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fondulproprietatea.ro
Fondul
Proprietatea SA
Annual Sole Director’s Report
for the Financial Year Ended
31 December 2023
This is a translation from the official Romanian version.
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
CONTENTS
List of Abbreviations ..................................................................................................................................... 3
Sole Director’s Letter to Shareholders.................................................................................................... 5
Overview of 2023 ............................................................................................................................................ 8
Portfolio ........................................................................................................................................................... 20
Corporate Strategy ....................................................................................................................................... 33
Financial Information ................................................................................................................................. 40
Company Information ................................................................................................................................. 48
Net Asset Value .............................................................................................................................................. 56
Corporate Governance ................................................................................................................................ 61
Risk Management ......................................................................................................................................... 81
Subsequent Events ....................................................................................................................................... 87
Annexes
Annex 1
Audited
Financial Statements for the year ended 31 December 2023, prepared in
accordance with the International Financial Reporting Standards as endorsed by the
European Union and applying the Financial Supervisory Authority Norm
no.
39/2015, regarding the approval of the accounting regulations in accordance with
IFRS, applicable to the entities authorised,
regulated, and supervised by FSA –
Financial Investments and Instruments Sector
Annex 2
Statement of Assets and Obligations of Fondul Proprietatea SA as at 31 December
202
3, prepared in accordance with FSA Regulation no. 7/2020 (Annex no.11)
Annex 3
Statement of persons responsible
Annex 4
Compliance with the corporate governance requirements
Annex
5
Actual versus Budget Analysis for the year ended 31 December 202
3
Annex
6
Constitutive Act of Fondul Proprietatea in force
as at 31 December 2023
Annex
7
Annual Cash Distribution Policy of Fondul Proprietatea in force
as at 31 December
202
3
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Annual Sole Director’s Report for 2023
List of Abbreviations
Accounting Directive
Directive 2013/34/EU of the European Parliament and of the Council of 26 June
2013 on the annual financial statements, consolidated financial statements and
related reports of certain types of undertakings, amending Directive 2006/43/EC
of the European Parliament and of the Council and repealing Council Directives
78/660/EEC and 83/349/EEC, with subsequent amendments
AIF
Alternative Investment Fund
AIF Law
Romanian Law no. 243/2019 on the regulation of alternative investment funds
and amending and supplementing certain normative acts
AIF Regulation
Regulation no. 7/2020 on the authorisation and functioning of alternative
investment funds, issued by the Financial Supervisory Authority
AIFM
Alternative Investment Fund Manager
AIFM Directive
Directive 2011/61/EU on Alternative Investment Fund Managers
ATS
Alternative Trading System
AVC
Audit and Valuation Committee
BB
Buyback programme
BoN
Board of Nominees of Fondul Proprietatea SA
BVB
Bucharest Stock Exchange
CAEN
Classification of Economic Activities in Romania
CE Oltenia
Complexul Energetic Oltenia SA
CIIF
Certification of Registration of Financial Instruments
CSRD
Directive (EU) 2022/2464 of the European Parliament and of the Council of 14
December 2022 amending Regulation (EU) No 537/2014, Directive
2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards
corporate sustainability reporting
DCM
Discount Control Mechanism
Depositary Bank/
Depositary
BRD – Groupe Societe Generale SA
Depozitarul Central SA
Romanian Central Depositary
EGM
Extraordinary General Shareholders Meeting
ESG
Environmental, Social and Governance
EU
European Union
Fondul Proprietatea/
the Fund/ FP
Fondul Proprietatea SA
FSA
Romanian Financial Supervisory Authority
FT
Franklin Templeton
FTIS/ AIFM/ Sole
Director/ Fund Manager
Franklin Templeton International Services S.à r.l.
GDP
Gross Domestic Product
GDR
Global Depositary Receipt
GEO
Government Emergency Ordinance
GEO no. 27/2023
GEO no. 27/2023 regarding amendments of some normative acts in the energy
field, as well as for the establishment of some exemptions
GO
Government Ordinance
GRI
Global Reporting Initiative
GSM
General Shareholders Meeting
IFRS
International Financial Reporting Standards as endorsed by the European Union
INS
Romanian National Institute of Statistics
IMF
International Monetary Fund
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Annual Sole Director’s Report for 2023
IPO
Initial Public Offering
IPS
Investment Policy Statement
Law no. 24/2017
Law no. 24/2017 on issuers of financial instruments and market operations
Law no. 296/2023
Law no. 296/2023 regarding some fiscal-budgetary measures for ensuring the
long-term financial sustainability of Romania
LSE
London Stock Exchange
NAV
Net Asset Value
NBR
National Bank of Romania
Norm no. 39/ 2015
FSA Norm no. 39/ 2015 regarding the approval of the accounting regulations in
accordance with IFRS, applicable to the entities authorised, regulated, and
supervised by the FSA – Financial Investments and Instruments Sector
NRC
Nomination and Remuneration Committee
OCR
Ongoing charge ratio
OGM
Ordinary General Shareholders Meeting
Order no. 85/2024
Ministry of Finance Order no. 85/2024 for the regulation of sustainability
reporting issues
Q1/ Q2/ Q3/ Q4
First/ second/ third/ fourth quarter
REGS
Main market (Regular) of Bucharest Stock Exchange
Salrom
Societatea Nationala a Sarii SA
SFDR
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27
November 2019 on sustainability related disclosures in the financial services
sector
SOE
State owned entities
Taxonomy Regulation
Regulation (EU) 2020/852 of the European Parliament and of the Council of 18
June 2020 on the establishment of a framework to facilitate sustainable
investment and amending Regulation (EU) 2019/2088
TER
Total expense ratio
TO
Tender Offer
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Sole Director’s Letter to Shareholders
Dear Shareholders,
2023 proved to be a landmark year for Fondul Proprietatea, with the execution of the historic
listing of Hidroelectrica during the month of July and the completion of the ENEL transaction in
October. The aforementioned transactions enabled the distribution to shareholders of a record
amount of RON 11.3 billion during the year through dividends and share buy-backs.
The RON 9.3 billion listing of Hidroelectrica was the largest Initial Public Offering in Europe in
2023, the largest in Romania and the third largest on a Central Eastern European stock exchange to
date. I would like to take this opportunity to thank the large range of stakeholders involved in the
process, without none of whom it would have been possible. Specifically, I would like to extend my
appreciation to my colleagues at Franklin Templeton and the team at Hidroelectrica for their
collaboration and the countless hours dedicated to achieving this record-breaking milestone.
In September, shareholders approved a one-year mandate of Franklin Templeton to continue as
Sole Director of Fondul Proprietatea from 1 April 2024 until 31 March 2025. In the same
shareholder meeting, the Fondul Proprietatea Board of Nominees was requested to initiate a
selection process for a Sole Director and to establish a new strategy for the Fund for subsequent
mandates, subject to further shareholder approval.
As evidenced by the abovementioned transactions and ongoing activities in relation to the
remaining holdings in the Fund portfolio, our focus throughout the year remained unwavered on
protecting and creating shareholder value for the Fund’s shareholders through our active
management approach, close supervision of the portfolio companies, and a constant focus on value-
enhancing corporate actions.
The Fund’s performance in 2023
In 2023 the NAV recorded a total negative return of -2.4%, the total return for the local shares was
45%, while the total return for the GDRs was 34.9%. Since the start of the calculation of the Fund’s
performance
1
, the NAV total return was 375.2%, while the total return for local shares was 989.5%,
and 355.2% for the GDRs.
On the BVB, the shares traded throughout the year at a discount
2
to NAV between 15.6% and
39.7%, ending the year at 17.5%. On LSE, the GDRs traded at a discount
2
to NAV between 15.6%
and 40.8%, ending the year at 18.6%. The average annual discount for ordinary shares was 22.8%,
while for GDRs was 23.4%.
We are pleased to have been able generating positive NAV and share price returns for the Fund’s
shareholders, and we will continue our efforts to create shareholder value.
1
Source: BVB, Bloomberg, Sole Director calculations. The Performance Inception date for the NAV is 31 December 2010, for the
Share Price is 25 January 2011, and for the GDRs is 29 April 2015.
2
Discount is calculated according to the IPS, based on the latest published NAV per share available for the day of the calculation
except for the period 7-14 September 2023, when discount is calculated based on 31 August 2023 NAV, published on 15 September
2023 (in order to eliminate the mismatch between the NAV and FP BVB market price adjustment).
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Outlook for 2024
According to the IMF
1
, the global economy experiences a gradual recovery from the COVID 19
pandemic and Russia’s unprovoked war on Ukraine. Inflation is decreasing faster than the previous
estimates, reflecting the improvements of the supply chains and the impact of central banks’
monetary policies. At the same time, high interest rates aimed at fighting inflation and tightening
fiscal policies are expected impact growth in 2024.
Global GDP growth
3
is projected at 3.1% in 2024 and 3.2% in 2025. For Romania, the real GDP
growth
3
is estimated at 2.2% in 2023 and is expected to increase to 3.8% in 2024.
IMF projections
1
forecast global inflation to fall from 6.8% in 2023 to 5.8% in 2024 and 4.4% in
2025. According to Eurostat
2
, the EU annual inflation rate was 3.4% in December 2023, down from
10.4% in December 2022. For Romania, according with National Statistics Institute
3
the annual
inflation rate in December 2023 was 6.6%.
According to the monthly BVB report
4
for December 2023, the Romanian capital market increased
by 40% in 2023, taking into account the BET-TR index, while total liquidity was over RON 38
billion. Also, in 2023 the number of investors in the Romanian capital market reached 168,000, a
level that represents an all-time high.
On 11 January 2023, the Board of the National Bank of Romania raised its key monetary policy
rate by 0.25% to 7.0%, this representing the eighth consecutive rate hike, in line with the trend
followed by most central banks across the world.
The potential for further interest rates increases has significantly decreased and we expect
inflationary pressure to be more subdued through 2024. With the appropriate combination of fiscal
and economic policies, Romania once again has strong prospects to become one of the best
performing economies in the European Union.
Maximising shareholder value in 2024
As we look to generate further value for the Fund’s shareholders, we will continue to actively
manage the Fund, collaborate closely with the Government with the aim that the state-controlled
companies in the Fund’s portfolio continue the progress registered in the past years.
Value-enhancing corporate actions, such as share buybacks and cash distributions to shareholders
combined with continued promotion of the Fund and of the Romanian capital market, are aimed at
allowing the Fund’s NAV to be better reflected in the share price.
We are confident that our time tested active, bottom-up investment process will allow us to
continue delivering long-term results for our shareholders and we look forward to the
opportunities ahead for Fondul Proprietatea.
1
World Economic Outlook, October 2023, January 2024, www.imf.org
2
Eurostat – Euro Indicators Publication no. 10/17 January 2024, www.ec.europa.eu/eurostat
3
National Institute of Statistics, Press Release no. 10/ 12 January 2024, www.insse.ro
4
BVB – Monthly report – December 2023, www.bvb.ro
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
2024 Annual General Shareholders Meeting
We would like to take this opportunity to invite shareholders to attend the 2024 Annual General
Shareholders Meeting convened for 30 April 2024 at Intercontinental Athenee Palace Bucharest
Hotel, Le Diplomate Salon, 1-3 Episcopiei street, 1
st
District, Bucharest, Romania, starting with 11
AM Romania time, where you will have the opportunity to receive the latest updates about the
Fund. The agenda of the Annual General Shareholders Meeting and the supporting documentation
are published on www.fondulproprietatea.ro.
Proposal for covering of accounting losses
As per the annual audited IFRS financial
statements, the Fund recorded an audited
net loss of RON 904,097,086 for the
financial year ended 31 December 2023.
The Fund’s Sole Director proposal, subject to
shareholders’ approval, is to cover the net
accounting loss for the 2023 financial year from
various retained earnings elements.
Proposal for dividend distribution
Although there is no distributable profit as
per the annual statutory financial
statements for the year ended 31
December 2023, the Sole Director remains
committed to ensure cash distributions to
the Fund’s shareholders.
Thus, once the coverage of the accounting losses
mentioned above (which legally impede any
distribution) is approved by the Fund’s
shareholders, the Sole Director’s proposal, subject
to shareholders’ approval during the Annual GSM
on 30 April 2024, is a gross cash distribution of
RON 0.06 per share from 2022 unallocated profits.
Johan Meyer
CEO of FTIS Bucharest Branch, Portfolio Manager of Fondul Proprietatea SA
Permanent Representative of FTIS in relation to Fondul Proprietatea SA
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Overview of 2023
Key 2023 highlights
1/23
•
Start of the 14
th
buy-back programme
•
Start of the 11
th
Tender
Offer
•
Hidroelectrica SA
announces ITF/
Prospectus approval
•
Start of the RON 0.05
annual dividend
distribution (RON 269.8
million)
•
Start of the RON
1.7225 special
dividend
distribution (RON
9.2 billion)
•
25 Sep 2023 GSM
•
Completion of the 12
th
Tender Offer and of the
14
th
buy-back
programme
•
Signing the agreement
for disposal of Engie
Romania SA
•
Fondul
Proprietatea
2023 Annual
GSM
•
Signing the SPA
with PPC for
Enel disposal
•
Completion of
Hidroelectrica SA
IPO
•
Hidroelectrica SA
starts trading on
BVB
•
Cancellation of the shares
bought back in the 13
th
buy-back programme
•
Start of the 12
th
Tender
Offer
•
Completion of Enel
disposal
•
Completion of
the 11
th
Tender
Offer
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
• Continued efforts to promote the Fund and raise its visibility, as well as the visibility of the
Romanian capital market, the local companies (listed or candidates for being listed), and of
Romania in general, in online and in person conferences, roadshows and events;
• Completion of the Hidroelectrica SA IPO, in which the Fund sold its entire stake in
Hidroelectrica SA and the company was listed on Bucharest Stock Exchange;
• Payment to shareholders in June 2023 of the dividend distribution from 2022 annual profit of
RON 0.05 per share (RON 269.8 million) – 96.8% of distribution collected by 31 December
2023;
• Payment to shareholders in September 2023 of the special dividend distribution of RON
1.7225 per share (RON 9.2 billion) from Hidroelectrica SA IPO proceeds – 94.5% of
distribution collected by 31 December 2023;
• Disposal of the entire Fund’s holding in Enel companies within a transaction completed in
October 2023, for a total consideration of RON 650 million;
• Signing of the agreement to sell the Fund’s shareholding in Engie Romania SA, subject to
shareholders approval during 2024;
• Completion of the 14
th
buy-back programme for 2.1 billion shares (1.89 billion in the form of
shares and 219.5 million in the form of GDRs). The total value of the programme excluding
transaction costs was RON 1,816.7 million;
• Completion of the 11
th
and 12
th
Tender Offers of 1,895 million shares (1,693.4 million in the
form of shares and 201.6 million in the form of GDRs), to accelerate the 14
th
buy-back
programme;
• Developments in the litigation started by the Fund against CN Aeroporturi Bucuresti SA for the
annulment of the EGM resolution regarding the share capital increase:
– decision of the first instance court: on 25 May 2023 Ilfov Court rejected the Fund’s
complaint for annulment of the EGM Resolution no. 15/26.10.2021
– the Fund’s appeal against the Ilfov Court decision was filed on 21 August 2023
– first hearing of the appeal took place on 14 December 2023
• Main shareholders’ approvals during 2023:
– Decrease of the subscribed and paid-up share capital from RON 3,233,269,110.76 to RON
2,947,779,186.56 pursuant to the cancellation of 549,019,085 own shares acquired during
2022 within the 13
th
buyback programme
– Distribution of a gross dividend of RON 0.05 per share from the 2022 net accounting profit
(Payment Date 6 June 2023)
– Distribution of a special gross dividend of RON 1.7225 per share from Hidroelectrica SA
IPO proceeds (Payment Date 29 September 2023)
– Renewal of the mandate for two BoN members for a 3-year period following the expiration
of their mandates 15 November 2023 and 25 November 2023, respectively
– Renewal of FTIS mandate as AIFM and Sole Director of FP for a period 1 year (1 April 2024
– 31 March 2025)
– Empowerment of the BoN to organise a selection procedure for the appointment of a new
Sole Director for a mandate not exceeding 4 years from 1 April 2025
– Coverage of the negative reserves related to 12
th
buy-back programme
– Decrease of the legal reserve in line with the share capital decrease
– Various changes to the Constitutive Act of the Fund
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Management
Franklin Templeton has been the Sole Director of the Fund starting 29 September 2010, with
successive mandates of two or four years. During the reporting period, the Fund was managed
by FTIS as its Sole Director and AIFM under the AIFM Directive and local implementation
regulations, based on the Management Agreement in force between 1 April 2022 – 31 March
2024. The portfolio management and the administrative activities are performed by FTIS via its
Bucharest Branch.
During 25 September 2023 GSM the shareholders approved the renewal of FTIS mandate as
Sole Director and AIFM of the Fund for a duration of 1 year (1 April 2024 - 31 March 2025).
During the same GSM the shareholders also approved that the BoN should launch a transparent
and competitive selection procedure for the appointment of a new Sole Director starting 1 April
2025.
The draft management agreement for the period 1 April 2024 – 31 March 2025, under
substantially same terms as the Management Agreement currently in force and in line with the
current IPS of the Fund was included on the agenda of 26 March 2024 GSM.
On 22 February 2024 the shareholder Ministry of Finance submitted a request to supplement
the 26 March 2024 GSM agenda with new points, proposing a base fee rate of 1.35% instead of
2.00% and an updated strategy of the Fund for the period 1 April 2024 - 31 March 2025, so that
it includes the preservation of the current portfolio. On 29 February 2024 the Fund submitted a
letter to the Ministry of Finance, requesting clarifications in respect of the points added on 26
March 2024 GSM. For more details, please see Subsequent events section.
Capital markets
In 2023, BVB registered an average performance in both local and EUR terms compared to the
largest markets in Central Europe, as shown in the table below:
% change in 2023
in local currency
in EUR
BUX (Hungary)
38.42%
44.24%
WIG20 (Poland)
30.75%
40.81%
BET-XT (Romania)
29.96%
29.23%
PX (Czech Republic)
17.67%
14.96%
ATX (Austria)
9.87%
9.87%
Source: Bloomberg
Trading on the Bucharest Stock Exchange
• 3.64 billion shares were traded on BVB in 2023, equivalent to 64.2% of the Fund’s paid shares
as at 31 December 2023;
• In 2023, the value of trading in the Fund shares was RON 3.19 billion / USD 709.1 million
1
/
EUR 640.8 million
1
. The total trading value since the listing reached RON 33.8 billion / USD 7.5
billion
1
/ EUR 6.8 billion
1
;
• The average daily trading volume in 2023 was 14.7 million shares.
1
based on NBR exchange rates as at 31 December 2023
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Trading on the London Stock Exchange
• In 2023, 7.4 million GDRs were traded on LSE, for a total value of USD 122.2 million
1
/ EUR
110.4 million
1
/ RON 549.3 million;
• Since the listing on the LSE on 29 April 2015, the total trading volume was 151.6 million GDRs,
reaching USD 2.0 billion
1
/ EUR 1.8 billion
1
/ RON 9.1 billion;
• The average daily trading volume in 2023 was 29.7 thousand GDRs.
BET-XT index evolution
The BET-XT index, which reflects the performance of the top 30 most traded companies listed
on BVB’s Regulated Market, including the financial investment companies (SIFs), increased by
30.0% during 2023 compared to the end of 2022.
Source: Bucharest Stock Exchange
BET-BK index evolution
BET-BK index is a free float market capitalisation weighted index of the Romanian and foreign
stocks listed on BVB’s regulated market with the highest free-float market capitalisation
adjusted with liquidity factors. BET-BK increased by 31.1% during 2023 compared to the end of
2022.
Source: Bucharest Stock Exchange
900
1,000
1,100
1,200
1,300
1,400
12/22 2/23 3/23 4/23 5/23 6/23 8/23 9/23 10/23 11/23
1,800
1,950
2,100
2,250
2,400
2,550
2,700
2,850
12/22 2/23 3/23 4/23 6/23 7/23 8/23 10/23 11/23 12/23
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Average Daily Turnover in 2023 (RON million)
Source: BVB, Bloomberg
Note: The values for FP, OMV Petrom and Romgaz also include the GDR trading on LSE (OMV Petrom GDRs were delisted from LSE and
their trading was cancelled on 26 October 2023). The values for FP include the tender offers settled in December 2023, March 2023, and
June 2022. The values for OMV Petrom include the 4.1 billion shares sold by FP in January 2022 and December 2022 under accelerated
bookbuild offerings. The average daily turnover for Hidroelectrica SA was calculated for the period 12 July 2023 (first trading day on
BVB) – 31 December 2023 and does not include the value of the IPO carried by the Fund and settled on 10 July 2023.
Fund’s Adjusted Share Price (RON/share) and Premium / (Discount) History (%)
Source: Bloomberg for Adjusted Share Price (price adjusted with cash distributions), Sole Director calculations for Discount / Premium
Note: The (discount) / premium is calculated in accordance with the IPS i.e. the (discount) / premium between the FP shares closing
price on the BVB - REGS for each trading day and the latest published NAV per share at the date of calculation. However, the discount to
NAV for the trading days 7-14 September 2023 was calculated based on the 31 August 2023 NAV (published on 15 September 2023), in
order to eliminate the mismatch between the NAV per share and FP BVB market price that was adjusted on 7 September 2023 (the Ex-
date of 29 September 2023 dividend distribution).
28.9
15.0
7.9
6.7
3.3
2.2
1.8
1.1
1.0
-
10.6
7.9
13.6
2.5
3.2
1.8
0.3
0.6
Hidroelectrica FP Banca
Transilvania
OMV
Petrom
Romgaz BRD NuclearelectricaTTS Transport Digi
2023
2022
-65%
-57%
-49%
-41%
-33%
-25%
-17%
-9%
-1%
7%
0.00
0.10
0.20
0.30
0.40
0.50
0.60
01/11 02/12 03/13 04/14 05/15 06/16 07/17 08/18 09/19 10/20 10/21 11/22 12/23
Adjusted Share Price Discount / Premium (%)
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Key portfolio updates
The main portfolio updates during 2023 refer to the completion of Hidroelectrica SA IPO for RON
9.3 billion, disposal of Fund’s entire holding in Enel companies for RON 650 million, signing of the
agreement
for the sale of Fund’s entire shareholding in Engie Romania SA for RON 432.6 million
(finalised in February 2024) and the developments of the legal actions initiated by the Fund against
CN Aeroporturi Bucuresti SA regarding the share capital increase with the land inside Baneasa
airport. Also, during 2023 the Fund received gross dividends of RON 962.8 million from the
portfolio companies.
For more details regarding the portfolio updates during 2023, please see section Key portfolio
developments.
For 31 December 2023 NAV, valuation updates in accordance with the International Valuation
Standards were prepared for 16 holdings with the assistance of KPMG Advisory and Darian DRS,
representing all the unlisted portfolio and 3 listed companies with low liquidity. Following this
update, the value of portfolio holdings for which valuation reports were prepared (both unlisted
and listed illiquid companies) increased by RON 268.0 million in 31 December 2023 NAV compared
to 31 December 2022 NAV. In addition, for the preparation of the IFRS financial statements the
Fund has analysed the events that took place between 31 October 2023 (date of valuation reports
for 31 December 2023 NAV) and 31 December 2023 and consequently has adjusted the value of CE
Oltenia SA from RON 64.8 million to RON 56.8 million in the final audited IFRS financial statements
of the Fund for the year ended 31 December 2023.
For more details regarding the valuation updates during 2023, including the valuation of CN
Aeroporturi Bucuresti SA, please see sections NAV evolution and Key portfolio developments.
Financial results summary
The table below presents the audited results of the Fund in accordance with IFRS for the financial
year ended 31 December 2023:
RON million
31 December 2023
31 December 2022
(Loss)/ Profit for the year ended
(904.1)
2,769.4
Equity investments
1,784.4
13,696.6
Shareholders’ equity
2,342.2
14,569.5
Source: audited IFRS financial statements of the Fund
The loss recorded during 2023 was mainly generated by the valuation of the holding in
Hidroelectrica SA at expected IPO proceeds (impact RON 1.87 billion), which was partially offset
by the gross dividend income received from portfolio companies of RON 962.8 million, mainly
from Hidroelectrica SA.
The net decrease in equity investments of RON 11.91 billion during 2023 was mainly related to
the disposal of the entire holdings in Enel companies (impact RON 588.8 million) and in
Hidroelectrica SA (RON 11.15 billion), and to the reclassification of the holding in Engie
Romania SA as non-current assets held for sale (RON 440.7 million).
In the final audited IFRS financial statements of the Fund for the financial year ended 31 December
2023, the Fund’s holding in CN Aeroporturi Bucuresti SA was valued using the same assumptions
and valuation methodology as in the previous valuation reports prepared during 2023.
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fondulproprietatea.ro
Annual Sole Director’s Report for 2023
Key financial highlights
The tables below show a summary of the Fund’s financial performance for the last 3 years and
during each quarter of 2023:
NAV
1
and share price developments
2
Notes
31 December
2023
31 December
2022
31 December
2021
Total shareholders’ equity at the end of the period (RON
million)
k
2,342.2
14,569.5
13,757.5
Total shareholders’ equity change in period (%)
-83.9%
+5.9%
+34.0%
Total NAV at the end of the period (RON million)
a
2,350.1
14,569.5
13,244.6
Total NAV change in period (%)
-83.9%
+10.0%
+29.0%
NAV per share at the end of the
period (RON)
a
0.6608
2.5701
2.2624
NAV per share at the end of the period (USD)
a
0.1470
0.5546
0.5176
NAV per share (RON) change in the period (%)
-74.3%
+13.6%
+33.3%
NAV per share total return in the period (%)
g
-2.4%
+19.1%
+47.8%
Share
price as at the end of the period (RON)
b
0.5230
2.0400
1.9900
Share price low in the period (RON)
b
0.3810
1.7080
1.4400
Share price high in the period (RON)
b
2.1500
2.1900
1.9900
Share price change in the period (%)
-74.4%
+2.5%
+37.2%
Share price total return in the period (%)
h
+45.0%
+12.2%
+48.5%
Share price discount to NAV as at the end of the period (%)
d
-20.9%
-20.6%
-12.0%
Average share price discount in the period (%)
d
-22.8%
-21.6%
-5.7%
Average daily share turnover in the period (RON million)
c, j
12.9
9.1
3.6
GDR price as at the end of the period (USD)
e
5.70
21.60
22.60
GDR price low in the period (USD)
e
4.12
17.50
17.40
GDR price high in the period (USD)
e
23.80
24.20
22.60
GDR price change in the period (%)
-73.6%
-4.4%
+32.2%
GDR price total return in the period (%)
i
+34.9%
+3.9%
+42.0%
GDR price discount to NAV as at the end of the period (%)
d
-22.4%
-22.1%
-12.7%
Average GDR price discount in the
period (%)
d
-23.4%
-22.4%
-7.6%
Average daily GDR turnover in the period (USD million)
f, j
0.49
0.3
1.0
Source: BVB (for shares), Bloomberg (for GDRs), Sole Director calculations
1. NAV for the end of each period was computed in the last working day of the month until 31 December 2021 NAV and in the last
calendar day of the month starting with the 31 January 2022 NAV.
2. Period should be read as year 2023/ year 2022/ year 2021, respectively
NAV
1
and share price developments
2
Notes
Q1 2023 Q2 2023 Q3 2023
Q4 2023
Total NAV at the end of the period (RON million)
a 13,999.6
13,008.0
3,372.8
2,350.1
Total NAV change in period (%)
-3.9%
-7.1%
-74.1%
-30.3%
NAV per share at the end of the period (RON)
a
2.5823
2.4103
0.6431
0.6608
NAV per share at the end of the period (USD)
a
0.5680
0.5268
0.1372
0.1470
NAV per share total return in the period (%)
g 0.5%
-4.9%
-0.6%
2.8%
Share price as at the end of the period (RON)
b
2.1050
1.9460
0.4200
0.5230
Share price total return in the period (%)
h 3.2%
-5.3%
19.2%
24.5%
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Annual Sole Director’s Report for 2023
NAV
1
and share price developments
2
Notes
Q1 2023 Q2 2023 Q3 2023
Q4 2023
Share price discount to NAV as at the end of the period (%)
d -18.5%
-19.3%
-34.7%
-20.9%
GDR price as at the end of the period (USD)
e
23.00
21.00
4.34
5.70
GDR
price total return in the period (%) i 6.5%
-6.8%
3.5%
31.3%
GDR price discount to NAV as at the end of the period (%)
d -19.0%
-20.3%
-36.7%
-22.4%
Source: BVB (for shares), Bloomberg (for GDRs), Sole Director calculations
1. NAV for the end of each period was computed in the last calendar day of the month.
2. Period should be read as Q1 2023/ Q2 2023/ Q3 2023/ Q4 2023, respectively
Notes:
a. Prepared based on local rules issued by the capital market regulator (NAV in USD calculated using
the NBR FX rate at the reporting date)
b. Source: BVB - REGS market - Closing prices
c. Source: BVB
d. Share Price/ GDR Price discount/ premium to NAV as at the end of the period (%) is calculated as the
discount/ premium between FP share closing price on BVB - REGS/ FP GDR closing price on LSE on
the last trading day of the period and the NAV per share at the end of the period; as a general rule,
the average discount/ premium is calculated according to IPS, using the latest published NAV per
share at the date of the calculation (NAV in USD is calculated using the NBR FX rate at the reporting
date) and includes both the days with premium and with discount. However, the discount to NAV for
the trading days 7-14 September 2023 was calculated based on the 31 August 2023 NAV (published
on 15 September 2023), in order to eliminate the mismatch between the NAV and BVB market price
that was adjusted on 7 September 2023 (the Ex-date of 29 September 2023 dividend distribution).
e. Source: Bloomberg - Closing prices
f. Source: Bloomberg
g. The NAV per Share Total Return is calculated in RON by geometrically linking total returns for all
intermediate periods when official NAV is published. Each total return for a single period is
calculated using the following formula: the NAV per share at the end of the period plus any cash
distribution during the period, dividing the resulting sum by the official NAV per share at the
beginning of the period. The resulting single period total returns are geometrically linked to result in
the overall total return. The Fund uses this indicator as it is directly related to the performance
objectives of the Fund included in the IPS
h. The Share Price Total Return is calculated in RON by geometrically linking daily total returns. Daily
total return is calculated as the closing price at the end of the day, plus any cash distributions on that
day, dividing the resulting sum by the closing price of the previous day. The resulting single period
total returns are geometrically linked to result in the overall total return. The Fund uses this
indicator as it is directly related to the performance objectives of the Fund included in the IPS
i. The GDR Price Total Return is calculated in USD by geometrically linking daily total returns. Daily
total return is calculated as the closing price at the end of the day, plus any cash distributions on that
day, dividing the resulting sum by the closing price of the previous day. The resulting single period
total returns are geometrically linked to result in the overall total return. The Fund uses this
indicator as it is directly related to the performance objectives of the Fund included in the IPS
j. Including the tender offers finalised by the Fund in June 2022/ March 2023/ December 2023
k. The difference between total NAV at 31 December 2023 and total shareholders’ equity at the same
date as per the IFRS financial statements of the Fund is due to CE Oltenia SA valuation update – the
Fund has analysed the events that took place between 31 October 2023 (date of valuation reports
used in 31 December 2023 NAV) and 31 December 2023 and updated the value of CE Oltenia SA from
RON 64.8 million to RON 56.8 million in the audited IFRS financial statements of the Fund for 2023.
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Annual Sole Director’s Report for 2023
Performance objectives
According to the Management Agreement in force starting with 1 April 2022, the first reporting
period of the mandate is from 1 January 2022 until 31 December 2022 and the second reporting
period is from 1 January 2023 until 31 December 2023.
In accordance with the Fund’s IPS, there are two performance objectives that the Sole Director is
aiming to achieve. The NAV objective refers to an Adjusted NAV per share
1
in the last day of the
reporting period higher than the reported NAV per share as at the end of the previous reporting
period. The discount objective implies the discount between the closing price of the Fund’s shares
on BVB – REGS and the latest reported NAV per share to be equal to, or lower than 15%, in at least
2/3 of the trading days in the reporting period.
NAV Objective – second reporting period
According to the IPS, the Adjusted NAV per share as at 31 December 2023 is calculated based on the
31 December 2023 NAV, that was published on 12 January 2024, and applying the adjustments
presented below.
The Adjusted NAV per share as at 31 December 2023 was RON 3.3805 per share, 31.5% higher than
the 31 December 2022 NAV per share of RON 2.5701.
NAV Objective
Amount
RON
Details
Total NAV as at 31 Dec 2023
2,350,138,488
Dividend distributions after 31 Dec 2022
9,450,090,560
Gross dividend distributions of (1) RON 0.05
per share with Payment Date 6 Jun 2023 and
of (2) RON 1.7225 per share with Payment
date 29 Sep 2023
Distribution fees for dividend distributions
performed after 31 Dec 2022
165,046,268
Distribution fee for the 2 dividend
distributions mentioned above
Distribution fees for buy-backs after 31 Dec
2022
36,015,541
Distribution fees for buy-backs
Costs related to buy-backs after 31 Dec 2022
20,774,299
Fees related to the buy-back programmes,
excluding the distribution fees for buy-backs
Costs related to dividends paid after 31 Dec
2022
140,922
Central Depositary and Paying Agent fees
Total Adjusted NAV as at 31 Dec 2023
12,022,206,078
Number of paid shares, less treasury shares
and GDRs held as at 31 Dec 2023
3,556,427,239
Adjusted NAV per share as at 31 Dec 2023
3.3805
NAV per share as at 31 Dec 2022
2.5701
Difference
0.8104
%
31.5%
Source: Sole Director calculations
1
The adjusted NAV for a given date is calculated as the sum of: (i) the reported NAV as at the end of the Reporting Period; (ii) any
distributions to shareholders, being either dividend or non-dividend ones (i.e. in the last case following reductions of the par value of the
shares and distribution to the shareholders), implemented after the end of the previous Reporting Period, and (iii) any distribution fee
and any transaction/ distribution costs relating to either dividend or non-dividend distributions including buy-backs of shares/ GDRs/
depositary interests executed through daily acquisitions or public tenders after the end of the previous Reporting Period. The adjusted
NAV per share is equal to the adjusted NAV divided by the total number of the Fund’s paid shares, less FP ordinary shares bought back
and less equivalent in FP ordinary shares of FP GDRs acquired and not yet converted into FP ordinary shares, on the last day of the
Reporting Period. For more details, please refer to the IPS available on the Fund’s webpage.
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Annual Sole Director’s Report for 2023
In 2023 the Sole Director implemented the 14
th
buyback programme, including two Tender offers
for 225 million shares and 1.67 billion shares of the Fund respectively (in the form of ordinary
shares and GDRs) that were completed in March 2023 and December 2023 respectively.
Also, during the 21 April 2023 GSM and 18 August 2023 GSM the shareholders approved the
following dividend distributions: (1) of RON 0.05 per share with payment date on 6 June 2023 and
(2) of RON 1.7225 per share with payment date on 29 September 2023.
Following the above, the total distributions to the Fund’s shareholders during 2023 (including
dividend distributions and buy-back transactions) amount to RON 11.3 billion.
Discount Objective – second reporting period
In the period 1 January 2023 - 31 December 2023, the discount to NAV was above 15% in all
trading days. The discount for the period 7-14 September 2023 was calculated based on 31 July
2023 NAV per share (in which the dividend distribution from Hidroelectrica IPO proceeds,
approved during 18 August 2023 GSM, was not reflected) and the corresponding FP closing price
on BVB, which was adjusted on 7 September 2023, the Ex-date for 29 September 2023 dividend
distribution. This mismatch was eliminated following the publication of 31 August 2023 NAV on 15
September 2023.
Discount at
3 Jan 2023
Discount at
31
Dec
2023
Average Discount
3 Jan –
31
Dec
2023
Discount Range
3 Jan –
31
Dec
2023
Share price
-18.8%
-17.5%
-23.9%
min -15.6%/ max -84.0%
GDR
-20.1%
-18.6%
-24.5%
min -15.6%/ max -84.5%
Source: Sole Director calculations
Note: discount is calculated according to the IPS, based on the latest published NAV per share available for the day of the calculation
The table below presents information regarding the average discount and discount range under the
assumption that discount for 7-14 September 2023 is calculated based on 31 August 2023 NAV (in
order to eliminate the mismatch between the NAV and FP BVB market price adjustment):
Average Discount
3 Jan –
31
Dec
2023
Discount Range
3 Jan –
31
Dec
2023
Share price
-22.8%
min -15.6%/ max -39.7%
GDR
-23.4%
min -15.6%/ max -40.8%
Source: Sole Director calculations
Note: discount is calculated according to the IPS, based on the latest published NAV per share available for the day of the calculation
except for the period 7-14 September 2023, when discount is calculated based on 31 August 2023 NAV, published on 15 September 2023
It is the Sole Director’s intention to continue its efforts to minimise the discount to NAV through
close collaboration with underlying portfolio companies to improve governance, efficiency, and
profitability, as well as ongoing implementation of the Discount Control Mechanism, transparent
communication, and disclosure, supported by proactive investor relations.
For more details regarding the clarifications requested by the Fund in the context of the point
added by the Ministry of Finance on 26 March 2024 GSM agenda concerning the Fund’s strategy
during the 1-year mandate for the period 1 April 2024 – 31 March 2025, please see section
Subsequent events.
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Annual Sole Director’s Report for 2023
Corporate actions
Annual Dividend Distribution from 2022 profit
On 21 April 2023, the shareholders approved the distribution of a gross dividend of RON 0.05 per
share from 2022 annual profit, with Ex-date on 11 May 2023 and Registration date on 12 May 2023.
The Fund started the payment of dividends on 6 June 2023 and by 31 December 2023
approximately 96.8% of the total distribution amount was collected by shareholders.
Special Dividend Distribution from Hidroelectrica SA IPO proceeds
On 18 August 2023, the shareholders approved the distribution of a gross dividend of RON
1.7225 per share from Hidroelectrica SA IPO proceeds, with Ex-date on 7 September 2023 and
Registration date on 8 September 2023. The Fund started the payment of dividends on 29
September 2023 and by 31 December 2023 approximately 94.5% of the total distribution
amount was collected by shareholders.
Buy-back programmes
During 2023 the Fund completed the cancellation of the shares acquired within the 13
th
buy-
back programme (carried on during 2022) and acquired shares within the 14
th
buy-back
programme, which will be proposed for cancellation to shareholders during 30 April 2024 GSM.
In 2023, the Fund bought back a total number of 2,112,378,889 own shares within the 14
th
buy-
back programme (out of which 1,892,873,339 ordinary shares and 219,505,550 ordinary
shares corresponding to GDRs), representing 37.3% of the total issued shares as at 31
December 2023, for a total acquisition value of RON 1,816,723,906, excluding transaction costs.
The total number of own shares (including shares corresponding to GDRs) held by the Fund as
at 31 December 2023 is 2,112,378,889, having a total nominal value of RON 1,098,437,022.28
(RON 0.52 per share). As at 31 December 2023 the Fund did not hold any GDRs.
The 14
th
buy-back programme was carried out through daily transactions on BVB and LSE and
two Tender Offers finalised by the Fund in March and December 2023, for 225 million shares
and 1.67 billion shares respectively.
The 15
th
buy-back programme was approved by shareholders during the 13 February 2024
GSM.
For more details regarding the clarifications requested by the Fund in the context of the point
added by the Ministry of Finance on 26 March 2024 GSM agenda concerning the Fund’s strategy
during the 1-year mandate for the period 1 April 2024 – 31 March 2025, please see section
Subsequent events.
Share capital decrease
On 12 October 2023, the Fund finalised the registration of the decrease of the subscribed share
capital from RON 3,233,269,110.76 to RON 2,947,779,186.56 pursuant to the cancellation of
549,019,085 shares acquired during 2022 within the 13
th
buy-back programme, which was
endorsed by FSA through Endorsement no. 140/5 October 2023.
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Annual Sole Director’s Report for 2023
Investor relations
In 2023, in our efforts to increase the visibility and the profile of the Fund, as well as the local
capital market, and Romania, to a broader international institutional investor base, and to keep
investors and shareholders up to date with the effects of the geopolitical and macroeconomic
developments, the Fund’s management team organised 10 road-shows in the United States and the
United Kingdom, and met with 76 investment professionals interested in finding out more details
about Fondul Proprietatea and its equity story, and in receiving updates on the Fund, its corporate
actions, and the main portfolio holdings, as well as on the Romanian macroeconomic environment.
During the year, we participated to one online investor conference and six conferences organised
by international brokers and investment banks in London, Zürs, Prague and Bucharest, where we
discussed with representatives of 44 international asset managers. Furthermore, we had 36
meetings and 73 additional conference calls with analysts, brokers, current and prospective
investors interested in the latest developments regarding the Fund’s corporate actions and its
portfolio companies.
As part of our communication strategy to update the institutional investors and analysts covering
Fondul Proprietatea on its financial results, the latest events involving the Fund and its portfolio
companies, and the planned corporate actions, we organised the 2022 annual results, 2023 first
quarter, 2023 first half, and 2023 third quarter results conference calls, with 26 analysts and
investors participating on average to the calls.
Communication between the Sole Director and investors remains our top priority as we aim to
ensure that investors are informed about the latest developments and obtain their feedback as we
continue to focus on maximising shareholder value.
Extension of two BoN members’ mandates
During 25 September 2023 GSM the shareholders of the Fund approved the appointment of Mr.
Ciprian Ladunca and of Mrs. Ilinca von Derenthall as members of the BoN for a period of 3 years,
following the expiration of their mandates on 15 November 2023 and 25 November 2023,
respectively.
Convening the 13 February 2024 GSM
On 27 December 2023, the Sole Director convened a GSM for 13 February 2024 with the
following main points on the agenda:
• approval the disposal of the Fund’s entire stake in Engie Romania SA;
• approval of a new buy-back programme to be carried during the financial year 2024;
• approval of a mandate for executing discretionary disposals exceeding 20% of the total
value of the non-current assets, less receivables of the Fund.
During 13 February 2024 GSM the shareholders approved the first two points, while the last
one was rejected.
For more details regarding the full text of the resolutions adopted by shareholders during the
13 February 2024 GSM, please see the current reports issued by the Fund and the dedicated
website section Investor Relations – GSM Information.
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Annual Sole Director’s Report for 2023
Portfolio
Portfolio structure
The equity exposure amounted to 94.7% of the Fund’s NAV as at 31 December 2023. As at that date,
the portfolio was composed of holdings in 25 companies (5 listed and 20 unlisted), a combination of
privately held and state-controlled entities.
Portfolio structure – by controlling ownership
Net cash and receivables include bank
deposits, current bank accounts, as
well as other receivables and assets,
net of all liabilities, including liabilities
to shareholders related to dividend
distributions.
Source: Sole Director calculations
Note: % in total NAV as at 31 December 2023
Portfolio structure – by sector
Source: Sole Director calculations
Note: % in total NAV as at 31 December 2023
Portfolio structure
– by asset type
Source: Sole Director calculations
Note: % in total NAV as at 31 December 2023
69.7%
25.0%
5.3%
State controlled
entities
Private entities
Net cash and
receivables
52.6%
18.4%
14.8%
4.8%
4.1%
5.3%
Infrastructure
Power&Gas Utilities:
distrib,supply
Heavy industry
Aluminium
Others
Net Cash and
Receivables
89.4%
5.3%
5.3%
Unlisted Equities
Listed Equities
Net cash and receivables
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Annual Sole Director’s Report for 2023
89.6%
8.0%
2.4%
Alro
Alcom
Others
Portfolio structure – unlisted holdings
The largest unlisted holding is
CN Aeroporturi Bucuresti SA
(37.4% of the NAV)
Source: Sole Director calculations
Note: as at 31 December 2023. The chart reflects the company’s NAV value as a % in total NAV value of unlisted holdings.
Portfolio structure – listed holdings
The largest listed holding
is Alro SA
(4.8% of the NAV)
Source: Sole Director calculations
Note: as at 31 December 2023. The chart reflects the company’s NAV value as a % in total NAV value of listed holdings.
Key portfolio developments
Annual dividends and special dividends received from portfolio companies
During 2023, 10 companies in the Fund’s portfolio declared annual dividends related to the 2022
financial year and/ or special dividends
1
. The total amount of the gross dividend income recorded
by the Fund in 2023 is RON 962.8 million. The table below presents details on the annual dividends
declared by the portfolio companies:
Portfolio company
Gross amounts
(RON million)
Date of recording
in accounting
Collection date
Hidroelectrica SA
780.7
28-Apr-23
16-Jun-23
Societatea Nationala a Sarii SA
56.0
22-May-23
17-Jul-23
CN Aeroporturi Bucuresti SA
31.5
25-May-23
26-Jul-23
Administratia Porturilor Maritime SA
5.7
26-May-23
16-Jun-23
Others
1.5
multiple
fully collected in 2023
Total
875.4
Source: Fondul Proprietatea internal records
1
According to the definition of “special dividends” from the Annual cash Distribution Policy of the Fund
41.8%
20.6%
15.6%
15.2%
6.8%
CN Aeroporturi Bucuresti
Engie Romania
CN Administratia Porturilor
Maritime
Societatea Nationala a Sarii
Others
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Annual Sole Director’s Report for 2023
Out of the companies that declared dividends, 3 portfolio companies also approved the distribution
of special dividends. During 28 April 2023 GSM the shareholders of Hidroelectrica SA approved the
distribution of a special dividend to the existing shareholders at GSM date, out of retained earnings,
in total amount of RON 435.0 million, with payment deadline 29 September 2023. As a result, even
if the Fund was no longer a shareholder of Hidroelectrica SA following the completion of the IPO, it
collected a special dividend from the company, according to the information presented below.
The following table presents the gross amounts approved as special dividends for the Fund, in
accordance with its shareholding in each company at the relevant date:
Portfolio company
Gross amounts
(RON million)
Date of recording
in accounting
Collection date
Hidroelectrica SA
1
86.8
28-Apr-23
28-Sep-23
Alcom SA
0.4
27-Jun-23
17-Jul-23
CN Administratia Porturilor Dunarii
Fluviale SA
0.3 11-Jul-23
10-Aug-23
7-Sep-23
Total
87.5
Source: Fondul Proprietatea internal records
1. The dividend receivable was subject to an 8% withholding tax according to the Romanian fiscal legislation, as the Fund was no longer a
shareholder of the company at dividend payment date.
Listings
Hidroelectrica SA
On 31 March 2022, the GSM of Hidroelectrica SA approved the initiation of the listing process on
BVB following a public offering of the company’s shares held by the Fund.
On 8 September 2022 the Fund informed the market that the Fund and Hidroelectrica SA selected
the consortium of investment banks in relation to the IPO, composed of reputable international,
regional, and local investment banks.
Details on the consortium of banks involved in the IPO are included in the table below:
Joint Global Coordinators Joint Bookrunners Co-Lead Managers
• Citigroup Global Markets
Europe AG
• Erste Group Bank AG
• Jefferies GmbH
• Morgan Stanley Europe SE
• Banca Comerciala Romana SA
• Barclays Bank Ireland PLC
• BofA Securities Europe SA
• UBS Europe SE
• UniCredit Bank AG
• Wood & Company Financial
Services
• Auerbach Grayson
• BRD - Groupe Societe
Generale
• SSIF BT Capital Partners SA
• SSIF Swiss Capital SA
Stabilisation Manager Stabilisation Agent
• Citigroup Global Markets Europe AG
• Erste Group Bank AG
Source: internal records of the Fund
Rothschild & Co Equity Market Solutions Limited acted as Financial Adviser to the Fund, and STJ
Advisors acted as Financial Adviser to Hidroelectrica SA in connection with the IPO.
The Fund’s shareholders approved the sale of the shares held by FP in Hidroelectrica SA during the
15 November 2022 GSM.
On 6 June 2023 Hidroelectrica SA announced its intention to apply for admission to trading on the
regulated market of the BVB through an IPO carried by the Fund for the shares held in the company.
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Annual Sole Director’s Report for 2023
On 22 June 2023 the FSA approved the prospectus for the IPO having the following main
provisions:
• Offer Period: 23 June 2023 - 4 July 2023
• Price range: between RON 94 and RON 112 per share
• Size of the offer, including any Over-Allotment Option - up to 89,708,177 shares (up to
entire holding of 19.94% of Hidroelectrica SA total issued share capital)
• Retail investors entitled to a discount of 3% from the Offer Price on the first 5 business
days of the Offer Period
• No new capital raised by Hidroelectrica in connection with the Offering and no proceeds
received by Hidroelectrica
• Over-Allotment Option granted by the Fund to the Joint Global Coordinators representing
up to 15% of the Offer Shares, exercisable within 30 calendar days following the Admission
• The Offer price and the exact number of Offer Shares announced on 5 July 2023
• Settlement date: 10 July 2023
• Admission and start of trading on the BVB: 12 July 2023
• Three Romanian institutional investor groups agreed to be cornerstone investors and have
undertaken to purchase in aggregate RON 2.24 billion in shares at Offer Price
• Hidroelectrica and the Fund - subject to a lock-up arrangement during a period from 22
June 2023 until the date falling 180 days after the date of Admission
• Majority shareholder will be subject to a lock-up arrangement during a period from 22
June 2023 until 12 months after the date of Admission.
On 5 July 2023, the Fund announced its agreement to sell 89,708,177 shares, representing
19.94% of Hidroelectrica SA total issued share capital, and the Fund’s entire holding in the
company, under the following structure:
Category of shares No. of shares sold IPO price (RON)
Total gross
proceeds (RON)
Base Deal shares
78,007,110
8,064,301,072
• Retail Tranche – with discount
15,525,118
RON 100.88
• Retail Tranche – no discount
2,416,517
RON 104
• Institutional Tranche
60,065,475
RON 104
Over-Allotment shares
11,701,067
1,216,910,968
• Institutional Tranche
11,701,067
RON 104
Total
89,708,177
9,281,212,040
Source: internal records of the Fund
The Institutional Tranche was allocated 80% of the total shares while Retail Tranche was
allocated 20% of the total shares (with pro rata allocation factor 0.3209762650).
Admission and start of trading on BVB under the symbol “H2O” took place on 12 July 2023
and Hidroelectrica SA shares were included in the BET index of the BVB immediately following
the Admission.
The Stabilisation Period ended on 19 July 2023, following the notification received by the
Fund according to the details presented in the current report published on the same date.
Further to this, on 21 July 2023, the Fund collected the additional gross proceeds in the amount
of RON 1,216,910,968 as the sale of the 11,701,067 additional shares in Hidroelectrica SA was
completed.
The Fund does not hold any shares in Hidroelectrica SA following the completion of the IPO.
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Annual Sole Director’s Report for 2023
The total costs incurred by the Fund in 2023 in respect of the IPO were of approximately RON
243 million and mainly included investment bank fees, legal fees, and other consultancy fees.
Societatea Nationala a Sarii SA
On 5 July 2021, the GSM of Salrom approved in principle the listing of the company on the BVB,
through a public offering of the company’s shares held by the Fund.
On 27 July 2022, the Government approved a Memorandum supporting the listing of Salrom by a
public offering of the company’s shares held by the Fund, which is a key milestone in the listing
process.
The approval is a positive development as it allows the Fund to explore its options with regards to a
potential realisation of all or part of its holding in the company.
The Fund continues to engage with the majority shareholder and the company in relation to
preparations for a potential IPO.
Legal actions against CN Aeroporturi Bucuresti SA share capital increase
Details regarding the proposed share capital increase
CN Aeroporturi Bucuresti SA called a GSM that took place on 25 October 2021 (through the
convening notice published in the Official Gazette of Romania Part IV no. 3873/20.09.2021), for
the approval of a share capital increase with the plots of land inside Baneasa airport, brought as
Romanian State’s contribution in kind to the company's share capital. The proposed value for
the relevant plots of land to be contributed to the share capital was RON 3,814,809,171. This
was the third time the share capital increase process was initiated by the Romanian state since
2001.
On 26 October 2021 (the second calling for the shareholders’ meeting) the share capital
increase was approved with only the Romanian State voting in favor, as follows:
• The share capital increase approved was RON 4,768,511,460.
• RON 3,814,809,170 represents in kind contribution of the Romanian State, calculated as the
value of the land parcels as evaluated by the valuer appointed by the Trade Registry.
• The amount of RON 953,702,290 represents the value of shares offered to be subscribed by
Fondul Proprietatea for maintaining the 20% participation to the share capital. The
preference rights may be exercised by the Fund within 60 days calculated starting with the
date when the shareholders’ resolution is published in the Official Gazette of Romania.
• After the 60 days period expires, the share capital would be increased with the value of the
paid-up shares (the Romanian State’s contribution in kind being considered as already
completed).
• If the Fund would not subscribe, the unsubscribed shares would be cancelled.
Valuation report prepared by ANG Consulting SRL
Fondul Proprietatea expressed its opinion (on 21 September 2021), through a current report
published after the agenda of the meeting was made public, strongly disputing the
fundamentally flawed land valuation report.
The land valuation report carried out in 2021 attributes a very high value to the plots of land,
despite a previously approved valuation report from 2017, which had set the value of the same
land at RON 269 million. In Fondul’s view, this huge discrepancy in valuation was created using
unrealistic and inaccurate commercial indicators in the disputed valuation report (prepared by
ANG Consulting SRL, valuation company assigned by the Trade Registry) such as:
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• The estimated traffic of 3,118,000 passengers/ year, although CN Aeroporturi Bucuresti SA
provided the valuator with an estimate of 460,000 passengers/ year, information ignored by
the valuator. Baneasa Airport had around 25,500 passengers in 2019 (pre-pandemic year),
which means the valuator chose to overestimate the potential passengers’ traffic, ignoring
company forecasts and comparing Baneasa airport to actual traffic numbers on City Airport
London and City Airport Belfast.
• The estimated revenues of Baneasa Airport are 30 times higher than the average revenues
of the airport between 2014-2020. In addition, it is important to note that Baneasa airport
has been incurring losses since 2014.
• The valuator did not include any estimated negative cash flows until the end of the forecast
period, 2069. This implies the expectation that the terminal, the equipment, and the runway
will not be repaired, changed, or modernized for almost 50 years.
Legal actions against CN Aeroporturi Bucuresti SA
To protect the interest of the Fund and its shareholders, Fondul Proprietatea started court cases for
the annulment of the EGM Resolution, and for the suspension of the entire process until the claim
for annulment case is irrevocably closed. Following the hearing that took place on 13 January 2022,
the Bucharest Court of Appeal admitted the request of suspension filed by the Fund and ordered the
suspension of the effects of the increase until the claim for the annulment of the EGM Resolution is
irrevocably settled.
In the main litigation related to the claim for annulment of the aforementioned EGM Resolution, on
25 May 2023, Ilfov Court (Tribunalul Ilfov) dismissed, in the first instance, the Fund’s claim as
unfounded. The Fund filed the appeal against the decision. The Bucharest Court of Appeal
postponed the final decision until 7 March 2024.
The Sole Director has analysed the legal argumentation and related outcomes of the Appeal
together with the external counsels appointed to represent the Fund. In the view of the Sole
Director, the arguments that are likely to be admitted by the court and lead to a favourable ruling
on the appeal are the following: (i) nullity grounds related to the convening notice (lack of precise,
correct and complete information necessary to identify the land parcels), (ii) breach of the special
legal regime of the land parcels that are subject of the capital increase, (iii) the flawed valuation
report of the land parcels and (iv) FP should have obtained 20% of the shares issued as a result of
the capital increase, without any contribution, as CN Aeroporturi Bucuresti already owned the land
parcels when FP was established.
On 7 March 2024 the Bucharest Court of Appeal admitted the appeal filed by the Fund, annulling
Resolution no. 15/ 26 October 2021 of CN Aeroporturi Bucuresti SA. The decision issued by the
Bucharest Court of Appeal is final.
Once the details regarding the Decision of the Court of Appeal will be made available as well as
depending on the actions carried out by CN Aeroporturi Bucharest, the Fund will reevaluate all
ongoing legal actions or other potential new legal actions necessary to protect the interests of
the Fund's shareholders.
In addition to the main litigation described above, the Fund has also entered into the following
court proceedings in order to protect the shareholders’ interests:
• Opposition against the registration of EGM Resolution no. 15/26.10.2021 with the Trade
Register - on 11 February 2022, the Ilfov Court has suspended the opposition pending a final
decision in the main file;
• Action against the Certificates of attestation of the right of ownership (RO: “Certificate de
atestare a dreptului de proprietate”) - the first hearing is scheduled on 3 April 2024;
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• Action against the valuation report issued by ANG Consulting SRL - on 20 February 2024,
the judge decided that another specialised section of the same Court is entitled to have
jurisdiction on solving the case;
• Action for annulment of the EGM Resolution no. 14/24.09.2019 for the annulment of the
decision based on which ANG Consulting SRL performed the valuation.
Valuation of CN Aeroporturi Bucuresti SA
In the 31 December 2023 NAV report published on 12 January 2024, in the Preliminary results
report of the Fund for 2023 published on 29 February 2024 and in the audited IFRS financial
statements of the Fund for the financial year ended 31 December 2023 authorised on 25 March
2024, the Fund’s holding in CN Aeroporturi Bucuresti SA was valued using the same assumptions
and valuation methodology as in the previous valuation reports prepared during 2023 based on the
developments and argumentation presented above.
Participation in share capital increases/ decreases
Hidroelectrica SA share capital increase
On 20 April 2023, the Fund subscribed to the share capital increase of Hidroelectrica SA with a cash
contribution of RON 2,678,640. The registration of the share capital increase with the Romanian
Trade Registry was finalised on 29 May 2023.
CN Administratia Porturilor Maritime share capital increase
On 9 February 2022, during the CN Administratia Porturilor Maritime GSM, the majority
shareholder approved the increase of the share capital from RON 132,906,430 to RON 323,311,340,
respectively with the amount of RON 190,404,910, through incorporation of part of reserves. The
Fund maintained its stake holding, as new shares issued were distributed proportionally to existing
shareholders. As at the date of issuing this report, the Fund held 6,466,226 shares, representing
20% of the company’s share capital. However, the Fund decided to challenge in Court the validity of
the GSM which approved the share capital increase. The first instance court has rejected the
complaint. The Fund has appealed the decision. On 28 September 2023, Constanta Court of Appeal
dismissed the Fund’s claim as unfounded. The Court’s decision is final.
Aeroportul International Timisoara SA share capital increase
During the GSM held on 9 June 2023, the majority shareholder approved a share capital increase of
RON 25.2 million, by issuing 2,523,850 new shares at a nominal value of RON 10 per share, to
finance a proposed investment project. In order to avoid dilution, Fondul Proprietatea would have
to subscribe to 504,770 new shares, representing RON 5.04 million.
Fondul Proprietatea challenged the validity of the GSM decision, and the Court decided to suspend
the effects of the share capital increase until there is a final verdict on the issues raised in the initial
claim. As the company did not appeal the Court’s decision, the effects of the GSM decision approving
the share capital increase are suspended until the final decision of the court in the annulment file
above-mentioned.
The main ground for annulment claimed by the Fund is that by the GSM decision approving the
share capital increase two unlawful State aid measures have been granted, without prior
notification to, and approval by, the European Commission. This is due to the fact that the
company’s share capital increase does not pass the private investor test – i.e. because of the low
return, a private investor would not have made the investment in question.
The legal proceedings initiated by the Fund in the file for the annulment of the GSM decision
regarding the share capital increase are still in early stages. The Fund will provide further details on
the development of the legal proceedings regarding Aeroportul International Timisoara SA share
capital increase as and when relevant.
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IOR Bucuresti SA share capital increase
The cash share capital increase of IOR Bucuresti SA approved by shareholders on 27 April 2023
was finalised on 14 September 2023, at the date of registration with the Romanian Trade Registry.
The Fund decided not to participate. As a result, starting 14 September 2023, the Fund’s stake in
the share capital of IOR Bucuresti SA was reduced from 0.70% to 0.47%.
Restructuring plan of CE Oltenia and related roadmap
In January 2022, the European Commission approved Romania's plan to grant CE Oltenia a
restructuring aid for up to EUR 2.66 billion (RON 13.15 billion). The measure will enable the
company to finance its Restructuring Plan with the view to restore its long-term viability. The
implementation of the Restructuring Plan will lead to the need to operate capital increases, both in
cash as well as with the value of lands that will be used by CE Oltenia to develop the new
investments alongside co-investors (photovoltaic power plants and gas fired power plants).
As approved in the general shareholders meetings of CE Oltenia, the Company will develop 4 solar
parks with a total capacity of 455 MW together with OMV Petrom, 4 solar parks with a total
capacity of 280 MW and a 475 MW natural gas energy block with Tinmar Energy and an 850 MW
combined cycle power plant on natural gas with Alro.
The restructuring led to a spin-off from CE Oltenia of 2 units totalling 300MW, respectively of the
Craiova II Power Plant Branch. Shareholders approved the spin-off process and related actions
during the August 2022 GSM. The new company, Electrocentrale Craiova SA, was established
following a symmetric spin-off, taking over the assets and liabilities of Craiova II Power Plant
Branch and mirrors percentage wise the current shareholding structure of CE Oltenia (share capital
of RON 23,829,130 with FP’s stake of 21.559%, respectively 513,754 shares).
In 2024, CE Oltenia will receive approximately EUR 79 million (RON 387 million) in state aid as part
of the Restructuring Plan. The state aid is intended to finance the purchase of greenhouse gas
emission certificates pertaining to 2023 and 2024. The company has received grants worth EUR
867 million so far (EUR 241 million in 2021, EUR 535 million in 2022 and EUR 91 million in 2023).
As per the restructuring plan, the Romanian authorities committed to create a distinct subsidiary of
CE Oltenia ("the lignite subsidiary") which will comprise and operate the existing lignite power
units and related assets of CE Oltenia that are not intended for transition to gas or renewables. The
accounts of the lignite subsidiary will be clearly separated from the accounts of CE Oltenia. Such
lignite capacities should decrease over time in line with national lignite phase-out calendar. During
the GSM taking place on 4 August 2023, the shareholders approved to initiate the establishment of
the lignite subsidiary which as per the Restructuring Plan should be completed before the end of
the restructuring period i.e. before the end of 2026.
The change in legislation brought by GEO 26/2023 allowing land valuation to be carried out at fair
value, instead of indexation method facilitated the share capital increase with the value of the lands
that will be contributed by CE Oltenia in the new investment companies, brought as Ministry of
Energy’s in-kind contribution to the company's share capital.
The share capital increase with the value of the lands amounting to EUR 41 million (RON 204
million) was approved during the GSM taking place on 29 August 2023, by issuing 20,346,788 new
shares at a nominal value of RON 10 per share in favour of the Ministry of Energy. Following the
implementation of the share capital increase with the value of the lands and registration with the
Trade Registry during September 2023, the Fund’s stake in CE Oltenia decreased to 11.81% while
Ministry of Energy’s stake increased to 87.48%.
In line with the Restructuring Plan that also entails an equity contribution in cash by the Romanian
State via the Ministry of Energy in amount of EUR 180 million, CE Oltenia has conveyed a GSM on 28
November 2023 for the approval of the share capital increase. The share capital increase was
approved during the GSM in November 2023, by issuing 27,036,159 new shares at a nominal value
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of 10 RON per share in favour of the Ministry of Energy and included a share premium in amount of
RON 620,727,531.
The Fund did not subscribe in the share capital increase. Following the cash contribution and
registration with the Trade Registry, the Fund’s stake in CE Oltenia share capital will decrease to
7.37%. As at the date of this report, the Ministry of Energy has not contributed the corresponding
cash amount related to the share capital increase. Consequently, until the cash contribution is made
by the Ministry of Energy, the Fund’s stake in CE Oltenia remains at 11.81%.
Disposal of the entire holdings in Enel companies
On 14 December 2022, Enel S.p.a. announced that it entered into an exclusivity agreement with
Greek company Public Power Corporation (PPC) in relation to the potential disposal of all the
equity held by Enel Group in Romania (Target Assets). During the exclusivity period that ended
on 28 February 2023, the parties negotiated the transaction documentation and PPC carried out
appropriate due diligence on the Target Assets.
On 9 March 2023 Enel S.p.a. announced that the two companies signed an agreement to sell the
equity stakes held by the Enel Group in Romania to PPC for a total consideration of
approximately EUR 1,260 million, equivalent to an enterprise value of about EUR 1,900 million
(on a 100% basis). According to the announcement, the closing of the sale was subject to certain
conditions precedent customary for this kind of transactions, including the clearance from
competent antitrust authorities.
On 19 April 2023 the Fund, as seller, and PPC, as purchaser, have concluded an agreement for
the sale of all the equity stakes held by the Fund in E-Distributie Muntenia SA, Enel Energie
Muntenia SA, E-Distributie Dobrogea SA, E-Distributie Banat SA, and Enel Energie SA, in
exchange for a total consideration of RON 650,000,000.
On 26 October 2023, the sale of the Fund’s entire holding in E-Distributie Muntenia SA, Enel
Energie Muntenia SA, E-Distributie Dobrogea SA, E-Distributie Banat SA, and Enel Energie SA
was finalised. Following the completion of the transaction the Fund received gross proceeds of
RON 650,000,000 and the Fund no longer holds any shares in the Enel Group in Romania.
Disposal of the entire holding in Engie Romania SA
On 11 December 2023 the Fund informed shareholders that it received a binding offer from GDF
International SA, the majority shareholder of Engie Romania SA, in relation to a potential sale of
its entire shareholding in Engie Romania SA, for a consideration of EUR 87 million.
Further to that, on 22 December 2023 the Fund, as seller, and GDF International SA, as
purchaser, entered into an agreement for the sale of the entire shareholding in Engie Romania
SA in exchange for a total consideration of RON 432,616,167.75. The completion of the sale
under the agreement was subject to the Fund GSM approval.
For more details regarding the completion of sale of the Fund’s shareholding in Engie Romania
SA, please see section Subsequent events.
Regulatory updates for portfolio companies
Changes in the legislation regarding corporate governance of public enterprises
In June 2023, the Parliament of Romania approved Law no. 187/2023 for amending and
supplementing GEO no. 109/2011 on corporate governance of public enterprises. According to
Law 187/2023 the Agency for Monitoring and Evaluation of the Performance of Public
Enterprises (RO: Agentia pentru Monitorizarea si Evaluarea Performantelor Intreprinderilor
Publice -„AMEPIP”) shall be set up under the Romanian Government. According to the law,
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AMEPIP’s role is to establish the corporate governance policies for SOEs as well as to coordinate
the implementation of corporate governance rules at the level of tutelary public authorities.
AMEPIP’s main responsibilities include:
(i) participation in the selection procedure for the appointment of the board members of
public enterprises at central level, through its representatives in the nomination and
selection committees;
(ii) approval of the minimum level of the key performance indicators for SOEs;
(iii) monitoring the implementation of the remuneration policy, the objectives and strategies
of public enterprises and assessment of the performance of the board members of public
enterprises;
(iv) application of sanctions to public tutelary authorities, public enterprises, and other
responsible persons.
Minimum tax on turnover, additional turnover tax for banks, and specific tax for the oil
and gas sector
Starting with the fiscal year 2024, Law no. 296/2023 introduced a minimum tax on turnover
(set at 1%) on entities whose turnover exceeds EUR 50 million in the previous year of
calculation. According to the regulation, in case the regular profit tax is determined at a level
lower than the minimum turnover tax, entities are required to pay profit tax at the level of the
minimum turnover tax.
Entities that exclusively carry out activities involving distribution, supply and transport of
electricity and natural gas are exempt from this tax regime.
At the same time, entities operating in the oil and natural gas sectors, which in the previous year
register a turnover of over EUR 50 million, will pay a turnover tax in addition to the profit tax, at
a rate of 0.5% of turnover. Furthermore, credit institutions, irrespective of their turnover, will
be subject to an additional tax on turnover calculated by applying a rate of 2% (in 2024 and
2025), and 1% (from 2026).
Utilisation of tax losses
Starting 1 January 2024 the utilisation of tax losses is limited as follows:
• entities showing a tax profit will be able to offset only 70% of the tax profit with past tax
losses (assuming that tax losses are available for utilisation). The remaining 30% of the tax
profit will be subject to Romanian corporate income tax at the 16% rate;
• tax losses brought forward from the fiscal years prior to 1 January 2024, as recorded as at
31 December 2023, might be recovered from future taxable profits during the next 7 years;
• tax losses recorded starting with 1 January 2024 might be recovered from future taxable
profits during the next 5 years.
As a result, if any entity shows a tax profit in 2024, it will be able to offset only 70% of this tax
profit (assuming that tax losses are available for utilisation). The remaining 30% will be subject
to Romanian corporate income tax at the 16% rate.
GEO no. 27/2023 regarding the exemption from regulatory requirements on profit
distribution
As per Article 5 of GEO no. 27/2023, by exemption from the provisions of Article 1 paragraph
(1) (e) and (f) from Government Ordinance no. 64/2001 regarding the distribution of profit of
state owned companies, for such companies that have a restructuring plan in progress notified
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and approved by the European Commission Decision and that have benefited from state aid for
restructuring in the form of grants for the financing of certain expenses, the accounting profit
remaining after tax deduction is distributed directly to other reserves – e.g. no distribution of
dividends.
Top portfolio holdings
Name
Fund’s
stake (%)
Value as at
31 Dec 2023 (RON mil)
% of NAV as at
31 Dec 2023
CN Aeroporturi Bucuresti SA
20.00%
877.7
37.4%
Engie Romania SA
1
12.00%
432.6
18.4%
CN Administratia Porturilor Maritime
SA
20.00% 328.3 14.0%
Societatea Nationala a Sarii SA
49.00%
318.4
13.6%
Alro SA
10.21%
112.2
4.8%
Top equity holdings
2,069.2
88.1%
Total equity holdings
2
2,225.0
94.7%
Net cash and receivables
125.1
5.3%
Total NAV
2,350.1
100.0%
Source: internal records of the Fund
1. The disposal of the Fund’s entire holding in Engie Romania SA was completed on 20 February 2024. For more details, please see
section Subsequent events.
2. For the purpose of the preparation of IFRS financial statements, the Fund has analysed the potential effect on the valuation of portfolio
holdings of the events that took place between 31 October 2023 (date of the valuation reports for 31 December 2023 NAV) and 31
December 2023 and consequently has adjusted the value of CE Oltenia SA from RON 64.8 million to RON 56.8 million in the 2023 IFRS
financial statements of the Fund.
CN Aeroporturi Bucuresti SA
Financial and operational results
RON million 2022
2023
1
%
Budget
2023
Budget
2024
%
Operating revenue
999.6
1,203.8
+20.4%
1,118.9
1,310.3
+17.1%
Operating profit
344.7
477.1
+38.4%
288.3
470.9
+63.3%
Net profit
304.0
404.0
+32.9%
229.1
408.7
+78.4%
Dividends
157.4
208.1
+32.2%
121.3
211.1
+74.0%
Source: Individual IFRS financial statements / Budgeted figures based on company’s budgets as approved by shareholders
1. preliminary figures for 2023 are extracted from the company’s budget document for 2024 as approved by shareholders
Traffic has recovered to pre-Covid levels in 2023 and surged by 17% year-over-year, reaching 14.7
million passengers. This was the main positive driver for the improved operating profitability,
which was up by 32.9% year-over-year to RON 404.0 million, according to preliminary results
published with the 2024 Budget.
Corporate governance
All Board members have interim mandates. Selection process was started, and it is expected to be
finalised in the coming months.
ESG
CN Aeroporturi Bucuresti SA does not publish sustainability reports.
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Engie Romania SA
On 22 December 2023 the Fund as seller and GDF International SA as purchaser entered into an
agreement for the sale of the entire shareholding in Engie Romania SA in exchange for a total
consideration of RON 432.6 million. The transaction was approved by the Fund’s shareholders
during 13 February 2024 GSM and was completed on 20 February 2024. Following the completion
of the transaction, the Fund collected gross proceeds of RON 432.6 million and no longer holds any
shares in Engie Romania SA.
CN Administratia Porturilor Maritime SA
Financial and operational results
RON million 2022 2023
1
%
Budget
2023
Budget
2024
%
Operating revenue
479.5
548.7
+14.4%
542.3
577.7
+6.5%
Operating profit
131.5
135.6
+3.1%
91.4
139.7
+52.8%
Net profit
114.5
133.9
+16.9%
89.8
143.1
+59.4%
Dividends
28.6
33.5
+17.1%
23.2
35.9
+54.7%
Source: Financial statements in accordance with applicable Romanian accounting regulations / Budgeted figures based on company’s
budgets as approved by shareholders
1. preliminary figures for 2023 are extracted from the company’s budget document for 2024 as approved by shareholders
Traffic reached 92.5 million tons in 2023, an increase of 22.4% year-over-year, driven by traffic of
Ukrainian merchandise, which doubled year-over-year, to approximately 25 million tons. Higher
traffic drove an improvement in operating profitability, which the management currently estimates
at RON 135.6 million.
Corporate governance
All Board members have interim mandates. Selection process for full mandates did not start yet.
ESG
CN Administratia Porturilor Maritime SA does not publish sustainability reports.
Societatea Nationala a Sarii SA
Financial results
RON million 2022 2023
1
%
Budget
2023
Budget
2024
%
Operating revenue
495.3
529.7
+6.9%
597.5
592.2
-0.9%
Operating profit
134.4
135.0
+0.4%
146.3
144.7
-1.1%
Net profit
120.7
128.1
+6.1%
129.7
130.0
+0.3%
Dividends
114.3
128.1
+12.1%
129.7
130.0
+0.3%
Source: IFRS financial statements / Budgeted figures based on company’s budgets as approved by shareholders
1. preliminary figures for 2023 are extracted from the company’s budget document for 2024 as approved by shareholders
Corporate governance
Following the finalisation of the selection procedure for Board Members based on GEO no.
109/2011 by the Ministry of Economy, during 23 February 2024 GSM the shareholders appointed
Board members for a period of 4 years. Fondul Proprietatea appointed 2 out of 5 members.
ESG
Societatea Nationala a Sarii reports on environmental and social responsibility issues in its non-
financial annual report, in accordance with GRI Standards, published on its website www.salrom.ro.
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Alro SA
Financial results
RON million 2022 2023
3
%
Budget
2022
1
Budget
2023
2
%
Operating revenue
3,554.1
2,849.7
-19.8%
4,010.3
3,561.4
-11.2%
Operating profit/ (loss)
683.9
(361.7)
<-100%
150.7
276.3
+83.3%
Net profit/ (loss)
409.5
(559.8)
<-100%
19.2
68.5
>100%
Dividends
-
-
-
-
-
-
Source: Consolidate IFRS financial statements / Budgeted figures based on company’s budgets as approved by shareholders
1. GSM resolution from 28 April 2022, values computed using the NBR USD/RON FX rate as at 31 March 2022
2. GSM resolution from 25 April 2023, values computed using the NBR USD/RON FX rate as at 31 March 2023
3. Preliminary results based on the preliminary report published by the company
Corporate governance
The members of the Board of Directors were appointed in April 2023 for a period of 4 years. The
Board of Directors of Alro is composed of 11 members, out of which 3 are independent. Starting 29
May 2023, Mr. Gheorghe Dobra was re-appointed as general manager of Alro for a 4-year mandate.
ESG
Alro reports annually on ESG issues through its sustainability reports and has a 5-year
sustainability strategy. Alro published its 2022 sustainability report in June 2023, and this can be
found on its website, www.alro.ro.
Bankruptcies, insolvencies, and reorganisations
The following companies from the Fund’s portfolio are under bankruptcy, insolvency or
reorganisation procedures:
• Gerovital Cosmetics SA (sole registration code 334493) is a company under bankruptcy
procedure starting with 6 January 2010, according to the decision issued by the Bucharest
Court related to the file 22491/3/2007;
• Romplumb SA (sole registration code 2206334) is a company under bankruptcy procedure
starting with 15 September 2017, according to the decision issued by the Maramures
Court related to the file 729/100/2012;
• Simtex SA (sole registration code 324490) is a company under judicial reorganisation
procedure starting with 10 December 2008, according to the decision issued by the
Bucharest Court related to the file 5768/3/2008;
• Salubriserv SA (sole registration code 7774360) is a company in judicial reorganisation
procedure according to the decision issued by the Mures Court related to the file
108/1371/2015 on 22 December 2016;
• World Trade Center Bucharest SA (sole registration code 364354) is a company under
insolvency procedure starting with 8 June 2010, according to the decision issued by the
Bucharest Court related to the file 45619/3/2011.
• Romaero SA (sole registration code 1576401) is a company under insolvency procedure
starting with 17 January 2024, according to the decision issued by the Bucharest Court
related to the file 39261/3/2023
The holdings in these companies are reflected at zero in the NAV reporting.
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Corporate Strategy
Distributions to shareholders
Annual Cash Distribution Policy
In order to comply with the requirements of the Bucharest Stock Exchange Corporate Governance
Code and in accordance with the IPS, Fondul Proprietatea adopted the Annual Cash Distribution
Policy. The scope of the policy is to set a series of guidelines and principles on the cash distributions
made by the Fund. The Annual Cash Distribution Policy of the Fund was last amended on 18
December 2023, mainly related to the elimination of the minimum RON 0.05 annual distribution
per share, and the updated version is included in full in Annex 7 to this report.
For more details regarding the clarifications requested by the Fund in the context of the point
added by the Ministry of Finance on 26 March 2024 GSM agenda concerning the Fund’s strategy
during the 1-year mandate for the period 1 April 2024 – 31 March 2025, please see section
Subsequent events.
General payment procedure
The payments of the distributions to shareholders are performed through the Romanian Central
Depositary, according to the legislation in force, as follows:
a) for shareholders having a custodian/ brokerage account, directly by the respective custodian
bank or broker;
b) for all other shareholders:
(i) by the Central Depositary, through BRD - Groupe Societe Generale (acting as Payment
Agent), for bank transfers when the supporting documentation required by the
Central Depositary, along with a payment request, have been submitted;
(ii) by the Payment Agent for cash payments, at any of its agencies, or by bank transfer
(when the supporting documentation required by the Payment Agent and a payment
request were submitted to the Payment Agent).
For each distribution the Fund publishes on its website all the necessary details, including the
Dividend Payment procedure, information regarding the potential tax implications, documents to
be submitted by shareholders to benefit from certain tax exemptions or lower tax rates, payment
forms, additional documentation needed in particular situations, contact details of the Paying Agent
and Central Depositary, etc.
Starting with the date when the statute of limitation occurs, the shareholders are no longer entitled
to collect the respective distribution. According to the provisions of the legislation in force, the
statute of limitation generally occurs three years after the date when the respective distribution
commences, except for specific instances that are individually assessed – in these cases the
payments are performed directly by the Fund based on the specific requests and documentation
provided by shareholders entitled to amounts payable.
Annual Dividend Distribution from 2022 profit
On 21 April 2023, the shareholders approved the distribution of a gross dividend of RON 0.05 per
share from 2022 annual profit, with Ex-date on 11 May 2023 and Registration date on 12 May 2023.
The Fund started the payment of dividends on 6 June 2023 and by the date of this report
approximately 96.8% of the total distribution amount was collected by shareholders.
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Annual Sole Director’s Report for 2023
Special Dividend Distribution from Hidroelectrica SA IPO proceeds
On 18 August 2023, the shareholders approved the distribution of a gross dividend of RON 1.7225
per share from Hidroelectrica SA IPO proceeds, with Ex-date on 7 September 2023 and Registration
date on 8 September 2023. The Fund started the payment of dividends on 29 September 2023 and
by the date of this report approximately 94.5% of the total distribution amount was collected by
shareholders.
Distributions history
Key information on the Fund’s distributions history is included in the table below:
Distribution
Paid
in
Gross
distribution
declared
(RON)
Gross
distribution
per share
(RON)
Total number
of shares
1
Status of
distribution
payment
(%)
Deadline for
distribution
collection as per
Central Depositary
2007 Dividend
2008
89,997,678
0.00660
13,644,179,910
30 Jun 2012
2008-2009 Dividend
(aggregate)
2010
1,124,316,80
4
0.08160 13,778,392,208 11 Oct 2013
2010 Dividend 2011 432,729,046 0.03141 13,776,792,208 30 Jun 2014
2011 Dividend
2012
507,658,517
0.03854
13,172,250,055
30 Jun 2015
2012 Dividend
2013
536,437,206
0.04089
13,119,031,695
28 Jun 2016
Distribution - Return
of capital
2014 601,325,852 0.05000
12,026,517,031 25 Jul 2017
Distribution - Return
of capital
2015 534,322,868 0.05000
10,686,457,366 29 Jun 2018
Distribution - Return
of capital
2016 516,886,344 0.05000
10,337,726,877 27 Jun 2019
Distribution - Return
of capital
Mar 2017 480,543,496 0.05000
9,610,869,928 27 Sep 2020
2
Distribution - Return
of capital
Jun 2017 443,502,747 0.05000
8,870,054,948 27 Sep 2020
2
2017 Dividend Jun 2018 499,976,344 0.06780
7,374,282,346 29 Jun 2021
2018 Dividend
Jul 2019
642,318,808
0.09030
7,113,165,099
1 Jul 2022
2019 Dividend
Jul 2020
417,965,383
0.06420
6,510,364,222
1 July 2023
3
2021 First Special
dividend
Jun 2021 427,147,747 0.07200
5,932,607,596
97.7%
22 Jun 2024
2021 Second Special
dividend
Aug 2021 413,480,183 0.07000
5,906,859,764
97.6%
27 Aug 2024
2021 Third Special
Dividend
Feb 2022 351,240,772 0.06000
5,854,012,863
97.5%
18 Feb 2025
2021 Dividend
Jun 2022
774,290,893
0.12500
6,194,326,989
97.5%
27 Jun 2025
2022 Dividend
Jun 2023
269,837,832
0.05000
5,396,756,645
96.8%
6 Jun 2026
2023 Special Dividend
Sep 2023
9,180,252,728
1.72250
5,329,609,743
94.5%
29 Sep 2026
Source: Fondul Proprietatea internal records
1. Number of shares defined as (1) the number of shares in issue, less (2) any unpaid shares and less (3) any treasury shares acquired via
buy-backs (in the form of ordinary shares or GDRs corresponding to ordinary shares) at the registration date decided upon by the GSM
approving the dividend distribution or return of capital.
2. Status of limitation was extended due to pandemic conditions; however, extended status of limitation occurred
3. Status of limitation was extended until 31 May 2026 due to certain legal provisions and procedures applied.
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Buy-back programmes
Overview of share buy-back programmes
Programme Period
No. of shares
(million
)
Tender offer Status
First
May – Sep 2011
240.3
N/A
Completed
Second
Apr – Dec 2013
1,100.9
Oct – Nov 2013
Completed
Third
Mar – Jul 2014
252.9
N/A
Completed
Fourth
Oct 2014 – Feb 2015
990.8
Nov – Dec 2014
Completed
Fifth
Feb – Jul 2015
227.5
N/A
Completed
Sixth
Sep 2015 – Sep 2016
891.7
Aug – Sep 2016
Completed
Seventh
Sep 2016 – May 2017
830.2
Feb – Mar 2017
Completed
Eight
May – Nov 2017
141.9
N/A
Completed
Ninth
Nov 2017 – Dec 2018
1,488.0
Jan – Feb 2018
Completed
Tenth
Jan – Dec 2019
403.8
Jul – Aug 2019
Completed
Eleventh
Jan – Dec 2020
798.0
Jan – Mar 2020/
Jul – Sep 2020 /
Oct – Dec 2020
Completed
Twelfth
Jan - Dec 2021
194.4
N/A
Completed
Thirteenth
Jan – Dec 2022
549.0
May – Jun 2022
Completed
Fourteenth Jan – Dec 2023 2,112.4
Jan – Mar 2023
Oct – Dec 2023
Cancellation in progress
1
Total
10,221.8
Source: Fondul Proprietatea internal records
1. Cancellation of shares pending approval during 30 April 2024 Annual GSM
Evolution of discount / premium vs. buy-back programmes and distributions
Source: Bloomberg for Adjusted Share Price (price adjusted with cash distributions), Sole Director calculations for Discount / Premium
Note: The (discount) / premium is calculated in accordance with the IPS i.e. the (discount) / premium between the FP shares closing
price on the BVB - REGS for each trading day and the latest published NAV per share at the date of calculation. However, the discount to
NAV for the trading days 7-14 September 2023 was calculated based on the 31 August 2023 NAV (published on 15 September 2023), in
order to eliminate the mismatch between the NAV and FP BVB market price that was adjusted on 7 September 2023 (the Ex-date of 29
September 2023 dividend distribution).
-50%
-40%
-30%
-20%
-10%
0%
0.00
0.10
0.20
0.30
0.40
0.50
0.60
1/22 3/22 5/22 7/22 9/22 11/22 1/23 3/23 5/23 8/23 10/23 12/23
Adjusted Share Price (RON) Discount / Premium (%)
13th buy-back programme
14th buy-back programme
RON 0.06
dividend
distribution
RON 0.125
dividend
distribution /
10th Tender Offer
11th Tender
Offer
RON 0.05
dividend
distribution
RON 1.7225
dividend
distribution
12th
Tender
Offer
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Annual Sole Director’s Report for 2023
The table below shows a summary of the buy-back programmes during 2023:
Progr. Description
No of
shares
Equivalent
shares of GDRs
Total no of
shares
% of issued
share capital
2
13
th
Balance at 1 Jan 2023
544,795,835
4,223,250
549,019,085
Conversions
4,223,250
(4,223,250)
-
Cancellations
(549,019,085)
-
(549,019,085)
Balance at 31 Dec 2023
-
-
-
-
Weighted average price
(RON per share, USD per GDR)
3
RON 2.1057 USD 22.4682 RON 2.1078
14
th
Balance at 1 Jan 2023
-
-
-
Acquisitions
1,892,873,339
219,505,550
2,112,378,889
Conversions
219,505,550
(219,505,550)
-
Balance at 31 Dec 2023
2,112,378,889
-
2,112,378,889
37.3%
Weighted average price
(RON per share, USD per GDR)
3
RON 0.7983 USD 6.8551 RON 0.8600
All
Total balance at 31 Dec 2023
2,112,378,889
-
2,112,378,889
37.3%
Source: Sole Director calculations
Notes:
1. All information is presented based on the transaction date
2. Calculated as the total number of shares acquired within the programme (own shares and shares corresponding to GDRs) divided
by the number of shares corresponding to the issued share capital at the end of the programme (for completed programmes)/at the
reporting date (for ongoing programmes).
3. Weighted average price is calculated based on transaction price, excluding the related transaction costs, for the entire buy-back
programme
The 13
th
buy-back programme (implemented during 2022)
The 13
th
buyback programme was finalised on 30 December 2022. During the 21 April 2023 EGM,
the Fund’s Sole Director proposed, and the shareholders approved the cancellation of the
549,019,085 treasury shares repurchased through the 13
th
buy-back programme. All the related
legal and regulatory steps for the cancelation of shares were finalised on 12 October 2023.
The 14
th
buy-back programme (implemented during 2023)
During 15 November 2022 GSM the shareholders approved the 14th buy-back programme for
2023, for a total number of 3,500 million shares in the form of ordinary shares and GDRs, at a price
between RON 0.2 per share and RON 3.0 per share.
Auerbach Grayson in consortium with Swiss Capital provided brokerage services for the
programme. The Fund was allowed to buy back daily up to 25% of the average daily trading volume
of the Fund’s shares (in the form of ordinary shares or GDRs) on the regulated market on which the
purchase was carried out, calculated in accordance with the applicable law.
The duration of the 14th buy-back programme was 1 January 2023 – 31 December 2023.
The Fund’s Sole Director proposed the cancellation of the treasury shares repurchased within the
14th buy-back programme during the 30 April 2024 Annual GSM.
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Annual Sole Director’s Report for 2023
The Tender Offers within the 14
th
buy-back programme
The table below presents details regarding the two tender offers completed by the Fund within the
14
th
buy-back programme:
First Tender Offer
March 2023
Second Tender offer
December 2023
Total no of shares acquired in the TO
225,000,000
1,670,000,000
Shares (ordinary)
132,875,150
1,560,550,300
Shares (corresponding to GDRs)
92,124,850
109,449,700
GDRs acquired
1,842,497
2,188,994
TO price per share (RON)
2.1900
0.6319
TO price per GDR (RON)
109.5000
31.5950
FX rate of the TO (RON/USD)
4.6150
4.6090
TO price per GDR (USD)
23.7270
6.8551
Dealer Managers
Swiss Capital SA and Auerbach Grayson
Intermediary for shares
Swiss Capital SA
Tender agent for GDRs
The Bank of New York Mellon
Date of application request to FSA
17 Jan 2023
11 Oct 2023
FSA approval of the tender 2 Feb 2023
24 Oct 2023/
8 Nov 2023
1
Subscription period
10 Feb - 13 Mar 2023
31 Oct - 5 Dec 2023
Total subscriptions, out of which:
1,237,263,281
3,513,088,143
Ordinary shares
730,673,281
3,282,844,693
Shares corresponding to GDRs
506,590,000
230,243,450
Subscriptions % Offer
549.895%
210.3646%
Source: internal records of the Fund
1. On 2 November 2023 the Fund submitted for FSA’s approval an application to amend the public tender offer documentation by
increasing the number of tendered shares (both in the form of shares and GDRs) from 670,000,000 to up to 1,670,000,000, which was
approved by the FSA on 8 November 2023.
Impact of the buy-back programmes on the Fund’s equity
The Fund recognises the treasury shares (repurchases of own shares and GDRs) at trade date as a
deduction from shareholders’ equity (in an equity reserve account). Treasury shares are recorded
at acquisition cost, including brokerage fees, distribution fees and other transaction costs directly
related to their acquisition.
Upon completion of all legal and regulatory requirements, the treasury shares are cancelled and
netted off against the share capital and / or other reserves. The details on the accounting treatment
to be applied for the registration and cancellation of treasury shares can be found in the FSA Norm
no. 39/2015, article 75.
A negative equity element arises upon cancelation of the shares acquired in a buy-back programme,
where the acquisition price is higher than the nominal value, but this does not generate an
additional shareholder’s equity decrease. At the cancellation date, only a reallocation between the
equity accounts is booked, without any impact on profit or loss and without generating additional
shareholders’ equity decrease (the decrease is recorded at share acquisition date).
Article 75 from Norm no. 39/2015 mentions that the negative balance arising on the cancellation of
equity instruments may be covered from the retained earnings and other equity elements, in
accordance with the resolution of the GSM.
As at 31 December 2023, the Fund’s equity elements that could be used to cover the negative
reserve are sufficient and include retained earnings, reserves, and share capital.
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Annual Sole Director’s Report for 2023
Buy
-back programme 14 impact on equity during 2023 All amounts in RON
Acquisition cost at trade price (excluding transaction costs)
1,816,723,950
Total costs directly related to transaction, out of which:
56,469,330
Distribution fees paid to the Sole Director in relation with the buy-
backs performed
1
35,695,074
FSA fees
15,620,638
Stock Exchange fees (BVB and LSE)
2,842,050
Brokerage fees
930,664
Fees paid to The Bank of New York Mellon
855,064
Legal advisory fees
376,229
Central
Depositary fees 130,153
Other professional fees
19,457
Total impact on equity of buy-back programme 14 during 2023
1,873,193,280
Source: Sole Director calculations
1. FTIS distribution fees related to buy-backs which are recognised directly in equity together with the acquisition cost of the
underlying shares
Coverage of the negative reserves
During the 21 April 2023 Annual GSM, the shareholders approved the coverage of the negative
reserves in amount of RON 230,576,693 related to the 12
th
buy-back programme using the other
reserves set up for this purpose as per the decision taken in the 2022 Annual GSM.
During the same GSM, the shareholders approved the cancellation of the 549,019,085 treasury
shares repurchased within the 13th buy-back programme and also the allocation of RON
908,845,064 from 2022 accounting profit to other reserves in order to be available for covering the
related negative reserve.
The table below shows the movement of the negative reserves during 2023:
Movement in negative reserve
All amounts in RON
Opening balance of the negative reserve as at 1 January 2023 (audited)
230,576,693
Coverage of negative reserves according with OGM Resolution no. 2/ 21 Apr 2023
(230,576,693)
Negative reserve arising on the cancellation of 13
th
buy-back programme shares
(recorded on 12 October 2023) according to EGM Resolution no. 2/ 21 Apr 2023
908,845,064
Closing balance of the negative reserve at 3
1 December 2023 (audited) 908,845,064
Source: Sole Director calculations
The table below shows additional details on the estimated negative reserve that will arise upon the
cancelation of the treasury shares in balance as at 31 December 2023:
Negative reserve to arise on cancellation of the treasury shares in
balance as at 31 December 2023
Buy-back
programme
14
1
Number of shares to be cancelled
(1)
2,112,378,889
Total costs (including transaction costs and other costs), representing the
accounting value of the shares to be cancelled in the future (RON)
(2) 1,873,193,280
Correspondent nominal value (NV = RON 0.52 per share) (RON) (3)=(1)*NV 1,098,437,022
Estimated negative reserve to be booked on cancelation (RON) (4)=(3)-(2) 774,756,258
Source: Sole Director calculations
1. During the period 7-30 September 2023, following the price adjustment at dividend Ex-date for the 29 September 2023 dividend
distribution, the Fund’s shares were traded at a price lower than the related nominal value of RON 0.52 per share.
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Annual Sole Director’s Report for 2023
During 30 April 2024 Annual GSM, the Fund’s Sole Director proposed the cancellation of the
2,112,378,889 treasury shares repurchased within the 14
th
buy-back programme. The
estimated negative reserve in amount of RON 774,756,258 (please see table above)
corresponding to the treasury shares repurchased within the 14
th
buy-back programme subject
to the cancellation proposal will be recorded only after all legal and regulatory steps related to
the cancellation are completed (FSA endorsement, registration with the Trade Registry, etc.).
The 15
th
buy-back programme (for 2024)
During 13 February 2024 GSM the shareholders approved the 15
th
buy-back programme for
2024, for a total number of 1 billion shares in the form of ordinary shares and GDRs, at a price
between RON 0.2 per share and RON 1.0 per share.
For more details regarding the clarifications requested by the Fund in the context of the point
added by the Ministry of Finance on 26 March 2024 GSM agenda concerning the Fund’s strategy
during the 1-year mandate for the period 1 April 2024 – 31 March 2025, please see section
Subsequent events.
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Annual Sole Director’s Report for 2023
Financial Information
Evolution of liquid assets
The table below shows the change in net liquid assets of the Fund as a percentage of the NAV.
RON million
31 Dec
2023
30 Sep
2023
30 Jun
2023
31
Mar
2023
31 Dec
2022
Current accounts
1
546.1
986.0
81.1
69.9
73.8
Bank deposits
191.4
1,345.7
786.7
351.7
912.6
Treasury bills and government bonds
-
202.0
-
-
-
Dividend receivables
-
-
175.8
-
-
Total liabilities
(613.8)
(1,974.0)
(139.6)
(123.5)
(114.4)
Liquid assets less liabilities
123.7
559.7
904.0
298.1
872.0
Net Assets Value
2,350.1
3,372.8
13,008.0
13,999.6
14,569.5
% Liquid assets less liabilities in NAV
5.3%
16.6%
6.9%
2.1%
6.0%
Source: Sole Director calculations
1. Current accounts include also the cash blocked for distributions to shareholders
The liquid assets decreased at the end of Q1 mainly as a result of the cash outflows for the
Tender Offer within the 14
th
buy-back programme settled in March 2023.
The most important cash inflows in Q2 are related to the collection of dividend receivables from
portfolio companies (mainly Hidroelectrica SA), partially netted off by the dividend distribution
of RON 0.05 per share with Payment date 6 June 2023.
The increase in total liabilities at the end of Q3 is related to the special dividend distribution
from Hidroelectrica SA IPO proceeds of RON 1.7225 per share, with Payment date 29 September
2023.
During Q4 the main cash inflow was related to the disposal of the Fund’s holding in Enel
companies (RON 650 million), netted off by the cash outflows related to the tender offer within
the 14
th
buyback programme, finalised in December 2023 (RON 1.1 billion).
Cost ratios of the Fund
The Fund elected to use Ongoing Charge Ratio and Total Expense Ratio as alternative
performance measures because applying industry standards to the calculation of expense
charges creates consistent and comparable data across the sector.
The Ongoing Charge Ratio of the Fund represents the annual percentage impact in shareholder
returns of the recurring operational expenses, and it is calculated as the total ongoing charges
for the last 12 months divided by the average monthly net asset value of the Fund during the
same period.
For the purpose of this calculation, expenses do not include foreign exchange losses, value of
equity investments disposed of, impairment adjustments, fair value adjustments, expenses with
provisions and income tax expenses.
Although the OCR figure is based on historical information, it provides shareholders with an
indication of the likely level of costs that will be incurred in managing the Fund in the future.
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Annual Sole Director’s Report for 2023
The OCR of the Fund as at 31 December 2023 was 2.83% and including transaction related
expenses this was 5.40% (31 December 2022: 0.85% and including transaction related
expenses this was 0.98%).
The OCR of the Fund increased significantly in 2023 compared to previous year as a result of the
higher administration fees (both base fee and distribution fee) and significant decrease in 2023
average NAV, following (1) the completion of Hidroelectrica SA IPO and subsequent distribution
to shareholders of the related proceeds and (2) the implementation of the 14
th
buyback
programme, in which the Fund repurchased 2.1 billion shares.
Also, the total transaction costs recorded by the Fund are significantly higher in 2023 as a result
of the expenses incurred in the listing of Hidroelectrica SA.
The Total Expense Ratio of the Fund recorded the same value as OCR for both 31 December
2023 and 31 December 2022.
Fees, charges, and expenses directly or indirectly borne by investors
According to article 22 of Law no. 74/2015 the AIFM shall make available to investors the
information on all fees, charges and expenses and the maximum amounts thereof which are
directly or indirectly borne by investors.
Please find below additional details on this topic, as recommended in the communications
received from FSA.
Fees and costs directly borne by investors
The brokerage fees and other costs incurred by investors in acquiring the Fund’s shares vary
depending on the specific contractual agreements concluded between the investors and the
intermediaries.
Fees and costs indirectly borne by investors
Pursuant to the Management Agreement and to the shareholders’ approval, the Fund bears,
pays or will reimburse the AIFM the following expenses incurred by the AIFM:
(i) expenses related to the payment of fees owed to the depositary;
(ii) expenses related to intermediaries and advisors including related to the financial advisory
services in connection with the trading, issue, purchase, sale or transfer of listed and
unlisted securities or financial instruments from the Fund’s portfolio, including fees and
commissions due to relevant market operators;
(iii) expenses related to taxes and fees owed to the FSA or other public authorities, according to
applicable legislation, as well as expenses or charges imposed to the Fund by any tax
authority related to the expenses in this clause or otherwise applicable to the running of
the business of the Fund, including the notary fees, stamp duty tax and other similar tax;
(iv) expenses related to the financial audit performed on the Fund and any other audits or
valuations required by the legislation in force applicable to the Fund (for clarity, these
expenses relate to the fair value measurement of the Fund's portfolio for the purpose of
IFRS accounting and financial statements preparation and NAV calculation);
(v) expenses related to the admission to trading of the financial instruments issued by the
Fund, and any subsequent issues or offerings; expenses with intermediaries and
professional advisors in relation to arranging and maintaining the listing;
(vi) expenses related to investor relations and public relations in the interest of the Fund;
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Annual Sole Director’s Report for 2023
(vii) expenses related to ongoing reporting and disclosure obligations according to legislation in
force;
(viii) expenses related to the organising of any GSM and communications with the shareholders
and to the payment of fees for registrar services and services related to distributions to
shareholders;
(ix) expenses related to the payment of taxes and fees owed to the BVB, LSE and any other
exchange on which the financial instruments of the Fund or GDRs or depositary interests
corresponding to shares of the Fund shall be admitted to trading, as well as membership
fees;
(x) expenses related to the registration with the Trade Registry or documents issued by the
Trade Registry;
(xi) expenses related to the payment of fees owed to the banks for banking services performed
for the Fund, including credit facility costs;
(xii) expenses related to appointing legal advisers and other advisors to act in the interest of the
Fund;
(xiii) expenses related to contracts with external service providers existing as of execution of
the Management Agreement until the expiry or termination of the agreement, including
expenses with lease for the headquarter of the Fund;
(xiv) expenses related to remuneration, transport and accommodation of the members of the
Board of Nominees (in relation to their services and attendance at meetings, in accordance
with the Constitutive Act, the mandate agreements and any applicable internal regulations)
and for independent persons (not employees of the AIFM) acting as representatives of the
Fund on the corporate bodies of companies in the portfolio, where appropriate; and
(xv) expenses relating to printing costs for the Fund’s documentation;
All costs and expenses incurred by the AIFM in the performance of its functions shall not be for
the account of the Fund but shall be borne by the AIFM.
The AIFM shall be liable for the following out of pocket expenses incurred by it when
performing its duties, including, but not limited to:
(i) expenses in connection with mailing and telephone, except for letters to the shareholders of
the Fund;
(ii) expenses in connection with business travel and accommodation, except for expenses
related to investors relations activities, shareholders meetings and meetings of the Board of
Nominees;
(iii) expenses incurred with salaries, bonuses and other remunerations granted to the
employees and collaborators of the AIFM or any associated company who acts as a delegate
in accordance with the provisions of the Management Agreement;
(iv) other expenses incurred for the functioning of the AIFM or any associated company who
acts as a delegate in accordance with the provisions of the Management Agreement.
In performing its obligations under the Management Agreement, the AIFM shall not use Soft
Dollar Practices (i.e., arrangements under which assets or services, other than execution of
securities transactions, are obtained by a fund manager from or through a broker in exchange
for the fund manager directing to the respective broker trades concluded on behalf of the
undertaking for collective investment managed by that fund manager). All transactions in
connection to the portfolio shall be consistent with the principle of best execution.
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Annual Sole Director’s Report for 2023
Financial statements analysis
The audited financial statements for the year ended 31 December 2023, prepared in accordance
with IFRS and applying the FSA Norm no. 39/2015 with subsequent amendments, are included
in full in Annex 1 to this report. Also, the independent auditor’s report for the IFRS financial
statements of the Fund for 2023 is published on the Fund website together with the Annual Sole
Director’s Report for 2023 in the section Investor Relations – Financial Results – Annual reports.
The captions in the Statement of Financial Position and Statement of Comprehensive Income
presented in the Annual Report may differ from the ones included in the audited IFRS financial
statements due to other regulatory requirements.
This section provides an overview of the Fund’s financial position and performance for the year
ended 31 December 2023. The analysis presents the main developments during 2023, for more
details regarding the comparative amounts from previous period, please see the corresponding
section in Annex 1 Audited IFRS Financial Statements.
The difference in valuation of equity investments in the IFRS financial statements of the Fund
authorised for issue on 25 March 2024 vs. the NAV reporting at 31 December 2023 published on
12 January 2024 is as a result of update in CE Oltenia SA valuation.
The Fund has analysed the potential effect on the valuation of portfolio holdings of the events
that took place between 31 October 2023 (date of valuation reports for 31 December 2023
NAV) and 31 December 2023 and consequently has adjusted the value of CE Oltenia SA from
RON 64.8 million to RON 56.8 million in the 2023 IFRS financial statements if the Fund.
Statement of Financial Position
RON million
31 December
2023
Audited
31 December
2022
Audited
31 December
2021
Audited
31 Dec 2023 vs.
31 Dec 2022
(%)
Cash and current accounts
0.1
0.1
0.1
-
Distributions bank accounts
547.5
73.8
68.1
>100%
Deposits with banks
191.4
912.6
347.4
-79.0%
Government bonds
-
-
77.1
-
Equity investments
1,784.4
13,696.6
12,577.7
-87.0%
Non-current assets held for sale
432.6
-
1,135.2
+100.0%
Other assets
-
0.5
0.3
-100.0%
Total assets
2,956.0
14,683.6
14,205.9
-79.9%
Payable to shareholders
546.5
74.2
408.3
>100%
Other liabilities and provisions
67.3
39.9
40.1
+68.7%
Total liabilities
613.8
114.1
448.4
>100%
Total equity
2,342.2
14,569.5
13,757.5
-83.9%
Total liabilities and equity
2,956.0
14,683.6
14,205.9
-79.9%
Source: Audited IFRS financial statements of the Fund
The liquid assets of the Fund during 2023 included current accounts, term deposits with banks,
T-bills and government bonds issued by the Ministry of Public Finance of Romania. All
instruments were denominated in RON, with maturities of up to one year.
The most important cash inflows during 2023 were related to the proceeds from Hidroelectrica
SA IPO (RON 9.28 billion), disposal of the entire stake in Enel companies (RON 650 million) and
the net dividends received from portfolio companies (RON 955.8 million), while the most
significant cash outflows were related to net dividends paid (RON 8.23 billion) and to the
acquisition of treasury shares within the 14
th
buyback programme, including the tender offers
settled in March 2023 and December 2023 (RON 1.83 billion in total).
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The net decrease in Equity investments of RON 11.91 billion during 2023 was mainly related
to the disposal of the entire holdings in Enel holdings (impact RON 588.8 million) and in
Hidroelectrica SA (impact RON 11.15 billion), and to the reclassification of the holding in Engie
Romania SA as non-current assets held for sale (RON 440.7 million).
At 31 December 2023, Payable to shareholders caption comprised the dividends payable to
shareholders, out of which the most significant amounts are related to the 29 September 2023
special dividend distribution (RON 464.8 million). At the same date the Other liabilities and
provisions caption mainly comprises the withholding tax due to the State budget related to
dividend distributions performed during 2023 (RON 44.2 million) and the Q4 2023 fees payable
to the Sole Director (RON 21.3 million).
Capital expenditure comprises the value of the licenses, the implementation costs and the
updates of the accounting and reporting software, net of the accumulated amortisation. During
2023 the Fund incurred capital expenditure costs of RON 131 thousand, which were entirely
amortised over the year.
Statement of Comprehensive Income
RON million
2023
Audited
2022
Audited
2021
Audited
Net (loss)/ gain from equity investments at fair value
through profit or loss
(1,612.3) 1,843.8
4,455.7
Gross dividend income 962.8
934.9
655.1
Interest income 157.5
25.1
13.7
Net gain/ (loss) from non-current assets held for sale 61.2
(157.0) -
Net gain/ (loss) from other financial instruments at
fair value through profit or loss
1.2
250.2
(4.5)
Other (expenses)/ income, net
1
(0.1) 4.4
5.4
Net operating (loss)/ income (429.7) 2,901.4
5,125.4
Administration fees recognised in profit or loss (202.2) (79.4) (84.0)
Other operating expenses (265.1) (45.8) (22.6)
Operating expenses
(467.3)
(125.2)
(106.6)
Finance costs (0.1) (0.1) (0.1)
(Loss)/ Profit before income tax (897.1) 2,776.1
5,018.7
Withholding tax on the dividend income (7.0) (6.7) (6.1)
(Loss)/ Profit for the year (904.1) 2,769.4
5,012.6
Other comprehensive income -
-
-
Total comprehensive income for the year
(904.1)
2,769.4
5,012.6
Source: Audited IFRS financial statements of the Fund
1. This caption mainly includes the net foreign exchange gain/ (loss), annual income from the depositary bank of the Fund’s GDRs and
other operating income/(expenses).
The operating income mainly comprises the gross dividend income, the changes in fair value of
financial instruments at fair value through profit or loss, interest income and the net realised
gains/ losses from transactions with financial instruments. The changes in fair value of the
equity investments of the Fund are recognised in profit or loss. The operating income is
influenced by the performance of the portfolio companies and their decisions on dividend
distributions, by the changes in the share price of listed companies as well as by money market
performance.
The loss from equity investments at fair value through profit or loss during 2023 was
mainly generated by the valuation of the holding in Hidroelectrica SA at expected IPO proceeds
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(impact RON 1.87 billion), which was partially offset by the increase in fair value of CN
Aeroporturi Bucuresti SA (impact RON 164.7 million), CE Oltenia SA (impact RON 56.8 million),
CN Administratia Porturilor Maritime SA (impact RON 45.3 million) and Societatea Nationala a
Sarii SA (impact RON 44.7 million).
Gross dividend income was mainly generated by the amounts recorded from Hidroelectrica SA
(RON 867.4 million), Societatea Nationala a Sarii SA (RON 56.0 million) and CN Aeroporturi
Bucuresti SA (RON 31.5 million).
The significant increase in interest income during 2023 was recorded following the placement
of Hidroelectrica SA IPO proceeds in various short term money market instruments for the
period between the IPO settlement date (10 July 2023) and the related dividend distribution
Payment date (29 September 2023). These instruments included bank deposits, treasury bills
and government bonds.
Net gain from non-current assets held for sale of RON 61.2 million represents the fair value
movement of the holdings in the Enel group companies following their reclassification to non-
current assets held for sale on 31 March 2023.
Additional details on the administration fees are presented below:
RON million 2023 Audited 2022 Audited 2021 Audited
Recognised in profit or loss 202.2 79.3 84.0
Base fee 36.8 57.3 62.0
Distribution fee for dividends 165.4 19.3 11.9
Performance fee -
2.7 10.1
Recognised in other comprehensive income 35.7 27.9 3.3
Distribution fee for buy-back programmes 35.7 27.9 3.3
Total administration fees 237.9 107.2 87.3
Source: Audited IFRS financial statements of the Fund
The increase in the administration fees recognised in profit or loss for 2023 compared to 2022
was mainly due to the increase in dividend distribution fee following the special gross dividend
distribution of RON 1.7225 per share from Hidroelectrica SA IPO proceeds.
The decrease in base fee during 2023 compared to 2022 is mainly due to:
• the decrease in base fee rate as per the Management Agreement starting on 1 April 2022
compared to previous one (i.e. 0.45% vs. 0.6%);
• the lower market capitalisation of the Fund following Hidroelectrica IPO proceeds
disbursement as dividends;
Other operating expenses
The main categories of other operating expenses are detailed in the table below:
RON million 2023 Audited 2022 Audited 2021 Audited
Intermediaries and other transaction related fees 242.9 19.1 0.1
FSA monthly fees 8.8 14.3 10.6
BON remunerations and other related expenses 2.7 2.2 2.0
Legal and litigation assistance expenses 2.7 2.6 3.3
Portfolio valuation services 1.3 2.4 1.6
Public relations services 0.9 1.0 0.3
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RON million 2023 Audited 2022 Audited 2021 Audited
Investors' relations expenses 0.8 1.0 0.4
Financial auditor’s fees 0.8 0.8 0.8
Other operating expenses 4.2 2.4 3.5
Total operating expenses 265.1 45.8 22.6
Source: Audited IFRS financial statements of the Fund
The intermediaries and other transaction related fees in amount of RON 242.9 million are
mainly related to the listing of Hidroelectrica SA and include bank fees, legal costs, and other
consultancy fees.
Statement of Cash Flows
RON million
2023
Audited
2022
Audited
2021
Audited
Cash flows from operating activities
Proceeds from disposal of equity investments
9,931.2 1,781.9 -
Dividends received (net of withholding tax)
955.8 928.2 649.3
Interest received
156.9 24.5 15.9
Amounts collected from the depository Bank of the Fund's GDRs
1.2 3.8 3.0
Net proceeds from transactions with treasury bills and bonds
1.2
304.3
495.5
Amounts received from Romanian State for the unpaid share capital
- 189.2 -
WHT payments performed
(702.4) (34.4) (25.0)
Suppliers and other taxes and fees paid
(50.3) (34.4) (21.9)
Intermediaries and other transaction related fees
(242.9) (11.5) -
Sole Director fees
(231.7)
(113.8)
(80.9)
Acquisition of treasury bills and bonds
- (227.8) (199.1)
Subscriptions to share capital increase of portfolio companies
(2.7) (17.4) (10.1)
Other payments performed/amounts received, net
(1.7) (1.6) (0.4)
Net cash flows from operating activities
9,814.6
2,791.0
826.3
Cash flows from financing activities
Transfer to distribution accounts
(8,687.1) (1,146.1) (777.9)
Dividends transferred corresponding to shareholders having
specific legal status
(18.4) (2.0) -
Acquisition cost of treasury shares
(1,829.5) (1,146.6) (327.1)
Payment of fees related to the short-term bank loans
(0.1)
-
(0.1)
Net cash flows used in financing activities (10,535.1) (2,294.7) (1,105.1)
Net increase/ (decrease) in cash and cash equivalents
(720.5)
496.3
(278.8)
Cash and cash equivalents at the beginning of the year 911.8 415.5 694.3
Cash and cash equivalents at the end of the year
191.3
911.8
415.5
Source: Audited IFRS financial statements of the Fund
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The presentation of the distribution accounts for 31 December 2022 has been changed in line with
the re-assessed presentation for the year ended 31 December 2023 where the distribution accounts
are presented separately from the cash and cash equivalents for the purpose of the cash flow
statement.
Related party transactions
The transactions with related parties were performed in the normal course of business. For more
details, please see Annex 1 Audited IFRS Financial Statements, Note 22.
Analysis of budget vs actual expenses
The 2023 Budget of Income, Expenses and Capital Expenditure of the Fund was prepared in
September 2022, based on IFRS as endorsed by the European Union and was approved by
shareholders on 15 November 2022. It contains the main categories of budgeted income and
expenses of the Fund. According to the main assumptions of the 2023 Budget, there are certain
categories of income and expenses which cannot be budgeted such as: foreign exchange gains
and losses, fair value changes, gains or losses and other expenses related to disposal of financial
instruments, and other items of income/ expenses.
During the year ended 31 December 2023, the actual expenses from current activity amount to
RON 224.4 million and exceed the budgeted expenses by RON 129.5 million. The negative
variance is due to the investment management and administration fees, for which the
shareholders granted the Sole Director the power to exceed the budgeted expenses as part of
the approval process for 2023 Budget. The management fees in 2023 exceeded the budgeted
levels mainly as a result of the distribution fee for the special dividend distribution from
Hidroelectrica SA IPO proceeds.
For more details, please see Annex 5 Actual versus Budget Analysis for the year ended 31
December 2023.
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Company Information
The company
Fondul Proprietatea was incorporated on 28 December 2005 as a joint stock company operating
as a closed-end investment company. The duration of Fondul Proprietatea is until 31 December
2031 and this may be extended by the EGM with additional periods of 5 years each.
On 28 January 2022, FSA authorised Fondul Proprietatea as an AIF closed-end type intended to
retail investors, with BRD - Groupe Societe Generale as depositary. The Fund is registered
within the FSA Register – Section 9 – ‘Alternative Investment Funds’ under no.
PJR09FIAIR/400018 as Alternative Investment Fund intended for retail investors.
The Fund is registered with the Bucharest Trade Register under the number J40/21901/2005
and has the sole registration code 18253260.
The main activities of the Fund according to the National Statistics CAEN and the Fund’s own
Constitutive Act are the business of operating mutual funds and other similar financial entities
(CAEN reference 643) and the main activity is financial investments (CAEN reference 6430).
The Fund’s investment objective is the maximisation of returns to shareholders and the increase
of the net asset value per share via investments mainly in Romanian equities and equity-linked
securities.
Since 25 January 2011, the Fund’s shares have been listed on BVB. Since 29 April 2015, the
Fund’s GDRs issued by The Bank of New York Mellon as GDR Depositary, having the Fund’s
shares as support, have been listed on the Specialist Fund Market of LSE.
Share information
Primary listing
Bucharest Stock Exchange – since 25 January 2011
Secondary listing
London Stock Exchange – since 29 April 2015
BVB symbol
FP
LSE symbol
FP.
Bloomberg ticker on BVB
FP RO
Bloomberg ticker on LSE
FP/ LI
Reuters ticker on BVB
FP.BX
Reuters ticker on LSE
FPq.L
ISIN
ROFPTAACNOR5
FSA register no
PJR09FIAIR/400018/28.01.2022
LEI code
549300PVO1VWBFH3DO07
CIIF registration no
AC-4522-10/16.10.2023
The list of countries where the Fund has notified CSSF for marketing activities under AIFM
Directive includes Denmark, the United Kingdom, France, Germany, Austria, and Romania.
History
The Fund was incorporated by the Romanian State in 2005 as a joint stock company with the
initial purpose of providing compensation to individuals whose real property assets were
abusively confiscated by the Romanian State during the communist regime, and which could no
longer be returned in kind to those individuals.
The Fund’s initial Constitutive Act was enacted by Government Decision no. 1481/2005
regarding the incorporation of Fondul Proprietatea, which established that the Fund would be
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Annual Sole Director’s Report for 2023
an undertaking for collective investments organised as a closed-end investment company.
However, the Fund was officially registered by CNVM (currently FSA) as a closed-end
investment company only in 2010 by CNVM Decision 34/18 August 2010.
The initial sole shareholder of the Fund was the Romanian state. Since the Fund’s launch, the
shares have been awarded by the National Authority for Property Restitution to individuals
entitled to receive compensation from the Romanian State and who chose to convert their
compensation entitlements into shares issued by the Fund.
In January 2015, Law no. 10/2015 entered into force, confirming that the Romanian State will
no longer use the compensation scheme for Fondul Proprietatea shares in the future. Starting
15 March 2013, the date when GEO no. 4/2012 regarding the application of certain provisions
of Law no. 247/2005 entered into force, the compensation process was suspended.
The Romanian state’s participation in the share capital of the Fund as at 31 December 2023 was
of 370,456,198 shares, representing 6.53% of the Fund’s subscribed and paid-up share capital.
Investment policy
The Fund's investment objective as set out in the IPS is the maximisation of returns to
shareholders and the increase of the net asset value per share, through investments
predominantly in Romanian equities and equity linked securities, subject to legislation and
regulations in force.
The Fund's IPS is drafted by the AIFM with the observance of the investment limits set forth in
the applicable laws and regulations and in the Constitutive Act. The current IPS was approved
by shareholders during the 15 December 2021 EGM and entered into force on 1 April 2022.
The IPS sets the prudential rules concerning the investment policy of the Fund and presents the
investment goals, objectives, and the decision-making process for selecting investments in
accordance with the investment objectives. The Fund’s investment restrictions are included in
the IPS, which is published on the Fund webpage in the section About the Fund – Fund overview.
The investment policy of the Fund is established by the AIFM, with the observance of the
Constitutive Act and of the investment limits provided by the legal provisions in force and it is in
line with the IPS approved by shareholders. In case of any breaches to the IPS, the AIFM would
inform investors by publishing current reports.
The AIFM provides the strategy in accordance with the investment policy to the Board of
Nominees for analysis before this is submitted for GSM approval. The Board of Nominees’
opinion on the proposed strategy is presented to the AIFM and to the GSM.
Management
Franklin Templeton has been the Sole Director of the Fund starting 29 September 2010, with
successive mandates of two or four years.
During the reporting period, the Fund was managed by FTIS as its Sole Director and AIFM under
the AIFM Directive and local implementation regulations, based on the Management Agreement
in force between 1 April 2022 – 31 March 2024. The portfolio management and the
administrative activities are performed by FTIS via its Bucharest Branch.
Starting with 23 August 2021, following the correspondence with FSA regarding the provisions
of art. 153
13
of the Companies Law no. 31/1990, the legal representation of the Sole Director of
the Fund will be made by a single permanent representative, which is registered with the Trade
Registry. As at 31 December 2023, Johan Meyer is the permanent representative of the AIFM,
being also the portfolio manager of the Fund.
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Annual Sole Director’s Report for 2023
Management Agreement in force during 1 April 2022 – 31 March 2024
Starting with 1 April 2022, the Fund is managed under the Management Agreement approved
during the 15 December 2021 GSM, with a duration of 2 years (1 April 2022 – 31 March 2024),
under the following key commercial terms:
Base Fee per year
• 0.45%
Consideration for the Base Fee
• Weighted average market capitalisation of the Fund
Distribution Fee for all distributions
• 2.50% applied to the value of the distributions during
1 April 2022 – 31 March 2023
•
1.75% applied to the value of the distributions during
1 April 2023 – 31 March 2024
Consideration for the Distribution Fee
• Share buy-backs and GDR buy-backs
• Public tender buy-backs
• Return of share capital and dividends
Duration
• 2 years
Management Agreement for the period 1 April 2024 – 31 March 2025
During 25 September 2023 GSM the shareholders approved the renewal of FTIS mandate as
Sole Director and AIFM of Fondul Proprietatea for a duration of 1 year (1 April 2024 - 31 March
2025).
The draft management agreement for the period 1 April 2024 – 31 March 2025 was discussed
and agreed with the Board of Nominees and was included on the agenda of 26 March 2024 GSM.
This is in line with the current IPS of the Fund and has similar contractual terms with the
Management Agreement currently in force, with the main difference represented by the
increase in base fee rate from 0.45% to 2.00%.
On 22 February 2024 the shareholder Ministry of Finance submitted a request to supplement
the 26 March 2024 GSM agenda with new points, proposing a base fee rate of 1.35% instead of
2.00% and an updated strategy of the Fund for the period 1 April 2024 - 31 March 2025, so that
it includes the preservation of the current portfolio.
On 29 February 2024 the Fund submitted a letter to the Ministry of Finance, requesting
clarifications in respect of the points added on 26 March 2024 GSM. For more details, please see
Subsequent events section.
Management Agreement in force starting 1 April 2025
During 25 September 2023 GSM the shareholders also approved that the Board of Nominees
should launch a transparent and competitive selection procedure for the appointment of a new
Sole Director starting 1 April 2025, based on investment expertise and experience, in
accordance with the legal provisions in force. The shareholders also approved that the Board of
Nominees is empowered to establish new terms and conditions for the evaluation and
remuneration of the fund manager, corresponding to the new objectives, in line with
international best practices and present them for approval by the GSM.
For more details regarding the full resolutions adopted by shareholders during 25 September
2023 GSM, please see the dedicated section on the Fund’s webpage Investor Relations - GSM
Information.
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Shareholder structure information
Largest shareholders – based on ownership disclosures submitted by shareholders
According to Art. 71(1) of Law no. 24/2017, if a shareholder acquires or disposes of shares from
an issuer listed on a regulated market, having attached voting rights, the shareholder must
notify the issuer about the percentage of voting rights held following the acquisition or disposal
in discussion, when the percentage reaches, exceeds or falls below one of the thresholds: 5%,
10%, 15%, 20%, 25%, 33%, 50% and 75%.
As a result of this legal requirement, during 2023 the Fund has received from shareholders the
disclosures presented below – the information is presented based on the data included in the
notification at the respective dates, while the voting rights percentage at 31 December 2023
might be different.
Shareholder
Latest ownership disclosure
% of voting rights
Ministry of Finance 1 April 2022 5.97%
NN Private Pension Funds 11 April 2022 11.24%
Silver Point Capital Funds
5 April 2023
4.89%
AZT pension funds and Allianz Tiriac
Asigurari SA
12 December 2023 4.13%
Metropolitan Life Pension Fund and
Metropolitan Insurance
22 December 2023 4.74%
Source: ownership disclosures submitted by shareholders
Silver Point Capital Funds
On 5 April 2023, the Fund announced that Silver Point Distressed Opportunities Fund, L.P,
Silver Point Distressed Opportunities Offshore Master Fund, L.P., Silver Point Distressed
Opportunity Institutional Partners (Offshore), L.P., Silver Point Distressed Opportunity
Institutional Partners, L.P., SPCP Luxembourg Strategies S.a.r.l. Offshore and SPCP Luxembourg
Strategies S.a.r.l. Onshore have sent an aggregate disclosure of holdings under 5% of the total
voting rights in the Fund.
According to the disclosure, by virtue of acting in concert, Silver Point Distressed Opportunities
Fund, L.P, Silver Point Distressed Opportunities Offshore Master Fund, L.P., Silver Point
Distressed Opportunity Institutional Partners (Offshore), L.P., Silver Point Distressed
Opportunity Institutional Partners, L.P., SPCP Luxembourg Strategies S.a.r.l. Offshore and SPCP
Luxembourg Strategies S.a.r.l. Onshore held together, as of 29 March 2023, a number of
266,233,051 voting rights, representing 4.89% of the total number of voting rights in the Fund.
AZT pension funds and Allianz Tiriac Asigurari SA
On 12 December 2023 the Fund announced that Fondul de Pensii Adminstrat Privat AZT
Viitorul Tau, Fondul de Pensii Facultative Privat AZT Moderato, Fondul de Pensii Facultative
Privat AZT Vivace and Allianz Tiriac Asigurari SA have sent an aggregate disclosure of holdings
under 5% of the total voting rights in the Fund.
According to the disclosure, as at 8 December 2023 Fondul de Pensii Adminstrat Privat AZT
Viitorul Tau, Fondul de Pensii Facultative Privat AZT Moderato, Fondul de Pensii Facultative
Privat AZT Vivace and Allianz Tiriac Asigurari SA, by virtue of acting in concert, held in common
a number of 234,082,629 voting rights, representing 4.13% of the total number of Fondul
Proprietatea of 5,668,806,128.
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Metropolitan group entities
On 10 May 2023, the Fund announced that Fondul de Pensii Administrat Privat Metropolitan
Life and Metropolitan Life Asigurari Metlife Europe D.A.C. Dublin Sucursala Bucuresti have sent
an aggregate disclosure of holdings over 5% of the total voting rights in the Fund. According to
the disclosure, Fondul de Pensii Adminstrat Privat Metropolitan Life and Metropolitan Life
Asigurări Metlife Europe D.A.C. Dublin Sucursala Bucuresti, by virtue of acting in concert, held in
common a number of 300,900,475 voting rights, representing 5.1267% of the total number of
voting rights in Fondul Proprietatea at 30 June 2022 (i.e. 5,869,326,989).
On 22 December 2023 the Fund announced that Fondul de Pensii Adminstrat Privat
Metropolitan Life and Metropolitan Life Asigurari Metlife Europe d.a.c. Dublin Sucursala
Bucuresti have sent an aggregate disclosure of holdings under 5% of the total voting rights in
the Fund. According to the disclosure, as of 8 December 2023, Fondul de Pensii Adminstrat
Privat Metropolitan Life and Metropolitan Life Asigurari Metlife Europe d.a.c. Dublin Sucursala
Bucuresti, by virtue of acting in concert, held a number of 168,468,348 voting rights,
representing 4.7370% from the total Fund voting rights (5,668,806,128) excluding own shares
whose voting rights are suspended (2,112,378,889), respectively from 3,556,427,239 voting
rights.
Metropolitan Life Private Pension Fund
On 12 April 2023, the Fund announced that Fondul de Pensii Administrat Privat Metropolitan
Life has sent a disclosure of holding over 5% of the total voting rights held in the Fund.
According to the disclosure, at 31 August 2022 Fondul de Pensii Administrat Privat
Metropolitan Life held a number of 287,443,608 voting rights, representing 5.0069% of the total
number of voting rights in the Fund (i.e. 5,740,983,458).
On 15 December 2023 the Fund announced that Fondul de Pensii Adminstrat Privat
Metropolitan Life has sent a disclosure of holdings under 5% of the total voting rights in the
Fund. According to the disclosure, as of 6 December 2023, Fondul de Pensii Adminstrat Privat
Metropolitan Life held a number of 146,032,587 voting rights, representing 4.1061% from the
total Fondul Proprietatea voting rights (5,668,806,128) excluding own shares that do not have
voting rights (2,112,378,889), respectively from 3,556,427,239 voting rights.
Shareholder structure as at 31 December 2023
Shareholder categories
1
% of subscribed
and paid-up
share capital
% of
total
voting rights
% of total
exercisable
voting rights
Treasury shares
2
37.26%
37.26%
-
Romanian institutional shareholders
24.41%
24.41%
38.91%
Romanian private individuals
23.42%
23.42%
37.32%
Romanian State represented by Ministry of Finance
6.53%
6.53%
10.42%
Foreign private individuals
3.25%
3.25%
5.18%
Foreign institutional shareholders
2.93%
2.93%
4.67%
The Bank of New York Mellon (GDRs)
3
2.20%
2.20%
3.50%
Source: Depozitarul Central SA
1. Information provided based on settlement date of transactions. The suspended voting rights related to the Fund’s treasury shares
acquired under the buyback programmes, either in the form of shares and/or GDRs, were not included in the computation of the
exercisable voting rights.
2. 2,112,378,889 treasury shares acquired in 2023 within the 14
th
buyback program (either in the form of shares and/or GDRs)
3. The shares underlying the GDRs issued by the Bank of New York Mellon are held in the name of the Bank of New York Mellon and
for the account of the GDRs holders. Out of BNY holding, the GDRs held by Fondul Proprietatea were excluded, namely 0 GDRs (0
shares equivalent – the Fund did not hold any GDR as at 31 December 2023)
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Annual Sole Director’s Report for 2023
As at 31 December 2023, the Fund had 22,673 shareholders. The total number of voting rights was
5,668,806,128, out of which a total of 3,556,427,239 exercisable voting rights.
Evolution of the shareholder structure
Source: Depozitarul Central SA, based on issued share capital until 31 July 2011, based on paid share capital starting 31 July 2011
Share capital information
Changes in share capital during the reporting period
31 December 2023
31 December 2022
31 December 2021
Issued share capital (RON)
2,947,779,186.56
3,233,269,110.76
3,334,342,422.84
Paid in share capital (RON)
2,947,779,186.56
3,233,269,110.76
3,145,160,000.84
Number of shares in issue
5,668,806,128
6,217,825,213
6,412,196,967
Number of paid shares
5,668,806,128
6,217,825,213
6,048,384,617
Nominal value per share (RON)
0.52
0.52
0.52
Source: National Trade Registry
On 12 October 2023, the Bucharest Trade Registry registered Resolution no. 2 /21 April 2023 of the
Fund’s EGM, approving the decrease of the subscribed share capital from RON 3,233,269,110.76 to
RON 2,947,779,186.56 pursuant to the cancellation of 549,019,085 own shares acquired by Fondul
Proprietatea during 2022 within the 13
th
buy-back programme.
The amendment of the Constitutive Act following the decrease was endorsed by the FSA through
Endorsement no. 140/5 October 2023.
Consequently, as of 12 October 2023, the new value of the Fund’s subscribed and paid-up share
capital is RON 2,947,779,186.56, divided into 5,668,806,128 shares with a nominal value of RON
0.52 per share.
GDR facility
The GDR facility is limited to one-third of the Fund’s subscribed share capital under the
Romanian securities regulations, or 37,792,040 GDRs (1,889,602,000 shares equivalent) as at
31 December 2023, each GDR representing 50 shares. As at 31 December 2023, 124,530,650 of
the Fund’s issued shares were held by The Bank of New York Mellon, the GDR depositary bank,
accounting for 2,490,613 GDRs, representing 6.59% of the GDR facility.
39%
6%
7%
31%
36%
29%
21%
20%
21%
18%
18%
16%
19%
18%
21%
21%
23%
6%
9%
9%
9%
11%
13%
14%
19%
17%
27%
33%
39%
37%
24%
34%
35%
37%
30%
28%
22%
18%
13%
2%
14%
43%
54%
55%
53%
25%
22%
20%
16%
17%
12%
15%
11%
3%
10%
10%
6%
5%
6%
4%
3%
3%
3%
3%
3%
4%
3%
3%
2% 2%
10%
10%
3%
8%
3%
18%
6%
12%
3%
9%
37%
12/10 12/11 12/12 12/13 12/14 12/15 12/16 12/17 12/18 12/19 12/20 12/21 12/22 12/23
Treasury Shares Foreign Individuals
Foreign Institutionals The Bank of New York Mellon (depository bank for GDRs)
Romanian Institutionals Romanian Individuals
Ministry of Public Finance
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Annual Sole Director’s Report for 2023
Evolution of the Fund’s share capital since listing
The following table presents information on the main events during the period from 1 January 2011
until 31 December 2023, which have changed the amount of the issued share capital of the Fund.
Structure of the share capital after event
Date Event
Issued share
capital (RON)
Paid share
capital (RON)
Issued shares
(Shares)
Paid shares
(Shares)
1 Jan 2011
Opening balance
13,778,392,208.00
13,778,392,208.00
13,778,392,208
13,778,392,208
24 Feb 2014
Cancelation of shares BB 1
13,538,087,407.00
13,172,832,785.00
13,538,087,407
13,172,832,785
25 Jun 2014
Decrease for annual cash
distribution to
shareholders
12,861,183,036.65
12,515,396,724.25
13,538,087,407
13,174,101,815
26 Sep 2014
Cancelation of shares BB 2
11,815,279,886.85
11,469,656,813.90
12,437,136,723
12,073,322,962
27 Jan 2015
Cancelation of shares BB 3
11,575,064,733.65
11,229,443,001.15
12,184,278,667
11,820,466,317
31 May 2015
Decrease for annual cash
distribution
10,965,850,800.30
10,638,419,685.30
12,184,278,667
11,820,466,317
12 Aug 2015
Cancelation of shares BB 4
10,074,080,745.90
9,746,649,630.90
11,193,423,051
10,829,610,701
14 Mar 2016
Cancelation of shares BB 5
9,869,265,720.90
9,541,834,605.90
10,965,850,801
10,602,038,451
9 Jun 2016
Decrease for annual cash
distribution
9,320,973,180.85
9,011,732,683.35
10,965,850,801
10,602,038,451
26 Oct 2016
Partial cancelation of
shares BB 6
9,168,314,116.70
8,859,073,619.20
10,786,251,902
10,422,439,552
18 Jan 2017
Partial cancelation of
shares BB 6
8,562,968,634.10
8,253,728,136.60
10,074,080,746
9,710,268,396
24 Mar 2017
Decrease for covering
accounting loss and for
extraordinary cash
distribution
5,742,226,025.22
5,534,852,985.72
10,074,080,746
9,710,268,396
16 Jun 2017
Decrease for annual cash
distribution
5,238,521,987.92
5,049,339,565.92
10,074,080,746
9,710,268,396
29 Nov 2017
Partial cancelation of
shares BB 7
4,854,034,784.56
4,664,852,362.56
9,334,682,278
8,970,869,928
29 Jun 2018
Partial cancelation of
shares BB 7 and BB 8
4,771,610,196.08
4,582,427,774.08
9,176,173,454
8,812,361,104
28 Dec 2018
Partial cancelation of
shares BB 8
4,733,020,898.32
4,543,838,476.32
9,101,963,266
8,738,150,916
15 Oct 2019
Cancelation of shares BB 9
3,959,264,762.44
3,770,082,340.44
7,613,970,697
7,250,158,347
30 Sep 2020
Cancelation of shares BB 10
3,749,282,292.08
3,560,099,870.08
7,210,158,254
6,846,345,904
25 Oct 2021
Cancelation of shares BB 11
3,334,342,422.84
3,145,160,000.84
6,412,196,967
6,048,384,617
1 Feb 2022
Payment of unpaid shares
by Romanian State
3,334,342,422.84
3,334,342,422.84
6,412,196,967
6,412,196,967
19 Oct 2022
Cancelation of shares BB 12
3,233,269,110.76
3,233,269,110.76
6,217,825,213
6,217,825,213
12 Oct 2023
Cancelation of shares BB 13
2,947,779,186.56
2,947,779,186.56
5,668,806,128
5,668,806,128
31 Dec 2023
Closing balance
2,947,779,186.56
2,947,779,186.56
5,668,806,128
5,668,806,128
Treasury shares
(2,112,378,889)
(2,112,378,889)
Voting rights
3,556,427,239
3,556,427,239
Source: Fondul Proprietatea internal records
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Annual Sole Director’s Report for 2023
Changes to the Constitutive Act during 2023
The Constitutive Act of the Fund updated on the basis of EGM Resolution no. 1 / 21 April 2023 for
approving the amendment of Article 15 (2) and of Article 21 (4) point ii), entered into force as of 2
October 2023, further to the FSA Authorisation no. 138 / 27 September 2023.
The second updated Constitutive Act of the Fund was published on 12 October 2023, following the
Authorisation no. 140/ 5 October 2023 by the FSA of the decrease of the subscribed and paid-up
share capital as approved through Resolution no. 2/ 21 April 2023 of the Fund’s EGM pursuant to
the cancellation of own shares acquired by the Fund during 2022.
The Fund’s Constitutive Act in force as at 31 December 2023 is included in full in Annex 6 to this
report.
For more details regarding the update of the Fund’s Constitutive Act following the shareholders
decision during 25 September 2023 EGM, please see section Subsequent Events.
Credit facility agreement and issued debt
The Fund had in place a credit facility from BRD - Groupe Societe Generale SA expiring on 31 July
2023 of RON 284 million. The credit facility was for general corporate use. The Fund did not use the
credit facility during 2023 and decided not to extend the credit facility after 31 July 2023.
The Fund had no bonds or other debt securities in issue during 2023.
Employees
As at 31 December 2023 the Fund had no employees. Given that the Fund is administrated by the
AIFM, it is not expected that the Fund will have any employees before 31 March 2025.
Subsidiaries
As at 31 December 2023, the Fund controlled the following companies, which under Romanian
applicable laws qualify as subsidiaries of the Fund, all of which are incorporated and operate in
Romania. In the Sole Director’s opinion, none of these subsidiaries qualifies as a significant
subsidiary.
Name
Ownership interest
Alcom SA
72%
Zirom SA
100%
Source: Fondul Proprietatea internal records
None of the Fund’s subsidiaries holds shares in the Fund as at 31 December 2023, based on the
information made available to the Fund.
Comsig SA was a subsidiary of the Fund in administrative liquidation process, which was finalised
on 28 March 2023, when it was deregistered from the Trade Registry.
There was no corporate reorganisation of the Fund or its subsidiaries during 2023.
Branches
During 2023 the Fund had no branches.
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Annual Sole Director’s Report for 2023
Net Asset Value
NAV methodology
The key performance indicator of the Fund is its Net Asset Value. The Fund is required to publish a
monthly net asset value per share in accordance with the local rules issued by the capital market
regulator, no later than 15 calendar days after the reporting month end and after the dates when
share capital changes are recorded within Trade Registry.
All NAV reports are published on the Fund’s website together with the share price and discount/
premium information.
Starting with 28 January 2022, the date when the Fund’s registration process as an AIF with the
FSA was finalised, the Fund started to apply the Romanian AIF Law (Law no. 243/2019) and AIF
Regulation (Regulation no. 7/2020).
Listed liquid shares are valued either at closing market prices if listed on regulated markets, or at
reference prices if listed on an ATS. Listed illiquid and unlisted shares are valued using valuation
techniques in accordance with International Valuation Standards. The holdings in the companies in
liquidation, dissolution, bankruptcy, insolvency, judicial reorganisation or which ceased their
activity are valued at zero.
The treasury shares acquired through buy-backs are excluded from the number of shares used in
the NAV per share computation. Due to the fact that in substance the Fund’s GDRs are similar to the
ordinary shares to which they correspond, in the computation of the number of shares used for the
NAV per share calculation, the equivalent number of shares corresponding to the GDRs bought back
and held by the Fund as at the NAV reporting date is also deducted, together with the number of
ordinary own shares bought back and held.
NAV evolution
Evolution of distribution adjusted NAV per share
Source: Sole Director calculations
Note: Distribution Adjusted NAV per share is calculated as the NAV per share for the respective month plus the cumulated cash
distributions per share since the start of FT mandates
0.50
0.83
1.16
1.49
1.82
2.15
2.48
2.81
3.14
3.47
3.80
01/11 02/12 03/13 04/14 05/15 06/16 07/17 07/18 08/19 09/20 10/21 11/22 12/23
NAV per share Distribution Adjusted NAV per share
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Annual Sole Director’s Report for 2023
Evolution of the NAV per share (RON)
The following chart shows information on the monthly published NAVs per share for the period
from 31 December 2022 to 31 December 2023. The 31 December 2023 NAV reporting was
published on 12 January 2024.
Source: Sole Director calculations
During the first quarter of 2023, the NAV per share had an increase of 0.5% compared to the
end of the previous year, mainly due to the tender offer within the 14
th
buyback programme
that was finalised in March and also due to the slight net increase in the value of listed holdings.
During the quarter, the Fund has also performed an analysis of the unlisted holdings valuation
based on the most recent information available (market multiples, updated financial
information, business plans, changes in legislation) and concluded that there were no significant
changes. As a result, no updates were required to the valuation of the unlisted holdings in the
portfolio.
During the second quarter of 2023, the NAV per share had an overall decrease of 6.7%
compared to the end of the first quarter, mainly due to the valuation update of the holding in
Hidroelectrica SA at the end of June (details included below), which was partially netted of by
the (1) dividends recorded from portfolio companies (impact on the Fund’s NAV of RON 962.5
million), (2) the valuation update of the other significant unlisted holdings in the portfolio
(details included below), and (3) the 14
th
buyback programme carried out by the Fund during
this period.
In April 2023, the valuation of the holding in Hidroelectrica SA was updated with assistance
from KPMG Advisory, using the Discounted Cash Flow method as primary valuation method and
taking into consideration the final (audited) financial statements as at 31 December 2022, the
financial information as at 31 March 2023, the dividends approved by the company’s
shareholders on 28 April GSM and the Company’s Business plan.
Also, following the signing on 19 April 2023 of the Sale and Purchase Agreement between the
Fund, as seller, and Public Power Corporation SA, as purchaser, for the sale of all the equity
stakes held by the Fund in E-Distributie Muntenia SA, Enel Energie Muntenia SA, E-Distributie
Dobrogea SA, E-Distributie Banat SA, and Enel Energie SA, in exchange for a total consideration
of RON 650,000,000, the Fund update the valuation of these holdings accordingly.
2.5701
2.5723
2.5728
2.5823
2.6510
2.6656
2.4103
2.3784
0.6319
0.6431
0.6457
0.6342
0.6608
0.4
0.9
1.4
1.9
2.4
12/22 01/23 02/23 03/23 04/23 05/23 06/23 07/23 08/23 09/23 10/23 11/23 12/23
NAV per share Dividend per share
Dividend per share: RON 0.05
Dividend per share:
RON 1.7225
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Annual Sole Director’s Report for 2023
Portfolio company
Value in
30 Apr 2023 NAV
Value in
31 Mar 2023 NAV/
31 Dec 2022 NAV
30 Apr 2023 NAV vs.
31 Dec 2022 NAV
RON million
RON million
%
Hidroelectrica SA
10,863.1
11,148.8
-2.6%
E-Distributie Banat SA
212.9
212.9
-
E-Distributie Muntenia SA
223.5
183.9
+21.5%
E-Distributie Dobrogea SA
170.4
170.4
-
Enel Energie SA
21.6
21.6
-
Enel Energie Muntenia SA
21.6
-
+100.0%
Total
11,513.1
11,737.6
-1.9%
Source: Fondul Proprietatea internal records
For 30 June 2023 NAV, following the completion of the offer period and publication of the
pricing announcement on 5 July 2023 for Hidroelectrica SA IPO, the Fund updated the valuation
of Hidroelectrica SA based on the total gross IPO proceeds of RON 9,281.2 million, resulting in a
14.6% discount vs. the valuation in 31 May 2023 NAV. The price used in valuation (RON 103.46
per share) was the weighted average between the final IPO price (RON 104 per share) and the
discounted price for the retail investors (RON 100.88 per share).
In addition, in June the Fund performed valuation updates for the remaining 4 large unlisted
holdings, which together with Hidroelectrica SA and Enel holdings represent 98.0% of the
Fund’s total unlisted portfolio as at 30 June 2023. The valuation was performed with the
assistance of KPMG Advisory, in accordance with International Valuation Standards. The
valuation date for the updated reports was 31 May 2023 (date for the market multiples) and it
was based on the financial data of the companies as at 31 March 2023. The reports also
considered all relevant subsequent events until 30 June 2023 (such as dividends declared,
changes in legislation, etc.). The total impact of the valuation update was an increase of RON
218.4 million compared to 31 December 2022 NAV.
Portfolio company
Value in
30 Jun 2023
NAV
Value in
30 Apr 2023
NAV
Value in
31 Mar 2023 NAV/
31 Dec 2022 NAV
30 Jun 2023 NAV vs.
31 Dec 2022 NAV
RON
million
RON million RON million RON million %
Hidroelectrica SA
9,281.2
10,863.1
11,148.8
(1,867.6)
-16.8%
CN Aeroporturi Bucuresti SA
828.1
713.0
713.0
115.1
16.1%
Engie Romania SA
490.3
440.7
440.7
49.6
11.3%
CN Administratia Porturilor Maritime
SA
313.2
283.0
283.0
30.2 10.7%
Societatea Nationala a Sarii SA
297.2
273.7
273.7
23.5
8.6%
Total
11,210.0
12,573.5
12,859.2
(1,649.2)
-12.8%
Source: Fondul Proprietatea internal records
During the third quarter of 2023, the NAV per share had an overall decrease of 73.3%
compared to the end of the second quarter, mainly as a result of the disposal of the Fund’s entire
holding in Hidroelectrica SA within the IPO finalised in July 2023, followed by the shareholders’
approval for the distribution of the related proceeds in total amount of RON 9.2 billion as
dividends, during 18 August 2023 GSM. There were no significant valuation updates in Q3 2023
for the other holdings in the Fund’s portfolio.
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Annual Sole Director’s Report for 2023
During the last quarter of 2023 the NAV per share recorded an increase of 2.8%. The most
important events that impacted the NAV per share were the tender offer within the 14
th
buyback programme finalised in December 2023 for 1.67 billion own shares and the valuation
update process for the portfolio holdings.
In November, the Fund has updated the valuation of the holding in Engie Romania SA, based on
the binding offer received from GDF International SA (total impact was a decrease of RON 57.7
million, to RON 432.6 million).
Portfolio company
Value in
30 Nov 2023
NAV
Value in
30 Jun 2023
NAV
Value in
31 Dec 2022
NAV
30 Nov 2023 NAV vs.
31 Dec 2022 NAV
RON million
RON million
RON million
RON million
%
Engie Romania SA
432.6
490.3
440.7
(8.1)
-1.8%
Source: Fondul Proprietatea internal records
For 31 December 2023 NAV, valuation updates in accordance with the International Valuation
Standards were prepared for 16 holdings with the assistance of KPMG Advisory and Darian DRS,
representing all the unlisted portfolio and 3 listed companies with low liquidity. The valuation
date was 31 October 2023, and the valuation reports considered all relevant corporate actions
until 31 December 2023 (such as dividends declared and share capital increases).
The overall impact of the valuation adjustments Fund’s holdings is detailed below:
Portfolio company
Value in
31 Dec 2023
NAV
Value in
30 Jun 2023
NAV
Value in
31 Dec 2022
NAV
31 Dec 2023 NAV vs.
31 Dec 2022 NAV
RON million RON million RON million RON million %
CN Aeroporturi Bucuresti SA
877.7 828.1 713.0 164.7 +23.1%
Engie Romania SA
432.6 490.3 440.7 (8.1) -1.8%
CN Administratia Porturilor Maritime SA
328.3 313.2 283.0 45.3 +16.0%
Societatea Nationala a Sarii SA
318.4 297.2 273.7 44.7 +16.3%
Complexul Energetic Oltenia SA
1
64.8 -
-
64.8 +100.0%
Zirom SA
28.6 28.8 28.8 (0.2) -0.7%
Posta Romana SA
17.4 21.7 21.7 (4.3) -19.8%
CN Administratia Canalelor Navigabile SA
15.6 13.5 13.5 2.1 +15.6%
Aeroportul Int Timisoara - Traian Vuia SA
6.0
5.5
5.5
0.5
+9.1%
CN Administratia Porturilor Dunarii
Maritime SA
3.2 3.8 3.8 (0.6) -15.8%
CN Administratia Porturilor Dunarii
Fluviale SA
3.1 3.3 3.3 (0.2) -6.1%
Aeroportul Int Mihail Kogalniceanu -
Constanta SA
2.1 2.1 2.1 -
-
Plafar SA
2.0
2.2
2.2
(0.2)
-9.1%
Societatea Electrocentrale Craiova SA
-
-
-
-
-
Total unlisted holdings
2,099.8
2,009.7
1,791.3
308.5
+17.2%
Alcom SA
10.1
10.4
10.4
(0.3)
-2.9%
Mecon SA
2.4
1.0
0.6
1.8
+300.0%
Romaero SA
-
31.2
42.0
(42.0)
-100.0%
Total listed and not liquid holdings
12.5
42.6
53.0
(40.5)
-76.4%
Total
2,112.3
2,052.3
1,844.3
268.0
+14.5%
Source: Fondul Proprietatea internal records
1. For the preparation of the IFRS financial statements of the Fund for the year ended 31 December 2023 the Fund has also analysed the
potential effect on the valuation of portfolio holdings of the events that took place between 31 October 2023 (the date of valuation
reports for 31 December 2023 NAV reporting) and 31 December 2023 and consequently has adjusted the value of CE Oltenia SA from
RON 64.8 million to RON 56.8 million in the 2023 IFRS financial statements if the Fund.
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Annual Sole Director’s Report for 2023
In the 31 December 2023 NAV report published on 12 January 2024, in the Preliminary results
report of the Fund for 2023 published on 29 February 2024 and in the audited IFRS financial
statements of the Fund for the financial year ended 31 December 2023 authorised on 25 March
2024, the Fund’s holding in CN Aeroporturi Bucuresti SA was valued using the same assumptions
and valuation methodology as in the previous valuation reports prepared during 2023 - for more
details please see section Legal actions against CN Aeroporturi Bucuresti SA share capital increase.
The Fund will continue to closely monitor the evolution of financial markets and that of the
specific industries the portfolio holdings operate in, and for each NAV reporting date will assess
if an updated valuation is required.
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Annual Sole Director’s Report for 2023
Corporate Governance
Overview
The Fund has a clear and transparent corporate governance framework concluded in 2011, that
was updated and enhanced in the subsequent periods in order to meet new demands and
opportunities. The framework presents clearly, for public reference, the main characteristics of
the Fund’s corporate governance structure, the functions of the Board of Nominees and of the
Fund’s Sole Director, as well as their powers and responsibilities and is published on the Fund’s
website in the section About the Fund – Fund Overview – Corporate Governance.
In order to enhance shareholder confidence, the Fund has implemented a transparent decision-
making process, based on clear rules. This contributes to the protection of shareholders’ rights,
improving the overall performance of the Fund, offering better access to capital and risk
mitigation.
Compliance with corporate governance principles
The Fund lends great importance to the principles of good corporate governance and coinciding
with its listing at the beginning of 2011, has adhered to the BVB Corporate Governance Code.
Following the self-assessment conducted, the SOLE DIRECTOR informs the shareholders and
investors that the Fund is fully compliant with the provisions of the current BVB Corporate
Governance Code.
For more details please see Annex 4 Compliance with the corporate governance requirements.
Management structure of the Fund
Corporate bodies
In September 2010, a one-tier system of governance was implemented at the Fund’s level, as a
result of the implementation of the rules established by Romanian legislation in force, in order
to allow the appointment of the Fund Manager as Sole Director of the Fund. Although the Fund
is currently administrated under a one-tier system, its corporate structure also includes the
Board of Nominees, a contractually created body whose main role is to monitor the activity of
the Sole Director.
The powers and duties of the above-mentioned bodies are described in a number of official
documents, available on the Fund’s website in About the Fund – Fund Overview – Corporate
Governance section:
• The Constitutive Act of the Fund;
• The current Management Agreement, signed between the Fund and FTIS in 2022, applicable
until 31 March 2024;
• The IPS; and
• Other internal regulations.
Commitment to follow the principles of corporate governance
In accordance with best corporate governance practices, the Fund is managed in a climate of
transparency, based on open discussions between FTIS and the Board of Nominees.
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Annual Sole Director’s Report for 2023
FTIS, its employees and the members of the Board of Nominees have a duty of care and loyalty
towards the Fund. Hence, FTIS and the Board of Nominees pass their resolutions as required for
the welfare of the Fund, primarily in consideration of the interests of shareholders and
investors.
The Fund implemented corporate governance principles and has in place:
• The Code of Ethics and Business Conduct of Fondul Proprietatea;
• The Annual Cash Distribution Policy;
• The Remuneration Policy;
• The Forecast Policy;
• General dividend payment procedure;
• Procedure regarding the handling of petitions; and
• The Policy regarding Related Parties Transactions.
General Shareholders Meeting
Overview
Any GSM shall be convened by the Sole Director whenever necessary, with the prior notification
of the Board of Nominees, in accordance with the provisions of the law. The date of the meeting
may not be less than 30 calendar days after publishing the convening notice. The convening
notice shall be published in the Official Gazette of Romania, Part IV, and in one of the widely
distributed newspapers in Romania.
In exceptional cases, when the Fund’s interest requires it, the Board of Nominees may convene
the GSM. Any convening notice will be sent for publication purposes to BVB and FSA in
accordance with the capital markets regulations. Any convening notice will also be published on
the Fund’s website in the Investor Relations - GSM Information section, together with any
explanatory document related to items included on the meeting agenda.
The annual financial statements are made available starting with the date of the convening
notice of the Annual OGM, convened to resolve upon them.
General Shareholders Meeting organisation
The GSM is usually chaired by the permanent representative of the Sole Director, who may
designate another person to chair the assembly. The chairperson of the meeting designates one
or more technical secretaries to verify the fulfilment of the formalities required by law for
carrying out the meeting and for drafting the minutes thereof, apart from the GSM secretary
appointed by shareholders during the GSM.
The minutes, signed by the Chairperson and by the GSM secretaries, shall ascertain the
fulfilment of the formalities relating to the convening notice, the date and place of the meeting,
the agenda, the shareholders presence, the number of shares, a summary of the issues
discussed, the resolutions passed, and, upon shareholders request, the statements made by such
shareholders during the meeting.
The resolutions of the GSM shall be drafted pursuant to the minutes and shall be signed by the
person empowered by the shareholders to do this. In observance of the capital market
regulations, the resolutions of the GSM will be disseminated to BVB and FSA within 24 hours
after the event. The resolutions will also be made available on the Fund’s website under the
respective GSM section.
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General Shareholders Meeting main duties
The main duties of the OGM are the following:
a) to discuss, approve and amend the annual financial statements after reviewing the
reports of the AIFM and financial auditor;
b) to establish the distribution of the net profit and to establish the dividends;
c) to appoint the members of the Board of Nominees and to cancel their appointment;
d) to appoint the AIFM in accordance with the law and to cancel its appointment;
e) to appoint and cancel the appointment of the financial auditor and to set the minimum
duration of the financial audit agreement;
f) to approve the remuneration policy applicable to the members of the Board of
Nominees and to the AIFM, that includes the level of their remuneration, and to set the
level of remuneration of the financial auditor;
f^1) to vote on an annual basis on the remuneration report for the previous fiscal year; such
a vote shall be of an advisory nature and the Fund shall explain in the following
remuneration report how the GSM vote has been taken into account;
g) to rule over the management of the AIFM and to evaluate his/ her performances and to
discharge him/ her from its management;
h) to decide on the action in a court of law against the AIFM or, as the case may be, against
the financial auditor, for damages caused to the Fund;
i) to approve the strategy and the development policies of the Fund;
j) to approve the annual budget for the following financial year;
k) to decide upon the pledge, lease or creation of movable securities or mortgages on the
assets of the Fund;
l) to approve significant related parties’ transactions, if their value is greater than 5% of
the net asset value, at the proposal of the AIFM;
m) to decide on any other aspects regarding the Fund, according to the legal duties.
The EGM is entitled to decide mainly upon:
a) set-up or closing of some secondary units: branches, agencies, representative offices or
other such units with no legal personality;
b) share capital increase;
c) share capital decrease or re-completion thereof by issuing new shares;
d) conversion of shares from one category to another;
e) conversion of a category of bonds to another category or to shares;
f) issue new bonds;
g) approval of the admission for trading and selection of the regulated market on which the
Fund’s shares will be traded;
h) the execution of contracts for acquiring, selling, exchanging or for creating pledges,
having as subject non-current assets of the Fund, whose value exceeds, individually or
cumulatively during a financial year, 20% of the total value of the non-current assets of
the Fund, less receivables;
i) change of the management system of the Fund;
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j) limitation or cancellation of the preference right of the shareholders;
k) approval of the IPS;
k^1) approval of (i) the dissolution and liquidation of the Fund; or (ii) the extension of the
duration of the Fund;
l) any other amendment of the Constitutive Act or any other resolution requiring the
approval of the EGM.
During 2023, there were 3 GSMs in which the shareholders adopted 14 resolutions (4 EGM
resolutions and 10 OGM resolutions). All EGM and OGM resolutions are published on the Fund’s
webpage.
The Fund’s shareholders rights
The rights of the Fund’s minority shareholders are adequately protected according to the
relevant domestic legislation.
According to the provision of the Constitutive Act in force, each share issued by the Fund which
is rightfully owned and paid by a shareholder carries the following rights: (i) voting right at the
GSM, (ii) the right to elect and to be elected in the management bodies, and (iii) the right to take
part in the profit distribution.
The Fund currently observes the one paid share, one vote, and one dividend principle. There are
no shares conferring the right to more than one vote or preference shares.
With respect to the right to receive dividends, the Constitutive Act sets out that the Fund’s net
profit shall be distributed based on the resolution of the GSM, each shareholder being entitled to
receive dividends proportionally with the number of paid in shares held in the Fund’s share
capital. Pursuant to Law no. 24/2017, the payment of dividends shall be carried out no later
than 6 months from the date of the GSM approving the dividend distribution.
The Romanian legislation imposes various restrictions regarding the unpaid shares, including
no voting rights for those unpaid shares and no right to receive dividends or return of capital in
relation to them.
Currently, the Constitutive Act does not specify any further special conditions on such rights
than those specified by the law. Other than as presented above, no rights, preference or
restrictions are attached to the shares.
Pursuant to the Companies’ Law, as a rule, the shares issued by a company entitle each holder to
equal rights. Such rights mainly refer to the shareholders’ involvement in the operations of a
company and the resulting benefits and are regulated by the applicable laws. Shareholders must
exercise their rights in good faith, without breaching the interest of other shareholders or that
of the company. The Fund ensures a fair treatment of investors and there is no preferential
treatment for any investor.
The Fund is committed to communicate with its shareholders effectively and actively and
ensure that all shareholders have equal access to relevant material information, so as to allow
them to fully exercise their rights. The AIFM has established a dedicated experienced investor
relations team, responsible for handling relationship with both private and institutional
investors, locally and abroad.
The Fund has a dedicated GSM related section on its website (Investor Relations – GSM
Documentation) that can be easily identified and accessed. The information in this section
typically includes: the time and place of meetings; information on how to exercise voting rights,
including the proxy process with relevant forms; meeting agendas, as well as detailed
documents relating to specific agenda items and draft of shareholders resolutions.
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The Fund is committed to encourage shareholders to participate at GSMs, to fully exercise their
rights, and to raise questions concerning items debated during such meetings. GSMs enable and
encourage the dialogue between the shareholders and the Fund and its representatives.
The shareholders may attend the GSMs in person or may be represented either by their legal
representatives or by representatives having a special or a general proxy, based on the proxies’
templates made available by the Fund. Such proxies’ templates may be obtained from the Fund’s
headquarters and/ or can be found on the Fund’s website, under the respective GSM section
item.
Also, the shareholders who cannot attend are able to vote in absence by sending the votes to the
Fund’s headquarters or via e-mail having attached an extended electronic signature, using the
voting bulletin for the votes by correspondence made available by the Fund at the headquarters
and/ or on the Fund’s website.
Starting 2024, namely the 13 February 2024 GSM, the Fund also implemented the possibility for
the Fund’s shareholders registered as such on the GSM Reference Date, to vote by electronic
means via eVote platform, in accordance with the provisions of Art. 197 of FSA Regulation no.
5/2018. The electronic voting may be used exclusively before each GSM, as detailed in the GSM
Procedure published on the Fund’s website in the Investor Relations - GSM Information Section.
Shareholders holding individually or jointly at least 5% of the Fund’s paid share capital may ask
for calling of a GSM. Such shareholders have also the right to add new items on the agenda of a
GSM, provided such proposals are accompanied by a justification or a draft resolution proposed
for approval and copies of the identification documents of the shareholders who made the
proposals.
Proposals with respect to adding new items on the agenda of such GSM can be submitted at the
Fund’s headquarters, or by e-mail having attached an extended electronic signature, in
compliance with Law no. 455/2001 on digital signature.
Likewise, the shareholders holding individually or jointly at least 5% of the Fund’s paid share
capital are entitled to propose revised versions of resolutions for the items listed on the agenda
or proposed by other shareholders for the agenda of the GSM.
The shareholders of the Fund, regardless of the stake held in the share capital, may submit
written questions with respect to the items on the agenda of the GSMs. The shareholders may
also send such questions by e-mail or may raise them during the GSM. The answers will be
provided during the GSM; the questions may be answered as well on the Q&A section of the
Fund’s website.
Should the questions require elaborate answers, a Q&A form will be made available on the
Fund’s website. The disclosure of commercially sensitive information that could result in a loss
or competitive disadvantage for the Fund will be avoided when providing the answers, in order
to protect shareholders’ interest.
A shareholder who was absent at a GSM or has voted against a certain resolution and has
requested that its vote against the resolution is registered in the minutes of that GSM is entitled
to challenge such resolution within 15 days as of its publication in the Official Gazette of
Romania, Part IV. Also, claims regarding an absolute nullity of a shareholder resolution may be
filed at any time.
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Increase of the Fund’s share capital
The share capital of the Fund can be increased with EGM approval, in accordance with the
provisions of Romanian law:
• by issuing new shares in exchange for cash contributions, based on the offering
documentation approved according to legislation in force;
• by incorporation of reserves, except for legal reserves and of the reserves created out of the
revaluation of the patrimony, as well as of the benefits and issuing premiums.
The share capital increase shall be registered at the Trade Registry, on the basis of the
resolution of the Fund’s GSM.
The share capital cannot be increased by issuing new shares if there are outstanding unpaid
shares in the share capital of the Fund.
Board of Nominees and the Consultative Committees
The Board of Nominees consists of 5 members appointed by the OGM in accordance with the
provisions of the Constitutive Act in force.
The Board of Nominees has sufficient members in order to effectively supervise, scrutinise and
evaluate the activity of the Sole Director and the fair treatment of all shareholders.
The composition of the Board of Nominees is balanced so as to enable it to take well-informed
decisions. The decision-making process is a collective responsibility of the Board, which
remains fully liable for decisions taken within its field of competence.
An independent member is defined as one who does not maintain, nor has recently maintained,
directly or indirectly, any business relationship with the Fund or persons linked to the Fund, or
shareholders of the Fund, of such significance as to potentially influence them.
The Board of Nominees ensures that the consultative committees of the Fund (i.e. the
Nomination and Remuneration Committee and the Audit and Valuation Committee) are
constituted to examine specific topics chosen by the Board and to report to the Board. The
majority of the members of such committee should be independent.
The mandate of each member of the Board of Nominees imposes restrictions around
confidentiality of information and certain type of reporting and consent requirements on the
individual’s ability to personally trade in the Fund’s shares. The members of the Board of
Nominees may be shareholders of the Fund.
Beginning with 2016, the Fund implemented the Board members annual evaluation – for more
details please see section Nomination and Remuneration Committee below.
Board of Nominees composition and activities during 2023
The structure of the Board of Nominees as at 31 December 2023 was the following:
Name
Position
First
appointment
date
Current
mandate
expiring on
Length
of
service
BON
meetings
attendance
AVC
meetings
attendance
NRC
meetings
attendance
Mrs. Ilinca von
Derenthall
• Chair of BON, member
of NRC
26 Nov 2020
26 Nov 2026*
3 years
and
1 month
5/5 n/a 6/6
Mr. Ciprian
Lăduncă
• BoN member, Chair of
AVC
16 Nov 2020
16 Nov
2026**
3 years
and
1 month
5/5 5/5 n/a
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Name
Position
First
appointment
date
Current
mandate
expiring on
Length
of
service
BON
meetings
attendance
AVC
meetings
attendance
NRC
meetings
attendance
Mr. Nicholas
Paris
• BoN member, Chair of
NRC and member of
AVC
6 Apr 2021 6 Apr 2024
2 years
and 8
months
5/5 5/5 6/6
Mr. Ömer Tetik
• BoN Member
6 Apr 2021 6 Apr 2024
2 years
and 8
months
4/5 n/a n/a
Mr. Martin
Bernstein
• BoN Member, member
of NRC and AVC
27 Apr 2022 27 Apr 2025
1 year and
8 months
5/5
5/5
6/6
Source: Fondul Proprietatea internal records
* During the 25 Sep. 2023 OGM, the Fund’s shareholders re-elected Mrs. Ilinca von Derenthall as Board of Nominees member for a
new 3-years mandate starting 26 November 2023.
** During the 25 Sep. 2023 OGM, the Fund’s shareholders re-elected Mr. Ciprian Ladunca as Board of Nominees member for a new 3-
years mandate starting 16 November 2023
During 2023, at the request of the BoN, there were also several informal conference calls and
meetings organised for discussing current subjects regarding the Fund’s activity, most
specifically the Hidroelectrica SA IPO, where BoN asked that fortnightly calls to be organised
between the BoN, the Sole Director and the advisors engaged in the project for presenting to the
BoN the developments on the Hidroelectrica SA IPO status.
For more details regarding the activity of the Board of Nominees during 2023, please see the
annual activity report of the Board, available on the Fund’s webpage in the Investor Relations –
GSM Information section.
Mrs. Ilinca von Derenthall is an experienced finance professional with an international
executive career in financial audit, investment banking and wealth management. Mrs. von
Derenthall was active in Germany, Austria and Romania, and she is currently based in Vienna,
Austria. Her knowledge of doing business and knotting strong personal ties comprises Central
and South-Eastern Europe as well as the UK. Mrs. von Derenthall also acts as a non-executive
director and Chair of the Advisory Board in other companies in Romania, Austria and the United
Kingdom.
As at 31 December 2023, Mrs. Derenthall did not hold any shares issued by the Fund. Mrs. von
Derenthall is an independent member of the Board of Nominees.
Mr. Ciprian Ladunca has a long and extensive experience in financial institutions and various
other industries, being certified in Board Practice & Directorship, Accounting and in ESG Investing.
Mr. Ladunca also acts as a trusted advisor and non-executive director in a number of other
companies.
As at 31 December 2023, Mr. Ladunca held 25,000 shares issued by the Fund. Mr. Ladunca is an
independent member.
Mr. Nicholas Paris is very experienced in investment management, especially in the closed-end
fund area around the globe. He is a member of the Chartered Institute for Securities &
Investment of the UK and a member of the Chartered Alternative Investment Analysts
Association. Mr. Paris also acts as a non-executive Chairman of ASEANA Properties Ltd. and a
Managing Director of DCI Advisors Ltd.
As at 31 December 2023, Mr. Paris held no shares issued by the Fund. Mr. Paris is an
independent member.
Mr. Omer Tetik has a long and extensive experience in financial markets, starting in Turkey
and Russia and continuing in Romania since 1999. Mr. Tetik has been the Chief Executive Officer
of Banca Transilvania for the last 10 years and acts as a Member of the Board for BT Capital
Partners.
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As at 31 December 2023, Mr. Tetik held no shares issued by the Fund. Mr. Tetik is an
independent member.
Mr. Martin Bernstein is an experienced investor across public and private markets in the USA
and Europe. Mr. Bernstein currently serves as Head of Private Investments with B. Riley
Principal Investments, responsible for sourcing, underwriting, and managing company
investments. He has extensive experience leading investments across technology,
transportation, automotive, aerospace, manufacturing, power, infrastructure, and other sectors.
Prior to joining B. Riley, Mr. Bernstein was with Anchorage Capital and led investments across
capital structures from their New York and London offices. While at Anchorage, he led the firm’s
investment in Fondul Proprietatea. Mr. Bernstein has extensive experience working with
management teams and boards on capital allocation strategies, governance, financing, and
operational turnarounds. He was appointed to the Synchronoss Technologies, Inc. (NASDAQ:
SNCR) board of directors in July 2021.
As at 31 December 2023, Mr. Bernstein held no shares issued by the Fund. Mr. Bernstein is an
independent member.
Duties of the Board of Nominees
The main duties of the Board of Nominees include:
1) Requesting, if necessary, the insertion of supplementary matters in the text of the GSM
calling notice, following the information received from the AIFM with regard to the
summoning of the OGM or EGM;
2) Receiving from the AIFM the answers to the written requests submitted by shareholders
before the GSM date, on topics regarding Fund activity;
3) Receiving from the AIFM the annual financial statements, the annual activity report
presented by the AIFM and the financial auditors’ report, before being made available to
shareholders and analysing them, in order to formulate an opinion to be presented to both
the AIFM and to the GSM;
4) Receiving from the AIFM for analysis the annual report and the management policy of
Fondul Proprietatea and presenting an opinion to the AIFM and to the GSM;
5) Receiving from the AIFM for analysis the annual budget, before it is submitted for approval
to the GSM and presenting an opinion to the AIFM and to the GSM;
6) Receiving from the AIFM for analysis the strategy in accordance with the Fund’s investment
policy, before these are submitted for approval to the GSM, and presenting an opinion to the
AIFM and to the GSM;
7) Receiving from the AIFM for analysis and approval the framework for carrying out Fondul
Proprietatea operations, as well as any other Fondul Proprietatea regulations issued by the
AIFM according to legal provisions in force, capital market rules and regulations;
8) Receiving from the AIFM for analysis the proposal to the OGM for concluding the financial
audit agreement and presenting an opinion to the AIFM and to the GSM;
9) Reviewing on a regular basis the investment policy of Fondul Proprietatea and presenting
an opinion to the GSM at any time it deems necessary, but in any case, at least once a year to
the Annual OGM;
10) Receiving the internal auditor’s report and presenting an opinion to the AIFM and to the
GSM;
11) Monitoring the following, based on information and reports received from the AIFM:
• the list of all portfolio investments and percentage breakdown by each investment type;
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• the list of major transactions implemented in the Fund portfolio for the period under review;
• the total profit of the portfolio companies and comparison with the appropriate market
benchmark;
• comparison of the obtained profit with the initial objective;
• the extent of compliance with the investment policy, including, specifically, the degree to
which any performance objectives set out are achieved, as well as any variations and actions
taken to achieve such objectives and improve investment results;
• the performance evaluation report.
The Board of Nominees shall draft and present to the GSM an annual report regarding the
monitoring activity performed or a monitoring report for another period agreed by the GSM.
12) Representing the GSM in relation with the AIFM regarding the communication between the
two corporate bodies, except for the cases expressly regulated by the Constitutive Act
regarding the direct communication between the GSM and the AIFM;
13) Verifying the report of the AIFM and permanently overseeing the management of the Fund,
verifying if the operations carried out by the AIFM are following the applicable law, the
Constitutive Act and any relevant resolution of the GSM;
14) Calling upon the GSM, under the conditions provided in the Constitutive Act;
15) Participating to the GSM and presenting the reports in all cases provided by the Constitutive
Act or regarding any issue it deems to be relevant for the GSM;
16) Proposes to the GSM the prior approval or rejection of the execution of contracts for
acquiring, selling, exchanging or for creating pledges, having as subject non-current assets of
the Fund, whose value exceeds, individually or cumulatively during a financial year, 20% of
the total value of the non-current assets of the Fund, less receivables;
17) Recommending to the GSM the termination of the management contract for the case when
the Board of Nominees considers this is to the benefit of the shareholders;
18) Recommending to the GSM on any other issues the Board of Nominees considers relevant to
the shareholders;
19) Recommending to the EGM the appointment of the public offer intermediate and his
remuneration, following the proposal of the AIFM, when it becomes necessary that such a
company is appointed, related to the admission to trading of Fondul Proprietatea;
20) Approving the delegation by the AIFM of certain activities. The delegation shall be effective
in accordance with the legal provisions in force;
21) Monitoring the AIFM performance in accordance with the Management Agreement.
Committees
Audit and Valuation Committee
A permanent Audit and Valuation Committee composed of Board of Nominees members was
established to help the governing bodies of the Fund in the area of internal control and financial
reporting. This committee reviews the annual financial statements and the proposal for profit
distribution and performs other activities under the European audit regulation. In addition, the
Audit and Valuation Committee analyses the proposal for appointing the independent financial
auditor, who is appointed by shareholders at an OGM.
The Committee also supervises the Fund’s risk management strategy and its financial
performance and assesses any issues brought to its attention by the internal auditor.
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The Sole Director reports to the Audit and Valuation Committee at least once per year on the
internal audit plan and on any material relevant matters.
The Audit and Valuation Committee includes members that have the necessary expertise in the
area of financial audit and accounting. Starting 10 May 2022, the composition of the Audit and
Valuation Committee of the Fund has changed, decreasing the number of members from 5 to 3.
As at 31 December 2023 the members of the Audit and Valuation Committee were Mr. Ciprian
Ladunca (as Chairperson), Mr. Nicholas Paris, Mr. Martin Bernstein.
Nomination and Remuneration Committee
A Nomination and Remuneration Committee composed of Board of Nominees members was
established to help the governing bodies of the Fund in the area of nomination and changes in
remuneration.
Starting 10 May 2022, the composition of the Nomination and Remuneration Committee of the
Fund has changed, decreasing the number of members from 5 to 3. As at 31 December 2023 the
Nomination and Remuneration Committee members were Mr. Nicholas Paris (as Chairperson),
Mr. Martin Bernstein and Mrs. Ilinca von Derenthall.
The Fund has in place a Remuneration Policy and its latest version was adopted by shareholders
during 15 November 2022 GSM and is available on the Fund’s website in About the Fund – Fund
Overview – Corporate Governance section. The Fund’s Remuneration Policy purpose is to set
forth the corporate governance principles with regards the remuneration of the (i) Sole Director
and of the (ii) Board of Nominees members. An updated version of the Remuneration Policy is
subject to shareholders approval during 26 March 2024 GSM, and this is available on the Fund’s
website in the section Investor Relations – GSM Information – GSM Documentation.
The Nomination and Remuneration Committee fully implemented the requirements of the
Remuneration Policy of Fondul Proprietatea, undertaking an annual evaluation for the members
of the Board of Nominees and of the Committees. The independence of each member of the
Board of Nominees has also been analysed.
During 2023, the Chairperson led the evaluation process which included the completion of
questionnaires and discussions between the Nomination and Remuneration Committee and
each member of the Board of Nominees and of the Committees. The experience, balance of skills,
diversity and knowledge of the Board of Nominees was considered as well as Board
effectiveness, role, and structure.
Formal performance evaluations will continue to take place at least annually. The Nomination
and Remuneration Committee considers succession planning as part of its responsibilities,
making recommendations to the Board of Nominees and shareholders when required.
More details on the remuneration of the Sole Director and of the Board of Nominees members
are presented in the Remuneration Report of Fondul Proprietatea for 2023 which is available on
the Fund’s website in the section Investor Relations – GSM Information and will be subject to
Fund’s shareholders advisory vote during 30 April 2024 Annual GSM.
The Sole Director and AIFM
Overview
The Sole Director of the Fund is Franklin Templeton International Services S.à r.l., a société à
responsabilité limitée qualifying as an alternative investment fund manager under Article 5 of
the Luxembourg Law of 12 July 2013 on alternative investment fund managers, authorised by
the Commission de Surveillance du Secteur Financier under no. A00000154/21 November
2013, whose registered office is located at 8A rue Albert Borschette, L-1246 Luxembourg and
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registered with the Luxembourg Register of Commerce and Companies under number B 36.979
and registered with the Romanian FSA under number PJM07.1AFIASMDLUX0037/10 March
2016.
FTIS, being qualified as an AIFM under Chapter 2 of the Luxembourg Law of 12 July 2013 on
alternative investment fund managers, is entitled to carry out services in Romania in
accordance with the Law no. 74/2015 being registered with the registry kept by the FSA and is
authorised to carry out the management of a fund such as Fondul Proprietatea (including,
without limitation, risk management and portfolio management).
The Sole Director issues decisions regularly and whenever necessary for the daily operations of
the Fund. The Sole Director is responsible for the Fund’s executive management. FTIS as Sole
Director and AIFM acts in the best interest of the Fund and protects the general interests of the
shareholders.
The Sole Director is appointed and revoked by the OGM. The duration of the current mandate as
the AIFM and Sole Director of the Fund is of 2 years starting 1 April 2022.
In June 2009, Franklin Templeton Investment Management Limited United Kingdom was
designated the winner of the international tender procedure organised by the Fund for the
selection of the Fund’s Investment Manager and Sole Director. Franklin Templeton Investment
Management Limited United Kingdom, Bucharest Branch was the Sole Director of the Fund
between 29 September 2010 and 31 March 2016.
In order to comply with the AIFM Directive, FTIS was appointed as the AIFM and Sole Director
of the Fund for a mandate of two years starting 1 April 2016 until 31 March 2018. This was
followed by successive mandates of two years, as detailed below:
• Mandate from 1 April 2018 until 31 March 2020, approved during 14 February 2018 GSM
• Mandate from 1 April 2020 until 31 March 2022, approved during 28 June 2019 GSM
• Mandate from 1 April 2022 until 31 March 2024, approved during 15 December 2021 GSM
During 25 September 2023 GSM the shareholders approved the renewal of FTIS mandate as
Sole Director and AIFM of the Fund for a duration of 1 year (1 April 2024 - 31 March 2025).
During the same GSM the shareholders also approved that the BoN should launch a transparent
and competitive selection procedure for the appointment of a new Sole Director starting 1 April
2025.
The draft management agreement for the period 1 April 2024 – 31 March 2025, under
substantially same terms as the Management Agreement currently in force and in line with the
current IPS of the Fund was included on the agenda of 26 March 2024 GSM.
On 22 February 2024 the shareholder Ministry of Finance submitted a request to supplement
the 26 March 2024 GSM agenda with new points, proposing a base fee rate of 1.35% instead of
2.00% and an updated strategy of the Fund for the period 1 April 2024 - 31 March 2025, so that
it includes the preservation of the current portfolio. On 29 February 2024 the Fund submitted a
letter to the Ministry of Finance, requesting clarifications in respect of the points added on 26
March 2024 GSM. For more details, please see Subsequent events section.
On 31 December 2023, FTIS, the current AIFM of the Fund, does not hold any shares issued by
the Fund.
FT policies
Treating customers fairly is one of the core values of Franklin Templeton.
Preferential treatment among clients is strictly prohibited. Aiming to ensure fair treatment to
any client or investor, FT has developed and implemented several policies and procedures. FTIS
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applies FT global best practices to meet regulatory obligations and comply with laws and
regulations.
These include:
• Code of Ethics and Business Conduct that summarises the values, principles and business
practices guiding the FT business conduct and also provides a set of basic principles to guide
Covered Persons (all officers, directors, employees and temporary employees of Franklin
Resources, Inc. and all of its United States and non-U.S. subsidiaries and affiliates), regarding
the minimum ethical requirements expected from them;
• Franklin Templeton Stewardship Policy comprising details on FT stewardship activities that
include monitoring and engagement on topics such as strategy, performance, risk (including
social and environmental risk) and governance (including remuneration and culture);
• Conflicts of Interest Policy to evidence that policies and procedures are put in place in FT to
address actual, perceived, or potential areas of conflicts and to prevent or manage such
conflicts as well as to ensure compliance with relevant regulatory requirements;
• Data Protection Policy to ensure that business operations comply with the Data Protection
Regulation;
• Anti-Corruption Policy to ensure that FTIS employees comply with the U.S. Foreign Corrupt
Practices Act and applicable anti-bribery and anti-corruption regulations of the local
jurisdictions where FTIS operates;
• Compliance Policy and Charter, which sets the compliance framework, describing the
generic compliance and regulatory requirements and the consequences of failure to comply;
• Personal Investments and Insider Trading Policy designed to prevent Franklin Templeton
employees from engaging in prohibited insider trading and to fairly disclose non-public
information;
• Gifts and Entertainment Compliance Policy, intended to deter providers of gifts or
entertainment from seeking or receiving special favours from employees of Franklin
Templeton;
• Regular staff training on compliance and related matters;
• Reinforcement of corporate values which focus on acting in the client’s best interests, with
integrity and confidentiality.
The main duties of the AIFM
As provided by the Constitutive Act, the Management Agreement and the IPS, the main duties of
FTIS performed under the control of the GSM and monitored by the Board of Nominees, are:
• fulfilling the necessary and useful operations to achieve the Fund’s business objective,
except for the operations reserved by the law for the GSM, having all the obligations
attributed to it by the applicable law;
• proposing to the Board of Nominees for the prior approval and further, to the GSM for final
approval, the general strategy in accordance with the investment policy;
• implementing the investment policy and achieving a proper balance between profits and the
risks related to Fondul Proprietatea portfolio;
• informing the Board of Nominees periodically on any significant changes in the activities
and portfolio structure of the Fund;
• establishing a reference date for shareholders entitled to vote within the GSM, under the
law, and drafting the text of GSM calling notice, after obtaining the prior approval of the
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Board of Nominees and after adding to the agenda the matters requested by the Board of
Nominees;
• giving responses on the aspects concerning the business of Fondul Proprietatea, upon the
written request submitted by any shareholder before the date of the GSM; such responses
shall be notified to the Board of Nominees;
• ensuring that a copy of or extract of the GSM minutes is given to any shareholder upon his
request; making available to shareholders the financial statements of the Fund and the
reports of the AIFM and of the financial auditors, after the announcement of the Annual OGM
is published;
• preparing the annual financial statements, drafting the annual activity report, examining the
financial auditors’ report, presenting them to the Board of Nominees before submitting such
documents to the GSM and making proposals on the distribution of the profit to the GSM,
after obtaining the prior approval of the Board of Nominees;
• managing the relationship with Romanian Central Depository with regard to its
shareholders register functions;
• preparing an annual report on the management and business policy of Fondul Proprietatea,
to be presented to the Board of Nominees for approval prior to its submission to the GSM;
• proposing to the Board of Nominees for prior approval and further, to the GSM for final
approval, the annual budget and business plan;
• approving the outsourcing of certain activities, within the limits of the approved budget,
delegating the performance of certain activities, subject to the observance of the applicable
legislation;
• submitting to the approval of the EGM the execution of contracts for acquiring, selling,
exchanging or for creating pledges, having as subject non-current assets of the Fund, whose
value exceeds, individually or cumulatively during a financial year, 20% of the total value of
the non-current assets of the Fund, less receivables;
• executing contracts for acquiring, selling, exchanging or for creating pledges, having as
subject non-current assets of the Fund, whose value does not exceed, individually or
cumulatively during a financial year, 20% of the total value of the non-current assets of the
Fund, less receivables, without the GSM approval;
• proposing to the OGM the conclusion of the financial audit agreement according to the legal
provisions in force, upon obtaining the prior approval of the Board of Nominees;
• approving the internal audit procedure and the internal audit plan;
• deciding on the relocation of the registered office, provided that the registered office shall
always be registered in Romania;
• making available to the Board of Nominees the reports and other necessary documents for
exercising the monitoring duties, in accordance with the Constitutive Act;
• informing at once the Board of Nominees of any litigation or infringement of legislation
regarding the AIFM, any operation that might represent an infringement to the investment
policy and about the plans/ correction measures for approaching these matters;
• calling the GSM to decide whenever an issue appears on which the Board of Nominees has a
disagreement with the AIFM, which cannot be resolved amiably;
• proposing to the Board of Nominees the recommendation for EGM for the appointment of
the investment firm/ investment bank who shall manage a public offer, as well as its
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remuneration, when it becomes necessary that such a company is appointed related to the
admission to trading of Fondul Proprietatea;
• approving any related parties transactions, and, if the related parties transactions’ value is
greater than 0.25% of the NAV, to ask for the Board of Nominees’ approval, and, if the
related parties transactions’ value is greater than 5% of the NAV, to convene the GSM.
The AIFM ensures that the provisions of the relevant European and Romanian capital markets
legislation are complied with and implemented by the Fund. Likewise, the AIFM ensures the
implementation and operation of an accounting, risk management and internal control system
which meets the requirements of the Fund.
The employees of the AIFM and the persons closely related to them and to the AIFM qualify as
insiders and have the duty to report to the AIFM and to the FSA any and all trading/ business
performed for their own account with (i) shares or other securities issued by the Fund and
admitted for trading on regulated markets; and/ or (ii) derivative financial instruments relating
to securities issued by the Fund and/ or (iii) any other instruments relating thereto.
The AIFM has the duty to disclose immediately to the Board of Nominees any material personal
interests it may have in the transactions of the Fund as well as all other conflicts of interest.
AIFM conducts all business according to the principle that it must manage any conflicts of
interest fairly between itself and the Fund. Franklin Templeton organisation has group-wide
policies for managing conflicts of interest and ensuring the ethical conduct of its entire staff
which apply to the AIFM. These policies were designed to evidence compliance with the conflict-
of-interest requirements as set out in MiFID II and were also submitted to FSA during the
AIFM’s licensing application.
All business transactions between the Fund and the AIFM as well as persons or companies
closely related to them must comply with the normal industry standards and applicable
corporate regulations.
Permanent representative of the AIFM
As at 31 December 2023, Johan Meyer is the permanent representative of the AIFM, being also
the portfolio manager of the Fund.
Johan Meyer is the CEO of FTIS Bucharest Branch and the Portfolio Manager of Fondul
Proprietatea. He joined Franklin Templeton Investments in 2004. Prior to his role in Romania,
he was Managing Director South Africa, and Director of Africa Strategy for Templeton Emerging
Markets Group. In this capacity, he was responsible for setting the overall strategy for his
respective area, providing guidance and thought leadership, coordinating appropriate resources
and coverage, and leveraging the group’s expertise to add value across products within the
strategy. Mr. Meyer holds a Bachelor of Commerce and a Bachelor of Commerce (Honours)
degree both with specialisation in economics from the University of Pretoria. He speaks English
and Afrikaans.
As at 31 December 2023, Mr. Meyer held no shares issued by the Fund.
The remuneration of the AIFM
The fees due to AIFM are approved by shareholders and are part of the management
agreements. The fees payable to the AIFM are calculated in RON and paid EUR - the amount
calculated in RON is converted into EUR using the official exchange rate for RON to EUR
published by the National Bank of Romania in the last banking day of the period invoiced. The
fees are calculated and paid on a quarterly basis. The payment of the fees is performed after the
computation of the fees is verified and certified by the Depositary of the Fund.
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More details on the remuneration of the AIFM are presented in Remuneration Report of Fondul
Proprietatea for 2023 which is available on the Fund’s website in the section Investor Relations –
GSM Information and that will be subject to Fund’s shareholders advisory vote during 30 April
2024 Annual GSM.
Potential professional liability risks for AIFM
The AIFM will always maintain the capital requirements and insurance required under AIFM
Directive and national legislation. The AIFM has in place the following insurance:
• Professional liability to provide against any failure to duly perform the management
agreement;
• Fidelity bond to provide against any failure to account to the Fund for any money or
investments.
The Depositary of the Fund
The Fund has appointed BRD – Groupe Societe Generale SA as its depositary and custodian, to
hold and transfer the Fund’s assets, and to certify the Fund’s NAV, and the computation of the
AIFM fees through a depositary and custody agreement entered into force on 20 May 2016 for a
three-year term. The agreement was initially extended for a three-year term until 20 May 2022
and subsequently extended again during 2022, for a three-year term until 20 May 2025.
The Depositary has the following main obligations under the agreement in place:
• Physically safeguards all the Fund’s financial instruments which can be physically delivered
or registered or held in an account directly or indirectly in the name of the Depositary and
are transferable securities including those which embed derivatives, money market
instruments or units of collective investment undertakings (the Custody Assets);
• Verifies the ownership of, and maintain records on, all assets which do not qualify as
Custody Assets and which, in accordance with applicable national law, are only directly
registered in the name of the Fund with the issuer itself or its agent, such as a registrar or a
transfer agent, based on the documents supplied by the Fund, as well as on external
evidence (the Non-Custody Assets);
• Keeps in custody the Custody Assets belonging to the Fund, separately from the Depositary’s
assets or other Funds’ assets, and registers them separately thus, as to be identifiable as the
Fund’s property;
• Settles the transactions with Custody Assets and Non-Custody Assets of the Fund in and
from the Fund’s accounts, according to the instructions received from the Fund and in
accordance with the applicable Central Depositary’s regulations;
• Collects the interests and other income related to the Custody Assets and exercises the
rights conferred by such Custody Assets, in accordance with the proper instructions
received from the Fund. The Depositary assists the Fund in recovering the difference of tax
on dividends withheld by the issuers (in case of investments abroad or in Romania),
according to the tax treaties in force;
• Certifies the value of the net assets, and the unit value of the net assets in compliance with
the legal provisions in force;
• Makes the payment of the equivalent value of the financial instruments or participation
interests purchased by the Fund, makes the payment of all the financial duties, including the
payment of interests, taxes, fees and other operational costs of the Fund, makes payments
for any other purposes, according to the proper instructions received from the Fund;
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• Validates and certifies the calculation of the AIFM for the fees owed by the Fund to it;
• Provides proxy voting services upon request and according to the instructions received;
• Carries out any other activities provided by laws and regulations as part of its responsibility.
• Executes payments from the Fund’s cash account only upon receiving proper instructions
and only after assessing the operation as compliant to the legal provisions, Fund’s articles of
incorporation and regulations of the Fund;
• Transfers financial instruments from the securities account of the Fund only upon receipt of
proper instructions, after the assessment of the operation as compliant with legal
provisions, the provisions of the articles of incorporation of the Fund, and upon the receipt
of the equivalent value of such financial instruments, where applicable;
Liability in case of safe-keeping of Custody Assets:
• In case of loss of a Custody Asset by the Depositary or by a third party to whom the custody
was delegated by the Depositary, the Depositary shall be liable to the Fund in the conditions
set forth by Article 21 (12) and (13) of AIFM Directive as such were transposed by Article 20
(13) and (14) of Law no. 74/2015, as well as by Articles 100 and 101 of EU Regulation
231/2013. In such conditions, unless the Depositary proves the existence of an exoneration
cause set forth by the EU Regulation 231/2013, the Depositary shall return to the Fund
identical Custody Asset or a custody asset with a corresponding value within maximum five
business days upon the Fund’s or the AIFM’s request;
• In case of other damages produced by the Depositary in connection with safe-keeping of
Custody Assets other than losses of such Custody Assets, the Depositary shall not be liable
towards the Fund for its actions or inactions in relation to these obligations as long as they
respect the legal provisions and the damages are not due to the Depositary’s negligence,
fraud, breach of agreement, bad faith or wilful default.
Liability in case of safe-keeping of Non-Custody Assets and other duties of the Depositary:
• With respect to all duties other than the safe-keeping of Custody Assets, the Depositary shall
not be liable towards the Fund for its actions or inactions in relation to these obligations, as
long as they respect the legal provisions, and, in addition, the Depositary shall not bear any
prejudice or expense resulting from such action or inaction, except in the case where these
are due to the Depositary’s negligence, fraud, breach of agreement, bad faith or wilful
default;
• The Depositary shall not be liable for the incompleteness or illegality of any investment
made by third parties on behalf of the Fund’s account and received by the Depositary from
them or in case the investment is no longer valid or is fraudulent, either by reason of
invalidity, forgery, falsity, incompleteness or otherwise except in so far as such situation
results from the negligence, wilful default, bad faith, breach of agreement or fraud on the
part of the Depositary;
• The Depositary shall not be liable to the Fund or any third party for any indirect
consequential or special damages, including loss of profits or business opportunity, arising
in connection with the agreement;
• Except as set out in the agreement concluded with the Fund and applicable law, the
Depository expressly disclaims all obligations to the Fund.
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Other aspects
The auditor of the Fund
The auditor of the Fund for the year ended 31 December 2023 is Ernst & Young Assurance
Services SRL, registered with the Trade Registry under no. J40/5964/1999, having Sole
Registration Code RO11909783, member of the Chamber of Financial Auditors of Romania and
registered in the Public Registry of Financial Auditors of ASPAAS with number FA77.
On 28 April 2021 the shareholders of the Fund approved the appointment of the Ernst & Young
Assurance Services SRL as the financial auditor of Fondul Proprietatea for the financial years
2022, 2023, 2024.
Gender and nationality diversity
The Fund and FTIS support gender and ethnic diversity and promotion of women in
management positions.
Franklin Templeton culture is founded on diversity, inclusion, and empowerment and the
selection policy is to appoint the best qualified person for the job, considering factors such as
diversity of gender, experience, and qualification. As a global company, Franklin Templeton
believes it benefits from the unique skills and experiences of an inclusive workforce made up of
employees who span different generations, capabilities, and cultural identification.
There is one female member in the Board of Nominees, and FTIS has women involved in the
management of the Fund. Also, people from more than 10 different nationalities are involved in
the management of the Fund, this being in line with the diversity of the shareholders of the
Fund.
ESG
Within the meaning of Article 6 of the SFDR, the sustainability risks were not deemed relevant
for the investment decision process due to the Fund’s unique initial set-up as well as the current
applicable regulatory framework, that imposes numerous investment restrictions, hence
limiting the investment decisions. Also, the Fund has limited ability to consider sustainability
risks in its investment decisions unless there are amendments to the governing regulatory
framework of the Fund, which cannot be reliably estimated at the date of this report.
Taxonomy Regulation
The investments underlying Fondul Proprietatea do not take into account the EU criteria for
environmentally sustainable economic activities, including enabling or transitional activities,
within the meaning of the Taxonomy Regulation.
Corporate Sustainability Reporting Directive
On 28 November 2022, the European Parliament adopted Directive (EU) 2022/2464 regarding
corporate sustainability reporting, published in the Official Journal of the European Union on 16
December 2022. The requirements will start to apply between 2024 and 2028, and the Member
States have to transpose the directive into local legislation so that it applies from 1 January
2024.
According to the provisions in CSRD, there is an explicit exemption for alternative investment
funds in respect of the applicability of reporting requirements on sustainability information
based on the provisions introduced in the revised Accounting Directive, Article 1 Scope,
paragraph 4.
On 15 June 2023, the FSA published on its website for public consultation a draft norm
amending FSA Norm no. 39/2015, implementing CSRD requirements for Fondul. Based on the
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provisions of this draft norm, similarly to the provisions of CSRD, there is a specific exemption
from the reporting requirements on sustainability information applicable in case of the Fund.
The Fund will continue to monitor the implementation of the directive requirements within the
national legislation, during the following reporting periods.
Conflicts of interests
FTIS implemented a Conflicts of Interest Policy and adopted operating solutions suitable to
facilitate the identification and adequate handling of any situations in which an employee has an
actual or potential conflict between the interest of the Fund and his/ her own or on behalf of
third parties. Also, FTIS adopted operating solutions suitable for the adequate handling of any
issues arising from related party transactions.
The Board of Nominees has also set strict rules for handling potential conflicts of interests in
their mandate agreements and the Code of Ethics.
Regulatory framework
Governing legislation
The Fund operates in accordance with the provisions of the following main laws
and regulations:
•
Law no. 31/1990 regarding companies, with subsequent amendments;
•
Law no. 82/1991 Accounting Law;
•
Law no. 297/2004 regarding the capital market, with subsequent amendments;
•
Law no. 247/2005 regarding the reforms in the sectors of justice and property as well as certain related
measures, with subsequent amendments;
•
Law no. 10/2015 on amending Title VII of Law no. 247/2005 regarding the reforms in the sectors of
justice and property, as well as certain related measures, with subsequent amendments;
•
Law no. 74/2015 on alternative investment fund managers;
•
Law no. 24/2017 on issuers of financial instruments and market operations;
•
Law no. 162/2017 regarding the statutory audit of annual financial statements and annual consolidated
financial statements and on amending other pronouncements;
•
Law no. 126/2018 on the markets of financial instruments;
•
Law no. 129/2019 on anti-money laundering and counter-terrorist financing and for amending other
regulations;
•
Law no. 243/2019 on the regulation of alternative investment funds and supplementing certain acts;
•
Government Decision no. 1481/2005 regarding the incorporation of Fondul Proprietatea;
•
Government Emergency Ordinance no. 81/2007 for the acceleration of the compensation procedure
related to the real estate abusively confiscated, with subsequent amendments;
•
Regulation (EU) no. 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the
European Parliament and of the Council with regard to exemptions, general operating conditions,
depositaries, leverage, transparency and supervision;
•
Regulation (EU) no. 537/2014 of the European Parliament and of the Council of 16 April 2014 on
specific requirements regarding statutory audit of public-interest entities and repealing Commission
Decision 2005/909/EC;
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•
Regulation (EU) no. 1212/ 2018 of the European Parliament and of the Council of 3 September 2018
laying down minimum requirements implementing the provisions of Directive 2007/36/EC of the
European Parliament and of the Council as regards shareholder identification, the transmission of
information and the facilitation of the exercise of shareholders rights;
•
FSA Regulation no. 9/2014 regarding the authorisation and functioning of the investment management
companies, undertakings for the collective investment in transferable securities and the depositaries of
undertakings for the collective investment in transferable securities
•
FSA Norm no. 39/2015, regarding the approval of the accounting regulations in accordance with IFRS,
applicable to the entities authorised, regulated, and supervised by FSA – Financial Investments and
Instruments Sector, with subsequent amendments;
•
FSA Norm no. 13/2019 on the framework for the statutory financial audit of the entities authorised,
regulated and supervised by the FSA, as subsequently amended;
•
FSA Regulation no. 4/2013 on underlying shares for depositary receipts;
•
FSA Regulation no. 10/2015 regarding the alternative investment funds management;
•
FSA Regulation no. 5/2018 regarding the issuers of financial instruments and market operations;
•
FSA Regulation no. 12/2018 on the implementation of certain provisions of Regulation (EU) no. 1286/
2014 on key information documents for structured and insurance-based individual investment
products;
•
FSA Regulation no. 13/2019 on implementing the measures related to anti-money laundering and
counter-terrorist financing within the financial sectors supervised by the FSA with subsequent
amendments provided within FSA Regulation no. 18/2022;
•
FSA Regulation no. 7/2020 on the authorisation and function of alternative investment funds, as
subsequently amended.
Regulatory updates
Minimum corporate tax
The fiscal requirements regarding the minimum corporate tax were published in the Official
Gazette of Romania on 27 October 2023 and are in force starting 1 January 2024.
Based on these provisions, a minimum corporate tax of 1% on adjusted turnover is
implemented for taxpayers:
• with an adjusted turnover above EUR 50 million in the previous fiscal year and
• for which during the concerned year:
- the minimum corporate tax is higher than the corporate tax calculated according to the
applicable general rules or
- if the entity registers a tax loss.
The adjusted turnover is calculated as the difference of the total revenues of the entity and
among other (i) non-taxable revenues, (ii) revenues related to product inventory costs, (iii)
revenues related to the costs of work in progress, (iv) specific revenues from the production of
tangible and intangible assets, (v) revenues from subsidies, (vi) revenues obtained from
compensation from insurance/ reinsurance companies for damage caused to stocks or tangible
assets.
The Fund’s adjusted turnover did not exceed the EUR 50 million threshold in 2023, therefore
the Fund would not be subject to the provisions of the minimum corporate tax in 2024.
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Utilisation of tax losses
Starting 1 January 2024 the utilisation of tax losses is limited as follows:
• entities showing a tax profit will be able to offset only 70% of the tax profit with past tax
losses (assuming that tax losses are available for utilisation). The remaining 30% of the tax
profit will be subject to Romanian corporate income tax at the 16% rate;
• tax losses brought forward from the fiscal years prior to 1 January 2024, as recorded as at
31 December 2023, might be recovered from future taxable profits during the next 7 years;
• tax losses recorded starting with 1 January 2024 might be recovered from future taxable
profits during the next 5 years.
As a result, if the Fund shows a tax profit in 2024, it will be able to offset only 70% of this tax
profit The remaining 30% will be subject to Romanian corporate income tax at the 16% rate. As
the Romanian corporate income tax needs to be computed and declared on quarterly basis, the
Fund might be in a corporate income tax paying position starting Q1 2024, if a tax profit for this
period will be reported. The actual amounts due to the state budget will depend on the amount
of taxable/ non-taxable elements recorded during the year 2024.
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Risk Management
Overview of main risks
The Fund’s investing activities expose it to various types of risks that are associated with the
financial instruments and with the markets in which it invests. The most important financial risks
the Fund is exposed to are market risk, valuation risk and credit risk. The management monitors
the potential adverse effects on the financial performance of the Fund associated with these risk
factors. In addition, non-financial risks such as operational risks, legal, regulatory risks and cyber
risks are monitored and mitigated where possible. The management consider that all risks are
aligned with the Fund’s risk appetite and that controls and reporting functions are in place and
aligned with the severity of the risks.
Starting 29 September 2010, the Fund management implemented financial risk management
procedures consistent with those applied globally by Franklin Templeton.
Description of risk Mitigating action
Market risk
Changes in market prices and rates, such as security
prices, changes in interest rates or foreign exchange
rates will affect the Fund’s income or the value of its
holdings.
The Fund implements market risk management
techniques to manage and control market risk
exposures, keeping them within acceptable levels,
while optimising returns. The AIFM has an
ongoing risk management framework in
compliance with requirements of the AIFM
Directive.
Security price risk and valuation risk
Fluctuations in the value of a security instrument as
a result of changes in market prices, whether caused
by factors specific to the issuer or factors affecting
all instruments traded in the market, can negatively
affect the Fund’s income or value of its holdings.
Securities without a readily available market price,
such as the Fund’s unlisted holdings, are exposed to
uncertainties coming from the valuation of the
securities prices, from factors such as the choice of
valuation model, parameter uncertainty and
timeliness of parameter estimates.
Diversification across securities and industries is
the primary technique for mitigating equity price
risk. All potential investments undergo a
thorough due diligence process. Portfolio
management reviews the risk/ return profiles of
portfolio assets on a regular basis. A detailed
pricing policy ensures adequate valuation of the
unlisted holdings. Valuations performed by the
external service providers are reviewed by
Franklin Templeton’s Fair Valuation Committee.
Dilution risk
Share capital changes in state owned companies
where the Fund holds a minority position can result
in a reduced valuation, legal action, and loss for the
Fund.
Dilution risk based on unjustified economic
inputs can be detrimental to a company’s value.
Where it is quantifiable, dilution risk is therefore
considered in the companies’ valuations. The
portfolio management team, investor relations
and legal teams are actively involved in all
corporate actions involving the Fund’s holdings.
Fundamental analysis, investor communication
and legal action are used to solidify the Fund’s
position. External legal and third-party counsel is
used where beneficial.

