of January 2014, until such date, the depositing activity having been held by ING Bank NV Amsterdam - Bucharest Branch.

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

a) administrating and managing the shares in the trading companies for which there were issued own shares, corresponding to the Ownership Certificates and the Nominal Privatization Coupons subscribed by citizens according to the provisions of Art. 4 Paragraph 6 of Law no. 55/1995;

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

c) risk administration;

d) other activities, auxiliary and adjacent to the collective management activities.

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

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

Simplified interim financial statements elaborated on June 30th, 2019, 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 (ASF), starting with the annual financial statements for the financial year 2015, the authorized, regulated and supervised entities by the ASF, apply the International Financial Reporting Standards adopted by the European Union ("IFRS") as official accounting regulations.

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

2. Bases of preparation (continuation)

a) Declaration of Conformity (continuation)

The date of 31st of December 2015 is the date of transition to IFRS as the basis for accounting, when the operations determined by the changeover from the CNVM Regulation no. 4/2011 to the Accounting Regulations in accordance with IFRS.

The simplified interim financial statements prepared on June 30th, 2019, were prepared in accordance with the requirements of IAS 34 "Interim Financial Reporting" and should be read together with the individual financial statements for the year 2018 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 Supervisory 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 19th of July 2002 and of Law no. 24/2017 on issuers of financial instruments and market transactions, 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.

The consolidated financial statements of the S.I.F. Oltenia S.A. Group on the 31st of December 2018 were drafted, approved and released on 24th of April 2019. These can be consulted electronically on the company's website: www.sifolt.ro.

Based on the provisions of Law 24/2017 and Regulations no. 5/2018 regarding issuers of financial instruments and market operations, the Company prepares consolidated half-yearly accounting report in accordance with IFRS.

The consolidated half-yearly accounting report shall be prepared and submitted to FSA no later than 3 months after the end of the semester.

It will be drawn up, approved by the Board of Directors and published on 27th September 2019 and made available to the public in electronic format on the company's website: www.sifolt.ro.

b) Presentation of financial statements

The presentation adopted by the Company is based on the liquidity within the simplified interim individual 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 individual statement of profit or loss and other items of the comprehensive income. The Company considers that such presentation methods 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 RON). The simplified interim individual financial statements are presented in RON, rounded to the nearest RON, the currency that the Company's management chose to be the presentation currency.

2. Bases of preparation (continuation)

d) Basis of Assessment

The simplified interim individual financial statements are prepared on the basis of the fair value convention for financial assets and liabilities measured at fair value through profit or loss and financial assets at fair value through other comprehensive income elements.

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

e) Using Estimates and Judgments

The preparation of the simplified interim individual 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 results of such estimates form 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.

3. Significant Accounting Policies

The accounting policies represent the principles, bases, conventions, rules and specific practices applied in the preparation and presentation of the financial statements.

The accounting policies adopted are consistent with those used in the previous year.

The financial statements are prepared on the basis that the Company will continue its activity in the foreseeable future. In order to evaluate the applicability of this principle, the management analyses the forecasts regarding the future cash inflows.

a) Subsidiaries and associated entities

Subsidiaries are entities under the control of the Company. The Company controls an entity in which it has invested when exposed or has variable return rights based on its participation in the investing entity and has the ability to influence those revenues through its authority over the entity in which it has invested.

Potential or convertible voting rights that can be exercised at that time must also be taken into account when assessing the control.

Associated entities are those companies in which the Company can exercise significant influence, but not control over the financial and operational policies.

The list of subsidiaries and associated entities as of June 30th, 2019 and December 31st, 2018, is presented in Note 25.

The Company has classified and accounted for in these individual financial statements all financial investments in subsidiaries and associated entities as financial assets assessed at fair value through other elements of the comprehensive income according to IFRS 9 "Financial Instruments".

3. Significant Accounting Policies (continuation)

b) Foreign currency transactions

The transactions expressed in foreign currency are initially recorded in RON at the official exchange rate from the date of the transactions. Monetary assets and liabilities recorded in foreign currencies at the date of preparation of the statement of financial position are converted into functional currency at the exchange rate of that day.

Gains or losses from their settlement and conversion using the exchange rate at the end of the reporting period of monetary assets and liabilities denominated in foreign currency are recognized in profit or loss, except those recognized in equity as a result of recording in compliance with risk hedging accounting.

The differences of conversion on the elements of the nature of the investments held at the fair value through the profit or loss account, are presented as gains or losses from the fair value.

Conversion differences on the elements of the nature of financial instruments classified as fair value through other elements of the comprehensive income are included in the reserve arising from the modification of the fair value of these financial instruments.

The exchange rates of the main foreign currencies, related to the leu, used at the reporting date are:
Currency	June 30th ,	December 31st, 2018	Variation
	2019
EUR	4.7351	4.6639	+ 1.52 %
USD	4.1587	4.0736	+ 2.09 %

c) Accounting the hyperinflation effect

According to IAS 29 "Financial Reporting in Hyperinflationary Economies", the individual financial statements of an entity whose functional currency is the currency of a hyperinflationary economy must be presented in terms of the current purchasing power of the currency at the date of preparing the statement of financial position, i.e. non-monetary items are restated by applying the general index of prices from the date of purchase or contribution. IAS 29 states that an economy is considered hyperinflationary if, among other factors, the cumulative inflation rate exceeds 100% over a three-year period.

The continuous decrease of the inflation rate and other factors related to the characteristics of the economic environment in Romania, indicate that the economy whose functional currency was adopted by the company has ceased to be hyperinflationary, with effect on the financial periods starting with January 1st, 2004. Thus, the provisions of IAS 29 were adopted in the preparation of the individual financial statements until December 31st, 2003.

Thus, the values expressed in the unit of measurement as at December 31st, 2003 are treated as the basis for the accounting values reported in the individual financial statements and do not represent measured values, replacement cost, or any other measurement of the current value of the assets or prices at which the transactions would take place at this time.

For the preparation of the financial statements under IFRS at December 31st, 2015, the Company adjusted to be expressed in the current unit of measure as at December 31st, 2003 the following elements:

the share capital and elements of the nature of the reserves;
financial assets available for sale assessed at cost, for which there is no active market or the market is not active.

d) Cash and cash equivalents

The cash includes the available in the house and in the banks and the deposits in sight.

Cash equivalents are short-term, highly liquid financial investments that are easily convertible to cash and which are subject to insignificant risk of changes in value.

When drawing up the statement of cash flows, the cash and cash equivalents were considered: the actual cash, the current accounts with banks and the deposits with an initial maturity of less than 90 days.

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements

on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

3. Significant accounting policies (continuation)

e) Financial assets and liabilities

Financial instruments, in accordance with IFRS 9 "Financial Instruments", include the following:

Investments in equity instruments (e.g. shares);
Investments in debt instruments (e.g. securities, bonds, loans);
Trade receivables and other receivables;
Cash and cash equivalents;
Derivative financial instruments;
Participations in subsidiaries, associates and joint ventures - according to the provisions of IFRS 10, IAS 27, IAS 28.

• Classification

The Company classifies the financial instruments held in accordance with IFRS 9 "Financial Instruments" in financial assets and financial liabilities.

An asset is a resource controlled by the company as a result of past events and from which future economic benefits for the company are expected.

A debt represents a current obligation of the company resulting from past events, the settlement of which is expected to result in an outflow of resources incorporating economic benefits for the company.

The company classifies financial assets as: assessed at amortized cost, at fair value through other elements of the comprehensive income or at fair value through profit or loss on the basis of:

the business model of the company for managing financial assets and
the characteristics of the contractual cash flows of the financial asset.

In accordance with IFRS 9, financial assets fall into one of the following categories:

Financial assets assessed at fair value through profit or loss

The financial assets measured at fair value through profit or loss are:

equity instruments held for trading;
equity instruments designated to be measured at fair value through profit or loss account;
debt instruments.

A financial asset must be measured at fair value through profit or loss, unless it is measured at amortized cost or at fair value through other comprehensive income.

A financial asset or financial liability is held for trading if they meet the following conditions cumulatively:

is held for sale and redemption in the near future;
at initial recognition it is part of a portfolio of identified financial instruments, which are managed together and for which there is evidence of a recent real pattern of short-term profit tracking.

This category includes financial assets or financial liabilities held for trading and financial instruments designated at fair value through profit or loss at the time of initial recognition.

Derivative financial instruments are classified as held for trading if they are not used for hedge accounting.

Financial assets measured at fair value through other comprehensive income

The financial assets assessed at fair value through other elements of the comprehensive income are:

equity instruments designated to be assessed at fair value through other elements of the comprehensive income;
debt instruments.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

A financial asset of an instrumental nature to come back must evaluate only other elements of the comprehensive income if both of the following conditions are met:

a) the financing activation is directly related to a business model because its objective is achieved for collecting the contractual cash flows and for selling the financial activity and

b) the contractual terms of the financing activity give birth, the deadline, the cash care flows are exclusively payments of the principal and the interest related to the main values of the data. The company may face or make irrevocable the initial recognition in the case of certain investigations in equity instruments the care of others would be to evaluate only the principle of profit or loss to present further changes of the fair values in other elements of the comprehensive income (according to points 5.7.5 and 5.7.6 of IFRS 9 - Financial Instruments). Investments of companies in equity instruments (shares) are fully classified as financial activities to evaluate only the justification and other elements of the comprehensive income. Company investments in fund units are classified and evaluate only the profit or loss rules.

Active repayment and financial liabilities are presented at amortized costs, may be reassessed or historical costs.

The method used to record the investigations of companies in capital instruments (shares) is the "first place", in terms of quantifying and evaluating companies and the bases of fair values. The financial activity evaluates the correct use of the elements of the results at the global level are measured at the correct establishment of the elements of the comprehensive incomes.

Changes in value are recognized in other comprehensive income when it is properly investigated, when cumulative gains or losses can be reclassified from other comprehensive income to a reported income statement over the period.

The dividends received from the entities in the care of the stock companies are recognized in profit or loss when they are lost:

a) The company for granting the dividend payment premiums is established;

b) it is probable that the economic benefits associated with the dividend will be generated for the company, and

c) the dividend can be reliably measured.

Financial assets measured at amortized cost

A financial asset must be measured at amortized cost if both of the following conditions are met:

a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

b) the contractual terms of the financial asset give rise, at certain dates, to cash flows that are exclusively payments of the principal and the interest related to the value of the principal due.

Financial debt

They are measured at amortized cost, except for financial liabilities classified at fair value through profit or loss.

Initial recognition

Financial assets and liabilities are recognized on the date on which the Company becomes a contractual party under the conditions of the respective instrument. When the Company first recognizes a financial asset, it must classify it in accordance with 4.1.1 - 4.1.5 (at amortized cost, at fair value through profit or loss or at fair value through other comprehensive income) in IFRS 9 and evaluate it in accordance with points 5.1.1 - 5.1.3. (a financial asset or a financial liability is measured at its fair value plus or minus the transaction costs that are directly attributable to the acquisition or issuance of the asset or debt).

