New Presentation of IFRS conversion impact for SIF Moldova at 31 … · 2012. 11. 1. ·...

Presentation of IFRS conversion

impact for SIF Moldova at 31

December 2011

Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 2

Message to shareholders

Dear shareholder,

One of the priority objectives of SIF Moldova’s Board of Directors is to

improve the quality of corporate governance for the benefit of all capital

market participants, also by increasing communication and improving the

quality of information presented to shareholders and investors.

In this respect, implementation of the "Corporate Governance Regulation

of SIF Moldova" in 2011 represents an assurance that good governance

mechanisms and principles have been properly assimilated and

implemented in running the company.

Internal compliance regulations and requirements are primarily aimed

at underpinning investment decisions in conditions of uncertainty caused

by changes in the financial environment surrounding national and

international markets, designed to lead to the development of growth

strategies and thus to improve efficiency. Ensuring internal compliance is a

complex activity that includes regulatory activities, risk management, staff

training, continuous adaptation of the organisational structure.

Our goal for the new mandate of the Board of Directors is to begin with an

independent validation of the methods/ objectives for decision

substantiation and formalisation, increasing the possibility of control by

shareholders and investors interested in SIF2 shares. Thus, we propose

the preparation and presentation of regular reports, exceeding the

mandatory reporting requirements (according to CNVM regulations),

designed to enable an up-to-date information and easy access to all

information used for preparation of mandatory reports.

An overview of business performance indicators can be found in the

periodic reports of the Board of Directors.

The Board of Directors seek a favourable context to achieve its major

objectives, i.e. amendment of the articles of incorporation and increase of

share capital, so as to make these objectives achievable and meet the

interests of as many shareholders of SIF Moldova as possible.

This report has been prepared by the management of SIF Moldova, with

the assistance of KPMG Romania1, in order to present the impact of IFRS

conversion on corporate governance, financial results and key financial

ratios of SIF Moldova, at individual and consolidated levels for the year

ended 31 December 2011.

1KPMG’s comments are identified distinctively in this report and marked as “KPMG comments”. KPMG

comments are based on the Company's individual financial statements at 31 December 2011 prepared in

accordance with RAS, the Company's individual financial statements at 31 December 2011 prepared in

accordance with IFRS and the consolidated financial statements of SIF Moldova Group at 31 December

2011 prepared in accordance with IFRS; all three sets of financial statements were audited by Deloitte

Audit.


Legend:

RAS = Romanian accounting regulations (for SIF Moldova: Accounting regulations conforming with the Fourth

Directive of the European Economic Communities applicable to entities authorised, regulated and supervised by the

National Securities Commission - CNVM)

IFRS = International Financial Reporting Standards.

Note: all amounts are presented in RON, unless otherwise specified.

With this report, the Board of Directors aims to increase the understanding

of IFRS financial results by its shareholders so as to ensure a greater

control by shareholders on the achievement of the Board’s strategies and

to accustom analysts and investors to the differences between the two sets

of accounting regulations, in this transitional period from RAS to IFRS,

when IFRS financial statements are prepared for information purposes.

SIF Moldova is prepared to meet its obligations for the financial year

starting on 1 January 2013 in connection with the preparation of IFRS

financial statements (for its individual financial statements and/ or those of

the entities in its portfolio). We believe that financial reporting in

accordance with IFRS is more relevant for investors’ needs and better

meets users’ information requirements at a time when a global financial

communication language is widely supported and promoted in order to

increase financial reporting transparency and relevance.

We wish this report to serve as well as a guide to help Romanian

shareholders gain a better understanding of the information included in the

IFRS financial statements. The content of this report meets the information

requirements regarding the consolidated report of directors on the

consolidated financial statements prepared in accordance with IFRS.

Sincerely yours,

dr.ing.ec.Costel Ceocea

President General Manager of SIF Moldova

Message to the shareholders


Corporate governance

Highlight of the main corporate governance rules implemented in the Company and

compliance by SIF Moldova with legal requirements regarding preparation of annual

financial statements, including measures taken to increase transparency and relevance of

financial reporting.

2

3

The impact of applying IFRS on the financial statements of SIF Moldova at 31

December 2011

Presentation of the impact of applying IFRS on the SIF Moldova’s individual financial

statements at 31 December 2011, explaining the main differences compared to the

financial statements prepared in accordance with RAS.

4

Comparative presentation of key economic ratios at 31 December 2011

Analysis of the main liquidity, activity and profitability ratios of the Company, computed

based on IFRS financial statement results and compared to the same ratios computed

based on RAS financial statement results, together with a comparison with the ratios

averaged for all SIFs.

5 Presentation of SIF Moldova portfolio structure at 31 December 2011

Analysis of SIF Moldova’s portfolio as regards the types of instruments held, the

activity sectors to which the Company is exposed to and the markets on which the

instruments held are traded.

6

Impact of IFRS transition on SIF Moldova Group at 31 December 2011

Presentation of SIF Moldova Group as regards the entities included in

consolidation, comparison of results in individual and consolidated financial

statements and analysis of the key economic ratios computed based on the

consolidated financial statement results.

1 Achievement of SIF Moldova’s objectives

Presentation of main directions of Company’s investment policy and target levels of

exposure for the main structural objectives at the end of 2011 together with the actual

values for the first quarter, first semester and third quarter of 2012.

Content


The objective of SIF Moldova’s investment policy is to increase the asset value as a result of

investments made based on identification of undervalued companies or companies with growth potential

determined according to a fundamental analysis. The investment horizon is medium and long. The

Company’s management has adopted an investment approach that is consistent with the risk objectives

and has applied prudent diversification rules, in order to avoid excessive dependence on an asset or

issuer. In addition, diversification generally contributes to lower volatility by reducing the specific risk

(source: “Investment policies statement 2011-2013”).

The Company has developed coherent long and medium term investment policies and strategies, an

example being the multiannual strategy for 2011- 2013. The “Investment polices statement” is revised

annually, in line with the macro-economical developments, the evolution of financial markets as well as

depending on the degree to which the objectives have been achieved, whilst maintaining an ongoing

process of restructuring the Company’s assets .

Structural objectives included in the Investment policies statement 2011-2013 (% of total asset value

computed in accordance with CNVM’s Regulation 15/2004):

Source: Board of Directors activity report for 2011

1 Achievement of SIF Moldova’s

objectives

Increase the weight of listed shares

TARGET - minimum 70%

Decrease the weight of unlisted shares (BCR holding

excluded)

TARGET - maximum 2 %

Decrease the weight of listed/ unlisted shares with no

growth potential/ illiquid together with a volume increase

in speculative operations

Maintaining the liquidity level (government, deposits,

liquidities)

TARGET - minimum 5%

Decrease the weight of the financial sector, which will

continue to be the main sector

TARGET– minimum 50%

Increase the weight of the energy sector

TARGET – minimum 20%

Holdings of 0 to 10% in the share capital of portfolio

companies

TARGET – decrease to 70%

Holdings of 10 to 20% in the share capital of portfolio

companies

TARGET – increase up to 10%

2011

81.50%

2011

3.70%

2011

5.00%

2011

11.20%

2011

52.40%

2011

17.20%

2011

73.80%

2011

4.70%

http://www.sifm.ro/aga/aga 2012/agoa/6.pdf


















http://www.sifm.ro/agoa_aprilie_2012.html


The objectives were defined in the multiannual strategy presented in the Investment policies statement 2011

– 2013, and the status of implementation at the end of 2011 financial year is part of the roadmap for

fulfillment of objectives until the end of the mandate. The most important objectives (increase the weight of

listed shares and decrease the weight of the financial sector) have been met; balancing of the energy sector

weight will be achieved later on, depending on the evolution of the Romanian state program of public

offerings in this sector. As regards the exposure corresponding to holdings between 0 – 10% and 10 – 20%

in the share capital of portfolio companies, the objectives have been revised by updating the Investment

policies statement in 2012, while the target to reduce the exposure to non-performing sectors has become

increasingly difficult to achieve, given the persistence of the economic crisis effects.

Structural objectives included in the Investment policies statement 2011-2013 (% of total assets value

computed in accordance with CNVM’s Regulation 15/2004):

Source: Q1 2012 report, H1 2012 report and Q3 2012 report


objectives

Increase the weight of listed shares

TARGET - 82% +/- 5%

Decrease the weight in unlisted shares

(BCR holding excluded)

TARGET - maximum 2 %

Decrease the weight of listed/ unlisted

shares with no growth potential/ illiquid

together with a volume increase in

speculative operations

Maintaining the liquidity level

(government, deposits, liquidities)

TARGET – min. 5% - max.10%

T1 2012

84.52%

T1 2012

3.05%

T1 2012

4.56%

T1 2012

8.23 %

T1 2012

1.44%

S1 2012

77.14%

S1 2012

3.47%

S1 2012

4.47%

S1 2012

13.26%

S1 2012

1.40%

T3 2012

81.34%

T3 2012

3.91%

T3 2012

4.72%

T3 2012

8.82%

T3 2012

1.55%

Decrease the weight of the financial

sector, which will continue to be the main

sector

TARGET - 50% +/- 10%

Increase the weight of the energy sector

TARGET - 25%

Exposure to gold mining companies to

reduce risk from financial markets

volatility - maximum 5%

T1 2012

51.64%

T1 2012

19.85%

S1 2012

20.50%

T3 2012

21.17%

S1 2012

44.30%

T3 2012

48.60%










http://www.sifm.ro/raportari/trimestriale/T1_2012/R.pdf







http://www.sifm.ro/raportari/semestriale/2012/Raport.pdf







http://www.sifm.ro/raportari_eng/trimestriale_eng/T3_2012_eng/SIF2 Report Q3 2012.pdf








The Board of Directors seeks a favourable context to achieve the major objectives, i.e.

amendment of the articles of incorporation and increase of the registered share capital, so that

these objectives become achievable and meet the interests of most shareholders of SIF Moldova.