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Description of risk Mitigating action
Sector concentration risk
Large portfolio exposure to a specific industry
sector or group of companies expose the Fund to
concentration risk and can cause overall Fund
performance to be negatively affected by the
performance of a specific sector.
Diversification and concentration limits are set
and monitored periodically. The companies in
which the Fund holds equity instruments operate
in different industries. Regular review is
performed assessing sector by sector risk and
return contribution.
Corporate governance risk
Poorly managed companies in the Fund’s portfolio
can negatively affect the Fund’s performance due to
missing professional skills and missing experience
in the industry the company operates in.
The portfolio management team is actively
involved with portfolio companies, promoting
and enhancing high standards of good corporate
governance.
People Risk
The ability of the Fund to achieve its objectives is
dependent upon the expertise of the Investment
Manager and its ability to attract and retain suitable
staff.
Fund management and the Board of Nominees
ensure that the principal members of the
management team are suitably incentivised,
participate in strategic leader programmes and
monitor key succession planning metrics. The
Board discusses this risk regularly with the Sole
Director.
Share price discount to NAV risk
Shares of the Fund are traded on the Bucharest and
London stock exchanges. Market participants
expectations may cause the shares of the Fund to
trade at a premium or discount to the NAV per share
of the Fund. Investor returns may be positively or
negatively affected by such market factors.
The Fund has implemented several measures to
reduce the discount to NAV, including an
attractive dividend yield, ongoing buy-back
programs as well as transparency, disclosure, and
proactive investor relation efforts. A discount
objective and related DCM are part of the IPS.
Credit and Counterparty risk
There is a risk of financial loss to the Fund if
counterparties to financial instruments fail to meet
their contractual obligations; it arises principally
from cash and deposits with banks, treasury bills,
government bonds and other receivables.
Cash and short-term money market instruments
are diversified across counterparties. An internal
Credit Counterparty Committee oversees the
selection and approval of authorised
counterparties. The committee meets periodically
and reviews current exposure, credit limits and
ratings for counterparties. The committee has the
power to assign a counterparty to a “watch list” or
“restricted list” thereby limiting or preventing
further trades with it.
Liquidity risk
The Fund might not be able to meet its financial
obligations as they fall due.
The Fund’s equity investments include unlisted
instruments issued by companies domiciled in
Romania, which are not traded on a regulated
market and generally may be considered illiquid. As
a result, the Fund may not be able to sell certain
investments within the time constraints imposed by
its own liquidity requirements, or to respond to
specific events such as deterioration in the
creditworthiness of a particular issuer.
As a closed end investment fund, liquidity risk of
the Fund is less significant than for an open-end
fund, as shareholders do not have the option to
redeem their holdings.
The Fund’s approach to managing liquidity is to
ensure that it has sufficient liquid assets to meet
its liabilities when they fall due, under both
normal and stressed conditions, without incurring
unacceptable losses or risking damage to the
Fund’s reputation. The Fund’s assets are
periodically monitored for their liquidity levels
under both normal and stressed market
conditions.