All other financial assets and liabilities are initially recognized at the date of the transaction.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

Assessment

After the initial recognition, the Company must evaluate the financial assets, in accordance with points 4.1.1 - 4.1.5 at:

a) amortized cost;

b) the fair value through other elements of the comprehensive income; or

c) fair value through profit or loss.

After the initial recognition, the Company shall evaluate the financial liabilities in accordance with paragraphs 4.2.1 - 4.2.2 of IFRS 9. Thus, the Company will classify all financial liabilities at amortized cost, except:

a) financial liabilities measured at fair value through profit or loss;
b) the financial debts that arise when the transfer of a financial asset does not meet the conditions for derecognition;
c) financial guarantee contracts, assessed at the highest value between the amount of the loss provision (section 5.5 of IFRS 9) and the amount initially recognized less the cumulative income (recognized under IFRS 15);
d) commitments to provide an interest rate loan at market value, measured at the highest value between the amount of the loss provision (section 5.5 of IFRS 9) and the value initially recognized less cumulative income (recognized under IFRS 15);
e) the contingent consideration recognized by an acquirer in a business combination for which IFRS 3. applies. Such contingent consideration must be subsequently assessed at fair value with the changes recognized in profit or loss.

Assessment at amortized cost

The amortized cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, less principal repayments, plus or minus accumulated depreciation using the effective interest method for each difference between the initial value and the value at maturity, and minus any reduction (direct or through the use of an adjustment account) for impairment or inability to recover.

The effective interest rate is the rate that exactly updates future payments or cash receipts estimated over the expected life of the financial asset or financial debt at the gross book value of the financial asset or at the amortized cost of a financial debt. When calculating the effective interest rate, the entity must estimate the expected cash flows taking into account all the contractual conditions of the financial instrument (e.g. prepayment, extension, call options and other similar options), but must not take into account the losses. expected from lending. The calculation includes all commissions and points paid or collected by the contracting parties that form an integral part of the effective interest rate (see points B 5.4.1 - B 5.4.3), transaction costs and all other premiums or discounts.

Assessment at fair value

Fair value is the price that would have been received when selling an asset or paid for the settlement of a debt in a transaction carried out under normal conditions between participants in the main market, at the assessment date, or in the absence of the main market, on the most advantageous market on which the Company has access to that date.

The company measures the fair value of a financial instrument using the prices quoted on an active market for that instrument. A financial instrument has an active market if quoted prices are available quickly and regularly for that instrument. The company measures the instruments quoted on active markets using the closing price.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

3. Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

A financial instrument is considered to be listed on an active market when quoted prices are available immediately and regularly from a exchange, a dealer, a broker, an industry association, a pricing service or a regulatory agency, and these prices reflect transactions that occur on a real and regular basis, conducted under objective market conditions.

In the category of shares listed on an active market are included all those shares admitted to trading on the Stock Exchange or on the alternative market and which present frequent transactions. The market price used to determine the fair value is the closing price of the market from the last trading day before the assessment date.

For the calculation of fair value, for equity instruments (shares), 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 quoted prices included in Level 1 which are observable for assets or liabilities, either directly (ex: prices) or indirectly (ex: price derivatives).
Level 3: assessment techniques based largely on unobservable elements. This category includes all instruments for which the assessment technique includes elements that are not based on observable data and for which unobservable input parameters can have a significant effect on the assessment of the instrument.

The assessment at the fair value of the equity instruments (shares) held is as follows:

for listed and traded securities during the reporting period, the market value was determined by taking into account the quotation from the last trading day (closing quotation on the main capital market for those listed on the regulated market - BVB, respectively the reference price for the alternative system - AERO for level 1, and for level 2, quotations are taken for the shares traded in the last 30 trading days);
for listed securities that have no transactions in the last 30 days of the reporting period, as well as for unlisted securities, the market value is determined as it results from the last approved annual financial statement of the entity;
for securities not admitted to trading on a regulated market or within an alternative trading system in Romania issued by issuers holding more than 33% of the share capital, these are assessed exclusively in accordance with International Assessment Standards on the basis of a assessment report updated at least annually;
for the securities related to the companies in the insolvency or reorganization procedure, the assessment is made at zero value;

The equity securities issued by OPC are assessed taking into account the last unit value of the net asset, calculated and published.

Identifying and assessing the impairment

The company must recognize a provision for the expected loan losses related to a financial asset that is assessed in accordance with point 4.1.2 or 4.1.2A (debt instruments assessed at amortized cost or at fair value through other elements of the comprehensive income), a debt that arises from a leasing agreement, a loan commitment and a financial guarantee contract.

The Company applies the impairment provisions for the recognition and measurement of the provision for losses related to the assets assessed at fair value through other elements of the comprehensive income in accordance with point 4.1.2A (assets held for the purpose of collecting cash flows and sales, whose cash flows represent Excluding principal repayments or interest payments). The provision thus determined is recognized on the basis of other comprehensive income and does not reduce the carrying amount of the financial asset from the statement of financial position.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

3. Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

Derecognition

The Company derecognises a financial asset when the rights to receive cash flows from that financial asset expire, or when the Company has transferred the rights to receive the contractual cash flows related to that financial asset in a transaction in which it has significantly transferred all the risks and benefits of ownership.

Any interest in the transferred financial assets held by the Company or created for the Company is separately recognized as an asset or liability.

The company derecognises a financial debt when the contractual obligations have been concluded or when the contractual obligations are cancelled or expired.

In derecognition of equity instruments (shares), the Company uses the "first in, first out" method.

Reclassification

If the Company reclassifies financial assets according to point 4.4.1 (as a result of the modification of the business model for the management of its financial assets), then all the affected financial assets will be reclassified. Financial liabilities cannot be reclassified after the initial recognition.

The Company applies the reclassification of financial assets prospectively from the date of reclassification. Any previously recognized gains, losses or interest will not be restated.

In the event of a reclassification, the Company proceeds as follows:

when reclassifying an asset from the category of amortized cost to that of fair value through profit or loss, the fair value is determined at the date of reclassification. The difference between amortized cost and fair value is recognized in profit or loss;
when reclassifying an asset from the category of fair value through profit or loss to that of the amortized cost, the fair value at the date of reclassification becomes the new gross book value; - when reclassifying an asset from the category of amortized cost to that of fair value through other elements of the comprehensive income, the fair value is determined at the date of reclassification. The difference between amortized cost and fair value is recognized in other comprehensive income, without adjusting the effective interest rate or expected loan losses;
when reclassifying an asset from the fair value category through other elements of the comprehensive income to the amortized cost, the reclassification is carried out at the fair value of the asset as of the reclassification date. The amounts previously recognized in other comprehensive income are eliminated in relation to the fair value of the asset, without affecting the profit or loss account. The effective interest rate and expected lending losses are not adjusted as a result of the reclassification;
when reclassifying an asset from the category of fair value through profit or loss to that of fair value through other elements of the comprehensive income, the asset continues to be measured at its fair value;
when reclassifying an asset from the category of fair value through other elements of the comprehensive income to that of fair value through profit or loss, the financial asset continues to be measured at fair value. The amounts previously recognized in other comprehensive income are reclassified from equity into profit or loss, as an adjustment from reclassification (according to IAS 1).

• Gains and losses

Gains or losses arising from a change in the fair value of a financial asset or a financial liability that is not part of a hedge relationship are recognized as follows:

a) Gains or losses generated by financial assets or financial liabilities classified as fair value through profit or loss are recognized in profit or loss;

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

b) Gains or losses generated by a financial asset assessed at fair value through other elements of the comprehensive income are recognized against other elements of the comprehensive income. When the asset (in the case of equity instruments) is derecognised, the previously recognized cumulative losses or gains on other comprehensive income are transferred to the retained earnings.

At the time of depreciation or derecognition of financial assets and financial liabilities accounted for at amortized cost, as well as through their amortization process, the Company recognizes a gain or loss in the profit or loss account.

f) Other financial assets and liabilities

Other financial assets and liabilities are measured at amortized cost using the effective interest method.

g) Intangible assets

Intangible assets are initially assessed at cost. After the initial recognition, an intangible asset is accounted for at cost less accumulated depreciation and any accumulated impairment losses.

Amortization of intangible assets

The amortization is recognized in the profit or loss account using the straight-line method for the estimated useful life of the intangible assets, from the date they are available for use.

The estimated useful lives for the current period and for the comparative periods are the following: computer programs - 3 years, and the licenses for their validity period.

Amortization methods, useful lives and residual values are reviewed at the end of each financial year and adjusted accordingly.

h) Tangible assets

Recognition and assessment

Tangible assets recognized as assets are initially assessed at the acquisition cost (for those purchased on an onerous basis), at the contribution value (for those received as an in-kind contribution to the constitution/increase of the share capital), respectively at the fair value from the date the acquisition for those received free of charge.

The cost of an item of property, plant and equipment consists of the purchase price, including non-recoverable taxes, after deducting any commercial price reductions and any costs that can be directly attributed to bringing the asset to the location and under the condition that it can be used. for the purpose set by the management, such as: expenses with employees that result directly from the construction or acquisition of the asset, the costs of setting up the placement, the initial costs of delivery and handling, the costs of installation and assembly, the professional fees.

Property, plant and equipment are classified by the Company in the following classes of assets of the same nature and with similar uses:

land and buildings;
machinery and equipment and mean of transport;
furniture, office equipment, equipment for the protection of human and material values and other tangible assets.

Assessment after recognition

For further recognition, the Company adopted the reassessment model.

After recognition as an asset, items of tangible assets of the nature of constructions and land whose fair value can be reliably measured are accounted for at a reassessed amount, this being the fair value at the reassessment date minus any subsequent accumulated depreciation and any losses. accumulated from impairment.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

Other property, plant and equipment are measured at cost less accumulated depreciation and eventual impairment losses.

The reassessments should be conducted with sufficient regularity to ensure that the carrying amount does not differ significantly from what would have been determined by using the fair value at the reporting period.

If an item of property, plant and equipment is reassessed, then the entire class of property, plant and equipment that is part of that item is subject to reassessment.

The bookings of the reassessment reserves are made on each fixed asset and on each reassessment operation that took place.

The surplus from the reassessment included in the own capital related to an item of property, plant and equipment is transferred directly to the result carried over as the depreciation measure and when the asset is derecognised at the disposal or scrapping.

Land and buildings are shown at reassessed value, representing fair value at the reassessment date less accumulated depreciation and impairment losses. The reassessments are carried out by specialized evaluators, members of ANEVAR. The frequency of reassessments is dictated by the dynamics of the markets to which the lands and constructions owned by the Company belong.

Amortization

The amortization is calculated at the carrying amount (acquisition cost or reassessed value, minus the residual value) and is recognized in the profit or loss account using the linear method for the estimated useful life for the tangible assets.

The land is not amortized.