The need to amend the articles of incorporation is determined by changes in the corporate law and

market practice, as well as by the legislative projects on the capital market (i.e. Emergency Government

Ordinance no. 32/2012). Amending the articles of incorporation will ensure harmonisation with the

legislation in force/ existing legislative proposals and will help streamline the decision making process.

The proposed share capital increase is mainly driven by the following factors:

– the need to maintain a financial balance of resources;

– the portfolio structure underpinning the multi-annual strategy to be proposed to the 2013 General

Shareholders Meeting (GSM) for the 2013 – 2017 mandate: consolidate the position in the non-

conventional energy sector, capitalise on investment opportunities in the areas where the

Company has developed expertise and in the activity sectors with potential for recovery after the

crisis effects;

– consolidate the position of shareholders interested in supporting the Company’s investment

programs and strategies;

– correlation with market conditions/ investment opportunities, as an essential requirement in

stimulating the investment programs.

The opportunity to reinitiate these proposals, that have already been included on the agenda of SIF

Moldova’s Extraordinary General Shareholders Meeting of 5/6 April 2012, is currently being analysed.


objectives

Continue investing in foreign markets

while maintaining a majority weight of

Romanian equities in the portfolio -

maximum 15%

T1 2012

25.27%

S1 2012

24.76%

T3 2012

27.85%

Source: Q1 2012 report, H1 2012 report and Q3 2012 report

The weight of holdings in non-UCITS

and UCITS should not exceed 5% of

the total asset value (except the holding

in Fondul Proprietatea) - maximum 5%

T1 2012

2.63%

S1 2012

3.12%

T3 2012

3.22%




















SIF Moldova has developed and

implemented the Corporate

Governance Regulation in 2011.

The adoption of this regulation

represents an additional

assurance for an adequate

implementation of mechanism and

principles of good governance in

running the Company.

The “Apply or Explain” declaration,

an appendix to the Corporate

Governance Regulation,

represents SIF Moldova’s

management declaration on the

implementation of corporate

governance principles and

recommendations, including those

relating to the preparation and

dissemination of financial reporting

under IFRS.

Through its activities, the

Company is constantly seeking

compliance with the corporate

governance principles set out in

the Corporate Governance

Regulation, for the following

directions:


structures

The corporate governance

structures, functions, powers and

responsibilities of the Board and of

the executive management were

defined in the Regulation.

In the process of internal

structures optimisation, the

internal regulations have been

reviewed and re-approved; the key

changes focused on the

independence of risk management

activities, as well as on the

definition and delegation of

temporary limits of authority to

non-executive directors. Also

envisaged was the harmonisation

and continuous adaptation of the

organisation chart, alongside the

corresponding staff restructuring;

to this end, the following changes

have been made:

– reduction in number of

employees, the number of

occupied positions reaching a

total of 46 (at the beginning of

the restructuring process

initiated during the current

Board mandate, the number of

positions was 119);

– dissolution of 5 departments

and 5 representative offices

during this year, in addition to

the 6 departments and 3

representative offices dissolved

at the previous change in the

organisation chart;

– integration of certain activities

and operations aimed at

reducing the cycle ‘analysis –

decision – implementation’, in

the context of a state of

uncertainty correlated with the

potential of the portfolio as well

as with the need to capitalise

on the opportunities specific

to the period;

– adoption of measures to

permanently adapt the

organisational structure and

departments’ duties and

responsibilities to ensure an

active and effective portfolio

management (the review of the

internal regulations has been

approved by CNVM);

– Development of internal

regulations and working

procedures, a process that

started in 2005; currently,

almost all activities are

regulated under internal

procedures;

– Continuous review and

submission for approval by

CNVM of the general working

procedures, as part of the

Company’s internal regulations.

The concern for the decision

making process optimisation

also results from the

implementation of “The

organisation and operation

regulation of SIF Moldova’s Board

of Directors “. Following the

implementation of the Corporate

Governance Regulation:

– transparent criteria and

procedures have been

implemented for electing the

members of the Board of

Directors and of the executive

management;

This chapter aims to highlight the corporate governance principles implemented within SIF

Moldova, as well as the Company’s efforts to optimise its internal structures and ensure

compliance with legal reporting requirements in order to increase the accuracy and

transparency of results reported in the individual and consolidated financial statements.

2

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2.1 Corporate governance regulation

http://www.sifm.ro/aga/aga 2011/Regulament_guvernanta.pdf


http://www.sifm.ro/aga/aga 2011/anexa 5_declaratia_aplici_explici.pdf










http://www.sifm.ro/P_despre noi.html








– the level of expertise has been

increased through the set-up of

consultative committees within

the Board of Directors (audit

committee, investment policies-

strategies committee) and of an

executive committee (the

investment committee- an

interdisciplinary and inter-

compartmental working

committee);

– the Company’s staff attended

numerous trainings on

compliance;

– the Company’s directors and

managers have signed

administration/ management

contracts for the term of the

current mandate; these

documents are public;

– the directors have created

security interests by

concluding professional liability

insurance policies and

collaterals, according to

statutory provisions.

Respect for shareholders’ rights

The Company’s shareholder policy

is based on respect for

shareholders’ rights, ensuring fair

treatment thereof.

The General Shareholders

Meeting is the supreme governing

body of SIF Moldova, which is

called by the Board of Directors

according to legal and statutory

provisions. For each financial year,

the Company publishes on its

website information

on the financial calendar as well as

periodical reports (annual, half-

yearly and quarterly) and regular

reports on important events from

the Company’s activity.

Board of Directors organisation

and operation

The main objective of the Board of

Directors on medium and long

term, as defined and determined

by the specific circumstances of

SIF Moldova and by the

macroeconomic context in which it

operates, is to ensure a balance

between business continuity in

optimal conditions and fulfillment of

shareholders’ expectations.

The Board of Directors undertakes

its activity by holding deliberations

within the meetings called

according to the statutory legal

provisions; meetings are held at

least once a month in order to

monitor the Company's operations.

Election of Board of Directors’

members by vote of shareholders

in the General Shareholders

Meeting is based on a transparent

procedure by bringing to the public

attention the content of the

candidate’s application file and the

criteria to be met for occupying

the position of a director in an

investment company.

The Board of Directors currently

sets out the remuneration policy

for directors and managers, which

is subject to annual approval by

the General Shareholders Meeting.

The annual report of the Board of

Directors presents the total direct

and indirect remuneration of

directors and executive

management, resulting from the

positions held.

Transparency, financial reporting,

internal control and risk

management

As part of the process of dynamic

adaptation to the developments in

the environment in which it

operates, SIF Moldova has

designed, in cooperation with

independent consultants (Siti,

Finconet) the tools for decision-

making under risk and uncertainty

conditions (an integrated IT

system).

To complement this system, an

internal risk management structure

has been created (that has

evolved in time to become an

independent structure reporting

directly to the President – General

Manager); this structure has

developed a portfolio risk

management handbook and

specific working procedures to

identify and report proximities to

prudential limits imposed under

CNVM regulations or by the

governing bodies.

The specific working procedures

governing the information flow in

terms of preparation and

documentation of decision

alternatives proposed to

hierarchical levels with decisional

powers allow for:

2


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2.1 Corporate governance regulation (continued)

http://bvb.ro/ListedCompanies/SecurityDetail.aspx?s=SIF2&t=3

http://www.sifm.ro/

http://www.sifm.ro/aga/aga 2012/agoa/Raport.pdf




– development of analyses and

scenarios for decision

alternatives regarding the

implementation of the multi-

annual strategies in respect of

investment policies aimed at

restructuring and increasing

portfolio performance;

– identification of decision

intervals outlined by prudential

regulations, imposed by the

specificities of the capital

market activities by means of

risk measurement techniques;

– control over the decision

making stage.

The Company is currently

validating mathematical models

that will support the decision

making process and which are

aimed at achieving the targets set

under the multi-annual strategies.

Conflict of interests and insider

trading

The Board of Directors has

implemented a procedure to

identify and appropriately address

any conflict of interests, which

requires that all investments or

sales of securities should be made

only to the benefit of shareholders.

SIF Moldova has defined a set of

rules regarding the reporting

obligations for transactions with

the Company’s shares conducted

by directors and other individuals

involved; the list of persons with

access to privileged information is

permanently updated and sent to

CNVM.

Corporate information system

SIF Moldova has adopted a

procedure for the internal flow and

communication to third parties of

documents and information on

issuers, which can influence the

market price of securities issued

by these entities. The Board of

Directors periodically reviews the

process of ensuring data and

information privacy.

Corporate social responsibility

The Company is constantly

involved in social responsibility

activities, constantly supporting the

disadvantaged categories in the

community where it is operating.

Management system

SIF Moldova is managed under a

one-tier system specific to

undertakings for collective

investments regulated by CNVM,

in line with the articles of

incorporation. The corporate

governance structures of SIF

Moldova are represented by the

Board of Directors and by the

executive management.