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Description of risk Mitigating action
Operational and cyber risk
The Fund might incur direct or indirect loss arising
from a wide variety of causes associated with the
Fund’s processes, service providers, technology, and
infrastructure, and from external factors such as
those arising from legal and regulatory
requirements and generally accepted standards of
corporate behaviour. Failure or breach of
information technology systems and security may
entail risk of financial loss, disruption to operations
or damage to the reputation of the Fund.
Operational risks arise from all the Fund’s
operations.
The Fund’s objective in managing operational risk
is to maintain a proper balance between
limitation of financial losses and damage to the
Fund’s reputation with the overall cost
effectiveness, avoiding control procedures that
restrict initiative and creativity. The Fund has in
place an operational monitoring system,
documented through policies and procedures,
which ensures escalation and remediation of
potential operational issues. The information
technology framework is designed to mitigate the
risk of a cyber security breach. A dedicated Cyber
Security Program aims to monitor, identify, and
respond to cyber-attacks and external threats.
The operational monitoring system covers all
teams involved with the operations of the Fund.
Legal and regulatory risk
The existence, operation and the initial set-up of the
Fund are regulated by local and European
regulations. Such regulations may be subject to
change or subject of some local interpretations and
may directly affect the Fund and its shareholders.
This risk is sustained by the legislative history of the
past years that reveals a series of laws which have
also changed the Fund’s portfolio composition.
Representatives of the Fund consult with external
agencies and law firms with the aim to anticipate
potential regulatory changes and interpretations
and assess their impact on the Fund. In doing so
the Fund strives to optimise its operational
efficiency under current and upcoming
regulations. Franklin Templeton has internal
policies promoting compliance with best practices
and regulations.
Source: Fondul Proprietatea
Internal control and risk management
Franklin Templeton has implemented internal policies and procedures for the Fund to ensure
that timely and accurate disclosure is made on all material compliance matters, including the
investment restriction breaches, NAV errors, regulatory reporting, and disclosures. In addition,
strict internal rules, designed to protect the Fund’s interests, have been established in the areas
of financial reporting, internal control, and risk management.
Franklin Templeton’s approach is to use a dedicated team of risk management specialists who
are independent of the portfolio managers and provide robust risk and performance analytics
and unbiased perspective on the risks and exposures in the portfolios.
Franklin Templeton has established the Compliance department responsible for managing the
compliance risk of the AIFM and of the Fund, considering the applicable legislation as well as the
internal policies and procedures. The Compliance Officer in charge of Fondul Proprietatea is
part of Global Regulatory Compliance team and reports directly to the Luxembourg Compliance
Director. The Compliance department is responsible for providing regulatory guidance, advice,
and compliance training to operational departments, assisting them in managing the
reputational risk in relation to legal and regulatory requirements and codes of conduct and
performing second level compliance controls.
The Fund and FTIS are covered by relevant policies, procedures and global good standing
practices implemented within the Franklin Templeton group as required by regulatory
requirements.