The estimated useful lives for the current period and for the comparative periods are the following:

constructions; 12-50 years
machinery and equipment and mean of transport; 3-20 years
furniture, office equipment, equipment for the protection of values 3-15 years

human and material and other tangible assets. Amortization methods, estimated useful lives, and residual values are re-visited by the Company's management on each reporting date.

Depreciation

An asset is depreciated when the carrying amount exceeds its recoverable amount.

At each reporting date, the Company must verify that there are indications of depreciation of assets. If such indications are identified, the Company must estimate the recoverable amount of the asset.

Derecognition

The carrying amount of an item of property, plant and equipment is derecognised (eliminated from the statement of financial position) upon disposal or when no future economic benefit from its use or disposal is expected.

Property, plant and equipment that are written off or sold are eliminated from the statement of financial position along with the corresponding accumulated depreciation.

The gain or loss resulting from derecognition of an item of property, plant and equipment is included in the current profit or loss account when the item is derecognised.

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

3. Significant accounting policies (continuation)

i) Real estate investments

Real estate investments are real estate (land, buildings or parts of a building) owned by the Company for the purpose of renting or for the increase of value or both, and not for:

be used for the production or supply of goods or services or for administrative purposes; or
be sold during the normal course of business.

Some properties include a part that is held for rent or for the purpose of increasing value and another part that is held for the purpose of producing goods, providing services or for administrative purposes.

If these parts can be sold separately (or rented separately under a lease agreement), then they are accounted for separately. If the parts cannot be sold separately, the property is treated as a real estate investment only if the part used for the production of goods, services or administrative purposes is insignificant.

Recognition

A real estate investment is recognized as an asset if and only if:

it is probable that a future economic benefit associated with real estate investment will enter the Company;
the cost of real estate investment can be reliably assessed.

Assessment

Initial assessment

An investment property is initially assessed at cost, including trading costs. The cost of a purchased real estate investment consists of its purchase price plus any directly attributable expenses (for example, professional fees for providing legal services, property transfer fees and other trading costs).

Afterwards assessment

The Company's accounting policy regarding the subsequent assessment of real estate investments is based on the fair value model. This policy is applied uniformly to all real estate investments. The assessment of the fair value of the real estate investments is carried out by the evaluators members of the National Association of Romanian Appraisers (ANEVAR). Fair value is based on market price quotations, adjusted, if applicable, to reflect differences related to the nature, location or conditions of the respective asset. These assessments are periodically reviewed by the Company's management.

Gains or losses resulting from changing the fair value of real estate investments are recognized in the profit or loss account of the period in which they occur.

The fair value of real estate investments reflects market conditions at the balance sheet date.

Transfers

Transfers to and from the category of real estate investments must be made then and only when there is a change in the use of the respective asset.

For the transfer of a real estate investment accounted for at fair value to tangible assets, the implicit cost of the asset for the purpose of its subsequent accounting will be its fair value from the date of the change of use.

Derecognition

The carrying amount of a real estate investment is derecognised at the time of the disposal or when the investment is definitively withdrawn from use and no future economic benefits from its disposal are expected.

Gains or losses resulting from the divestiture or disposal of a real estate investment are recognized in the profit or loss account when it is sold or sold.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

3. Significant accounting policies (continuation)

j) Impairment of assets other than financial assets

The carrying amount of the Company's assets that are not of a financial nature, other than deferred tax assets, is reviewed at each reporting date to identify the ex-occurrence of impairment indices. If such indications exist, the recoverable amount of the respective assets is estimated.

An impairment loss is recognized when the carrying amount of the asset or its cash-generating unit exceeds the recoverable amount of the asset or cash-generating unit. A cash generating unit is the smallest identifiable group that generates cash and is independent of other assets and other asset groups. Impairment losses are recognized in the profit or loss account.

The recoverable amount of an asset or cash-generating unit is the maximum between the use value and its fair value less the costs of selling that asset or unit.

To determine the net use value, future cash flows are updated using a pre-tax discount rate that reflects current market conditions and risks specific to that asset.

Impairment losses recognized in prior periods are assessed at each reporting date to determine whether they have decreased or no longer exist. Impairment loss is resumed if there has been a change in the estimates used to determine the recovery value. Impairment loss is resumed only if the carrying amount of the asset does not exceed the carrying amount that would have been calculated, net of depreciation and impairment, if the impairment loss had not been recognized.

k) Share capital

The share capital consists of ordinary shares, indivisible, registered, of equal value, issued in dematerialized form and grants equal rights to their holders.

l) Provisions

Provisions are recognized in the profit or loss account when the company has a current obligation (legal or implicit) generated by a past event, when an outflow of resources incorporating economic benefits is required and when it can be made a credible estimate as to the value of the obligation.

To determine the provision, future cash flows are discounted using a pre-tax discount rate that reflects current market conditions and risks specific to the respective debt.

m) Employee benefits

Short-term benefits

Short-term employee benefits include salaries, bonuses and social security contributions. The short-term benefits obligations to employees are not updated and are recognized in the profit or loss account as the related service is provided.

A provision is recognized for the amounts expected to be paid by way of premiums in shortterm instalments or schemes for the participation of staff for profit, given that the Company currently has a legal or implicit obligation to pay these amounts. as a result of past services provided by employees and if the obligation can be reliably estimated.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

m) Employee benefits (continuation)

Besides wages and other rights of a salary nature, according to the company contract (the articles of incorporation) and the collective labour agreement, the directors, directors with a mandate contract and the employees of the Company have the right to receive bonuses (incentives) under the conditions of the profit indicator. net established by the income and expense budget approved by the General Meeting of Shareholders for the current year, within the limit approved by the GMS approving the financial statements for that year.

This obligation is first recognized in the profit or loss account of the financial year in which the profit was realized in the form of provisions for employee benefits. The distribution of these bonuses (incentives) is made in the following year, after their approval by the General Meeting of Shareholders.

Determined contribution plans

The company makes payments on behalf of its employees to the Romanian state pension system, health insurance and the insurance contribution for work during the normal activity. All the employees of the Company are members and have the legal obligation to contribute (through individual social contributions) to the pension system and to the health system of the Romanian state. The employment insurance contribution is recognized in the profit or loss account of the period. The company has no additional obligations.

The company is not engaged in any independent pension system and, consequently, has no other obligations in this regard. The company is not engaged in any other system of post-retirement benefits. The company has no obligation to provide subsequent services to former or current employees.

Long-term employee benefits

The net obligation of the Company regarding the benefits related to the long-term services is represented by the value of the future benefits that the employees have gained in exchange for the services provided by them during the current period and the previous periods. On the basis of the collective labor agreement in force, the persons who retire at the age limit benefit on the date of retirement of an allowance equal to the value of two salaries taken at the time of retirement.

The present value of this obligation is not significant, and as such the company does not recognize these future costs as a provision in the financial statements.

n) Interest income and expenses

Interest income and expenses are recognized in the profit or loss account by the effective interest method. The effective interest rate is the rate that exactly updates the expected cash payments and receipts in the future over the expected life of the financial asset or debt (or, where appropriate, for a shorter term) to the carrying amount of the financial asset or debt.

o) Dividend income

Dividend income is recognized in the profit or loss account at the date on which the right to receive such income is established.

Dividend income is recorded at gross value including dividend tax, which is recognized as a current expense with profit tax.

In the case of dividends received in the form of shares as an alternative to cash payment, the income from dividends is recognized at the level of the cash that would have been received, in correspondence with the increase of the related participation. The company does not record dividend income related to the shares received free of charge when they are distributed proportionally to all shareholders.

p) Gains and losses from exchange rate differences

Transactions in foreign currency are recorded in the functional currency (leu), by converting the amount into value at the official exchange rate communicated by the National Bank of Romania, valid at the date of the transaction.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Significant accounting policies (continuation)

p) Gains and losses from exchange rate differences (continuation)

At the reporting date, the monetary items expressed in foreign currency are converted using the exchange rate from the last day of currency auction of the year.

The differences of course that arise when settling the monetary elements or converting the monetary elements at different rates from those at which they were converted to initial recognition (during the period) or in previous financial statements are recognized as profit or loss. in the profit or loss account, during the period in which they appear.

r) Dividends to be distributed

Dividends are treated as a distribution of profit during the period in which they were declared and approved by the Ordinary General Meeting of Shareholders. The profit available for distribution is the profit of the year recorded in the financial statements prepared in accordance with IFRS.

s) Profit tax

The profit tax for the year includes the current tax and the deferred tax. Current income tax includes income tax from dividends recognized at gross value.

Profit tax is recognized in profit or loss or in other comprehensive income if the tax is related to capital items.

The current tax is the tax payable related to the profit realized during the current period, determined on the basis of the percentages applied at the reporting date and of all the adjustments related to the previous periods.

For the period ended June 30th, 2019 and December 31st, 2018, the corporate income tax rate was 16%. The tax rate for income from taxable dividends at June 30th, 2019 and December 31st, 2018 was: 5% and 0%.

The deferred tax is determined by the Company using the balance sheet method for those temporary differences that appear between the fiscal basis for calculating the tax for assets and liabilities and their accounting value, used for reporting in the individual financial statements.

Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities arising from transactions that are not business combinations and which do not affect the accounting or fiscal profit and differences arising from investments in subsidiaries, provided they are not resumed in the near future.

The deferred tax is calculated on the basis of the tax rates that are expected to be applicable to the temporary differences upon their resumption, based on the legislation in force at the reporting date.

The deferred tax claim is recognized by the Company only insofar as it is probable that future profits may be used to cover the tax loss. The claim is revised at the end of each financial year and is diminished to the extent that the related tax benefit is unlikely to be realized. The additional taxes arising from the distribution of dividends are recognized at the same time as the obligation to pay the dividends.

Receivables and debts with deferred tax are offset only if there is a legal right to offset current debts and debts with the tax and if they are related to the tax collected by the same tax authority for the same taxable entity or for different tax authorities but wishing to settle the claims and current liabilities with the net asset using a net basis or the related assets and liabilities will be realized simultaneously.

t) The result per share

The company presents the result on basic and diluted share for ordinary shares. The result per basic share is determined by dividing the profit or loss attributable to the ordinary shareholders of the Company to the weighted average number of ordinary shares related to the reporting period.

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

3. Significant accounting policies (continuation)

t) The result per share (continuation)

The diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares with the dilution effects generated by potential ordinary shares.

4. Financial risk management

The management constantly assesses the risks that may affect the achievement of the company's objectives and takes the necessary measures in case of changing the conditions in which they operate.

The risk management activity, an important component of the company's activity, concerns both general and specific risks, as provided by Law no. 297/2004 and CNVM Regulation no. 15/2004, as subsequently amended and supplemented.

By the nature of the object of activity the Company is exposed to different types of risks associated with the financial instruments and the markets on which it has exposure.