Additional information on the

corporate governance policy of SIF

Moldova is available on the

Company’s website:

– description of corporate

governance structures; list of

members of Board of Directors

executive management, with a

brief CV for all members;

– updated articles of

incorporation;

– internal regulations comprising

the key aspects regarding

organisation and operation of

internal departments, a

document also submitted to

CNVM’s approval;

– „Apply or Explain” statement.

2


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2.1 Corporate governance regulation (continued)






http://www.sifm.ro/

http://www.sifm.ro/Act constitutiv/20120425 Act constitutiv avizat.pdf

http://www.sifm.ro/Act constitutiv/20120425 Act constitutiv avizat.pdf

http://www.sifm.ro/

http://www.sifm.ro/








According to legal provisions in

effect, SIF Moldova S.A., an entity

registered with the CNVM as a

non-UCITS, is responsible for

preparation and presentation of the

following sets of financial

statements :

– financial statements prepared

according to Accounting Law

no. 82/1991, as republished

and CNVM’s Order no. 13/

03.02.2011 approving CNVM’s

Regulation no.4/2011 for

approval of Accounting

regulations conforming to the

Fourth Directive of the

European Economic

Communities applicable to

entities authorised, regulated

and supervised by CNVM,

within 150 days after the end of

the fiscal year;

– Individual financial statements

to meet the requirements of

Order no. 116 for approval of

Instruction 6/2011 regarding the

implementation of IFRS as

adopted by the European Union

by entities authorised, regulated

and supervised by CNVM,

within 180 days after the end of

the fiscal year;

– annual consolidated financial

statements, prepared in

accordance with IFRS as

adopted by the European

Union, in accordance with

CNVM’s Decision no.

176/15.09.2010 and the

procedure provided under

Regulation no. 1606/2002

issued by the European

Parliament and the European

Council of 19 July 2002, within

8 months after the end of the

fiscal year.

2


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2.2 Legal requirements regarding preparation of financial statements

2.3 Financial reports for the financial year ended 31 December 2011

In order to meet the legal requirements for preparation and presentation of financial statements and also to

increase the accuracy and transparency of information presented in the financial statements, SIF Moldova has

met users’ information requirements by preparing and posting on the Company’s website, www.sifm.ro, the

following sets of financial statements for the year ended 31 December 2011:

Financial statements prepared in accordance with the Accounting

regulations conforming to the Fourth Directive of the European

Economic Communities applicable to entities authorised, regulated

and supervised by CNVM, for the financial year ended 31 December

2011 (prepared by SIF Moldova and audited by Deloitte Audit)

The financial statements were presented to and approved by the General

Shareholders Meeting on 6 April 2012.

http://www.sifm.ro/

http://www.sifm.ro/

http://www.sifm.ro/

http://www.sifm.ro/

http://www.sifm.ro/






http://www.sifm.ro/raportari/anuale/2011/Sit_fin_auditate.pdf


2


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2.3 Financial reports for the financial year ended 31 December 2011

(continued) Individual financial statements prepared in accordance with IFRS as

adopted by the European Union, for the financial year ended 31

December 2011 (prepared with the assistance of KPMG Romania and

audited by Deloitte Audit)

The individual financial statements prepared in accordance with IFRS were

approved by the Board of Directors on 28 June 2012 and were

made available to shareholders, investors and regulatory and supervisory

authorities on the Company's website on 29 June 2012, earlier than the

statutory deadline required by CNVM.

The priority given by SIF Moldova to compliance with assumed corporate

governance principles and ongoing communication with stakeholders has led

to the preparation and publication of the financial statements in accordance

with IFRS starting on 29 June 2012, considering that, according to CNVM

Instruction 6/15.12.2011, amended by CNVM under ruling no. 14/21.06.2012,

the deadline for the preparation of audited IFRS financial statements by

entities regulated and supervised by CNVM was 30 September 2012.

This set of financial statements is the first set of IFRS financial statements of

SIF Moldova and was prepared in accordance with the requirements of IFRS

1 First time adoption of IFRS.

Consolidated financial statements prepared in accordance with IFRS,

for the financial year ended 31 December 2011 (prepared with the

assistance of KPMG Romania and audited by Deloitte Audit)

The consolidated financial statements of SIF Moldova Group have been

approved by the Board of Directors on 28 August 2012 and were made

available to users on 30 August 2012.

This set of consolidated financial statements represent the first set of IFRS

financial statements of SIF Moldova Group (consisting of SIF Moldova SA

and its subsidiaries) and was prepared in accordance with the requirements

of IFRS 1 First-time Adoption of IFRS.

Deloitte Audit issued an unqualified audit opinion on all sets of financial statements prepared for the financial

year ended 31 December 2011.

KPMG comment

These sets of financial statements are the first sets of individual and consolidated financial statements

prepared by SIF Moldova in accordance with IFRS. The transition date was 1 January 2010 and full

information was presented for the financial years ended 31 December 2010 and 31 December 2011.

http://www.sifm.ro/

http://www.sifm.ro/raportari/trimestriale/2011IFRS/situatiifinanciare.pdf

http://www.sifm.ro/raportari/anuale/2011/IFRS/2.pdf


KPMG comment

IFRS training programs for SIF Moldova staff

In the context of IFRS conversion, SIF Moldova has initiated the process of staff training on International

Financial Reporting Standards with the assistance of KPMG Romania.

The training program involving the staff of SIF Moldova consisted of two phases:

• attendance to the seminar organised in Bucharest by KPMG between 7 - 8 May 2012 on the topic of

IFRS financial statement preparation by investment entities; and

• attendance to the customised IFRS training course organised by KPMG at the Company’s premises

in September 2012, which was followed by evaluation of participants. The purpose of this training

course was to provide to the Company’s employees information on the most important provisions of

IFRS and on the impact of IFRS conversion on the Company.

SIF Moldova pays a particular attention to staff training, placing

great emphasis on ongoing professional training for its employees

in order to maintain the expertise acquired over many years of

specialisation. Personnel training in various fields of activity is

aimed at ensuring an increased responsiveness of the

organisation to the prolonged effects of the financial crisis, an

essential process in decision making in uncertainty conditions

(fundamental analysis, technical analysis, quantitative analysis,

risk management, macroeconomics, etc.) and for compliance

purposes (internal audit, internal control). The training process is

continuous and takes place with the assistance of consultants/

experts active on the national and international capital markets.

During 2012, SIF Moldova employees have obtained complex

qualifications and have gained a broad multidisciplinary

experience in specific fields, by taking part in multiple training

courses and evaluations (e.g. staff training for quality

management certification, training prior to the preparation of

working procedures), for which optimal logistics as well as partial

or full coverage of associated costs were ensured (investment

consultant, technical consultant, financial auditor, valuator, etc.)

2


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2.4 Principles regarding staff training











3 The impact of applying IFRS on

the financial statements of SIF

Moldova at 31 December 2011

KPMG comment

The objective of the IFRS financial statements is to provide financial information about the reporting entity

that is useful to investors, borrowers and other creditors in making decisions about providing resources to

the entity.

SIF Moldova has prepared for the first time individual financial statements in accordance with

IFRS for the year ended 31 December 2011.

IFRS does not prescribe a standard format for presenting the financial statements prepared by the Company.

IAS 1 Presentation of financial statements sets out minimum elements that need to be presented in the balance

sheet and the income statement. Also, the following principles have to be complied with in the process of

preparing the IFRS financial statements: going concern, faithful presentation, compliance with IFRS,

comparative information, consistency of presentation, offsetting, materiality and aggregation, accrual basis of

accounting.

By comparison, the format of the balance sheet and the income statement prepared in accordance with RAS is

strictly defined in the regulations issued by CNVM, which also prescribe the requirement to use a specific chart

of accounts. Thus, differences may arise between IFRS financial statements and RAS financial statements

generated by different rules and principles regarding presentation of information. The complete list of notes to

the IFRS financial statements is presented in the table below.

Note Description Note Description

1 Reporting entity 17 Investment property

2 Basis of preparation 18 Property, plant and equipment and intangible assets

3 Significant accounting policies 19 Other assets

4 Management of significant risks 20 Dividend payable

5 Financial assets and financial liabilities 21 Provisions for risks and expenses

6 Dividend income 22 Deferred tax liabilities

7 Interest income 23 Other liabilities

8 Other operating revenue 24 Equity and reserves

9 Net gain on sale of assets 25 Earnings per share

10 Net gain on revaluation of assets at fair value through

profit or loss 26 Commitments and contingent liabilities

11 Impairment losses on assets 27 Transactions and balances with related parties

12 Other operating expenses 28 Reconciliation of profit determined under RAS with profit

determined under IFRS

13 Income tax expense 29 Reconciliation of equity determined under RAS with equity

determined under IFRS

14 Cash and cash equivalents 30 Substantiation of transition to IFRS

15 Deposits with banks 31 Events after the reporting date

16 Financial assets


3

3.1 Comparative analysis of assets at 31 December 2011

691,008,496

1,105,423,492

RAS IFRS

Total assets

Note: All amounts are presented in RON, unless otherwise specified

KPMG comment

Total assets under IFRS are higher than

total assets under RAS mainly due to the

positive differences in fair value recorded

in equity in relation to financial

instruments classified as available for

sale financial assets in accordance with

IFRS.

The impact of applying IFRS on



This chapter presents a comparison between the captions in the individual financial

statements prepared in accordance with RAS and IFRS for SIF Moldova, explaining the main

differences. Each difference resulting from IFRS conversion is detailed in the following

sections.