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FTIS has implemented a specific Risk Management Policy applicable to the Fund. The purpose of
this policy is to outline the main business processes in place and to establish an effective risk
framework which observes regulatory requirements, and thereby enhances the governance
structure throughout the business.
Franklin Templeton oversees the key compliance risks based on the multi-annual Compliance
Monitoring Plan. The risk assessment is a critical element of the compliance oversight and
monitoring program. The high-risk areas are reviewed at least annually to reflect the results of
the final risk assessment for each year.
In respect of the portfolio monitoring activity, Franklin Templeton has implemented procedures
and controls which are designed to ensure that all assets are managed prudently and in
accordance with client mandates. In addition, Franklin Templeton has a dedicated Investment
Compliance team of specialists who are responsible for the rigorous day-to-day monitoring of
all accounts, including Fondul Proprietatea, against the agreed investment guidelines and
constraints.
The front office trade management system has embedded compliance functionality which
enables investment restrictions, regulatory and internal requirements to be included within the
system. All trade orders (with the exception of foreign exchange trades and certain debt and
derivative security trades) are automatically checked against the relevant investment
restrictions in the system prior to trading.
Post trade compliance checks are automatically run overnight for all portfolios against the
investment restrictions included within the trade management system. Any exceptions are
investigated and cleared by Franklin Templeton Investment Compliance team. Investment
restrictions that cannot be automated are reviewed periodically.
All active and passive breaches are reported to the relevant investment managers, Regulatory
Compliance, and operating departments. Corrective action is taken as necessary to address and
resolve any issues. Trading errors are monitored by the Investment Compliance department of
Franklin Templeton. Regulatory Compliance produces monthly reports providing details on
material compliance matters and initiatives, updates on monitoring activities and current client
complaints and breaches. These reports are circulated to the relevant senior management.
The FTIS Risk Management Committee of Franklin Templeton provides the oversight
framework for risk management processes and is made up of senior management from the
business areas and key risk and control functions. Meeting quarterly, it reviews risk reports and
input from business management and maintains a detailed register of risk items and
resolutions.
The Board of FTIS provide oversight, being aware of the risk management practices and their
deployment within the firm, staying apprised of significant risks and management responses.
Risk management systems
The AIFM has established a permanent risk management function to ensure that effective risk
management policies and procedures are in place and to monitor the risks and compliance with
risk limits. The AIFM has a risk management process document filed with the regulator of the
AIFM and risk management policies which cover the risks associated with the Fund and the
adequacy and effectiveness of this framework is reviewed and approved at least annually.
Regular reporting is prepared and reviewed by the AIFM Senior Management.
For each relevant risk area, risk limits are set by the AIFM considering the objectives, strategy,
and risk profile of the Fund. These limits are monitored regularly as required by the nature of
the risk area, and the sensitivity of the portfolio to key risks is undertaken periodically as