The main risks identified in the activity of the Company are:

a) market risk (price risk, currency risk, interest rate risk)

b) credit risk
c) liquidity risk.
d) the tax risks
e) the risk related to the economic environment
f) operational risk

a) Market risk

Market risk represents the current or future risk of a negative impact on profits, as determined by the market fluctuations in the prices of equity securities - in terms of activities belonging to the trading portfolio, the interest rate, as well as fluctuations in the exchange rate for the entire activity of the company.

The efficient management of the market risk is done by using the fundamental analysis that gives indications on the soundness of an investment, as well as estimating the potential of some companies, and taking into account the forecasts regarding the evolution of the economic branches and financial markets.

The main aspects pursued in the analysis of the market risk are: assessment of the portfolio of actions from the point of view of profitability and growth potential, strategic allocation of longterm investments, identification of short-term investments to take advantage of price fluctuations in the capital market, setting limits of concentration of assets in a certain economic sector.

The company is subject to market risk, mainly because of its trading activity.

The management of the Company has always pursued and aims to minimize the possible adverse effects associated with the market risk, through an active policy of prudential diversification of the portfolio of financial assets managed.

We estimate that the market risk to which the Company is exposed is medium.

The company is exposed to the following market risks:

Price risk

The Company is exposed to the fair value risk of the financial instruments held that fluctuate as a result of changes in market prices, whether it is caused by factors specific to the issuer's activity or factors affecting all the instruments traded on the market.

As of June 30th, 2019, and December 31st, 2018 the Company has the following asset structure subject to credit risk:

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

4. Financial risk management (continuation)

a) Market risk (continuation)

In RON	Com. No.	Market value June 30th, 2019	Com. No.	Market value December 31st. 2018
Capital investment
Listed companies	31	1,896,401,845	32	1,319,404,429
Unlisted companies	17	166,306,618	17	159,052,930
Fund units	4	3,256,345	4	2,732,940
Total capital investments	52	2,065,964,808	53	1,481,190,299

The market value of the listed stock portfolio (on BVB - regulated market, BVB-AERO - alternative trading system), at June 30th, 2019 represents 91.79% (December 31, 2018: 89.08%) of the total value of the portfolio administered.

Under these conditions, the Company has an average risk, associated with the change in the prices of financial assets on the capital market.

Within the managed portfolio are found a number of 7 issuers, of the 16 that constitute the BET index of the Bucharest Stock Exchange.

The market value according to IFRS of the shares held by the 7 issuers, represents on June 30th, 2019: 71.83% (December 31, 2018: 65.36%) of the market value of the shares held in the listed companies.

The company also monitors the concentration of risk on sectors of activity that are presented as follows:

Portfolio structure	Total market value of	package June 30th, 2019	Total market value of package December 31st, 2018
Economic sectors with weight in SIF value portfolio:	(RON)	%	(RON)	%
	2,065,964,808	100.00	1,481,190,299	100.00
Finance and banking	890,724,655	43.11	461,252,477	31.14
oil resources, methane gas and related services	356,026,076	17.23	258,739,649	17.47
renting and leasing real estate	271,241,630	13.13	265,754,054	17.94
energy and gas transport	144,539,928	7.00	135,190,148	9.13
tourism, public food, leisure	92,405,552	4.47	94,502,421	6.38
financial intermediation	67,950,184	3.29	28,135,844	1.90
the pharmaceutical industry	63,441,101	3.07	50,319,987	3.40
food industry	53,954,714	2.61	54,070,058	3.65
metallurgical industry	36,957,142	1.79	31,089,782	2.10
machine building industry, processing	35,875,254	1.74	19,174,290	1.29
the electronic, electrotechnical industry	32,554,276	1.58	33,558,808	2.27
chemical industry	11,850,539	0.57	10,910,020	0.74
others	3,526,586	0.17	332,490	0.02
grain storage and trade	1,660,826	0.08	1,660,826	0.11
distribution, supply of electricity and energy services		0.00	33,766,505	2.28
TOTAL CAPITAL SECURITIES	2,062,708,463	99.84	1,478,457,359	99.82
FUNDING UNITS	3,256,345	0.16	2,732,940	0.18

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

4. Financial risk management (continuation)

a) Market risk (continuation)

From the analysis of the data presented above, on June 30th, 2019 the Company mainly held shares with issuers operating in the field of finance, banks with a share of 43.11% of the total portfolio, increasing compared to December 31st, 2018, when on the same activity sector recorded a share of 31.14%.

Currency risk

Given that most of the Company's assets are expressed in national currency, exchange rate fluctuations do not directly affect the Company's activity. These fluctuations have an influence on the assessment of investments such as foreign currency deposits and current account availability.

Available in foreign currency, as of June 30th, 2019, 0.58% (December 31st, 2018: 22.52%) of the total financial assets, so the foreign exchange risk is low.

Investments in bank deposits in foreign currency are constantly monitored and investment, disinvestment measures are taken, depending on the forecast evolution of the exchange rate.

The concentration of assets and liabilities by types of currencies is summarized in the following table:

In RON	Accounting value	RON	EUR	USD
June 30th, 2019
Financial assets
Cash and cash equivalents	24,281,270	12,237,935	12,043,302	33
Deposits placed in banks	52,010,519	51,568,743		441,776
Financial assets measured at fair value through other comprehensive income	2,062,708,463	2,062,708,463
Financial assets measured at fair value through profit or loss	3,256,345	3,256,345
Loans and receivables	5,437,478	5,437,478
Other financial assets	206,871	206,871
Total financial assets	2,147,900,946	2,135,415,835	12,043,302	441,809
Financial debts
Payment dividends	66,313,636	66,313,636
Other financial debts	6,296,874	6,296,874
Total financial debts	72,610,510	72,610,510

In RON	Accounting value	RON	EUR	USD
December 31st, 2018
Financial assets
Cash and cash equivalents	472,375,238	29,100,114	443,275,059	65
Deposits placed in banks	554,340	122,244		432,096
Financial assets measured at fair value through other comprehensive income	1,478,457,359	1,478,457,359
Financial assets measured at fair value through profit or loss	2,732,940	2,732,940
Loans and receivables	15,836,743	15,836,743
Other financial assets	134,574	134,574
Total financial assets	1,970,091,194	1,526,383,974	443,275,059	432,161
Financial debts
Payment dividends	42,515,955	42,515,955
Other financial debts	9,855,891	9,855,891

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

4. Financial risk management (continuation)

a) Market risk (continuation)

Interest rate risk

The interest rate risk represents the current or future risk of adversely affecting profits and capital, as a result of adverse changes in interest rates. The factors that define this type of market risk are a wide range of interest rates corresponding to a variety of markets, currencies and maturities for which the Company holds positions. The interest rate directly influences the income and expenses attached to the variable interest-bearing financial assets and liabilities.

Most of the assets in the portfolio are not interest bearers. Consequently, the Company is not significantly affected by the interest rate risk. Interest rates applied to cash and cash equivalents are short-term.

In order to benefit from the interest rate volatility, for greater flexibility in the policy of allocating the money availabilities, it will be intended that the placing of the money availabilities in monetary instruments will be made especially in the short term, of 1-3 months.

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

In RON	Accounting value	Under 3 months	Between 3 and 12 months	Without interest
June 30th, 2019
Financial assets
Cash and cash equivalents	24,281,270			24,281,270
Deposits placed in banks	52,010,519	52,010,519
Financial assets measured at fair value through other comprehensive income	2,062,708,463			2,062,708,463
Financial assets measured at fair value through profit or loss	3,256,345			3,256,345
Loans and receivables	5,437,478			5,437,478
Other financial assets	206,871			206,871
Total financial assets	2,147,900,946	52,010,519	0	2,095,890,427
Financial debt
Payment dividends	66,313,636			66,313,636
Other financial liabilities	6,296,874			6,296,874
Total financial debt	72,610,510	0	0	72,610,510

In RON		Under 3	Between 3 and 12
	Accounting value	months	months	Without interest
December 31st, 2018
Financial assets
Cash and cash equivalents	472,375,238			472,375,238
Deposits placed in banks	554,340	554,340
Financial assets measured at fair value through other comprehensive income	1,478,457,359			1,478,457,359
Financial assets measured at fair value through profit or loss	2,732,940			2,732,940
Loans and receivables	15,836,743			15,836,743
Other financial assets	134,574			134,574
Total financial assets	1,970,091,194	554,340	0	1,969,536,854
Financial debt
Payment dividends	42,515,955			42,515,955
Other financial liabilities	9,855,891			9,855,891
Total financial debt	52,371,846	0	0	52,371,846

4. Financial risk management (continuation)

b) Credit risk

Credit risk represents the risk of the Company to record losses as a result of the insolvency of its debtors.

The credit risk expresses the possibility that the borrowers or the issuers do not meet their obligations at maturity, as a result of the degradation of the financial situation of the borrower or of the general situation of the economy. Credit risk appears in relation to any type of debt.

The issuer risk represents the risk of losing the value of a security in a portfolio, as a result of the deterioration of its economic-financial situation.

The main elements of credit risk identified, which can significantly influence the Company's activity are:

the risk of non-collection of dividends from the companies in the portfolio;
the risk of non-cashing of the contract amount, in the case of the activity of selling the shares in "closed" companies, through a sale-purchase contract;
the risk that in the situation of liquidation of a portfolio company, the value obtained will be lower than the value of the initial investment.

In the case of the Company, the credit risk is largely determined by the exposures on asset items of the "share" type which represent 95.49% of the assets managed, assessed according to the legal provisions.

Credit risk assessment is carried out in two stages, both before carrying out the investment operations and after the approval and the actual execution of the operations, tracking the evolution of the assets in order to take appropriate measures in case of occurrence of elements that may lead to the deterioration of the economic activity of the companies. and in extreme cases, upon their insolvency.

We estimate that the credit risk to which the Company is exposed is medium.

The maximum exposure to credit risk on June 30th, 2019 is 81,677,450 RON (December 31st, 2018: 488,735,889 RON) and can be analysed in the following tables.

In RON	June 30th, 2019	December 31st, 2018
Deposits and accounts at banks	76,259,611	472,903,745
Other assets	5,417,839	15,832,144
TOTAL	81,677,450	488,735,889

Exposure to current accounts and deposits placed with banks (exclusive of attached interest)

In RON	June 30th, 2019	December 31st, 2018
Bank: RAIFFEISEN BANK	9,626,836	28,977,540
Bank: TRANSILVANIA	794,502	527,773
Bank: COMERCIALĂ ROMÂNĂ	65,836,223	443,396,211
Bank: BRD - GSG	569	741
Bank: EXIMBANK	1,481	1,480
Total	76,259,611	472,903,745

4. Financial risk management (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

b) Credit risk (continuation)

Other assets

In RON	June 30th, 2019	December 31st, 2018
Dividends to be cashed	5,185,105	21,578
Other miscellaneous debtors and trade receivables	968,024	16,545,856
Provisions for impairment of other financial assets	(735,290)	(735,290)
Total	5,417,839	15,832,144

c) Liquidity risk

The Company aims to maintain a level of liquidity appropriate to its underlying obligations, based on an assessment of the relative liquidity of the assets on the market, taking into account the period required for liquidation and the price or value at which the respective assets can be liquidated, as well as their sensitivity. market risks or other external factors.