The detailed accounting policies applied by SIF Moldova in preparing the IFRS financial

statements are available in note 3 to the financial statements published on the Company’s

website.

Balance sheet position

Note to the

IFRS financial

statements

RAS IFRS Difference

Cash and cash equivalent 14 476,570 476,570 -

Deposits with banks 15 129,363,105 129,363,105 -

Financial assets at fair value through

profit or loss 16a 8,204,381 8,611,260 406,879

Available for sale financial assets 16b 533,437,298 947,280,998 413,843,700

Held-to-maturity investments 16c 1,362,653 1,362,653 -

Investment property 17 - 4,274,849 4,274,849

Intangible assets 18 1,277,508 1,277,508 -

Property, plant and equipment 18 15,098,350 10,987,918 (4,110,432)

Other assets 19 1,788,631 1,788,631 -

Total assets 691,008,496 1,105,423,492 414,414,996














KPMG comment

In accordance with the provisions of IAS 39 Financial Instruments: Recognition and Measurement,

financial assets at fair value through profit or loss are measured at fair value, any gain or loss in fair value

being reflected in profit or loss.

SIF Moldova classified in this category short-term shares and fund units, purchased with the intention to

benefit from short-term price fluctuations.

The difference of RON 406,879 resulting from the application of IFRS is generated by the positive change

in fair value for unlisted fund units, differences that are not recorded according to RAS provisions.

2 3.1 Comparative analysis of assets (continued)

3 KPMG comment

In accordance with the provisions of IAS 39 Financial Instruments: Recognition and Measurement, financial

assets are classified into the following categories:

Financial assets at fair value through profit or loss – financial assets held for trading, derivatives,

and any other asset designated into this category upon initial recognition;

Loans and receivables – non-derivative financial assets with fixed and determinable payments that

are not quoted in an active market;

Held-to-maturity investments - non-derivative financial assets with fixed and determinable

payments and fixed maturity that the entity has the positive intention and ability to hold to maturity;

Available for sale financial assets – all financial assets that are not classified in another category

are classified as available for sale. Also, any financial asset may be designated into this category

upon initial recognition.

Financial assets at fair value through profit or loss






Note to the

IFRS financial

statements

RAS IFRS Difference

Financial assets at fair value through

profit or loss 16a 8,204,381 8,611,260 406,879



KPMG comment

Available-for-sale financial assets are those financial assets that are not classified as loans and

receivables, held-to-maturity investments or financial assets at fair value through profit or loss. These

assets are measured at fair value, changes in fair value (excluding impairment) being recognised in other

comprehensive income within equity.

In applying the provisions of IAS 39 Financial Instruments: Recognition and Measurement, SIF Moldova

classified in this category shares and fund units, other than those acquired with the intention to benefit

from short-term price fluctuations.

The difference of RON 413,843,700 between the value under IFRS and the value under RAS is the

cumulated result of the following restatement adjustments:

RON (103,093,311) cancellation of RAS reserve related to equity instruments received and for

witch no consideration was paid (as under IFRS such shares distributed proportionately to all

shareholders are not economic benefits);

RON 214,108,726 cancellation of impairment loss allowances set up under RAS;

RON (92,540,926) cancellation of reserves set up as an effect of applying Law no. 133/1996 on

transformation of Private Property Funds into financial investment companies

RON 425,084,161 recording shares at fair value in accordance with IFRS provisions. This amount

includes both positive and negative changes in fair value recorded against other comprehensive

income (other than impairment losses), unlike RAS provisions under which only negative changes

are recorded;

RON 3,018,727 recording the effects of applying IAS 29 Financial reporting in hyperinflationary

economies for available for sale financial assets measured at cost;

RON (7,410,264) recording in profit or loss the impairment loss allowances on available-for-sale

financial assets measured at cost, based on the impairment indicators defined by SIF Moldova for

the application of IAS 39 Financial instruments: recognition and measurement provisions;

RON (25,979,184) recording in profit or loss the impairment loss allowances related to available-

for-sale financial assets measured at fair value and for which a significant and prolonged decline of

market prices has been observed;

RON 655,771 recording in other comprehensive income the positive changes in fair value of the

fund units classified as available for sale financial assets.


Available for sale financial assets

3






Note to the

IFRS financial

statements

RAS IFRS Difference

Available for sale financial assets 16b 533,437,298 947,280,998 413,843,700




KPMG comment

In accordance with the provisions of IAS 40 Investment property, an investment property is a property

(land or a building — or part of a building — or both) held (by the owner or by the lessee under a finance

lease contract) to earn rentals or for capital appreciation or both, rather than for use in the production or

supply of goods or services or for administrative purposes or sale in the ordinary course of business.

This category of assets does not exist under RAS.

SIF Moldova classified as investment property buildings held for rental and selected the fair value

measurement model, allowed under IFRS. According to this model, investment properties are not

depreciated but are revalued periodically and the revaluation results are accounted for in profit or loss.

The value of investment property amounting to RON 4,274,849 has been reclassified from the value of

property, plant and equipment, for the purpose of preparing the IFRS financial statements.

Regarding the property, plant and equipment, SIF Moldova selected the revaluation model allowed by

IAS 16 Property, plant and equipment, with no significant differences compared with the amounts

recorded under RAS for this category.

The difference of RON 4,110,432 related to property, plant and equipment arises from the

reclassification of RON 4,274,849 in investment property category together with the cancellation of the

corresponding depreciation recorded under RAS after the reclassification as investment property,

amounting to RON (164,417).


Investment property and property, plant and equipment

3






Note to the

IFRS financial

statements

RAS IFRS Difference

Investment property 17 - 4,274,849 4,274,849

Property, plant and equipment 18 15,098,350 10,987,918 (4,110,432 )






3.2 Comparative analysis of liabilities and equity

124,853,096

566,155,400

134,713,904

970,709,588

Total liabilities Total equity

Total equity and liabilities

RAS IFRS


here to here]











here]

3


KPMG comment

The differences between total liabilities under

RAS and IFRS mainly arise from the

application of IAS 12 Income taxes.

The main differences related to equity are

generated by the positive differences of fair

value recorded for available-for-sale financial

assets and by the different profit obtained by

SIF Moldova under the two reporting

frameworks.





Note to the

IFRS financial

statements

RAS IFRS Difference

Dividend payable 20 24,036,072 24,036,072 -

Provisions for risks and expenses 21 14,678,961 14,678,961 -

Deferred tax liabilities 22 38,045,369 47,906,177 9,860,808

Other liabilities 23 48,092,694 48,092,694 -

Total liabilities 124,853,096 134,713,904 9,860,808

Share capital 24 51,908,959 487,811,190 435,902,231

Retained earnings 676,202,433 237,717,597 (438,484,836)

Reserves from revaluation of property, plant

and equipment 13,378,078 9,076,661 (4,310,417)

Reserves from revaluation of available for

sale financial assets (175,343,070) 236,104,140 411,447,210

Total equity 566,155,400 970,709,588 404,554,188







-4.


here to here]











here]

3.2 Comparative analysis of liabilities and equity (continued)

Deferred tax liabilities

Share capital

3

KPMG comment

In accordance with the provisions of IAS 12 Income taxes, deferred tax liabilities or assets are

recorded for the temporary differences between the carrying amount and tax base of the Company’s

assets and liabilities. Deferred tax liabilities or deferred tax assets are recorded either against profit or

loss or against other comprehensive income, depending on the accounting treatment of the item that

generated them.

The difference of RON 9,860,808 represents the cumulated effect of the following restatement

adjustments:

cancellation of provisions for taxes set up in accordance with RAS of RON 38,045,369 related to

shares received without any consideration paid, shares from the initial portfolio, dividends

prescribed in previous years, revaluation surplus, fiscal facilities, and

recording the deferred tax liability computed in accordance with IFRS and amounting to RON

47,906,177.

KPMG comment

The Romanian economy was considered to be hyperinflationary until 31 December 2003, as defined in

IAS 29 Financial reporting in hyperinflationary economies (the cumulative inflation rate over a three

year period exceeded 100%). Thus, the historical cost of non-monetary assets and non-monetary

liabilities was corrected up to the date specified by multiplying it with the relevant inflation index.

The difference of RON 435,902,231 related to share capital arises from the application by the

Company of the provisions of IAS 29 Financial reporting in hyperinflationary economies. The

hyperinflation adjustment was recorded against retained earnings.






Note to the

IFRS financial

statements

RAS IFRS Difference

Deferred tax liabilities 22 38,045,369 47,906,177 9,860,808


Note to the

IFRS financial

statements

RAS IFRS Difference

Share capital 24 51,908,959 487,811,190 435,902,231




KPMG comment

The differences between retained earnings under RAS and IFRS are the cumulative effect of recording

all the restatement adjustments with an impact on the profit or loss or other comprehensive income in

previous periods and also in the current period.

The difference of RON (438,484,836) between retained earnings under IFRS and retained earnings

under RAS arises from:

RON (435,902,231) recording the effects of hyperinflation on share capital, in accordance with the

provisions of IAS 29 Financial reporting in hyperinflationary economies;

RON 5,107,261 cancellation of revaluation reserves on property, plant and equipment classified

as investment property in accordance with the provisions of IAS 40 Investment property and

measured at fair value with the differences recorded in profit or loss in the IFRS financial

statements;

RON (86,598,381) cancellation of RAS reserve related to equity instruments received without any

consideration paid, net of deferred taxes;

RON 54,654,240 cancellation of the cumulated impairment loss allowances recorded by the

Company under RAS, net of tax provisions set up by the Company;

RON (105,520,668) cancellation of the initial reserve set up as an effect of applying Law no.