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appropriate to ascertain the impact of changes in key variables to the Fund. Diversification and
concentration limits are set for the management of market risk and are monitored daily.
An important part of the Fund’s assets consists of unlisted securities. The principal risks in
relation to the Fund are therefore market risk, valuation risk and credit risk. Further details in
relation to the nature and extent of these risks are presented above in Overview of Main Risks
section and in the Audited IFRS financial statements of the Fund, Annex 1 to this report.
Amongst other measures considered regularly, the AIFM is assessing and monitoring market
risk through relative Value at Risk (VaR) calculated using the Monte Carlo approach. VaR is a
statistical risk measure that estimates the potential portfolio loss from adverse market moves in
an ordinary market environment. VaR analysis reflects the interdependencies between risk
variables, unlike a traditional sensitivity analysis. VaR can be defined as the predicted loss a
portfolio can experience at a specified confidence level (e.g. 99%) over a given period of time
(e.g. 20 days).
The VaR calculations are based on a confidence level of 99% with a holding period of not greater
than 1 month (20 days) and a historical observation period of not less than 1 year (250 days). A
99% 1-month VaR means that the expectation is that 99% of the time over a 1-month period the
Fund will lose less than this number in percentage terms. Therefore, higher VaR numbers
indicate higher risk.
The AIFM uses the relative VaR methodology and calculates this figure for the portfolio using
observable prices for listed securities and proxies for the unlisted holdings. Relative VaR is
simply the absolute VaR of the portfolio divided by the absolute VaR of the benchmark. The
benchmark used is the one that is most representative of the Fund’s strategy and likely risk
exposures.
It is noted that the use of this VaR methodology, as any other statistical risk measure, has
limitations. There is some probability that the loss could be greater than the VaR amounts and
therefore the AIFM can neither guarantee that losses will not exceed the indicated VaR, nor that
losses in excess of the VaR amounts will not occur more frequently. Risk statistics are subject to
fluctuations and historical figures may not reflect current or future portfolio characteristics.
The AIFM assesses on a regular basis the sensitivity of the Fund’s portfolio in relation to local
and global markets, commodities, as well as historical scenarios.
The Fund’s equity trading activity is conducted on a Delivery versus Payment basis with
approved counterparties only, minimising counterparty exposure. Any counterparty is subject
to a review and approval process prior to any trading activity. The risk function of the AIFM
prepares and assesses counterparty exposure reports regularly and reviews the reporting
provided by FT Counterparty Credit Committee.
No risk limits set by the AIFM have been exceeded or were likely to be exceeded during 2023.
Liquidity risk
As at 31 December 2023, the Fund held 89.4% of the NAV in unlisted securities. In addition, the
total unlisted holdings and listed but not liquid holdings represent 95.0% of the total equity
portfolio at 31 December 2023. There were no assets subject to special arrangements arising
from their illiquid nature.
The Fund’s closed-end structure has relatively low liquidity requirements, reducing the impact
of potential illiquidity in the portfolio. The risk function of the AIFM performs a regular
assessment of the asset liquidity status using liquidity market data from different sources to
ensure that the portfolio is sufficiently liquid in normal and exceptional market conditions.
The processes for potential listing of Societatea Nationala a Sarii SA as proposed by Fondul
Proprietatea need to continue to be supported by Romanian State as controlling shareholder.