The company must hold liquid assets, the sum of which will cover the difference between liquidity outflows and liquidity inflows in crisis situations, so as to ensure that the company maintains levels of liquidity reserves that are adequate to enable it to cope. any imbalances between liquidity inflows and outflows in crisis situations.

The liquidity risk is mainly related to the shares held in the "closed" type companies existing in the managed portfolio. Thus, the sale of participations - in the case of the appearance of negative aspects in their economic-financial situation or if the aim is to obtain

of liquidity - it is particularly cumbersome, there is a risk that it will not be possible to obtain a price higher or at least equal to the one with which these investments are assessed in the calculation of the net assets, according to the regulations F.S.A.

The structure of assets and liabilities in terms of liquidity is analysed in the following table: In RON

In RON				Without
	Accounting value Under 3 months		Between 3 and 12 months	preestablished maturity
June 30th, 2019
Financial assets
Cash and cash equivalents	24,281,270	-	-	24,281,270
Deposits placed in banks	52,010,519	52,010,519	-	-
Financial assets measured at fair value through other comprehensive income	2,062,708,463	-	-	2,062,708,463
Financial assets measured at fair value through profit or loss	3,256,345	-	-	3,256,345
Loans and receivables Other financial assets	5,437,478 206,871	- -	- -	5,437,478 206,871
Total financial assets	2,147,900,946	52,010,519	0	2,095,890,427
Financial debt
Payment dividends	66,313,636	66,313,636	-	-
Other financial liabilities	6,296,874	6,296,874	-	-
Total financial debt	72,610,510	72,610,510	0	0

4. Financial risk management (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

c) Liquidity risk (continuation)

In RON

In RON				Without
	Accounting value Under 3 months		Between 3 and 12 months	preestablished maturity
December 31st, 2018
Financial assets
Cash and cash equivalents	472,375,238	-	-	472,375,238
Deposits placed in banks	554,340	554,340	-	-
Financial assets measured at fair value through other comprehensive income	1,478,457,359	-	-	1,478,457,359
Financial assets measured at fair value through profit or loss	2,732,940	-	-	2,732,940
Loans and receivables	15,836,743	-	-	15,836,743
Other financial assets	134,574	-	-	134,574
Total financial assets	1,970,091,194	554,340	0	1,969,536,854
Financial debt
Payment dividends	42,515,955	42,515,955	-	-
Other financial liabilities	9,855,891	9,855,891	-	-
Total financial debt	52,371,846	52,371,846	0	0

d) The tax risks

Since the date of Romania's accession to the European Union, the Company has had to comply with EU tax regulations and implement the changes brought by European law. The way in which the Company has implemented these changes remains open for fiscal audit for five years.

The management of the Company considers that it has correctly interpreted the legislative provisions and has recorded correct wave times for taxes, taxes and other debts to the state but, under these conditions, there is a risk attached.

The fiscal system in Romania is subject to various interpretations and permanent changes. In certain situations, the tax authorities may adopt different interpretations of the tax aspects to the Company and may calculate interest and penalties.

Tax and tax returns may be subject to review and review for a period of five years, generally after the date of filing.

The Government of Romania has a large number of agencies authorized to carry out control of companies operating in the territory of Romania. These controls are similar to tax audits in other countries and can cover not only tax issues but also other legal and regulatory issues that are of interest to these agencies. It is possible that the Company will be subject to fiscal controls as new tax regulations are issued.

e) The risk related to the economic environment

This risk is extremely important, through the direct effect on the activity of the Company, as well as indirectly, through the companies in which holdings are held.

The Romanian economy continues to present the characteristics of an emerging economy and there is a significant degree of uncertainty regarding the development of the political, economic and social environment.

The Romanian economy is still a fragile economy and is affected by the evolution of the other economies, especially the EU countries, which are the main business partners for our country.

The EU economy is subject to political risks in 2019. The policy will influence the economy and generate uncertainty.

How the UK will exit the EU, the conditions to be negotiated, still raises questions about the evolution of the EU economy in 2019.

4. Financial risk management (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

e) The risk related to the economic environment (continuation)

These changes also have their mark on the economic evolution. In Romania, there is also a high political risk. We estimate that the risk related to the economic environment to which the Company is exposed is moderate (average).

f) Operational risk

Operational risk is defined as the risk of recording losses or failing to achieve the estimated profits due to internal factors, such as the inadequate performance of internal activities, the existence of inadequate personnel or systems, or because of external factors, such as change. economic conditions, legislative changes on the capital market, socio-political events.

Operational risks are inherent in the Company's activity.

The company manages the operational risk by identifying, estimating, monitoring and controlling the risks.

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

g) Capital adequacy

The management policy regarding capital adequacy focuses on maintaining a solid capital base in order to support the continued development of the Company and to achieve investment objectives.

The equity of the Company consists of the share capital, the reserves created, the current result and the deferred result. As of June 30th, 2019, the Company's equity is RON 1,969,571,187 (December 31st , 2018: 1,760,119,782 RON).

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

5. Financial assets and liabilities

Accounting classifications and fair values

The accounting values and fair values of financial assets and liabilities are presented on June 30th, 2019, as follows:

In RON	Fair value through other elements of the comprehensive income	Fair value through profit or loss account	Amortized cost	Net accounting value	Fair value
Cash and cash equivalents	-	-	24,281,270	24,281,270	24,281,270
Deposits placed in banks	-	-	52,010,519	52,010,519	52,010,519
Financial assets measured at fair value through other comprehensive income	2,062,708,463	-	-		2,062,708,463 2,062,708,463
Financial assets measured at fair value through profit or loss	-	3,256,345	-	3,256,345	3,256,345
Held-to-maturity investments	-	-	-	-	-
Other financial assets	-	-	5,644,349	5,644,349	5,644,349
Total financial assets	2,062,708,463			3,256,345 81,936,138 2,147,900,946 2,147,900,946
Payment dividends	-	-	66,313,636	66,313,636	66,313,636
Other financial liabilities	-	-	6,296,874	6,296,874	6,296,874
Total financial debt	-	-	72,610,510	72,610,510	72,610,510

The accounting values and fair values of financial assets and liabilities are presented on December 31st , 2018, as follows:

In RON	Fair value through other elements of the comprehensive income	Fair value through profit or loss account	Amortized cost	Net accounting value	Fair value
Cash and cash equivalents	-	-	472,375,238	472,375,238	472,375,238
Deposits placed in banks	-	-	554,340	554,340	554,340
Financial assets measured at fair value through other comprehensive income	1,478,457,359	-	-		1,478,457,359 1,478,457,359
Financial assets measured at fair value through profit or loss	-	2,732,940	-	2,732,940	2,732,940
Other financial assets	-	-	15,971,317	15,971,317	15,971,317
Total financial assets	1,478,457,359			2,732,940 488,900,895 1,970,091,194 1,970,091,194
Payment dividends	-	-	42,515,955	42,515,955	42,515,955
Other financial liabilities	-	-	9,855,891	9,855,891	9,855,891
Total financial debt	-	-	52,371,846	52,371,846	52,371,846

6. Dividend income

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Dividend income is recorded at gross value. Dividend tax rates for the period ended June 30th, 2019 were 5% and zero (2018: 5% and zero).

Dividend income, mainly by taxpayers, is presented as follows:

In RON	June 30th, 2019	June 30th, 2018
BRD-GROUPE SOCIETE GENERALE S.A. Bucharest	46,359,520	24,329,621
BANCA TRANSILVANIA S.A.	35,010,273	6,683,453
OMV PETROM S.A. Bucharest	19,633,816	14,362,006
S.N.G.N. ROMGAZ S.A.	7,600,780	-
S.N.T.G.N. TRANSGAZ S.A. Medias	5,270,116	8,770,593
C.N.T.E.E. TRANSELECTICA S.A. Bucharest *	2,467,745	-
UNIVERS S.A. Rm.Vâlcea	1,703,805	1,010,533
ELECTROMAGNETICA S.A. Bucharest	706,870	-
BURSA DE VALORI BUCHAREST S.A.	432,030	647,010
SIF MOLDOVA S.A.	114,590	-
ELBA S.A. Timisoara	87,182	131,830
DEPOZITARUL CENTRAL S.A. Bucharest	77,994	52,958
PROVITAS S.A. Bucharest	48,351	91,361
BANCA COMERCIALĂ ROMÂNĂ S.A.	-	14,365,762
B.T. ASSET MANAGEMENT S.A.	-	1,999,969
MERCUR S.A. Craiova	-	978,336
FLAROS S.A. Bucharest	-	810,386
EXIMBANK S.A. Bucharest	-	405,805
TURISM S.A. Pucioasa	-	101,060
S.E. ELECTRICA S.A. Bucharest	-	89,535
RELEE S.A. Medias	-	13,074
TOTAL	119,513,072	74,843,292

* Additional dividends for the financial year 2017, distributed by the Ordinary General Meeting of Shareholders of C.N.T.E.E. Transelectrica S.A. Bucharest from December 14th, 2018, with ex-date January 3rd, 2019.

7. Other operating income

In RON	June 30th , 2019	June 30th , 2018
Financial income from adjustments in value of financial assets	-	292,945
Revenue from provisions for impairment of current assets	-	-
Other operating revenues	51,360	79,569
other incomes	16,663	32,206
Income from deferred income tax	-	-
Total	68,023	404,720

8. Net profit from the sale of financial assets

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

In RON	June 30th , 2019	June 30th , 2018
Income from the sale of financial assets measured at fair value through other comprehensive income	-	7,724,929
The carrying amount of financial assets measured at fair value through other comprehensive income, assigned, reflected in profit or loss	-	(3,276,292)
Net profit from the sale of financial assets reflected in profit or loss	0	4,448,637

In the first half of 2018, the Company recorded revenues from the transfer of the financial assets measured at fair value through other elements of the comprehensive income in the profit or loss account. In the third quarter of 2018, it was returned to this registration, the gain or loss from the transfer of the financial assets assessed at fair value through other elements of the comprehensive income was recorded in the reported result.