133/1996 on the transformation of Private Property Funds into financial investment companies;

RON 3,018,727 recording the effects of applying IAS 29 Financial reporting in hyperinflationary

economies on available-for-sale financial assets measured at cost;

RON (8,276,813) recording the impairment loss allowances on available-for-sale financial assets

measured at cost, based on the impairment indicators defined by SIF Moldova for the application

of IAS 39 Financial instruments: recognition and measurement provisions;

RON (16,634,093) recording the impairment loss allowances related to available-for-sale

financial assets measured at fair value and for which a significant and prolonged decline of market

prices has been observed;

RON 8,911,977 recording of deferred tax liabilities in accordance with the provisions of IAS 12

Income taxes;

RON 137,401,681 the effect of restatement adjustments on the profit or loss for the financial year

ended 31 December 2011;

RON 5,353,464 other restatement adjustments.

-4.


here to here]











here]


Retained earnings

3






Note to the

IFRS financial

statements

RAS IFRS Difference

Retained earnings 676,202,433 237,717,597 (438,484,836)


-4.


here to here]











here]


Reserves from revaluation of property, plant and equipment

Reserves from revaluation of available -for-sale financial assets

3

KPMG comment

The difference of RON (4,310,417) related to reserves from revaluation of property, plant and

equipment arises from:

RON (5,107,261) cancellation adjustments for the revaluation reserves corresponding to items

classified as investment property in accordance with the provisions of IAS 40 Investment

property;

RON 796,844 other adjustments.

KPMG comment

The reserve from revaluation of available-for-sale financial assets is generated from the application of

IAS 39 Financial instruments: recognition and measurement provisions regarding measurement at fair

value for this category of financial assets. The difference of RON 411,447,210 arises from:

RON 175,343,070 cancellation of reserve recorded under RAS for decreases of value;

RON 235,448,369 recording the fair value differences determined in accordance with IFRS, net

of deferred tax;

RON 655,771 other adjustments related to available-for-sale financial assets.






Note to the

IFRS financial

statements

RAS IFRS Difference

Reserves from revaluation of property,

plant and equipment 13,378,078 9,076,661 (4,310,417)


Note to the

IFRS financial

statements

RAS IFRS Difference

Reserves from revaluation of available-

for-sale financial assets (175,343,070) 236,104,140 411,447,210


3.3 Comparative analysis of comprehensive income

Position in comprehensive income

Note to the

IFRS financial

statements

RAS IFRS Difference

Revenue

Dividend income 6 18,088,642 20,818,818 2,730,176

Interest income 7 3,719,234 3,719,234 -

Other operating revenue 8 12,086,398 12,336,209 249,811

Other income 233,445 233,445 -

Gain from investments

Net gain on sale of assets 9 252,228,320 419,761,823 167,533,503

Net loss from re-measurement of financial

assets at fair value through profit or loss 10 (800,257) (592,898) 207,359

Expenses

Impairment losses on assets 11 (5,185,520) (12,889,744) (7,704,224)

Expenses relating to provisions for risks and

charges (13,896,057) (13,896,057) -

Other operating expenses 12 (34,324,702) (35,184,416) (859,714)

Other expenses (151,760) (151,760) -

Profit before income tax 231,997,743 394,154,654 162,156,911

Income tax expense 13 (39,075,148) (63,830,481) (24,755,333)

Profit for the period 192,922,595 330,324,173 137,401,578

Other comprehensive income

Increases/ (Decreases) in reserves from

revaluation of property, plant and equipment,

net of deferred tax

15,216

Change in fair value of available-for-sale

financial assets, net of deferred tax (118,723,568)

Decrease in reserve arising from sale of

available-for-sale financial assets (421,062,838)

Other comprehensive income (539,771,190)

Total comprehensive income for the period (209,447,017)


here to here]











here]

3














3.3 Comparative analysis of comprehensive income (continued)


here to here]











here]

192,922,595

330,324,173

RAS IFRS

3

KPMG comment

The difference between the profit under

RAS and the profit under IFRS

amounting to RON 137,401,578 is mainly

generated by recording in the IFRS

income statement the gains from disposal

of available-for-sale financial assets, as a

result of different acquisition costs

recorded under the two reporting

frameworks.

Net profit for the period

Total comprehensive income for the period

KPMG comment

Comprehensive income is the change in equity

of an entity during a period, determined by

transactions, events and circumstances, other

than transactions with shareholders

(shareholders’ contributions and distributions

to shareholders). Other comprehensive income

includes all those transactions that determine

changes in equity and have not been

recognised in profit or loss.

SIF Moldova recorded “In other

comprehensive income” the negative fair value

reserve arising from the decrease in value of

instruments classified as available-for-sale.

192,922,595

-209,447,017

RAS IFRS






KPMG comment

In accordance with IAS 18 Revenues, dividend income is recognised at a value gross of withholding

taxes. In the financial statements prepared in accordance with RAS, the dividend income has been

recognised by the Company at a value net of corresponding withholding tax.

The difference of RON 2,730,176 related to dividend income arises from the effect of applying the

provisions of IAS 18 Revenues, this amount being equal to the dividend withholding tax.

8



here to here]











here]

Dividend income


Note to the

IFRS financial

statements

RAS IFRS Difference

Dividend income 6 18,088,642 20,818,818 2,730,176

Other operating income and expenses


Note to the

IFRS financial

statements

RAS IFRS Difference

Other operating income 8 12,086,398 12,336,209 249,811

Other operating expenses 12 (34,324,702) (35,184,416) (859,714)

3


KPMG comment

The difference of RON 249,811 related to other operating income is the result of reclassification

adjustments to the category of impairment losses on assets.

In the case of other operating expenses, the difference of RON (859,714) arises from:

RON 164,417 cancellation of property, plant and equipment depreciation corresponding to assets

classified as investment property in accordance with IAS 40 Investment property;

RON (1,024,130) reclassification to the category of impairment losses on assets.








KPMG comment

In accordance with the provisions of IAS 39 Financial instruments: recognition and measurement, upon

disposal of a financial asset a gain or a loss is recognised for the difference between the carrying amount

of the asset and the sum of the following items: (1) the amount of consideration received (including any

new asset obtained less any new assumed liability) and (2) the amount of any gains or losses recorded in

other comprehensive income and corresponding to the derecognised financial asset. Also, in accordance

with the provisions of IFRS, financial assets are initially recognised at fair value, and the best evidence of

fair value is the existence of a quoted price in an active market.

The difference of RON 167,533,503 is mainly related to the recognition in the IFRS financial statements

of net gains on disposal of available-for-sale financial assets up to the fair value of the consideration

received, for those assets for which gains have been recognised in RAS financial statements up to the

levels of cash received.

8



here to here]











here]

Net gain on sale of assets


Note to the

IFRS financial

statements

RAS IFRS Difference

Net gain on sale of assets 9 252,228,320 419,761,823 167,533,503

3







8



here to here]











here]

Net loss on revaluation of financial assets at fair value through profit or loss


Note to the

IFRS financial

statements

RAS IFRS Difference

Net loss on revaluation of financial assets

at fair value through profit or loss 10 (800,257) (592,898) 207,359

Impairment losses on assets


Note to the

IFRS financial

statements

RAS IFRS Difference

Impairment losses on assets 11 (5,185,520) (12,889,744) (7,704,224)

3

KPMG comment

The difference of RON 207,359 related to net loss on revaluation of financial assets at fair value through

profit or loss arises from recording the positive differences of fair value for fund units classified at fair

value through profit or loss, in accordance with IFRS.

KPMG comment

The difference of RON (7,704,224) related to impairment losses on assets arises from:

RON (8.478.543) recording the impairment loss allowances on available-for-sale financial assets;

RON (774.319) reclassification adjustments of impairment losses from other operating income

and/ or expenses.








8



here to here]











here]

Income tax expense


Note to the

IFRS financial

statements

RAS IFRS Difference

Income tax expense 13 (39,075,148) (63,830,481) (24,755,333)

3

KPMG comment

The Company applied the provisions of IAS 12 Income taxes to record income and expenses related to

current and deferred income taxes. Following the application of IFRS principles, a difference of RON

(24,755,333) compared to the income tax expense recorded under RAS regulations has arise and was

generated by:

RON (2,730,176) additional income tax recorded as a result of reflecting dividend income at

gross value;

RON (22,025,157) adjustments to record the deferred tax liabilities determined by reference to

the provisions of IAS 12 Income tax expense.







Position in comprehensive income RAS IFRS Difference

Dividend income 18,088,642 20,818,818 2,730,176

Interest income 3,719,234 3,719,234 -

Other operating income 12,319,843 12,569,654 249,811

Gain from investments 251,428,063 419,168,925 167,740,862

Total income 285,555,782 456,276,631 170,720,849

Dividend income

7%

Interest income

1% Other operating income

4%


88%

RAS

Dividend income

4%

Interest income

1%

Other operating income

3%


92%

IFRS


3

Comparative presentation of income structure


KPMG comment

As indicated by the charts and the information

in the table above, although the total income

under IFRS is higher by RON 170,720,849

than the total income recorded under RAS, the

related structure is comparable under the two

reporting frameworks, with gains from

investments prevailing.





4 Comparative presentation of

key economic ratios at 31

December 2011

4.1 Liquidity ratios

The liquidity ratios are used to determine the ability of the entity to pay off, at some point in

time, the payment obligations assumed through its current assets. Liquidity indicates the

ability of an asset to be converted into cash with minimum loss of value.