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There may be a risk for the listing to be blocked by Romanian State and the percentage of
unlisted securities in Fund’s portfolio not to be decreased.
The Fund’s shares are not redeemable, and shareholders do not have the right to require their
shares to be purchased by the Fund. Accordingly, the general liquidity management policies
ensure the Fund’s portfolio is sufficiently liquid to meet the following main obligations:
• the Fund’s operating and financing expenses: in practice, these expenses are typically covered
by dividends received from the Fund’s holdings; and
• the potential need to repay borrowings at short notice, which might require to be met by the
sale of liquid assets.
Leverage under AIFM Directive considerations
The leverage definition under AIFM Directive is wider than the traditional gearing definition
applied. In accordance with the Regulation (EU) 231/2013 leverage is any method which
increases the Fund’s exposure, including the borrowing of cash and the use of derivatives. It is
expressed as a percentage of Fund’s exposure to its net asset value and is calculated on both a
gross and commitment method.
Under the gross method, exposure represents the sum of the Fund’s positions (including all
holdings like ordinary shares) after deduction of cash balances and cash equivalents, without
taking account of any hedging or netting arrangements. Under the commitment method,
exposure is calculated without the deduction of cash balances and cash equivalents and after
certain hedging and netting positions are offset against each other if applicable.
The use of derivative financial instruments is permitted. The Fund is not using derivatives to
hedge any risks as at 31 December 2023.
The maximum incremental level of leverage which the AIFM is entitled to employ on behalf of
the Fund for AIFM Directive monitoring and reporting purposes is 50% which, considering
100% of long assets held in the portfolio, relates to a ratio of 1.5 (or 150%) for both the gross
method and the commitment method.
There was no change to the level of leverage applied for AIFM Directive monitoring and
reporting purposes since 1 January 2023.
Therefore, the actual level of leverage recorded under the requirements of AIFM Directive
for 31 December 2023 is 100% using the “commitment” method and 94.67% under the
“gross” method.