9. Commissions, fees and administration and Supervisory fees

In RON	June 30th, 2019	June 30th, 2018
Fees on commissions due to SSIF for share transactions	-	15,660
Expenses regarding commissions due for shareholder registry services	71,400	71,400
Expenses regarding commissions with the depository company	205,308	157,541
BVB expenses	-	-
Expenses on taxes due to entities in the capital market (ASF)	734,531	700,858
Audit fee expenses	-	-
Other expenses related to commissions, fees and contributions	70,334	41,795
Total	1,081,573	987,254

10. Other operating expenses

In RON	June 30th, 2019	June 30th, 2018
Tax and tax expenses	93,795	106,477
Expenses with salaries and other expenses with personnel	3,591,542	3,255,274
Expenses with depreciation, provisions and value adjustments	290,864	393,361
Expenses on external materials and benefits	456,265	377,040
Total	4,432,466	4,132,152

Salaries and assimilated expenses

In RON	June 30th, 2019	June 30th, 2018
Salary expenses	3,479,061	3,161,061
Insurance and social protection expenses	112,481	94,213
Total	3,591,542	3,255,274

10. Other operating expenses (continuation)

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

	June 30th, 2019	June 30th, 2018
Staff with a mandate contract	2	2
Employees with higher education	30	29
Employees with high school	13	12
Employees with general education	3	4
Total	48	47

Other operating expenses include personnel expenses, expenses with other taxes and duties, expenses with depreciation, provisions and value adjustments, expenses with external benefits.

In the period ended June 30th, 2019 the average number of employees was 44 (June 30th, 2018: 45), and the number of employees registered on June 30th, 2019 was 46 (June 30th, 2018: 45).

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

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

11. Income tax

Reconciliation of profit before tax with the profit tax expense in the profit or loss account

In RON	June 30th, 2019	June 30th, 2018
Current income tax	1,108,469	647,134
Dividend tax	5,852,702	3,591,928
Deferred income tax expense	-	-
Total tax on profit recognized as a result of the year	6,961,171	4,239,062
Profit before tax	121,245,861	74,616,423
Tax according to the statutory quota of 16%	19,399,338	11,938,628
The effect on the profit tax of:
Non-deductible expenses	831,222	747,596
Non-taxable income	(19,122,091)	(12,039,090)
Dividend tax rate	5,852,702	3,591,928
Amounts representing sponsorship within legal limits	-	-
Records and resumes of temporary differences	-	-
Profit tax	6,961,171	4,239,062

12. Cash and cash equivalents

In RON	June 30th, 2019	December 31st, 2018
Cash in the cashier	6,583	6,229
Current accounts in banks	24,268,604	472,350,025
Cash equivalents	6,083	18,984
Total cash and cash equivalents	24,281,270	472,375,238

Current accounts opened at banks are permanently available to the Company and are not restricted.

13. Deposits placed in banks

In RON	June 30th, 2019	December 31st, 2018
Bank deposits	51,991,007	553,720
Claims attached	19,512	620
Total deposits placed in banks	52,010,519	554,340

14. Financial assets

As of June 30th, 2019 the Company has the following structure of financial assets:

In RON	Com. No.	Market value June 30th, 2019	Com. No.	Market value December 31st, 2018
Capital investments
Listed companies	31	1,896,401,845	32	1.319.404.429
Unlisted companies	17	166,306,618	17	159.052.930
Fund units	4	3,256,345	4	2.732.940
Total capital investments	52	2.065.964.808	53	1,481,190,299

Financial assets assessed at fair value through other comprehensive income

In RON	June 30th, 2019	December 31st, 2018
Shares assessed at fair value	2,062,708,463	1,478,457,359
Total	2,062,708,463	1,478,457,359

14. Financial assets (continuation)

The financial assets measured at fair value through profit or loss (fund units) are presented as follows:

In RON	June 30th, 2019	December 31st, 2018
Opened investment fund BT INDEX România	2,180,510	1,766,016
Opened investment fund Napoca	215,810	193,470
Opened investment fund Transilvania	391,747	353,194
Opened investment fund Tehnoglobinvest	468,278	420,260
Total	3,256,345	2,732,940

The movement of financial assets during the reporting period ended June 30th, 2019 is presented in the following table:

In RON	Shares assessed at fair value	Shares assessed at cost	Fund units	Total
January 1st, 2019	1,478,457,359	0	2,732,940	1,481,190,299
Purchases	355,512,039	-	-	355,512,039
Sales	(41,736,527)	-	-	(41,736,527)
Fair value modification	270,475,592	-	523,405	270,998,997
June 30th, 2019	2,062,708,463	0	3,256,345	2,065,964,808

The shares in the current period amounting to 355,512,039 RON mainly include the acquisition of shares on the capital market at Banca Transilvania (197.1 million RON), BRD Groupe Societe Generale (86.1 million RON), SIF Banat-Crișana (36.9 million RON), S.N.G.N. Romgaz (17 million RON), Antibiotice Iasi (11.6 million RON).

The sales of shares in the current period amount to 41,736,527 RON and represent the book value of the shares coming out of the Company's portfolio: S.E. Electica S.A. (41.3 million RON), S.I.F. Moldova (0.3 million RON) and Contactoare Buzau (0.1 million RON).

The net gain from the sale of shares in the current period amounts to 1,940,535 RON and was recorded according to the provisions of IFRS 9 in the reported result. The movement of financial assets during the reporting period ended December 31st, 2018 is presented in the following table:

In RON	Shares assessed at fair value	Shares assessed at cost	Fund units	Total
January 1st, 2018	1,788,585,977	6,721,546	2,789,494	1,798,097,017
Transfer from shares assessed at cost to shares assessed at fair value through other items of the comprehensive income	6,721,546	(6,721,546)	-	-
acquisitions	242,761,080	-	-	242,761,080
Sales	(112,304,568)	-	-	(112,304,568)
Impairment losses	-	-	-	0
Changing the fair value	(447,306,676)	-	(56,554)	(447,363,230)
December 31st, 2018	1,478,457,359	0	2,732,940	1,481,190,299

14. Financial assets (continuation)

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

The share entries during the year 2018 in a total amount of 242,761,080 RON (purchases amounting to 221,643,696 RON) are mainly represented by acquisitions on the capital market at: Banca Transilvania (88.5 million RON), BRD Groupe Societe Generale (67.9 million RON), SE Electrica (36.6 million RON), S.N.T.G.N. Transgaz Mediaș (17.5 million RON), S.I.F. Banat-Crișana (5.9 million RON), Antibiotice Iasi (3.2 million RON).

The sales of shares during 2018 in a total amount of 112,304,568 RON, represent the book value of the shares issued from the Company's portfolio, respectively: Bank: Comercială Română (102.3 million RON), M.A.T. Craiova (5.1 million RON), C.N.T.E.E. Transelectrica (1.5 million RON), etc.

The net profit from the sale of shares during 2018 was in the amount of 507,864,789 RON and was recorded according to the provisions of IFRS 9 in the reported result.

On June 30th, 2019 and December 31st, 2018, in the category of shares assessed at fair value, mainly include the value of shares held by the following issuers: OMV Petrom SA Bucuresti, BRD - Groupe Societe Generale, Banca Transilvania SA Cluj Napoca, C.N.T.E.E. Transelectrica SA Bucuresti, S.N.T.G.N. Transgaz SA Mediaș, Argus SA Constanța, Antibiotice SA Iași, S.N.G.N. Romgaz SA Medias, etc.

The fair value at June 30th, 2019 of the first 10 issuers present in the portfolio represents 77.13% of the value of the total assets of the Company and is presented as follows:

No.	Issuer	Fair value	Percentage in total asset	Percentage in net asset
1	BANCA TRANSILVANIA S.A. Cluj-Napoca	493,232,951	22.8333	23.5880
2	BRD GROUPE SOCIETE GENERALE S.A. Bucharest	359,886,636	16.6603	17.2109
3	OMV PETROM S.A. Bucharest	287,235,445	13.2970	13.7365
4	MERCUR S.A. Craiova	133,570,917	6.1834	6.3878
5	SNTGN TRANSGAZ Mediaş	87,591,960	4.0549	4.1889
6	SNGN ROMGAZ S.A. Mediaş	68,790,631	3.1845	3.2898
7	FLAROS S.A. Bucharest	64,136,280	2.9691	3.0672
8	ANTIBIOTICE S.A. Iaşi	63,441,101	2.9369	3.0340
9	CNTEE TRANSELECTRICA Bucharest	56,947,968	2.6363	2.7234
10	ARGUS S.A. Constanţa	51,327,293	2.3761	2.4546
	TOTAL	1,666,161,182	77.1318	79.6811

The fair value at December 31st, 2018 of the first 10 issuers present in the portfolio represents 56.51% of the value of the total assets of the Company and is presented as follows:

No.	Issuer	Fair value	Percentage in total asset	Percentage in net asset
1	BRD GROUPE SOCIETE GENERALE S.A. Bucharest	232,802,672	11.7422	12.6639
2	OMV PETROM S.A. Bucharest	214,711,983	10.8298	11.6798
3	BANCA TRANSILVANIA S.A. Cluj-Napoca	193,755,280	9.7727	10.5398
4	MERCUR S.A. Craiova	134,991,884	6.8088	7.3432
5	SNTGN TRANSGAZ SA Mediaş	76,886,276	3.8780	4.1824
6	FLAROS S.A. Bucharest	61,669,500	3.1105	3.3547
7	CNTEE TRANSELECTRICA SA Bucuresti	58,303,872	2.9408	3.1716
8	ARGUS S.A. Constanţa	52,873,296	2.6669	2.8762
9	ANTIBIOTICE S.A. Iaşi	50,319,987	2.5381	2.7373
10	SNGN ROMGAZ S.A. Mediaş	44,027,666	2.2207	2.3950
	TOTAL	1,120,342,416	56.5085	60.9439

14. Financial assets (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

The hierarchy of fair values

For the calculation of fair value for equity instruments (shares), 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 quoted prices included in Level 1 which are observable for assets or liabilities, either directly (ex: prices) or indirectly (ex: price derivatives).
Level 3: assessment techniques based largely on unobservable elements. This category includes all instruments for which the assessment technique includes elements that are not based on observable data and for which unobservable input parameters can have a significant effect on the assessment of the instrument.