Current ratio measures the

entity's ability to meet short-term

liabilities.

Current ratio is calculated as

current assets of the Company

divided by its short-term liabilities.

The higher the current ratio value

is the better the ability to pay off

its short-term liabilities, without

using long-term financial

resources. Otherwise, if the value

obtained is less than one, the

company will have to seek for

external funding resources.

Irrespective of the sector in which

the entity operates, the optimal

value of current ratio is consider

to be around 2. For a correct

interpretation of the current

liquidity ratio, it should be

compared with the industry

averages or with the level of the

ratio for competitors.

Quick ratio measures the entity’s

ability to meet short-term liabilities

through the most liquid current

assets of the company.

KPMG comment

For the financial year ended 31 December 2011 the current ratio,

determined both on the basis of the information from financial

statements prepared in accordance with RAS and on the basis of

information from financial statements prepared in accordance with

IFRS, has a value higher than 2, which is considered an optimal

value.

The value of the current ratio is equal to the quick ratio as SIF

Moldova has no inventories.

Note: This indicators were calculated based on the information from the financial statements of SIF

Moldova.

2.43 2.43 2.44 2.44

0

0.5

1

1.5

2

2.5

Current ratio Quick ratio

RAS IFRS


KPMG comment

For the financial year ended 31 December 2011 the long term

asset turnover, determined both on the basis of the information

from financial statements prepared in accordance with RAS and

on the basis of the information from financial statements prepared

in accordance with IFRS, reflects a turnover less than one.

The efficiency ratios have similar values under both reporting

frameworks analysed, the differences being explained by the

different level of assets in the financial statements prepared in

accordance with RAS as compared to the level of assets in the

financial statements prepared in accordance with IFRS (see

Chapter 3).

4.2 Activity ratios

Fixed asset turnover is the ratio

of income from current activities to

the value of long term assets.

Long term asset turnover

measures the effectiveness of a

entity’s use of its long term assets

by analysing the turnover obtained

by a certain amount of assets.

Asset turnover is the ratio of

turnover to the total assets.

Asset turnover is the ratio that

measures the turnover obtained by

a certain amount of total assets.

Activity ratios measure the effectiveness of the company’s use of assets.

4 4 Comparative presentation of


December 2011


Moldova.

0.61

0.49 0.47 0.41

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

RAS

IFRS

Long term asset

turnover

Total asset

turnover


4.3 Profitability ratios

Return on equity (ROE) is the ratio of

profit before interest and income tax to

equity.

Return on equity is one of the most

important ratios used to measure an

entity’s performance. The main

objective of any business is to

maximise the shareholders’

investment. Therefore, a high value of

ROE shows that the shareholders’

investment was converted by the

entity’s management into a large profit.

Return on assets (ROA) is the ratio

of net profit to total assets of the entity

and measures the efficiency of the

assets used in terms of profits

obtained, showing how many RON are

obtained for every leu invested in the

entity’s assets.

Return on assets is, together with

return on equity, one of the most

important ratios of an entity’s

profitability.

Profitability ratios reflect the efficiency of an entity's activities, meaning its capacity to

generate profit using the available resources



December 2011

KPMG comment

For the financial year ended 31 December 2011 the return on

equity ratio and the return on assets ratio, determined both on the

basis of the information from financial statements prepared in

accordance with RAS and on the basis of the information from the

financial statements prepared in accordance with IFRS, indicate

that the shareholders investment has generated a high profit.

The return on equity was obtained, both for the analysis based on

the information from financial statements prepared in accordance

with RAS and for the analysis based on the information from

financial statements prepared in accordance with IFRS, taking

into account that SIF Moldova S.A. has no medium and long term

liabilities.


Moldova.

40.98

27.92 29.88

Return on equity (ROE) Return on assets (ROA)

Ratios expressed in %

RAS IFRS

40.60


4.3 Profitability ratios (continued)

Earnings per share is the ratio of

net profit or loss of an entity for a

financial year to the number of

ordinary shares in issue during the

period.

From a financial point of view

earnings per share is an important

ratio when comparing a company

results over a certain period of time

or when comparing the entity results

with the results of other entities in the

same industry.

For a proper interpretation of this

ratio its evolution over a period of

several years should be considered.

0.3717

0.6364

RAS IFRS

RON/share



December 2011


Moldova.

KPMG comment

For the financial year ended 31 December 2011 the level of

earnings per share determined on the basis of information from

financial statements prepared in accordance with IFRS is higher

than the level of earnings per share obtained on the basis of

information from the financial statements prepared in accordance

with RAS due to the higher profitability recorded under IFRS.




December 2011

4.4 SIF Moldova share price evolution

The graph below shows the evolution of SIF Moldova share prices between January 2011

and October 2012.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

SIF Moldova shares are traded since 1 November 1999 on

the Bucharest Stock Exchange, tier I.

The records of the Company's shares and shareholders are

kept, in accordance with the legislation in force, by the

Central Depository.

Information at 31 December 2011:

Market capitalisation:

RON 560,616,755 (EUR 129 million)

Price: RON 1.0800

EPS: RON 0.37

PER: 2.91

P/BV: 0.99

52 m: 0.7180 RON/share

52 M: 1.5080 RON/share


Profitability ratios (%)

Profitability ratios reflect the efficiency of an entity's activities, meaning its capacity to generate profit using the

available resources. For the purpose of this analysis, the following ratios were taken into account: return on

assets, return on equity, earnings per share.

4.5 Comparative presentation of key financial ratios of SIF Moldova

against the average for the other financial investment companies (SIFs)

This section aims to analyse SIF Moldova’s key ratios computed based on IFRS results by

comparing them against the average ratios for the other financial investment companies.

For the purpose of this analysis information from the individual financial statements prepared

in accordance with International Financial Reporting Standards for the following entities was

used: SIF Banat-Crisana S.A., SIF Moldova S.A., SIF Transilvania S.A., SIF Muntenia S.A.,

SIF Oltenia S.A.

22.68

17.11

40.60

29.88

Return on equity(ROE) %

Return on assets(ROA) %

SIF Moldova S.A. Average SIF-uri

.



December 2011

0.31

0.636 Earnings per share

(lei/share)


Based on the comparative analysis,

SIF Moldova profitability ratios have

higher levels than the average ratios

computed for all five investment

companies (SIFs). It can be concluded

that SIF Moldova investment policy

has generate a higher profitability than

the average in the field in which it

operates.

Note: The ratios were obtained based on the information from IFRS financial statements of each SIF

s

s


0.27

0.24

0.47

0.41

Fixed asset turnover

Asset turnover


4.5 Comparative presentation of key financial ratios of SIF Moldova

against the average for the other financial investment companies (SIFs)

(continued)

Activity ratios

Activity ratios measure the effectiveness of the entity’s use of assets.



December 2011


Based on the comparative analysis,

SIF Moldova activity ratios have higher

levels than the average ratios

computed for all five investment

companies (SIFs). It can be concluded

that the SIF Moldova investment policy

led to a more effective use of its

assets compared to the average in the

field in which it operates.


5 Presentation of SIF Moldova

portfolio structure at 31

December 2011

Quoted shares 81.53%

Unquoted shares 3.70%

Fund units 1.28%

Monetary instruments

11.22%

Bonds 2% Other assets

1.61%

RAS

Quoted shares 80.10%

Unquoted shares 4.46%

Fund units 1.35%

Monetary instruments

11.75%

Bonds 0.68%

Other assets 1.66%

IFRS

The charts below present a comparative analysis of the structure of assets managed by SIF

Moldova, based on information from financial statements prepared in accordance with IFRS

and RAS.

KPMG comment

The analysis indicates that the asset weight differs for “Unquoted shares” and “Bonds”, otherwise the

percentage are almost identical. The difference in value for unquoted shares is due to the use of valuation

techniques to determine the fair value for IFRS reporting purposes for some of these shares.

The target set for increasing the weight of quoted shares to at least 70% of the assets managed by SIF

Moldova has been achieved also according to the information from IFRS financial statements, this weight

standing at 82.93% at 31 December 2011.

The target set for decreasing the weight of unquoted shares to less than 2% of the assets managed by

SIF Moldova has been reached according to the information from IFRS financial statements, unlike RAS

where the proportion is 3.7%.

5.1 Portfolio structure by type of instruments held


The chart below presents the structure of SIF Moldova’s portfolio based on the number of issuers, as follows::

in the financial statements prepared in accordance with RAS the portfolio structure is divided into: quoted

shares and unquoted shares;

in the financial statements prepared in accordance with IFRS the portfolio structure is divided into: shares

with an active market and shares without an active market.


here to here]











here]

89

111 121

99

IFRS RAS

Shares portfolio structure depending on the type of market

Without an active

market

Active market



December 2011

KPMG comment

Under IFRS, a financial instrument has an active market if for that financial instrument quoted prices are

readily and regularly available and those prices represent regularly market transactions on an arm’s

length basis.

It can be observed that the number of issuers that have an active market (under IFRS) is lower than the

number of quoted entities (under RAS), due to differences in classification of shares under the two

financial reporting systems.

Thus, there are certain shares in SIF Moldova’s portfolio which are listed on a stock exchange but for

which quoted prices representing regularly market transactions on an arm’s length basis are not readily

and regularly available. For the purpose of IFRS financial statements, these shares were classified as

shares without an active market and were measured at cost less impairment.