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Subsequent Events
Order no. 85/2024 regulating sustainability reporting aspects
On 26 January 2024, the Ministry of Finance Order no. 85/2024 regulating sustainability reporting
aspects entered into force, transposing the CSRD provisions into the national legislation.
The entities in scope of Order 85/2024 should include in the administrators' report relevant
information for understanding the business impact of sustainability issues and how sustainability
issues affect the development, performance and position of the entity.
The reporting requirements provided by Order 85/2024 will enter into force in stages, starting
with the financial year 2024. The reporting obligations and deadlines for implementation depend
on various criteria such as: number of employees, turnover, total assets, if the company is a public
interest entity, if the company is part of a group, etc.
The companies in the Fund’s portfolio are currently analysing the applicability and potential impact
of Order no. 85/2024 on their activity.
In terms of Fund’s portfolio valuation, for the relevant portfolio companies based on the
information available, under income approach, a higher volatility embedded in the market risk
premium was considered compared to previous year.
Amendment of the Fund's Constitutive Act
During 25 September 2023 EGM, the Fund’s shareholders approved the amendment of Article 19
paragraph (3) of the Fund’s Constitutive Act, as proposed by the Ministry of Finance. The
amendment entered into force on 30 January 2024, when the FSA Authorisation no. 6/ 19 January
2024 was registered with the Trade Registry.
Resolutions adopted during 13 February 2024 GSM
During 13 February 2024 GSM the Fund’s shareholders approved the following:
• approval the disposal of the Fund’s entire stake in Engie Romania SA;
• approval of a new buy-back programme to be carried during the financial year 2024, for
maximum 1 billion shares (in the form of shares or GDRs), at a price that cannot be lower
than RON 0.2 per share or higher than RON 1 per share.
The third point on the agenda, regarding the approval of a mandate for executing discretionary
disposals exceeding 20% of the total value of the non-current assets less receivables of the Fund,
was rejected by shareholders.
For more details regarding the full text of the resolutions adopted by shareholders during the 13
February 2024 GSM, please see the Fund’s website, sections Investor Relations – GSM Information.
Disposal of the entire holding in Engie Romania SA
Following the approval of the transaction by the Fund’s shareholders during 13 February 2024
GSM, on 20 February 2024 the Sole Director of the Fund informed the market about the
completion of the sale of the Fund’s entire holding in Engie Romania SA. Following the
transaction, the Fund received gross proceeds of RON 432,616,167.75 and no longer holds any
shares in Engie Romania SA.

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26 March 2024 GSM
Convening 26 March 2024 GSM
On 5 February 2024, the Sole Director convened a GSM for 26 March 2024 with the following
main points on the agenda:
• approval of the Management Agreement for the renewal of FTIS mandate as Sole Director
and AIFM of the Fund for the period 1 April 2024 – 31 March 2025;
• approval of the updated Remuneration Policy of the Fund;
• approval of the Budget for the financial year 2024;
• appointing two new members in the BoN following the expiration of the mandates of Mr.
Omer Tetik and Mr. Nicholas Paris.
Supplementing the agenda of 26 March 2024 GSM
On 26 February 2024, the agenda of 26 March 2024 GSM was supplemented with the following
points, based on the request received on 22 February 2024 from the shareholder Ministry of
Finance:
• alternative to item 1 of GSM convening notice - approval of the Management Agreement in
the form set out in GSM agenda item 1, with a change in base fee rate from 2.00% to 1.35%;
• alternative to item 2 of GSM convening notice – approval of the Remuneration Policy of the
Fund in force starting 1 April 2024, with a change in the base fee rate from 2.00% to 1.35%;
• approval of the Fund’s strategy during the mandate from 1 April 2024 to 31 March 2025 so
that it includes the preservation of the current portfolio managed FTIS.
Clarifications requested from the Ministry of Finance in respect of the additional points
included on the agenda of 26 March 2024 GSM
On 29 February 2024 the Fund sent a letter to the Ministry of Finance requesting clarifications
in respect of the points added on the agenda of 26 March 2024 GSM, as detailed below:
• confirmation that the only amendment proposed by the Ministry of Finance to the
Management Agreement for the period 1 April 2024 to 31 March 2025 (“New Management
Agreement”) refers to the base fee rate (which is to be reduced to 1.35% from 2.00%) and
that all other proposed clauses of the New Management Agreement remain unchanged;
• clarifications on the proposed strategy of the Fund applicable to the 1-year mandate period
(1 April 2024 to 31 March 2025), in terms of portfolio management and general strategy:
1. “current portfolio” refers to the latest NAV available (i.e. 31 January 2024) or to the NAV
as at 31 March 2024 (before the beginning of the new mandate)?
2. “current portfolio” includes only shares in Fund’s portfolio companies or refer also to
other financial instruments such as cash and cash equivalents held by the Fund?
3. How should the proposed Strategy of the Fund be implemented considering:
a) the IPS already approved by the GSM and in force starting with April 2022;
b) the Annual Cash Distribution Policy, updated as of 18 December 2023;
c) the annual payment of dividends;
d) that portfolio companies may initiate share capital increases during the period 1
April 2024 to 31 March 2025 and this may trigger the need for the Fund to
contribute cash amounts in order to maintain its shareholding (assuming that the

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Sole Director decides that contributing the cash amount and maintaining the
shareholding are in the best interest of the Fund) and
e) the EGM Resolutions no. 1 and 2 approved during 13 February 2024 GSM, whereby
the shareholders approved the buy-back program for 2024 and the disposal of
shares in Engie Romania SA?
4. In addition the Fund inquired if, in the Ministry of Finance understanding, the strategy
of the Fund proposed by the Ministry of Finance would allow the Sole Director to carry
out the buy-back program approved for 2024.
Clarifications received from the Ministry of Finance in respect of the additional points
included on the agenda of 26 March 2024 GSM
On 11 March 2024 the Fund received the response from the Ministry of Finance following the letter
mentioned above submitted by the Fund, in which:
• It is confirmed the fact the only amendment proposed by the Ministry of Finance to the new
Management Agreement for the period 1 April 2024 to 31 March 2025 refers to the base fee
rate - the Ministry of Finance proposes this to be reduced from 2.00% to 1.35%;
• It is clarified that by “the preservation of the current portfolio managed FTIS” it is proposed
that the Fund should maintain its holdings in the portfolio companies as at 31 March 2024
without performing disposals of shares during the 1-year mandate 1 April 2024 – 31 March
2025.
The response received from the Ministry of Finance with clarifications in respect of the additional
points included on the agenda of 26 March 2024 GSM is published on the Fund’s website in the
section Investor Relations – GSM Information.
Litigation with CN Aeroporturi Bucuresti SA
In the main litigation related to the claim for annulment of the EGM Resolution regarding the share
capital increase of CN Aeroporturi Bucuresti SA, the Fund filed the appeal against the 25 May 2023
Ilfov Court’s decision. Following the hearing, the Bucharest Court of Appeal decided to postpone
the issuance of a final decision for 7 March 2024. On 7 March 2024 the Bucharest Court of Appeal
admitted the appeal filed by the Fund, annulling EGM Resolution no. 15/ 26 October 2021 of CN
Aeroporturi Bucuresti SA. The decision issued by the Bucharest Court of Appeal in the file is final.
For additional information please see section Legal actions against CN Aeroporturi Bucuresti SA
share capital increase.
Signatures:
25 March 2024
Prepared by
Johan Meyer Catalin Cadaru
Permanent Representative Fund Administration and
Oversight Senior Manager
Franklin Templeton International Services S.à r.l. acting in the capacity of Sole Director and
Alternative Investment Fund Manager of Fondul Proprietatea SA

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Contact
Address:
76-80 Buzesti Street, 7th floor, District 1, postal code 011017,
Bucharest, Romania.
Web:
www.fondulproprietatea.ro
E-mail:
office@fondulproprietatea.ro
investor.relations@fondulproprietatea.ro
Telephone:
+40 21 200 9600
Fax:
+40 21 200 9631/32
+40 31 630 00 48

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FONDUL PROPRIETATEA SA
Annual financial statements for the
y
ear ended 31 December 2023
Annex 1   
 
 
 
FONDUL PROPRIETATEA SA 
 
 
 
ANNUAL FINANCIAL STATEMENTS 
FOR THE YEAR ENDED  
31 DECEMBER 2023 
 
 
Prepared in accordance with the International Financial Reporting Standards as adopted by the European Union
(“IFRS”) and applying the Financial Supervisory Authority (“FSA”) Norm no. 39/ 28 December 2015, regarding the
approval of the accounting regulations in accordance with IFRS, applicable to the entities authorised, regulated
and supervised by the FSA – Financial Investments and Instruments Sector (“Norm 39/2015”)

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FONDUL PROPRIETATEA SA
Annual financial statements for the
y
ear ended 31 December 2023
 
 
Contents 
Statement of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Statement of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Statement of Changes in Shareholders’ Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . .
3
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .
5
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .
6

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FONDUL PROPRIETATEA SA
STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the
y
ear ended 31 December 2023 1
Note 
Period ended 
31 December 2023 
Period ended 
31 December 2022 
Net (loss)/gain from equity investments
at fair value through profit or loss 6  (1,612,251,514) 1,843,756,081
Gross dividend income 7  962,766,928 934,898,400
Interest income 8  157,467,146 25,065,131
Net realised gain/(loss) from non-current
assets held for sale 9  61,200,000 (156,975,000)
Net gain from other financial instruments
at fair value through profit or loss 10  1,165,243 250,186,726
Net foreign exchange (loss)/gain
 
(1,397,889) 752,624
Other income, ne
t
 
1,307,978 3,721,768
Net operating (loss)/income 
 
(429,742,108)  2,901,405,730  
     
Operating expenses 
 
(224,440,567)  (106,153,485) 
Transaction costs    (242,865,533)  (19,087,916) 
Total operating expenses  11            (467,306,100)            (125,241,401) 
       
Finance costs  12  (68,471)  (37,250) 
       
(Loss)/Profit before income tax  (897,116,679)  2,776,127,079 
Withholding tax on the dividend income 13  (6,980,407)  (6,678,208) 
(Loss)/Profit for the period 
 
(904,097,086)  2,769,448,871  
       
Other comprehensive income
 
- -
Total comprehensive income for the 
period 
 
(904,097,086)  2,769,448,871  
     
Basic and diluted (loss)/earnings per 
share  14  (0.1709)  0.4664 
The annual financial statements were authorised for issue on 25 March 2024 by:
Franklin Templeton International Services S.à r.l. Luxembourg, in its capacity of Sole Director and
Alternative Investment Fund Manager of Fondul Proprietatea SA
Johan Meyer
Permanent Representative
Prepared by:
Catalin Cadaru
Fund Administration and Oversight Senior Manager
The notes on pages 6 to 59 are an integral part of these annual financial statements.

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FONDUL PROPRIETATEA SA
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the
y
ear ended 31 December 2023 2
Note  31 December 2023  31 December 2022 
Assets       
Cash and current accounts  15  60,109 58,066
Distributions bank accounts  15  547,496,881 73,775,078
Deposits with banks  15  191,368,978 912,616,396
Equity investments  17  1,784,396,314 13,696,597,396
Non-current assets held for sale  18  432,616,168 -
Other assets    27,704 569,827
Total assets     2,955,966,154  14,683,616,763 
  
Liabilities    
Payable to shareholders 19(a)  546,457,941 74,166,644
Other liabilities and provisions 19(b)  67,328,920 39,906,577
Total liabilities     613,786,861  114,073,221 
  
Equity    
Paid share capital 20(a)  2,947,779,187 3,233,269,111
Other reserves 20(b)  646,805,769 667,020,430
Treasury shares 20(c) 
(1,873,193,280) (1,194,334,988)
Retained earnings
  
620,787,617 11,863,588,989
Total equity     2,342,179,293  14,569,543,542 
Total liabilities and equity  2,955,966,154  14,683,616,763 
The notes on pages 6 to 59 are an integral part of these annual financial statements.

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FONDUL PROPRIETATEA SA
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the
y
ear ended 31 December 2023 3
Share capital  Other reserves  Treasury shares  Retained earnings 
Total attributable to the equity 
holders of the Fund 
Balance as at 1 January 
2023  3,233,269,111  667,020,43 0  (1,194,334,988)  11,863,588,989  14,569,543,542 
(Loss) for the period - - - (904,097,086) (904,097,086) 
Total comprehensive 
income for the period  ‐  ‐  ‐  (904,097,086)  (904,097,0 86) 
           
Transactions with owners, 
recorded directly in equity 
Profit appropriation to other
reserves - 908,845,064 - (908,845,064) ‐ 
Dividends declared - - - (9,450,090,560) (9,450,090,560) 
Acquisition of treasury shares - - (1,873,193,280) - (1,873,193,28 0) 
Cancellation of treasury
shares (285,489,924) (908,845,064) 1,194,334,988
‐ 
Legal reserve transfer to
retained earnings - (20,214,662) - 20,214,662 ‐ 
Distributions for which the
statute of limitation occurred - - - 16,676 16,676 
Total transactions with 
owners recorded directly in 
equity  (285,489,924)  (20,214,661)  (678,858,292)  (10,338,704,287)  (11,323,267,164) 
       
Balance as at 31 December 
2023  2,947,779,187  646,805,76 9  (1,873,193,280)  620,787,617  2,342,179,293 
The notes on pages 6 to 59 are an integral part of these annual financial statements.

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FONDUL PROPRIETATEA SA
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the
y
ear ended 31 December 2023 4
Share capital 
Reserves related 
to the unpaid 
share capital 
Other 
reserves  Treasury shares  Retained earnings 
Total attributable 
to the equity 
holders of the 
Fund 
Balance as at 1 January 2022 
3,145,160,001  189,182,422  666,991,766  (331,650,005)  10,087,863,723  13,757,547,907 
Profit for the period
- - - - 2,769,448,871 2,769,448,871 
Total comprehensive income for 
the period 
‐  ‐  ‐  ‐  2,769,4 48,871  2,769,448,871 
  
           
Transactions with owners, 
recorded directly in equity 
Profit appropriation to other
reserves
- - 230,576,693 - (230,576,693) ‐ 
Dividends declared
- - - - (774,290,893) (774,290,893) 
Acquisition of treasury shares - - - (1,194,334,988) - (1,194,334,988) 
Cancellation of treasury shares (101,073,312) - (230,576,693) 331,650,005 - ‐ 
Collection of the unpaid share
capital
189,182,422 (189,182,422) - - - ‐ 
Distributions for which the statute
of limitation occurred
- - 28,664 - 11,143,981 11,172,645 
Total transactions with owners 
recorded directly in equity 
88,109,110  (189,182,422)  28,664  (862,684,983)  (993,723,605)  (1,957,453,236) 
       
Balance as at 31 December 2022 
3,233,269,111  ‐  667,020,430  (1,194,334,988)  11,863,588,989  14,569,543,542 
The notes on pages 6 to 59 are an integral part of these annual financial statements.

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FONDUL PROPRIETATEA SA
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the
y
ear ended 31 December 2023 5
Cash flows from operating activities 
Period ende d 
31 December 2023 
Period ended 
31 December 2022 
Proceeds from disposal of equity investments  9,931,212,040   1,781,883,964
Dividends collected (net of withholding tax) 955,786,521 928,242,194
Interest collected 156,856,933 24,491,606
Amounts collected from the depository Bank of the
Fund's GDRs 1,179,636 3,840,656
Net proceeds from transactions with treasury bills and
bonds 1,165,243 304,282,220
Amounts received from Romanian State for the unpaid
share capital (see Note 10) - 189,182,422
Dividend withholding tax payments performed (702,390,480) (34,352,270)
Suppliers and other taxes and fees paid (50,349,332) (34,435,290)
Intermediaries and other transaction related fees
(242,939,993) (11,507,219)
Sole Director administration fees
(231,666,775) (113,819,169)
Acquisition of treasury bills and bonds
- (227,774,993)
Subscriptions to share capital increase of portfolio
companies (2,678,640) (17,427,589)
Other payments performed, net  (1,498,938)  (1,660,102) 
Net cash flows from operating activities 9,814,676,215 2,790,946,430
 
Cash flows from financing activities
Transfer to distribution accounts (8,687,126,113) (1,146,162,505)
Dividends transferred corresponding to shareholders
having specific legal status (18,362,279) (1,956,556)
Acquisition cost of treasury shares (1,829,544,967) (1,146,552,498)
Payment of fees related to the short term bank loans (68,471) (45,000)
Net cash flows used in financing activities 
 (10,535,101,830)   (2,294,716,559) 
Net (decrease)/ increase  in cash and cash 
equivalents            (720,425,615)               496,229,871  
Cash and cash equivalents at the beginning of the
period 911,757,882 415,528,011
Cash and cash equivalents at the end of the period 
as per the Statement of Cash Flows              191,332,267   911,757,882  
Reconciliation of Statement of Cash Flows with the equivalent items reported in the Statement of 
Financial Position 
   31 December 2023  31 December 2022 
Cash and current accounts (see Note 15) 60,109 58,066
Bank deposits with original maturities of less than
three months (see Note 15) 191,272,158 911,699,816
   191,332,267   911,757,882  
Distributions bank accounts (see Note 15) 546,066,907 73,775,078
Interest accrued on bank deposits (see Note 15) 96,820 916,580
Interest accrued on distribution accounts (see Note
15) 1,429,974 -
Total cash and current accounts, distribution 
accounts, deposits with banks, treasury bills and 
government bonds as per Statement of Financial 
Position              738,925,968   986,449,540  
The notes on pages 6 to 59 are an integral part of these annual financial statements.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 6
1. General information 
Fondul Proprietatea SA (referred to as “Fondul Proprietatea” or “the Fund”) was incorporated as a joint
stock company, undertaking for collective investment, in the form of a closed end investment company,
based on Law no. 247/2005 on the reform in the field of property and justice and other adjacent
measures, as subsequently amended (“Law 247/2005”) and registered in Bucharest on 28 December
2005. The address of the Fund’s registered office is 76 - 80, Buzesti Street, 7th Floor, District 1,
Bucharest.
Starting 1 April 2016, Fondul Proprietatea is an alternative investment fund as defined by the Directive
2011/61/EU (“Alternative Investment Fund Managers Directive”) and by the Romanian legislation. On
28 January 2022, the Financial Supervisory Authority authorized Fondul Proprietatea as a closed-end
Alternative Investment Fund intended to retail investors, with BRD Groupe Société Générale as
depositary. The Fund undertakes its activities in accordance with Law 24/2017 on issuers of financial
instruments and market operations, Law 74/2015 regarding Alternative Investment Fund Managers,
Law 247/2005, Law 297/2004 regarding the capital market, as subsequently amended, Law 243/2019
regulating the alternative investment funds and amending and supplementing certain normative acts
and Companies Law 31/1990 republished as subsequently amended and it is an entity authorised,
regulated and supervised by the FSA, as an issuer. In accordance with its Constitutive Act, the main
activity of the Fund is the management and administration of its portfolio.
The Fund was initially established to allow the payment in shares equivalent of the compensation due
in respect of abusive expropriations undertaken by the Romanian State during the communist period,
when properties were not returned in kind. Beginning with 15 March 2013, the compensation process
was suspended and starting January 2015, the Romanian State decided to use a different compensation
scheme that no longer involves the payment in Fondul Proprietatea shares equivalent.
Starting with 1 April 2016 the Fund is managed by Franklin Templeton International Services S.à r.l.
(“FTIS”) as its Sole Director and Alternative Investment Fund Manager (“AIFM”) under the Alternative
Investment Fund Managers Directive and local implementation regulations. The FTIS mandate is for a
period of two years and the current mandate was approved during 29 September 2021 shareholders’
meeting for the period 1 April 2022 – 31 March 2024. The related contractual terms along with the
execution of the Management Agreement were approved by the Fund’s shareholders during 15
December 2021 shareholders’ meeting and subsequently amended during 15 November 2022
shareholders’ meeting.
During the September 2023 GSM, the shareholders of the Fund approved the Sole Director’s mandate
renewal for a period of 1 year, starting on 1 April 2024 and ending on 31 March 2025. The contractual
terms of this new mandate are subject to the approval of the shareholders and have been included on
the Convening Notice for the 26 March 2024 OGSM.
During the same September 2023 GSM, the shareholders also approved that the Board of Nominees
should launch a transparent and competitive selection procedure for the appointment of a new director
based on investment expertise and experience for a mandate not exceeding four years from 1 April
2024, in accordance with the legal provisions in force. The shareholders also approved that the Board
of Nominees is empowered to establish new terms and conditions for the evaluation and remuneration
of the manager of the Fund corresponding to the new objectives, in line with international best
practices and present them for approval by the GSM.
Since 25 January 2011, Fondul Proprietatea has been a listed company on the spot regulated market
managed by the Bucharest Stock Exchange in Tier I Shares of the Equity Sector of the market, under
ISIN number ROFPTAACNOR5 with the market symbol “FP”. Since 29 April 2015, the Fund’s Global
Depositary Receipts (“GDR”) have been listed on the London Stock Exchange – Specialist Fund Market,
under ISIN number US34460G1067, with the market symbol “FP.”. The Bank of New York Mellon has
been appointed by the Fund to act as depositary bank in relation to the GDR facility. The GDR facility is
limited to one-third of the Fund’s subscribed share capital under the Romanian securities regulations,
each GDR representing 50 shares, and the currency of the GDRs is the US dollar.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 7
2. Basis of preparation 
(a) Statement of compliance 
These separate financial statements are the annual statutory financial statements of Fondul
Proprietatea for the year ended 31 December 2023 prepared in accordance with the International
Financial Reporting Standards as adopted by the European Union and applying the FSA Norm 39/2015.
These financial statements are available starting with 26 March 2024, on the Fund’s official webpage,
www.fondulproprietatea.ro, and at the Fund’s registered office.
The Fund is an investment entity and does not consolidate its subsidiaries as it applies IFRS 10, IFRS 12
and IAS 27 (Investment Entities). In consequence, the Fund does not prepare consolidated financial
statements, the separate financial statements being the Fund’s only financial statements. The Fund has
reassessed the criteria for being an investment entity for the year ended 31 December 2023 and
determined that it continues to meet them.
In determining whether the Fund meets the criteria from the definition of an investment entity, the
management considered the investments portfolio structure and the Fund’s investment objective.
Aspects considered in making this judgement were the fact that the Fund has more than one
investment, more investors neither of which are related parties of the Fund and the ownership
interests from its portfolio are in the form of equity. The Fund’s investment objective is a typical one for
an investment entity, respectively the maximization of returns to shareholders and the increase of the
net asset value per share via investments in Romanian equities and equity-linked securities.
The Fund’s management analysis considered also other relevant factors, including the fact that
substantially all Fund investments are accounted for using the fair value model, the Fund has a set exit
strategy for its equity positions through initial public offerings and/or private placements.
(b) Going concern 
The liquidity events from Hidroelectrica initial public offering (IPO) and sale of Enel Group companies
and subsequent distributions to shareholders were performed in accordance with the provisions of the
Management Agreement, related Investment Policy Statement as well as relevant shareholders
decisions and resulted in a 83.92% decrease of the Fund’s equity compared to 31 December 2022.
The Fund’s Sole Director has at the authorization date of these financial statements, a reasonable
expectation that the Fund has adequate resources to meet all its obligations as and when they fall due
and continue in operational existence for the foreseeable future. Thus, it continues to adopt the going
concern basis of accounting in preparing the financial statements.
According to the Fund’s Constitutive Act, the duration of Fondul Proprietatea is until 31 December
2031 and it may be extended by the extraordinary general meeting of shareholders, with additional
periods of 5 years.
During the September 2023 GSM, the shareholders of the Fund approved the Sole Director’s mandate
renewal for a period of 1 year, starting on 1 April 2024 and ending on 31 March 2025.
During the same GSM, the Board of Nominees was empowered by the shareholders to initiate, organize
a transparent selection procedure for a Fund Manager after 1 April 2025 and to establish new
objectives, performance criteria and remuneration conditions realigned with these objectives and
present them for approval by the shareholders.
While assessing the appropriateness of the going concern basis, the Sole Director has also analysed the
following events, factors and conditions related to the Fund’s ability to continue as a going concern.
These events, factors and conditions include, but are not limited to:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 8
2. Basis of preparation (continued) 
(b) Going concern (continued) 
● The portfolio structure/ composition at the end of the reporting period and expected
developments/ events (e.g. ongoing litigations, dividends receivable) for a period of at least 12
months after the end of the reporting period.
● Alternative cash flow projections scenarios that may occur, including the effects of potential
negative ruling in the litigation against CN Bucharest Airport. In all the alternatives scenarios
considered, the Fund has adequate liquidity resources to meet its obligations as they fall due.
On 7 March 2024 the Bucharest Court of Appeal admitted the claim filed by the Fund, annulling
Resolution no. 15/ 26 October 2021 of C.N. Aeroporturi Bucuresti S.A.
● The cash management policies and procedures implemented for the Fund and the related cash
flow projections up to 31 March 2025 (the end of the Sole’s Director 1-year mandate) give a
reasonable expectation that all the Fund’s obligations will be met in the regular course of
business.
● The 2024 Budget proposed for shareholders’ approval and the ongoing costs for a period of 12
months correlate with the size of the Fund as of the reporting period. The proposed 2024
Budget is available on the website of the Fund and the main categories include: dividend
income, interest income, Sole Director’s fees based on the proposed 1-year Management
Agreement, buyback related costs, transaction costs and other operating expenses needed to
run the Fund (based on the agreements in place, historical information and the new size of
Fondul).
● Shareholders’ decisions during the September 2023 GSM and communication/ feedback from
the Board of Nominees relating to the selection process ongoing at the date the financial
statements were authorized for issuing.
Considering the information described above, the Sole Director has concluded that there are mitigating
actions related to each event, factor, and condition above and that the Fund is operating under normal
circumstances relevant for a closed end fund, and there are no material uncertainties related to the
Fund’s ability to continue as a going concern.
(c) Basis of measurement 
These annual financial statements have been prepared on a fair value basis for the main part of the
Fund’s assets (equity investments, non-current assets held for sale, respectively), and on the historical
cost or amortised cost basis for the rest of the items included in the financial statements.
(d) Functional and presentation currency 
These annual financial statements are prepared and presented in Romanian Lei (RON), which is the
Fund’s functional and presentation currency. All financial information presented in RON has been
rounded to the nearest unit.
(e)  Foreign currency 
Transactions in foreign currency are translated into the functional currency of the Fund at the
exchange rate valid at the date of the transactions. Monetary assets and liabilities denominated in
foreign currency at the reporting date are translated into the functional currency at the exchange rate
valid at that date. Non-monetary assets and liabilities denominated in foreign currency that are
measured at fair value are translated into the functional currency at the exchange rate valid at the date
of the transaction and are not subsequently remeasured.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 9
2. Basis of preparation (continued) 
(e) Foreign currency (continued) 
The exchange rates of the main foreign currencies, published by the National Bank of Romania at 31
December 2023 were as follows: 4.9746 RON/EUR, 4.4958 RON/USD and 5.7225 RON/GBP (31
December 2022: 4.9474 RON/EUR, 4.6346 RON/USD and 5.5878 RON/GBP).
(f) Use of estimates 
The preparation of these annual financial statements in accordance with IFRS requires management to
make judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
 
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.
Information and critical judgements in applying accounting policies with significant areas of estimation
uncertainty that have the most significant impact on the amounts recognised in these annual financial
statements are included in the following notes:
● Note 4 – Risk management;
● Note 5 – Financial assets and financial liabilities;
● Note 16 – Deferred tax;
● Note 17 – Equity investments;
● Note 18 – Non-current assets held for sale;
● Note 21 – Contingencies.
The Fund uses measurement techniques to develop accounting estimates in regards to the valuation of
its holdings and other relevant assets and liabilities. It does so in order to measure these items at
monetary amounts that cannot be observed directly and must instead be estimated
(g) The impact of the Russia – Ukraine military conflict on the Fund’s financial position 
On 24 February 2022, Russia engaged in military actions on Ukraine territory. The Fund does not have
any direct exposure to Russia or Ukraine. The Sole Director is closely monitoring developments that
may impact financial markets including sanctions, actions by governments and developments in
Ukraine itself. The Sole Director will further assess the impact on the portfolio companies operations
and valuation and take any potential actions needed, as facts and circumstances are subject to change
and may be specific to investment strategies and jurisdictions. At the authorization date of these annual
financial statements, the Sole Director is not able to reliably estimate the impact as events are unfolding
day-by-day.
The Fund’s Sole Director will continue to closely monitor the evolution of the economic environment
and the effects of the economic measures applied on a national and international level.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 10
3. Material accounting policies 
The material accounting policies applied in these annual financial statements are the same as those
applied in the Fund’s financial statements for the year ended 31 December 2022 and have been applied
consistently to all periods presented in these annual financial statements.
(a) Subsidiaries and associates 
Subsidiaries are entities controlled by the Fund. The existence of significant influence is assessed, in
each reporting year, by analysing the ownership structure of the companies in which the Fund holds
20% or more of the voting power of the investee, their articles of incorporation and the Fund’s power
to participate in the financial and operating policy decisions of the investee.
However, the Fund does not exercise significant influence in several companies in which it holds
between 20% and 50% of the voting power, where the Fund’s rights as minority shareholder are
protective in nature, and not participative and where the majority shareholder, or a group of
shareholders holding majority ownership of the investee, operate without regard to the views of the
Fund.
Also, in situations where the Fund holds less than 20% of the voting power of an investee, but it is a
significant shareholder and demonstrates that it has significant influence through Board representation
and participates in the policy making decisions, the investee is considered an associate.
As at 31 December 2023 there were two portfolio companies (31 December 2022: three portfolio
companies), which met the criteria for classification as subsidiaries, and two portfolio companies (31
December 2022: two portfolio companies) which met the criteria for classification as associates. The
lists of subsidiaries and associates as at 31 December 2023 and 31 December 2022 are disclosed in
Note 22 Related parties (b) and (c) and in Note 17 Equity investments.
(b) Financial assets and liabilities 
i) Recognition 
The Fund recognises financial assets and liabilities on the date it becomes a party to the contractual
provisions of the instrument. The Fund applies trade date accounting. Financial assets and liabilities are
recognised initially at fair value plus, in case of financial assets and financial liabilities not measured at
fair value through profit or loss, any directly attributable transaction costs (including brokerage fees).
Mergers of portfolio companies are recognised at the date when the merger is registered with the
Trade Register. Share capital increases of portfolio companies are also recognised at the date the
shareholder decision is registered with the Trade Register.
ii) Classification and subsequent measurement 
● Financial assets at fair value through profit or loss 
The Fund classified all its equity investments as equity investments at fair value through profit or loss
(the default option under IFRS 9). The Fund also uses the fair value classification and subsequent
measure for all its government bonds and treasury bills. Being an investment entity as described in the
Statement 
of c
ompliance section, the Fund’s management believes that fair value classification and
subsequent measure method are the most relevant for the Fund.
Financial assets at fair value through profit or loss are initially recognised at fair value and transaction
costs are recorded in profit or loss. Subsequent measurement is at fair value and all changes in fair
value are accounted for through profit or loss. Financial assets at fair value through profit or loss are
not subject to the review for impairment.
 