In RON	June 30th, 2019	December 31st, 2018
Level 1	1,643,336,856	1,033,478,989
Level 2	226,653,409	269,243,692
Level 3	195,974,543	178,467,618
Total	2,065,964,808	1,481,190,299

The fair value measurement of the investments (equity instruments - shares) held on June 30th, 2019 was performed as follows:

for quoted and traded securities during the reporting period, the market value was determined by taking into account the quotation of the last trading day (closing quotation on the main capital market for those listed on the regulated market - BVB, respectively the reference price for the alternative system - AERO for level 1, and for level 2 the quotations were taken for the shares traded in the last 30 trading days);
for listed securities that had no transactions in the last 30 days of the reporting period, as well as for unlisted securities, the market value was determined as it results from the last approved annual financial statement of the entity;
for securities issued by credit institutions not admitted to trading, the assessment is made at the book value per share calculated on the basis of the value of the own capital included in the monthly reports transmitted to the NBR.
for securities not admitted to trading on a regulated market or within an alternative trading system in Romania issued by issuers holding more than 33% of the share capital, these are assessed exclusively in accordance with International Assessment Standards on the basis of a assessment report updated at least annually;
for the securities related to the companies in the insolvency or reorganization procedure, the assessment is made at zero value;

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

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

In RON	June 30th, 2019	December 31st, 2018
Trade receivables	241,505	15,830,833
borrowers	5,911,624	736,600
Claims on the state budget and the social insurance budget	12,498	-
Other receivables	7,141	4,600
Accrual impairment adjustments	(735,290)	(735,290)
TOTAL	5,437,478	15,836,743

16. Other assets

In RON	June 30th, 2019	December 31st, 2018
Intangible assets	2,915	2,521
Other fixed assets	48,137	42,683
stocks	12,785	10,549
Prepayments	143,034	78,821
TOTAL	206,871	134,574

17. Payment dividends

In RON	June 30th, 2019	December 31st, 2018
Payment dividends afferent to 2013	644,780	644,780
Payment dividends afferent to 2014	484,237	484,242
Payment dividends afferent to 2015	17,975,565	18,079,375
Payment dividends afferent to 2016	12,684,957	12,820,745
Payment dividends afferent to 2017	10,261,818	10,486,813
Payment dividends afferent to 2018	24,262,279	-
Total payment dividends	66,313,636	42,515,955

18. Taxes and fees

In RON	June 30th, 2019	December 31st, 2018
Debts in connection with the Social Insurance Budget	231,961	203,938
Debts related to the State Budget	2,070,317	97,364,185
Other taxes and fees	-	147,380
Total	2,302,278	97,715,503

19. Debt on deferred income tax

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Deferred tax liabilities are determined by the following elements:

In RON	Assets	Debts	Net	Tax
June 30th, 2019
Fair value assessment of financial assets assessed at fair value through other comprehensive income	624,254,131		624,254,131	99,880,662
Reassessment of tangible assets	9,132,539		9,132,539	1,461,207
The result carried forward representing reassessment reserves made non-taxable	2,098,632		2,098,632	335,782
The result carried forward representing unachieved reserves	4,049,219		4,049,219	647,875
Deferred result representing unachieved reserves - real estate investments	359,751		359,751	57,561
Differences from the change in the fair value of the financial assets measured at fair value through other elements of the comprehensive income - free shares in the balance	57,509,383		57,509,383	9,201,502
Legal reserves	11,603,314		11,603,314	1,856,531
Other reserves - dividends prescribed according to the OGMS decision of April 23rd, 2005	6,551,528		6,551,528	1,048,245
Other reservations	980,658		980,658	156,907
Differences from the change in the fair value of financial assets measured at fair value through other elements of the comprehensive income - hyperinflation	6,380,492		6,380,492	1,020,879
TOTAL	722,919,647			722,919,647 115,667,151
In RON	Assets	Debts	Net	Tax
December 31st, 2018
Fair value assessment of financial assets assessed at fair value through other comprehensive income	353,778,539		353,778,539	56,604,566
Reassessment of tangible assets	9,338,439		9,338,439	1,494,150
The result carried forward representing reassessment reserves made non-taxable	2,094,978		2,094,978	335,197
The result carried forward representing unachieved reserves	3,929,462		3,929,462	628,713
Deferred result representing unachieved reserves - real estate investments	359,751		359,751	57,560
Differences from the change in the fair value of the financial assets measured at fair value through other elements of the comprehensive income - free shares in the balance	57,509,383		57,509,383	9,201,501
Legal reserves	11,603,314		11,603,314	1,856,530
Other reserves - dividends prescribed according to the			6,551,528	1,048,244
	6,551,528
OGMS decision of April 23rd, 2005 Other reservations	980,658		980,658	156,906
Differences from the change in the fair value of financial assets measured at fair value through other elements of the comprehensive income - hyperinflation	6,380,492		6,380,492	1,020,879

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

In RON	June 30th, 2019	December 31st, 2018
Staff debt	330,525	403,872
Commercial debts	133,137	3,628,089
Guarantees received	814	-
Various creditors	4,861	-
Earnings recorded in advance	29,438	25,831
Provisions for employee participation in profit and bonuses payable	5,798,099	5,798,099
Total other debts	6,296,874	9,855,891

21. Capital and reserves

Share capital

The share capital according to the Company's articles of association has the value of 58,016,571 RON, is divided into 580,165,714 shares with a nominal value of 0.1 RON/share and is the result of the direct subscriptions made to the share capital of the Company, by transforming it into shares of the amounts due as dividends based on Law no. 55/1995 and through the effect of Law no. 133/1996.

The shares issued by the Company are traded on the Bucharest Stock Exchange, Premium category as of September 1st, 1999, with SIF5 market symbol.

The records of the shares and the shareholders are kept by the Depozitarul Central S.A. Bucharest.

The shares of the Company are ordinary, indivisible, registered, of equal value, issued in dematerialized form and grant equal rights to their holders. All shares were fully subscribed and paid on June 30th, 2019 and December 31st, 2018.

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

There were no changes in the number of shares issued during the reporting period.

On April 25th, 2018, the Extraordinary General Meeting of the Shareholders of the Company was held, where a program of redemption by the company of its shares, in accordance with the applicable legal provisions, was approved under the following conditions:

size of the program - maximum 32,704,308 shares with a nominal value of 0.10 RON/share representing maximum 5.637% of the share capital;
the acquisition price of the shares - the minimum price will be 1.50 RON/share and the maximum price will be 2.50 RON/share;
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;
the payment of the repurchased shares and the size of the related fund - from the available reserves, the maximum amount affected by the repurchases being of 49,056,462.55 RON, according to the decision no.3 of the OGMS of September 6th, 2017;
the purpose of the program - the reduction of the share capital

On December 13th, 2018, it was submitted to the Financial Supervisory Authority by SSIF Voltinvest S.A. Craiova - as an intermediary in the Public Purchase Offer Shares issued by the Company - the Document of Public Offer of Purchase Shares issued by the Company, together with the related documentation.

On January 17th, 2019, the Company received from the Financial Supervisory Authority Decision no. 66/16.01.2019 approving the public offer document for the purchase of shares issued by the Company.

The quotation was successfully carried out between January 28th, 2019 - February 8th, 2019, a number of 19,662,585 shares were purchased at the price of 2.5 RON/share, representing 3.3822% of the share capital.

21. Capital and reserves (continuation)

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

The quotation was oversubscribed 13.2 times, which demonstrates the interest of the shareholders towards such actions.

The settlement of the transaction related to the public offer was made on February 14, 2019 through the Depozitarul Central.

The share capital according to the constitutive act is presented in the following table:

In RON	June 30th, 2019	December 31st, 2018
Statutory share capital	58,016,571	58,016,571
Share capital	58,016,571	58,016,571

As of June 30th, 2019, the number of shareholders was 5,739,983 (December 31st, 2018: 5,742,311), which is as follows:

	Shareholders no.	Shares no.	Amount (RON)	(%)
June 30th, 2019
Resident natural entities	5,737,879	230,522,035	23,052,204	39.73
Non-resident natural entities	1,861	2,014,172	201,417	0.35
Total natural entities	5,739,740	232,536,207	23,253,621	40.08
Resident legal entities	201	240,196,944	24,019,694	41.40
Non-resident legal entities	42	107,432,563	10,743,256	18.52
Total legal entities	243	347,629,507	34,762,950	59.92
Total June 30th, 2019	5,739,983	580,165,714	58,016,571	100.00
December 31st, 2018
Resident natural entities	5,740,203	237,561,073	23,756,107	40.95
Non-resident natural entities	1,852	2,168,581	216,858	0.37
Total natural entities	5,742,055	239,729,654	23,972,965	41.32
Resident legal entities
Non-resident legal entities	213	246,894,549	24,689,455	42.56
Total legal entities	43	93,541,511	9,354,151	16.12
Resident natural entities	256	340,436,060	34,043,606	58.68
Total 2018	5,742,311	580,165,714	58,016,571	100.00

Reserve established according to Law no. 133/1996

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

Reserve established according to Law no. 133/1996 is at June 30th, 2019 in the amount of 144,636,073 RON (December 31st, 2018: 144,636,073 RON).

Legal reserves

The legal reserves are constituted according to the legal requirements in the amount of 5% of the profit registered according to the accounting regulations applicable up to the level of 20% of the value of the share capital, according to the constitutive act. The value of the legal reserve at June 30th, 2019 is 11,603,314 RON (December 31st, 2018: 11,603,314 RON). On June 30th, 2019 and in 2018, the Company did not constitute legal reserves of profit, reaching the ceiling of 20% of the share capital, according to the articles of incorporation.

Legal reserves cannot be distributed to shareholders.

Capital and reserves (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

Dividends

The Ordinary General Meeting of Shareholders, meeting on April 24th, 2019, decided to distribute the net profit for the financial year of 2018, in the amount of 96,259,800.47 RON, on the following destinations:

a) Dividends: 84,081,469.35 RON (87.3485% of net profit), which ensures a gross dividend per share of 0.15 RON.

The proposed dividend provides a shareholder remuneration rate of 7.0175% calculated at the average trading price of the shares in 2018 (2.1375 RON/share) and 7.1942% calculated at the closing price for 2018 (2,0850 RON). /action).

The date of 17.06.2019 is approved as the date of payment of dividends in accordance with the provisions of art. 178 para. (2) of the FSA Regulation no. 5/2018. The distribution of dividends to the shareholders will be carried out in accordance with the legal provisions, the costs related to the payment being borne by the shareholders from the net dividend value.

b) Other reserves: 12,178,331.12 RON (12.6515% of net profit) in order to set up the necessary funds to carry out a future repurchase program of approximately 30,000,000 own shares in order to reduce the Company's share capital by cancelling the repurchased shares.

Duration of the program: maximum 18 months from the publication in the Official Gazette of Romania part IV of the decision of the EGMS which will establish the conditions for the redemption program to be carried out.

Differences from the modification of the fair value related to the financial assets assessed at the fair value through other elements of the comprehensive income

The differences in the assessment of financial assets measured at fair value through other elements of the comprehensive income include the cumulative net changes in the fair values of the financial assets from the date of their classification in this category and until their derecognition. These are recorded at the net amount of the related deferred tax.

22. Other reserves

In RON	June 30th, 2019	December 31st, 2018
Other reserves	555,210,270	521,517,906
- Entries	12,178,331	33,692,364
- Exits	(47,942,779)	-
Total	519,445,822	555,210,270

Mainly the inputs represent reserves distributed from the net profit for the year 2018, set up for the development of a future share repurchase program (12,178,331 RON) and the exits represent reserves related to the share repurchase (47,942,779 RON).

23. Result per share

Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

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

In RON	June 30th, 2019	June 30th, 2018
Profit attributable to ordinary shareholders	114,284,690	70,377,361
The weighted average number of ordinary shares	580,165,714	580,165,714
The result per basic share	0.1970	0.1213

24. Granted warranties

The company has no warranties whatsoever.