5.2 Portfolio structure based on the trading market

Quoted

Unquoted


Presentation of SIF Moldova


December 2011

RAS IFRS

Financial 59% 62%

Manufacturing 16% 12%

Pharmaceutical 5% 3%

Retail 1% 2%

Energy 11% 17%

8% 4% Other

5 5.3 Portfolio structure by sector of activity

5.4 Portfolio structure by sector of activity against the average for the

other SIFs

KPMG comment

The financial sector includes

securities held in banks, as well

as in companies performing

services of financial

intermediation or management

of financial markets.

It can be noted that the target

set in the investment policies of

the Company to reduce the

exposure on the financial sector

but maintaining this sector as

main sector was achieved both

under RAS and IFRS.


4%

2%

3%

12%

17%

62%

11%

4%

2%

13%

7%

63%

0% 10% 20% 30% 40% 50% 60% 70%

Other

Commercial

Pharmaceutical

Manufacturing

Energy

Financial

Medie SIF-uri SIF MoldovaAverage SIFs


Company RAS IFRS

1. BRD 8,000,891 244,934,680

2. ERSTE BANK 4,671,867 233,717,960

3. FONDUL PROPRIETATEA 78,395,686 96,701,105

4. BANCA TRANSILVANIA 25,838,211 78,395,686

5. SNTGN TRANSGAZ 56,233,556 38,597,337

6. OMV PETROM 52,088,790 33,313,714

7. BIOFARM 96,701,105 25,838,211

8. TESATORIILE REUNITE 13,032,754 21,733,038

9. MECANICA CEAHLAU 33,313,714 15,203,268

10. AEROSTAR 37,080,376 14,441,645

TOTAL 405,356,951 802,876,644

Top 10 companies in total

portfolio of shares 78% 86%

Top 10 companies in the portfolio held at 31 December 2011, according to the shares value recorded

in the financial statements are presented in the table below



December 2011

5.5 Top 10 companies in portfolio

KPMG comment

The analysis indicates that based on the values recorded in the financial statements prepared in

accordance with RAS the largest holding is in Biofarm, followed by Fondul Proprietatea, while based on the

values recorded in the financial statements prepared in accordance with IFRS the largest holdings are in

BRD and Erste Bank. These differences result from different measurement rules under the two financial

reporting frameworks (mainly in relation to increases in fair value of shares, which are recognised in the

financial statements prepared in accordance with IFRS but are not recognised in the financial statements

prepared in accordance with RAS).

The proportion of Top 10 companies in total portfolio is higher under IFRS, particularly as a result of

recognition of the positive fair value differences, in accordance with the provisions of IAS 39 Financial

instruments: Recognition and measurement.

Note: All amounts are presented in RON


6 Impact of IFRS transition on

SIF Moldova Group at 31

December 2011

SIF Moldova has prepared its first consolidated financial statements in accordance with IFRS

for the year ended 31 December 2011. The consolidated financial statements for the year

ended 31 December 2011 comprise the Company and its subsidiaries ("the Group"),

together with the Group's interests in associates.

Subsidiaries are entities controlled by the Group. Control is the power to govern the financial and operating

policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are

included in the consolidated financial statements since the control begins and until its termination. The

accounting policies of subsidiaries have been changed in order to align them with those of the Group.

Associates are those companies in which the Group has significant influence, but not control over the financial

and operating policies. The consolidated financial statements include the Group's share of results of associates

using the equity method from the date on which the Group began to exercise significant influence until the date

on which such influence ceases. SIF Moldova has no associates at 31 December 2011.

The Group policies regarding basis of consolidation and the complete list of subsidiaries are included in the

notes to the consolidated financial statements of the Company.

KPMG comment

Usually control exists in the following situations:

owning more than half of the voting power

power over more than half of the voting rights by virtue of an agreement with other investors

power to govern the financial and operating policies of the entity under a statute or an agreement

power to appoint or remove the majority of the members of the board of directors

power to cast the majority of votes at meetings of the board of directors or equivalent governing

body

The existence of significant influence is usually evidenced in one or more of the following ways:

ownership of 20% or more of the voting rights

representation on the board of directors

participation in policy-making processes, including participation in decisions about dividends or

other distributions

material transactions between the investor and the investee

interchange of managerial personnel

provision of essential technical information

6.1 Principles of consolidation










Note Name Note Name

1 Reporting entity 17 Deposits with banks

2 Basis of preparation 18 Financial assets

3 Basis of consolidation 19 Investment property

4 Significant accounting policies 20 Property, plant and equipment and intangible

assets

5 Financial risk management 21 Other assets

6 Acquisitions and disposals of subsidiaries 22 Borrowings

7 Financial assets and liabilities 23 Dividends payable

8 Dividend income 24 Provisions for risks and expenses

9 Interest income 25 Deferred income payable

10 Other operational income 26 Other payables

11 Net income from sale of assets 27 Equity and reserves

12 Net loss/ (Net gain) from revaluation of assets

held at fair value through profit or loss account 28 Earnings per share

13 Impairment losses on assets 29 Contingent assets and liabilities

14 Other operating expenses 30 Related parties

15 Income tax 31 Subsequent events

16 Cash and cash equivalents

The table below presents the full list of notes to the consolidated financial statements of the SIF Moldova

Group:



December 2011

Ownership

100 %

20 %

50 %

0 %

Control

Common

control

Significant

influence*

Limited

influence or no

influence

Influence

6.2 Levels of influence over other entities

(*) Ownership of 20% -50% of share capital of a company does not automatically lead to the existence of significant influence over that

company; the analysis performed also takes into account a number of qualitative factors.




December 2011

6.3 Area of consolidation for SIF Moldova

SIF

Moldova

CASA

Mecanica Ceahlău

Comppil

Oltcotton

Gastroinvest

Regal

Ţesătoriile

Reunite

Comppil

Târgu Mureş

59.19%

Mecanica

Ceahlău

Piatra Neamţ

55.12%

Gastroinvest

Iaşi

95.69%

Ţesătoriile

Reunite

Bucureşti

88.14%

Oltcotton

Drăgăneşti

51.11%

Casa

Bacău

99.96%

Regal

Galaţi

92.86%

Note: The percentages shown represent the ownership of SIF Moldova in the share capital of the entities

presented at 31 December 2011.


6.4 Summary financial data for SIF Moldova Group

RON ‘000 SIF Moldova

Mecanica Ceahlău

Țesătoriile Reunite Regal Gastro

invest Oltcotton Casa Comppil Total

Total assets 1,105,423 49,063 19,093 6,114 2,045 1,872 1,621 946 1,186,179

Net assets 970,710 39,436 20,278 5,858 1,997 548 1,599 736 1,041,162

Equity 487,811 23,991 1,196 1,750 490 1,162 2,750 389 519,539

Turnover 456,277 31,794 2,621 1,753 332 287 45 1,047 494,156

Profit/ (Loss) 330,324 7,200 (359) 17 51 (148) (198) 59 336,946

The table below highlights the main balance sheet and profit and loss account captions for

each of the entities included in the consolidation. The figures presented in this section are in

accordance with IFRS.

SIF Moldova 93.2%

Mecanica 3.8%

Țesătoriile 1.9%

Regal 0.6%

Gastroinvest 0.2%

.Oltcotton 0.1%

Casa S.A. 0.2%

Comppil 0.1%

Subsidiaries 6.8%

Net assets

SIF Moldova 92.3%

Mecanica 6.4%

Țesătoriile 0.5%

Regal 0.4%

Gastroinvest 0.1%

Oltcotton 0.1%

Casa S.A. 0.0%

Comppil 0.2%

Subsidiaries 8%

Turnover



December 2011

The structure of net assets and turnover for SIF Moldova Group

KPMG comment

Out of total net assets for

the Group, 93.2% are net

assets of SIF Moldova,

while subsidiaries account

for only 6.8%.

Out of all Group

subsidiaries, Mecanica

Ceahlău has the highest

turnover, representing 6.4%

of the total Group turnover.

Note: All amounts are presented in RON.


6.5 Brief presentation of SIF Moldova’s subsidiaries

Key indicators (IFRS)

RON 2011 2010 Change

Total assets 49,063,154 46,899,937 4.61%

Turnover 31,793,840 22,829,140 39.27%

Profit/(Loss) 7,199,614 1,941,193 270.89%

ROE % 21.33 11.05 10.28 pp

ROA % 14.67 4.14 10.53 pp



Total assets 2,045,140 1,984,113 3.08%

Turnover 332,760 211,042 57.67%

Profit/(Loss) 51,185 39,308 30.22%

ROE % 3.09 2.27 0.82 pp

ROA % 2.50 1.98 0.52 pp


here to here]











here]

The main object of activity is the production

of fabrics of worsted and worsted yarns.

Tesatoriile Reunite was founded in 1933.

Currently it consists of two manufacturing

units of which one weaving and the other

textile finishing, located in Bucharest.



Total assets 19,093,459 19,302,980 (1.09%)

Turnover 2,621,147 3,158,931 (17.02%)

Profit/(Loss) (359,299) 4,670,350 (107.69%)

ROE % (1.28) 23.03 (24.31 pp)

ROA % (1.88) 24.19 (26.07 pp)

Founded in 2000, SC Gastroinvest

S.A.’s main business is renting and sub

renting of own or leased real estate.

Mecanica Ceahlău

Țesătoriile Reunite

Gastroinvest



December 2011


The object of activity of the Company is

manufacturing of agricultural machinery

and forest exploration.