25. Transactions and balances with parties in special relationships

During the course of its activity, the company identified the following parties in special relationships:

Branches

In accordance with the legislation in force, the Company holds control in a number of 11 issuers on June 30th, 2019 (December 31st, 2018: 11 issuers). All branches of the Company on June 30th, 2019 and December 31st, 2018 are based in Romania. For them the percentage of holding is not different from the percentage of the number of votes held. The subsidiaries holdings are presented as follows:

No.	Company name	Percentage held at June 30th, 2019 - % -	Percentage held at December 31st , 2018 - % -
1	COMPLEX HOTELIER DAMBOVITA S.A. Targoviște	99.94	99.94
2	VOLTALIM S.A. Craiova	99.19	99.19
3	MERCUR S.A. Craiova	97.86	97.86
4	GEMINA TOUR S.A. Rm. Vâlcea	88.29	88.29
5	ARGUS S.A. Constanța	86.42	86.42
6	FLAROS S.A. Bucharest	81.07	81.07
7	CONSTRUCȚII FEROVIARE S.A. Craiova	77.50	77.50
8	UNIVERS S.A. Rm. Vâlcea	73.75	73.75
9	PROVITAS S.A Bucharest	70.28	70.28
10	TURISM PUCIOASA S.A. Dâmbovița	69.22	69.22
11	ALIMENTARA S.A. Slatina	52.24	52.24

The branches held by the Company represent as of June 30th, 2019: 15.82% of the total assets (December 31st, 2018: 16.80%), and of the net assets represent as of June 30th, 2019: 16.34% (December 31st, 2018 : 18.12%).

Associated entities

As of June 30th, 2019, the Company had holdings of more than 20% but not more than 50% of the share capital in a number of 8 issuers (December 31st, 2018: 8 issuers). All of them are based in Romania. For these issuers the percentage of holding is not different from the percentage of the number of votes held.

The holdings in these issuers were not qualified as associates, due to the fact that the Company does not exert significant influence in these companies.

The Company does not hold associates on June 30th, 2019 and December 31st, 2018.

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

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

Issuers whose ownership is over 20% but not more than 50% are as follows:

No.	Company name	Percentage held at June 30th, 2019 - % -	Percentage held at December 31st , 2018 - % -
1	LACTATE NATURA S.A. Târgoviște	40.38	40.38
2	SINTEROM S.A. Cluj-Napoca	31.88	31.88
3	ELECTRO TOTAL S.A. Botoșani	29.86	29.86
4	TURISM FELIX S.A. Băile Felix	28.97	28.97
5	ȘANTIERUL NAVAL Orșova S.A.	28.02	28.02
6	PRODPLAST S.A. Bucharest	27.55	27.55
7	TURISM LOTUS FELIX S.A. Băile Felix	27.46	27.46
8	ELECTROMAGNETICA S.A. Bucharest	26.14	26.14

Holdings of more than 20% but not more than 50% of the share capital of the 8 issuers above represent as of June 30th, 2019: 6.31% of the total assets (December 31st, 2018: 6.19%), and in Net assets represent 6.52% at June 30th, 2019 (December 31st, 2018: 6.68%).

Key management staff

June 30th, 2019

The members of the Board of Directors: Tudor Ciurezu - Chairman, Cristian Bușu - Vice-president, Anina Radu, Radu Hanga, Ana - Barbara Bobirca, Nicolae Stoian, Carmen Popa. Top management: Tudor Ciurezu - General Manager, Cristian Bușu - Deputy General Manager.

December 31st, 2018

The members of the Board of Directors: Tudor Ciurezu - Chairman, Cristian Bușu - Vice-president, Anina Radu, Radu Hanga, Ana - Barbara Bobirca, Nicolae Stoian, Carmen Popa.

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

The company has no contracted obligations regarding the payment of pensions to the former members of the Board of Directors and therefore has no commitments of this nature.

The company has not granted loans or advances (except for advances for travel in the interest of the service, justified in legal terms) to the members of the Board of Directors and the management and has not recorded commitments of this nature.

The Company has not received and has not given guarantees to any affiliated party.

26. Contingent liabilities and liabilities

Actions in court

As of June 30th, 2019, there are 32 disputes pending before the courts. The company had active procedural quality in 12 litigation, passive procedural quality in 14 litigation, in one case it has the quality of intervener, in 2 cases it is called in guarantee, 3 cases being in insolvency proceedings.

In most of the disputes in which the Company has the status of complainant, the object of the litigations is the annulment/finding of invalidity of some decisions of the general meetings of the shareholders in the companies in the portfolio.

26. Contingent liabilities and liabilities (continuation)

Environmental contingencies

The company has not registered any provision for future costs regarding environmental elements. The management does not consider the expenses associated with these elements to be significant.

Transfer price

The Romanian tax legislation contains rules on transfer prices between affiliated persons since 2000. The current legislative framework defines the principle of "market value" for transactions between affiliated persons, as well as the methods of establishing transfer prices. As a result, it is expected that the tax authorities will initiate thorough checks of the transfer prices, in order to ensure that the fiscal result is not distorted by the effect of the prices charged in the relations with affiliated persons. The company cannot quantify the result of such verification.

27. Events after the interim period

After the first six months of 2019, the main events of the Company's activity were:

1) Concerning the request to convene a General Meeting of Shareholders registered under no. 5071/11.06.2019, transmitted by S.I.F. Banat-Crișana S.A. and S.I.F. Muntenia SA, with items on the agenda regarding changes in the administrative and executive management of the Company, in the meeting of the Board of Directors from 08.07.2019, following the analysis of the above mentioned request, the summons of the Ordinary General Meeting of the requested Shareholders was rejected by the joint application registered with the company under no. 5071/11.06.2019 formulated by the shareholders of S.I.F. Banat Crișana S.A. and S.I.F. Muntenia S.A. (shareholders holding jointly representing 5.00% of the company's share capital), due to non-compliance with the legal conditions of form and fund.

2) The Board of Directors meeting in the meeting of 08.07.2019 took note of the resignation of Mr. Tudor Ciurezu, starting with 01.07.2019, as a member of the Nomination and Remuneration Committee and completed the composition of the Committee with the administrator Anina Radu.

Thus, the new composition of the committee is:

-Ana Barbara Bobirca - independent non-executive manager, Chairman

-Radu Hanga - independent non-executive manager

-Anina Radu - non-executive manager

3) The company took note of the Decision F.S.A. no. 937/18.07.2019, which establishes the task of the Board of Directors of the Company to convene and to ensure the holding of the ordinary general meeting of shareholders within a maximum of 45 days from the date of issuing the decision, including on the order of day the points proposed by SIF shareholders Banat Crișana S.A. and S.I.F Muntenia S.A. by the request registered at the issuer's headquarters with no. 5071/11.06.2019.

F.S.A. decision no. 937/18.07.2019 was submitted for analysis to the Board of Directors of the Company in the meeting of 29.07.2019 and the convening of the Ordinary General Meeting of Shareholders was rejected and motivated by lowering the shareholding of the two requesting shareholders under the legal threshold and 5% of the share capital of the Company, according to the Declaration of holdings transmitted by the Financial Investment Company Banat Crișana SA under no. 1663/23.07.2019.

4) Also the Company took note of the address of the F.S.A. no. VPI 4888/30.07.2019, regarding the Decision of the F.S.A. no. 937/18.07.2019 establishing by the Board of Directors of the Company the obligation to convene and to ensure the ordinary general meeting of shareholders within 45 days from the date of issuing the decision, without needing a further assessment of the fulfilment of the conditions provided by art. 119 paragraph (1) of Law no. 31/1990.

Events after the interim period (continuation)

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019 (all amounts are expressed in RON, unless otherwise stated)

At the meeting of the Board of Directors from 01.08.2019, the convening of the Ordinary General Meeting of the Company's Shareholders was rejected. The motivation: the decrease of the shareholding of the two requesting shareholders below the legal and statutory threshold of 5% of the share capital of the Company, according to the Declaration of holdings transmitted by S.I.F. Banat Crișana S.A. under no. 1663/23.07.2019 (registered with the company under no. 6535/24.07.2019) and of the non-fulfilment of the legal conditions of form and substance of the request of the two shareholders.

Associate Professor PhD Ec. Ciurezu Tudor Associate Professor PhD Bușu Cristian Chairman/General Manager Vice-president/Deputy General Manager

Ec. Sichigea Elena Financial Manager

AI Terminal

SIF Oltenia S.A.

2304_ir_2019-08-14_cd66c66e-e762-4fae-8a73-dc40a695f8e7.pdf

SIMPLIFIED INTERIM INDIVIDUAL FINANCIAL STATEMENTS as of June 30th, 2019

UNAUDITED

SIMPLIFIED INTERIM INDIVIDUAL FINANCIAL STATEMENTS as of June 30th, 2019

Table of contents

Simplified interim individual statement of the profit or loss and of other items of the comprehensive income as of June 30th, 2019

Simplified interim individual statement of the profit or loss and of other items of the comprehensive income as of June 30th, 2019

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Simplified interim individual statement of the changes in own equity as of June 30th, 2019

Simplified interim individual statement of the changes in own equity as of June 30th, 2019

Simplified interim individual statement of treasury flows prepared on June 30th, 2019

1. REPORTING ENTITY

2. Bases of preparation

a) Declaration of Conformity

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

2. Bases of preparation (continuation)

a) Declaration of Conformity (continuation)

b) Presentation of financial statements

c) Functional and Presentation Currency

2. Bases of preparation (continuation)

d) Basis of Assessment

e) Using Estimates and Judgments

3. Significant Accounting Policies

a) Subsidiaries and associated entities

3. Significant Accounting Policies (continuation)

b) Foreign currency transactions

c) Accounting the hyperinflation effect

d) Cash and cash equivalents

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements

3. Significant accounting policies (continuation)

e) Financial assets and liabilities

• Classification

Financial assets assessed at fair value through profit or loss

Financial assets measured at fair value through other comprehensive income

e) Financial assets and liabilities (continuation)

Financial assets measured at amortized cost

Financial debt

Initial recognition

e) Financial assets and liabilities (continuation)

Assessment

Assessment at amortized cost

Assessment at fair value

3. Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

Identifying and assessing the impairment

3. Significant accounting policies (continuation)

e) Financial assets and liabilities (continuation)

Derecognition

Reclassification

• Gains and losses

e) Financial assets and liabilities (continuation)

f) Other financial assets and liabilities

g) Intangible assets

Amortization of intangible assets

h) Tangible assets

Recognition and assessment

Assessment after recognition

Amortization

Depreciation

Derecognition

SOCIETATEA DE INVESTIŢII FINANCIARE OLTENIA S.A. Selected explanatory notes to simplified interim individual financial statements on June 30th, 2019

3. Significant accounting policies (continuation)

i) Real estate investments

Recognition

Assessment

Initial assessment

Afterwards assessment

Transfers

Derecognition

3. Significant accounting policies (continuation)

j) Impairment of assets other than financial assets

k) Share capital

l) Provisions

m) Employee benefits

Short-term benefits

m) Employee benefits (continuation)

Determined contribution plans

Long-term employee benefits

n) Interest income and expenses