Established in 1921, SC Mecanica Ceahlău

S.A. Piatra - Neamt is today one of the

most famous companies producing

agricultural machinery both in Romania and

abroad.

The machinery produced by Mecanica

Ceahlău covers the whole range of

agricultural works from soil preparation for

sowing to harvesting.

Mecanica Ceahlău




Total assets 6,114,332 6,515,205 (6.15%)

Turnover 1,752,651 2,729,024 (35.78%)

Profit/(Loss) 16,785 387,602 (95.67%)

ROE % 0.29 7.55 (7.26 pp)

ROA % 0.27 5.95 (5.68 pp)

The main objects of activity of the

Company are catering business -

restaurants, pastry production and sale and

letting of own property.

SC Regal S.A. was founded in 1990 by

Decision of Prefecture Galati as a joint

stock company under Law no. 15/1991 and

Law no. 31/1990.

The company has its own pastry-

confectionery laboratory that provides

customers with a wide range of products of

the highest quality.



Total assets 1,621,442 1,799,654 (9.90%)

Turnover 44,782 10,301 334.73%

Profit/(Loss) (198,066) (189,955) 4.27%

ROE % (12.39) (10.35) (2.04 pp)

ROA % (12.22) (10.56) (1.66 pp)

Oltcotton S.A. operates as an

independent company with its own

legal personality based on the

constitutive act since 1991.

The object of the company is fiber

preparation and spinning of cotton and

cotton type fiber.



Total assets 1,871,902 1,882,362 (0.56%)

Turnover 287,298 727,200 (60.49%)

Profit/(Loss) (147,759) (135,227) 9.27%

ROE % (26.97) 4.82 (31.79 pp)

ROA % (7.89) (7.18) (0.71 pp)

Established in 1999 as a joint stock

company under Law no. 31/1990, the

main activity of the Company is in

business and management consulting.

Regal

Oltcotton

Casa


here to here]











here]

6.5 Brief presentation of SIF Moldova’s subsidiaries (continued)



December 2011





Total assets 945,608 811,100 16.58%

Turnover 1,047,231 802,899 30.43%

Profit/(Loss) 59,424 50,748 17.10%

ROE % 9.56 8.43 1.13 pp

ROA % 6.28 6.26 0.02 pp

The Company was founded in 1997

and its main activity is wholesale of

furs, skins and hides.

Comppil operates five centers in the

country: Ludus, Reghin, Sighisoara,

Târnăveni and Targu Mures and the

Company's products are sold on the

domestic market (70%) and on the

external market (30%).

Comppil*

6.5 Brief presentation of SIF Moldova’s subsidiaries (continued)



December 2011

*Note: All amounts are presented in RON. The participation was sold in 2012. Please see note 31 from the

consolidated financial statements.



The table below presents the comparative breakdown of assets based on individual and

consolidated financial statements prepared in accordance with IFRS.

85.69%

11.70%

0.99% 0.78%

0.83%

Individual financial statements

v

6.6 Comparative analysis of assets

Position in the statement of financial position Individual Consolidated Differences

Cash and cash equivalents 476,570 4,445,585 3,969,015

Deposits with banks 129,363,105 139,432,323 10,069,218

Financial assets at fair value through profit and loss 8,611,260 9,475,533 864,273

Available for sale financial assets 947,280,998 900,329,098 (46,951,900)

Held to maturity investments 1,362,653 1,362,653 -

Investment property 4,274,849 5,265,805 990,956

Intangible assets 1,277,508 2,331,817 1,054,309

Property, plant and equipment 10,987,918 59,250,495 48,262,577

Other assets 1,788,631 25,018,733 23,230,102

Total assets 1,105,423,492 1,146,912,042 41,488,550



December 2011

KPMG comment

The IFRS accounting policies of subsidiaries have been aligned with those of the Group.

The difference between total assets in the individual and consolidated financial statements is 3.7%,

representing the cumulative effect of consolidation of subsidiaries’ assets with SIF Moldova’s assets after

specific consolidation adjustments to eliminate transactions and balances between entities within the

Group.


78.50%

12.16%

5.17% 0.83% 3.35%

Available for salefinancial assets

Bank deposits

Property, plantand equipment

Financial assets atfair value throughprofit and loss

Other assets

Consolidated financial statements


6.7 Comparative analysis of equity and liabilities

Position in the statement of financial position Individual Consolidated Differences

Borrowings - 3,799,397 3,799,397

Dividends payable 24,036,072 24,063,140 27,068

Provisions for risks and expenses 14,678,961 15,024,108 345,147

Deferred tax liability 47,906,177 42,556,325 (5,349,852)

Current tax payable 29,011,540 29,317,076 305,536

Other liabilities 19,081,154 25,192,901 6,111,747

Total liabilities 134,713,904 139,952,947 5,239,043

Share capital 487,811,190 487,811,190 -

Retained earnings 237,717,507 275,961,314 38,243,717

Reserves from the revaluation of property, plant and

equipment

9,076,661 11,505,507 2,427,846

Reserves from the revaluation of financial assets available

for sale 236,104,140 210,642,546 (25,461,594)

Total equity attributable to owners of the Company - 985,919,557 985,919,557

Non-controlling interests - 21,039,538 21,039,538

Total equity 970,709,588 1,006,959,095 36,249,507

134,713,904

970,709,588

139,952,947

1,006,959,095

Total liabilities Total equity

Individual Consolidated



December 2011

KPMG comment

Total consolidated equity is separated in total equity attributable to owners of the Company and to non-

controlling interests. Non-controlling interests represent the portion of a subsidiary’s equity that is not

attributable, directly or indirectly, to the parent.

The difference between the individual and consolidated financial statements is determined by the

cumulative effect of consolidation of subsidiaries’ liabilities with those of SIF Moldova after specific

consolidation adjustments to eliminate transactions and balances between entities within the Group.



Position in the statement of comprehensive income Individual Consolidated Differences

Income

Dividend income 20,818,818 20,564,595 (254,223)

Interest income 3,719,234 4,535,568 816,334

Other operating revenue 12,336,209 49,819,186 37,482,977

Other income 233,445 - (233,445)


Net gain on sale of assets 419,761,823 419,768,719 6,896

(Net loss)/ Net gain from re-measurement of financial assets

at fair value through profit or loss (592,898) (816,480) (223,582)

Expenses

Impairment losses on assets (12,889,744) (12,769,321) 120,423

Expenses relating to provisions for risks and charges (13,896,057) (13,901,959) (5,902)

Other operating expenses (35,184,416) (65,214,649) (30,030,233)

Other expenses (151,760) - 151,760

Operating profit 394,154,654 401,985,659 7,831,005

Finance costs - (640,534) (640,534)

Profit before income tax 394,154,654 401,345,125 7,190,471

Income tax (63,830,481) (64,522,187) (691,709)

Profit for the period 330,324,173 336,822,983 6,498,765

Other comprehensive income

Increases/ (Decreases) in reserves from revaluation of

property, plant and equipment, net of deferred tax 15,216 (74,595) 89,811

Transfer of revaluation reserve to retained earnings on

disposal of property, plant and equipment - (106,307) (106,307)

Change in fair value of available-for-sale financial assets, net

of deferred tax (118,723,568) (124,816,163) (6,092,595)

Decrease in reserve arising from sale of available-for-sale

financial assets (421,062,838) (421,062,838) -

Other comprehensive income (539,771,190) (546,059,902) (6,288,712)

Total comprehensive income for the period (209,447,017) (209,236,964) 210,053

6.8 Comparative analysis of comprehensive income



December 2011





December 2011


KPMG comment

The net profit for the year differs insignificantly between the two sets of financial statements, i.e. by only

RON 6,498,765.

The differences between the statement of comprehensive income in the consolidated financial statements

compared to the individual financial statements are mainly due to the following factors:

the volume of income and expenses generated by the consolidated entities;

the different nature and object of activity of SIF Moldova compared with its subsidiaries.


-200,000,000

-100,000,000

0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

Income Expenses Profit for the year

Individual Consolidated


6.9 Comparative analysis of key economic ratios

Liquidity ratios (number of times)

Liquidity ratios Individual Consolidated

Current ratio 2.44 3.05

Quick ratio 2.44 3.05

Activity ratios (number of times)

Activity ratios Individual Consolidated

Fixed asset turnover 0.47 0.50

Asset turnover 0.41 0.43

Profitability ratios (%)

Profitability ratios Individual Consolidated

Return on equity (ROE) 40.60 39.86

Return of assets (ROA) 29.88 29.30

Earnings per share 0.64 0.65



December 2011

KPMG comment

The comparative analysis of the

two sets of ratios indicates that

the subsidiaries included in the

consolidation had an

insignificant influence on SIF

Moldova Group ratios, with a

slight improvement in liquidity

ratios, activity ratios as well as

in earnings per share.


SIF Moldova is prepared to continue the preparation of IFRS financial statements both

at individual and consolidated levels. We believe that financial reporting in accordance

with IFRS is more relevant to investors’ needs and better meets users’ information

requirements in the context of supporting and promoting a global financial

communication language, aimed at increasing transparency and relevance of financial

reports.

However, according to CNVM Instruction no. 6/2011, financial statements prepared in

accordance with IFRS for the financial year ended 31 December 2011 are intended

solely for the information of shareholders and CNVM, and must not be relied upon as

the basis of investment decisions.

Also, the financial statements prepared in accordance with IFRS for the year ended 31

December 2011 do not affect the rights of shareholders for dividends and have no

impact in terms of taxation.

Conclusions

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