 
 
 
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 11
3. Material accounting policies (continued) 
ii) Classification and subsequent measurement 
● Financial assets and liabilities at amortised cost
As required by IFRS 9 Financial instruments, the Fund classifies financial assets which are debt
instruments as subsequently measured at amortised cost based on both:
(a) the business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.
Financial assets and liabilities are measured at amortised cost using the effective interest method, less
any impairment losses (of financial assets). Financial assets and liabilities at amortised cost include
cash and current accounts, deposits with banks, dividends receivable, payables to shareholders,
amounts due to service suppliers and other receivables and payables.
● Financial assets reclassified as non‐current assets held for sale  
See accounting policy 3(c) for details.  
iii) Derecognition 
A financial asset (or, where applicable, a part of a financial asset or a part of a group of similar financial
assets) is derecognised where the rights to receive cash flows from the asset have expired, or the Fund
has transferred its rights to receive cash flows from the asset and the Fund has transferred
substantially all of the risks and rewards of the asset.
The Fund derecognises a financial liability when the obligation under the liability is discharged,
cancelled or expired.
iv) Fair value measurement 
When available, the Fund measures the fair value of an equity instrument using quoted prices in an
active market for that instrument at the reporting date. A market is regarded as active if transactions
for the asset or liability take place with sufficient frequency and volume to provide pricing information
on an ongoing basis. The fair values of equity instruments that are not traded in an active market are
determined and approved by the Fund’s Sole Director, based on independently appraised valuation
reports, using valuation techniques in accordance with In
ternational Valuation Standards. The Fund
uses a variety of methods and makes assumptions that are based on the market conditions existing at
each reporting date.
Valuation techniques used are recognised as standard within the industry and include the use of
comparable recent arm’s length transactions, reference to other instruments that are substantially the
same, discounted cash flow analysis, and other valuation techniques commonly used by market
participants, making maximum use of observable market inputs and relying as little as possible on
entity-specific inputs. Some of the inputs to these models may not be observable in the market and
are therefore estimated based on various assumptions. The valuation techniques selected incorporate
all the factors that market participants would consider in pricing a transaction.
The output of a valuation model is always an estimate/ an approximation of a fair value that cannot be
determined with certainty, and valuation techniques employed may not fully reflect all factors
relevant to the positions the Fund holds. Therefore, where appropriate, the valuations are adjusted to
reflect additional factors, including model risk, liquidity risk, counterparty risk and commodity price
risk, where applicable.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 12
3. Material accounting policies (continued) 
v) Identification and measurement of impairment  
The Fund recognises a loss allowance for expected credit losses on all assets that are measured at
amortised cost. No impairment loss is recognised for the Fund’s investments in equity or debt
instruments measured at fair value through profit or loss. The amount of expected credit losses is
updated at each reporting date to reflect changes in credit risk since initial recognition of the
respective financial instrument.
The Fund recognises lifetime expected credit losses when there has been a significant increase in
credit risk since the initial recognition of the instrument. If, on the other hand, the credit risk on the
financial instrument has not increased significantly since initial recognition, the Fund measures the
loss allowance for that financial instrument at an amount equal to 12 months expected credit losses.
The Fund’s assessment of whether lifetime expected credit losses should be recognised is based on
significant increases in the likelihood or risk of a default occurring since initial recognition instead of
on evidence of a financial asset being credit-impaired at the reporting date or an actual default
occurring.
Lifetime expected credit losses represent the expected credit losses that will result from all possible
default events over the expected life of a financial instrument. In contrast, 12 months expected credit
losses represents the portion of lifetime expected credit losses that is expected to result from default
events on a financial instrument that are possible within 12 months after the reporting date.
As described above, the Fund’s financial asset which are measured at amortised cost are cash and
current accounts, deposits with banks, dividends receivable and other receivables. The related loss
allowance for expected credit losses for cash and current accounts and deposits with banks is
considered to be insignificant as the Fund only places it’s funds on very short maturities and only with
financial institutions where the institution or the institution’s corporate parent has a credit rating
“investment grade” (BBB- or better). Loss allowances for expected credit losses for dividends
receivable and other receivables are recognised by the Fund based on the method described above.
(c) Non‐current assets held for sale 
An asset is classified as a non-current asset held for sale and presented separately in the statement of
financial position when the following criteria are met: the Fund is committed to selling the asset, an
active plan of sale has commenced, the asset is actively marketed for sale at a price that is reasonable in
relation to its current fair value, the asset is available for immediate sale in its present condition subject
only to terms that are usual and customary for sales of such assets and the sale is expected to be
completed within twelve months without significant changes to the plan.
The instruments classified by the Fund under IFRS 5 Non‐current Assets Held for Sale and Discontinued 
Operations are measured based on the requirements of
IFRS 9 Financial In
struments as this standard
still applies after the reclassification as non-current assets held for sale. The disclosures in the financial
statements for non-current assets held for sale are in accordance to IFRS 5.
(d) Operating segments 
According to IFRS 8 Operating Segments an entity shall disclose information to enable users of its
financial statements to evaluate the nature and financial effects of the business activities in which it
engages and the economic environments in which it operates.
The Fund’s activity is not managed by activity components and therefore there are no reportable
segments at 31 December 2023 or 31 December 2022.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 13
3. Material accounting policies (continued) 
(e) Cash, current accounts and deposits with banks and distribution accounts 
Cash, current accounts, deposits with banks 
Cash and current accounts include petty cash and current accounts held with banks. Deposits with
banks are only placed for maturities of less than one year, according to the Fund’s cash management
policy. Cash and current accounts and deposits with banks are carried at amortised cost, which
approximate their fair value.
Deposits with banks, Government bonds and treasury bills with original maturities of less than three
months are included as a component of cash and cash equivalents for the purpose of the statement of
cash flows.
Current accounts include both regular accounts and distribution accounts.
Distribution accounts 
The legal framework applicable to the Fund states that the listed entities must pay dividends and any
other amounts due to shareholders through the Central Depository of the respective securities, as well
as the participants in their system. According to the same legislation, a listed entity designates as
Paying Agent a financial institution through which the holders of debt securities can exercise their
financial rights.
The Fund has signed agreements with both the Central Depository and a Paying Agent. The Fund has
selected BRD Groupe Societe Generale as Paying Agent. For each distribution approved by the
shareholders, the Fund needs to open two dedicated accounts (“distribution accounts”) with the Paying
Agent.
As per applicable legislation, the distribution to shareholders process is managed by the Central
Depository and the Paying Agent.
The cash held in the distributions bank accounts can only be used for payments to shareholders. Such
payments are subject to a general statute of limitation, respectively the shareholders may request the
payments only within a three-year term starting with the distribution payment date, except for specific
instances that are individually assessed.
During 2023 the cash flow presentation of the distribution accounts as cash and cash equivalents has
been re-assessed. The re-assessment has indicated that the distribution accounts have the nature of an
account for dividend payments restricted for operational use (for any other use than payments to
shareholders)until the 3-year statute of limitation expires. As a result, the distribution accounts are not
included in cash and cash equivalents for the purpose of cash flow statement presentation. The
transfers to distribution accounts are presented on two separate lines Transfer to distribution accounts
and Dividends transferred corresponding
 to shareholders having s
pecific legal status under cash-flow
from financing activities with corresponding amounts to be further used exclusively for shareholder
payments (until the status of limitations expires). The actual payments to shareholders are not
presented in the cash flow statement but these are reflected in Note 19 (a) to the financial statements.
The presentation of the distribution accounts for 31 December 2022 has been changed in line with the
re-assessed presentation for the year ended 31 December 2023 where the distribution accounts are
presented separately from the cash and cash equivalents for the purpose of the cash flow statement. As
a result, in the comparative information of the Cash Flow statement for 2022:
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 14
3. Material accounting policies (continued) 
(e) Cash, current accounts and deposits with banks and distribution accounts (continued) 
● Under Cash flows from financing activities line item Dividends paid (net of withholding tax) was
replaced with the two line items Transfer to distribution accounts (RON 1,146,162,505) and
Dividends transferred to shareholders with special legal provisions (RON 1,956,556) the sum of
which is RON 73,775,078 more that the amount previously reported as dividends paid,
● Line item Cash and cash equivalents at the end of the period as per  the S
tatement of Cash Flows has
decreased by RON 73,775,078.
(f) Share capital 
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax effect. The share capital accounting
presentation and measurement are generally following the legal requirements. Due to the complexity of
the legal framework and necessary approvals with respect to share capital transactions, only successful
completion of the legal steps can trigger the accounting recognition.
(g) Treasury shares 
The Fund recognises the treasury shares (repurchases of own shares) at trade date as a deduction to
shareholders’ equity. Treasury shares are recorded at acquisition cost, including brokerage fees and
other transaction costs directly related to the acquisition.
The GDRs bought back by the Fund are accounted for exactly as the own ordinary shares repurchased,
as a deduction to shareholders’ equity. This is the result of the application of substance over form
principle, due to the fact that buy-back via GDRs is only a technical/ legal form of the transaction, the
substance of the transaction being that the Fund buys back its own shares, giving the same rights to
both the holders of the Fund’s ordinary shares and to the holders of the Fund’s GDRs, to take part in
the buy-back programmes carried out by the Fund.
The cancellation of treasury shares is performed in accordance with the shareholder’s approval after
all legal requirements are fulfilled. At cancellation, the treasury shares balance is netted off against the
share capital and reserves.
The cancellation of treasury shares may trigger gains or losses, depending on the treasury shares’
acquisition value as compared to their nominal value. The gains or losses resulted from the cancellation
of the treasury shares are directly recognised within the shareholders ‘equity and distinctively
presented in the notes to the financial statements.
(h)    Provisions 
A provision is recognised if, as a result of a past event, the Fund has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are estimated by discounting the expected future cash
outflows at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability.
(i)   Dividend income 
Dividend income related to listed equity investments is recognised in profit or loss on the ex-dividend
date.
Dividend distributions from unlisted equity investments are recognised in profit or loss as dividend
income when declared, at the date when the dividend distribution is approved by the General
Shareholders Meeting (“GSM”) of the respective company.
When the Fund receives or chooses to receive dividends in the form of additional shares rather than
cash, the dividend income is recognised for the amount of the cash dividend alternative, with the
corresponding debit treated as an additional investment.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 15
3. Material accounting policies (continued) 
(i)   Dividend income (continued) 
When bonus shares are received with no cash alternative and if only certain shareholders are granted
additional shares, these are measured at fair value and a corresponding amount of dividend income is
recognised. In cases when all shareholders receive bonus shares in proportion to their shareholdings,
no dividend income is recognised as the fair value of the Fund’s interest is unaffected by the bonus
share issue.
For overdue dividend receivables, the Fund initiates legal recovery measures (conciliation, litigations,
etc.). The Fund is entitled to charge penalties for overdue amounts from net dividends, applying the
legal penalty interest rate according to the legislation in force. Penalty income on dividends is
recognised when collection is virtually certain.
Dividend income is presented gross of dividend withholding taxes, which are separately recognised as
income tax expense. Dividend withholding taxes are calculated in accordance with the provisions of the
Romanian Fiscal Code.
(j)   Interest income and expense 
Interest income and expense are recognised in profit or loss using the effective interest method.
Interest income relates to current accounts, distribution accounts, deposits held with banks, treasury
bills and government bonds. In case of financial assets at fair value through profit or loss, the Fund’s
accounting policy is to record the accrued interest income separately from the changes in fair value.
(k) Gains and losses from disposal of equity investments 
Gains and losses from the disposal of equity investments are recognised in profit or loss at the date of
derecognising the financial asset and are calculated as the difference between the consideration
received (including any new asset obtained less any new liability assumed) and the carrying amount of
the financial asset at the disposal date.
The realised gains and losses from the disposal of equity investments classified as financial assets at
fair value through profit or loss are presented in the statement of comprehensive income under the
caption “Net (loss)/gain from equity investments at fair value through profit or loss”, together with the
unrealised gains and losses from the change in the fair value of these instruments and detailed in the
notes to the financial statements.
The realised gains and losses from the disposal of equity investments classified as non-current assets
held for sale, if any, are presented in the statement of comprehensive income under the caption “Net
gain/(loss) from non-current assets held for sale valued at fair value through profit or loss”. This
caption is also used to present the fair value movement of non-current assets held for sale following the
assets classification in this category (presented as unrealised in the notes if the asset has not been sold
at date of the financial statements).
(l)   Foreign currency gains and losses 
Foreign currency gains and losses are recognised in profit or loss on a net basis and include the realised
and unrealised foreign exchange differences. The Fund’s investments and substantially all of its
transactions
are denominated in RON.
(m) Expenses 
All expenses are recognised in profit or loss on an accrual basis.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 16
3. Material accounting policies (continued) 
(n)   Income tax 
Income tax expense comprises current and deferred tax. Current tax also includes dividend withholding
taxes.
Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised
in equity (other comprehensive income), in which case it is recognised in equity (other comprehensive
income).
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax
loss) for the reporting year. Current tax for current and prior years is, to the extent unpaid, recognised
as a liability. If the amount already paid in respect of current and prior years exceeds the amount due
for those years, the excess is recognised as an asset. The deferred tax is the amount of future income
taxes expected to be payable (recoverable) in respect of taxable temporary differences.
During 2023 and 2022, the applicable standard tax rate was 16%. The applicable dividend withholding
tax was nil in case of holdings over 10% of the total share capital of the issuer, held for an
uninterrupted period of at least one year and 8%/5% in case of the other holdings. On 15 July 2022
Government Ordinance No 16/2022 was published which modified the Romanian Fiscal Code.
According to the legislative changes, for dividends distributed after 1 January 2023, the applicable
dividend withholding tax was changed from 5% (applicable throughout the financial year ended 31
December 2022) to 8% while the 10% holding exemption mentioned above still in place.
Please see Note 4 Risk management – (d) Taxation risk for information regarding fiscal changes on
income tax and possible impact on the Fund's financial statements.
(o) Distributions to shareholders 
According to the Fund’s Annual Cash Distribution policy, which can be found on the Fund’s website, the
distributions to shareholders may comprise dividend distributions and returns of capital, subject to
corporate approvals, legal provisions in force and existence of financial resources.
Dividends declared by the Fund are recorded as dividend payable at the date when these are approved
by the Fund’s GSM, as this is the date when, from legal point of view, the Fund’s liability to shareholders
arises. Returns of capital declared by the Fund are recorded as payable at the date when all legal
requirements and substantive conditions stipulated in the Fund’s GSM resolution approving the
respective distribution are met. As stated in Note 3 - (e) Cash, current accounts and deposits with
banks, dividends are distributed to shareholders through the Central Depository and the Paying Agent.
According to the provisions of the legislation in force, the statute of limitation occurs three years after
the date when the respective distribution commenced except for specific instances that are individually
assessed. Starting with the date when the statute of limitation occurred, the shareholders are no longer
entitled to collect the respective distribution.
At the date when the statute of limitation for distributions occurs, the Fund records the value of the
outstanding uncollected distribution through retained earnings or reserves, as applicable.
(p)   Basic and diluted earnings per share 
Basic and diluted earnings/ (loss) per share is calculated by dividing the profit or loss for the year by
the weighted average number of ordinary paid shares in issue during the year, excluding the average
number of ordinary shares purchased by the Fund and held as treasury shares.
The weighted average number of ordinary shares outstanding during the year is the number of
ordinary paid shares outstanding at the beginning of the year, adjusted by the number of ordinary
shares bought back during the year (based on their settlement date) multiplied by a time-weighting
factor.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 17
3. Material accounting policies (continued) 
(p)   Basic and diluted earnings per share (continued) 
The time-weighting factor is the number of days that the shares are outstanding as a proportion of the
total number of days in the reporting year.
As at 31 December 2023 and 31 December 2022, none of the Fund’s issued shares or other instruments
had dilutive effect, therefore basic and diluted earnings per share are the same.
(q)   Board of Nominees members’ remuneration 
The Fund has no employees, but from the benefits point of view, the members of the Board of Nominees
have the same fiscal treatment as employees, as they have mandate agreements (as opposed to labour
agreements).
During the normal course of business, the Fund makes payments due to the state health and social
security funds related to the remuneration of the members of the Board of Nominees in accordance
with the regulations in force. Such costs are recognised in profit or loss as part of the remunerations.
The members of the Board of Nominees are members of the pension plan of the Romanian State except
those members who are registered as contributors in other countries or those that cannot benefit from
Romanian pension according to the applicable tax treaties. The Fund does not operate any pension plan
or post-retirement benefits plan and therefore has no obligations regarding pensions.
(r) Standards/amendments that are effective and have been endorsed by the European Union 
The following standards/amendments to the existing standards and new interpretations issued by the
International Accounting Standards Board (IASB) and adopted by the European Union, are effective for
the current reporting period:
● IFRS 17 insurance contracts 
● IAS 1 Presentation of Fi
nancial Statements and IFRS Practice Statement 2: Disclosure of 
Accounting policies (Amendments), 
● IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of 
Accounting Estimates (Amendments), 
● IAS 12 Income taxes: Deferred Tax related to Assets and Liabilities arising from a Single 
Transaction (Amendments), 
● IAS 12 Income taxes: Inter
national Tax Reform ‐ Pillar Two Model Rules (Amendments) 
The newly adopted IFRS and amendments to IFRS did not have a material impact on the Fund’s
accounting policies. Please see below a summary description of the changes brought to the standards
applicable to the Fund:
● IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of 
Accounting policies (Amendments): The Amendments are effective for annual periods beginning
on or after January 1, 2023. The amendments provide guidance on the application of materiality
judgements to accounting policy disclosures. In particular, the amendments to IAS 1 replace the
requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’
accounting policies. Also, guidance and illustrative examples are added in the Practice Statement to
assist in the application of the materiality concept when making judgements about accounting
policy disclosures.  
The Fund has reviewed the presentation of the accounting policies considering the new
requirements in IAS 1 and has updated the financial statements accordingly.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 18
3. Material accounting policies (continued) 
(r) Standards/amendments that are effective and have been endorsed by the European Union 
(continued) 
● IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of 
Accounting Estimates (Amendments): The amendments become effective for annual reporting
periods beginning on or after January 1, 2023 and apply to changes in accounting policies and
changes in accounting estimates that occur on or after the start of that period. The amendments
introduce a new definition of accounting estimates, defined as monetary amounts in financial
statements that are subject to measurement uncertainty, if they do not result from a correction of
prior period error. Also, the amendments clarify what changes in accounting estimates are and how
these differ from changes in accounting policies and corrections of errors. 
The Fund has reviewed the presentation of the accounting policies considering the new
requirements in IAS 8 and has update the financial statements accordingly.
● IAS 12 Income taxes: International Tax Reform ‐ Pillar Two Model Rules (Amendments):The
amendments are effective immediately upon issuance, but certain disclosure requirements are
effective later. The Organisation for Economic Co-operation and Development’s (OECD) published
the Pillar Two model rules in December 2021 to ensure that large multina
tional companies would be
subject to a minimum 15% tax rate. On 23 May 2023, the IASB issued International Tax Reform—
Pillar Two Model Rules – Amendments to IAS 12. The amendments introduce a mandatory temporary
exception to the accounting for deferred taxes arising from the jurisdictional implementation of the
Pillar Two model rules and disclosure requirements for affected entities on the potential exposure to
Pillar Two income taxes. The Amendments require, for periods in which Pillar Two legislation is
(substantively) enacted but not yet effective, disclosure of known or reasonably estimable
information that helps users of financial statements understand the entity’s exposure arising from
Pillar Two income taxes. To comply with these requirements, an entity is required to disclose
qualitative and quantitative information about its exposure to Pillar Two income taxes at the end of
the reporting period.  
The disclosure of the current tax expense related to Pillar Two income taxes and the disclosures in
relation to periods before the legislation is effective are required for annual reporting periods
beginning on or after 1 January 2023, but are not required for any interim period ending on or before
31 December 2023.
The Fund has reviewed the legislative provisions and concluded that it does not fall within the scope
of the new regulation because it is classified as an investment fund that is also an Ultimate Parent
Entity and according to article 1.5 Excluded Entity, point (e), this type of company is exempted from
the new provisions. 
(s) Standards and interpretations issued by the IASB and endorsed by the EU but not yet 
effective and not early adopted 
At the date of authorisation of these annual financial statements, the following amendments to the
existing standards issued by IASB and adopted by the EU are not yet effective:
● IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-
current (Amendments). The amendments are effective for annual reporting periods beginning
on or after January 1, 2024, with earlier application permitted, and will need to be applied
retrospectively in accordance with IAS 8.
  
● IFRS 16 Le
ases: Lease Liability in a Sale and Leaseback (amendments). The amendments are
effective for annual reporting periods beginning on or after January 1, 2024, with earlier
application permitted.  
Management has assessed that the two standard amendments will not have a material impact on the
Fund as the Fund does not apply IFRS 16 and all liabilities are current.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 19
3. Material accounting policies (continued) 
(t) Standards and amendments/interpretations that are not yet effective and have not yet been 
endorsed by the European Union 
At the date of authorisation of these annual financial statements, IFRSs as adopted by the EU do not
significantly differ from regulations adopted by the IASB except for the following amendments to the
existing standards, which were not endorsed by the EU as at the reporting date of these financial
statements:
● IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosure ‐ Supplier 
Finance Arrangements (Amendments). The amendments are effective for annual reporting
periods beginning on or after January 1, 2024, with earlier application permitted.  
● IAS 21 The Effects of Changes in Foreign Exchange Rates
: Lack of Exchangeability 
(Amendments). The amendments are effective for annual reporting periods beginning on or
after January 1, 2025, with earlier application permitted.  
● Amendment in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in 
Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture. In December 2015 the IASB postponed the effective date of this
amendment indefinitely pending the outcome of its research project on the equity method of
accounting. 
The Fund estimates that the adoption of these new amendments to the existing standards will have no
material impact on its annual financial statements in the year of initial application
4. Risk management  
The Fund’s investment portfolio comprises mainly unlisted equity investments.
The Fund’s investing activities expose it to various types of risks that are associated with the financial
instruments and with the markets in which it invests. The most important financial risks the Fund is
exposed to are market risk, credit risk and liquidity risk. The management monitors the potential
adverse effects on the financial performance of the Fund associated with these risk factors.
The management consider that all risks are aligned with the Fund’s risk appetite and that controls and
reporting functions are in place and aligned with the severity of the risks. The Sole Director
implemented for the Fund financial risk management procedures consistent with those applied globally
by Franklin Templeton.
Franklin Templeton’s approach is to use a dedicated team of risk management specialists who are
independent of the portfolio managers and provide robust risk and performance analytics and
unbiased perspective on the risks and exposures in the portfolios.
FTIS has implemented a specific Risk Management Policy applicable to the Fund.
The AIFM has established a permanent risk management function to ensure that effective risk
management policies and procedures are in place and to monitor the risks and compliance with risk
limits. The AIFM has a risk management process and risk management policies which cover the risks
associated with the Fund and the adequacy and effectiveness of this framework is reviewed and
approved at least annually. Regular reporting is prepared and reviewed by the AIFM senior
management.
For each relevant risk area, risk limits are set by the AIFM considering the objectives, strategy, and risk
profile of the Fund. These limits are monitored regularly as required by the nature of the risk area, and
the sensitivity of the portfolio to key risks is undertaken periodically as appropriate to ascertain the
impact of changes in key variables to the Fund. Diversification and concentration limits are set for the
management of market risk and are monitored regularly.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 20
4. Risk management (continued) 
The Risk Management Committee of Franklin Templeton provides the oversight framework for risk
management processes and is made up of senior management from the business areas and key risk and
control functions. This Committee meets quarterly, reviews risk reports and input from business
management and maintains a detailed register of risk items and resolutions.
The Board of FTIS provides oversight, being aware of the risk management practices and their
deployment within the firm, staying apprised of significant risks and management responses.
(a) Market risk 
Market risk is the risk that changes in market prices and rates, such as equity prices, interest rates and
foreign exchange rates will affect the Fund’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
(i) Equity price risk 
Equity price risk is the risk that the value of an equity instrument will fluctuate as a result of changes in
market prices, whether caused by factors specific to its issuer or factors affecting all instruments traded
in the market.
Equity price risk arises from changes in the value of equity investments, and it is the primary risk
impacting the Fund. Diversification across securities and industries, to the extent possible, is the
primary technique for mitigating equity price risk. The companies in which the Fund holds investments
at the end of the reporting period operate in different industries, the largest exposures being in the
“Infrastructure”, “Power and gas utilities: distribution, supply” and “Heavy industry” sectors.
The Fund’s exposure to industries is detailed below: 
  31 December 23 
31 December 
2023 (%)  31 December 22 
31 December 
2022 (%) 
Infrastructure 1,235,851,681 55.74% 1,066,219,748 7.78%
Power and gas utilities:
distribution, supply 432,616,168 19.51% 1,029,500,000 7.52%
Heavy industry 346,984,407 15.65% 302,543,300 2.21%
Aluminium 112,242,460 5.06% 114,429,001 0.84%
Power utilities: generation 56,840,465 2.56% 11,148,800,000 81.40%
Postal services 17,398,691 0.78% 21,700,000 0.16%
Others 15,078,611 0.68% 13,405,347 0.10%
  2,217,012,482  100%  13,696,597,396  100% 
The Fund’s equity investments include unlisted instruments issued by companies incorporated in
Romania and listed but illiquid instruments, both of which represent 95.0% of total equity investments
as at 31 December 2023 (99.2% of total equity investments as at 31 December 2022).
As at 31 December 2023, the listed and liquid investments represented 5.0% (31 December 2022:
0.8%) of the total Fund’s equity investments. As at 31 December 2023, the Fund’s listed liquid holdings
are in amount of RON 112,242,460 (31 December 2022: RON 114,429,001) represented at both
reporting dates by Alro SA which is listed on Bucharest Stock Exchange.
Up to the Hidroelectrica SA initial public offering date and its subsequent inclusion in the BET-BK
index, Alro SA used to also be included in this index. The BET-BK index is a free float market
capitalization weighted index of the Romanian and foreign stocks listed on BVB’s regulated market,
with the highest free float market capitalization adjusted with liquidity factors and selected also based
on qualitative criteria (the index contains 30 companies). Based on the Sole Director review, the
exclusion of Alro SA from the companies included in the index was not related to a decrease in the
liquidity of the holding.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 21
4. Risk management (continued) 
(a) Market risk (continued) 
(i) Equity price risk (continued)
As mentioned above, at 31 December 2023, the Fund’s listed portfolio consists mainly of Alro SA. At the
reporting date, the Fund holds 72,884,714 shares in Alro SA, representing 10,21% of the company’s
share capital. As the company is no longer included in the BET-BK index, the Fund prepared a stress
test analysis only by changing the closing price compared to the previous period when the BET-BK
index was also used.
A 10% decrease of the closing share price for the company would result in a total fair value loss for the
Fund in amount of RON 11,224,246 (31 December 2022: RON 11,442,900). A similar change of price in
the opposite direction would result in an identical fair value gain for the Fund.
The Fund periodically monitors the liquidity of the markets where it’s holdings are listed and correlates
this analysis with the liquidity and cash management process.
(ii) Interest rate risk 
The Fund places cash into fixed rate bank deposits and short-term government securities with fixed
interest rates and original maturities of up to one year. Any potential reasonable movement in interest
rates would have an immaterial effect on the Fund’s financial statements.
At the reporting dates 31 December 2023 and 31 December 2022 the Fund’s interest-bearing fixed rate
financial instruments consist of bank deposits with original maturities of less than three months in
amount of RON 191,272,158 (31 December 2023) and RON 911,699,816 (31 December 2022).
As described in Note 3 - (e) Cash, current accounts and deposits with banks, for each distribution, the
Fund opens dedicated distribution accounts with the Paying Agent, which generate variable interest
paid monthly to the Fund. As per the agreed contract with the Paying Agent the distribution accounts
bear a variable interest rate based linked on ROBID ON.
(iii) Currency risk  
The Fund’s exposure to currency risk is not significant. The Fund holds current accounts with banks,
receivables and payables denominated in foreign currencies (EUR, USD and GBP), but the balances
were immaterial during the reporting period.
During 2023, the local currency appreciated compared to the USD (4.6346 RON/USD at 31 December
2022 to 4.4958 RON/USD at 31 December 2023) and depreciated compared to the EUR (from 4.9474
RON/EUR at 31 December 2022 to 4.9746 RON/EUR at 31 December 2023) and to the GBP (from
5.5878 RON/GBP at 31 December 2022 to 5.7225 RON/GBP at 31 December 2023).
The tables below contain information on the Fund’s financial assets and monetary liabilities based on
the original currency:
RON equivalent ‐ 31 December 2023         
Monetary assets  RON  EUR  USD  GBP  Total 
Cash and current accounts 55,098 1,255 1,955 1,801 60,109 
Distributions bank accounts 547,496,881 - - - 547,496,881 
Deposits with banks 191,368,978 - - - 191,368,978 
 
Monetary liabilities 
 
Other financial liabilities (398,762) (21,781,722) (708,397) (63,691) (22,952,573) 
Payable to shareholders (546,457,941) - - - (546,457,941) 
Net position  192,064,253  (21,780,467)  (706,442)  (61,890)  169,515,454 
Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 22
4. Risk management (continued) 
(a) Market risk (continued) 
(iii) Currency risk  (continued)
RON equivalent ‐ 31 December 2022
Monetary assets  RON  EUR  USD  GBP  Total 
Cash and current accounts 53,664 1,599 2,040 764 58,066  
Distributions bank
accounts 73,775,078 - - - 73,775,078 
Deposits with banks 912,616,396 - - - 912,616,396 
Other financial assets 30,030 295,142 - - 325,172 
 
Monetary liabilities 
 
Other financial liabilities (14,701,712) (20,084,641) (2,104,401) (63,528)  (36,954,282) 
Payable to shareholders (74,166,644) - - -  (74,166,644) 
Net position  897,606,812    (19,787,900)  (2,102,361)   (62,765)  875,653,786  
A ten percent strengthening of the RON against the EUR, USD and GBP respectively as at 31 December
2023 and 31 December 2022 would have the following impact on profit or loss (the analysis assumes
that all other variables remain constant), impact expressed in RON:
Profit   31 December 2023    31 December 2022  
EUR 2,178,047 1,978,790
USD 70,644 210,236
GBP 6,189 6,276
A ten precent depreciation of the RON against the currencies would have an identical opposite effect
compared to the one presented above.
As at 31 December 2023 and 31 December 2022, the Fund did not hold any equity investment
denominated in a currency other than RON.
(b) Credit and counterparty risk 
Credit risk is the risk of financial loss to the Fund if counterparties to financial instruments fail to meet
their contractual obligations, and arises principally from cash and deposits with banks, treasury bills,
government bonds and other receivables.
(i) Cash and deposits with banks 
As presented in the below table, at 31 December 2023, the Fund’s maximum exposure to credit risk
from cash and deposits with banks was RON 738,925,552 (31 December 2022: RON 986,449,124).
Cash and deposits with banks are held with the following banks:
Cash and deposits held with 
banks 
Credit 
rating* 
31 December 
2023 
31 December 
2022 
BRD - Groupe Societe Generale BBB+(stable) 557,578,037 290,835,385
Banca Comerciala Romana BBB+(stable) 45,475,560 167,666,953
Unicredit Bank BBB(stable) 45,428,109 77,331,334
ING Bank AA-(stable) 45,221,286 297,855,062
Citi Bank A+(stable) 45,220,984 152,759,637
Raiffeisen Bank AA-(stable) 1,576 753
  738,925,552  986,449,124 
*Source: Fitch Ratings at reporting date 
As of 31 December 2023 a significant part of the amounts held with BRD - Groupe Societe Generale, are
linked to distribution accounts (98.2%) (31 December 2022: 25.4%).
Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 23
4. Risk management (continued) 
 (b) Credit and counterparty risk (continued) 
(i) Cash and deposits with banks (continued) 
Current accounts and deposits are held with banks in Romania. The management of the Fund
implemented a formal policy regarding bank counterparty risks and limits. The Fund only establishes
new deposits with financial institutions where the institution or the institution’s corporate parent has a
credit rating “investment grade” (BBB- or better). The counterparty credit risk is also diversified by
allocating the cash and cash equivalents across several banks.
All current accounts and deposit balances are assessed to have low credit risk as they are held with
reputable banking institutions, and they are held for very short maturities according to the cash
management policy. Considering this, the effect of any credit loss is assessed as immaterial.
(ii) Treasury bills and Government bonds
During 2022 and 2023, the Fund invested in treasury bills and government bonds that had maturities
during the same year. Therefore, the balances as at 31 December 2023 and 31 December 2022 are nil.
These items were assessed to have low credit risk being issued by the Ministry of Public Finance of
Romania. At the reporting date of these financial statements, Fitch Ratings quote Romania’s sovereign
rating at “BBB-“ with a stable outlook.
(iii) Other financial assets 
As can be seen from the table above, at 31 December 2023 the Fund did not have any other financial
assets. At 31 December 2022, other financial assets generally include receivables from portfolio
companies or other third parties.
(c) Liquidity risk 
Liquidity risk is the risk that the Fund will not be able to meet its financial obligations as they fall due.
The Fund’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to
meet its liabilities when they fall due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Fund’s reputation.
The Fund’s equity investments include unlisted instruments issued by companies registered in Romania
and listed but not liquid instruments (respectively 95% of total equity investments as at 31 December
2023 and 99.2% of total equity investments as at 31 December 2022). The table below shows the
amounts afferent to the listed liquid portfolio and the listed but not liquid portfolio.
 31 December 2023    31 December 2022  
Listed and liquid (Alro SA) 112,242,460 114,429,001
Listed and not liquid* 13,090,715 53,179,859
Total listed portfolio  125,333,174  167,608,860 
*On December 31, 2023, the Fund, with assistance from the external evaluators, prepared evaluation reports for Alcom SA, Romaero SA and
Mecon SA. Considering materiality aspects, IOR SA (the value of this company representing 0.03% of the entire portfolio at 31 December 2023),
although considered illiquid, was valued using the market price.
Not all shares listed on the Bucharest Stock Exchange are considered liquid due to insufficient volumes
of transactions. Liquidity can vary over time and from market to market and some investments may take
longer to sell. As a result, the Fund may not be able to sell some of its investments in these instruments
within the time constraints imposed by its own liquidity requirements, or to respond to specific events
such as deterioration in the credit worthiness of any particular issuer. As a closed ended investment fund,
liquidity risks attributable to the Fund are less significant than for an open-ended fund.
The Fund prudently manages liquidity risk by maintaining an optimal level of liquid assets to finance
current liabilities. The following tables present the split of the Fund’s financial assets and financial
liabilities by residual maturities:
Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 24
4. Risk management (continued) 
(c) Liquidity risk (continued) 
31 December 2023 
Less than 1 
month 
1 to 3 
months 
3 to 12 
months 
No fixed 
maturity  Total 
Financial assets 
         
Cash and current accounts 60,109 - - - 60,109
Distributions bank accounts 547,496,881 - - - 547,496,881
Deposits with banks 191,368,978 - - - 191,368,978
Equity investments - - - 1,784,396,314 1,784,396,314
Non-current assets held for
sale - 432,616,169 - - 432,616,168
738,925,968 432,616,169  ‐ 1,784,396,314 2,955,938,451
Financial liabilities
Other financial liabilities (22,952,573)  -   -   -   (22,952,573) 
Payable to shareholders (546,457,941) - - - (546,457,941)
   (569,410,514)  ‐  ‐  ‐  (569,410,514) 
Net position  169,515,454  432,616,169  ‐  1,784,396,314  2,386,527,937 
31 December 2022 
 Less than 1 
month  
 1 to 3 
months  
 3 to 12 
months  
 No fixed 
maturity    Total  
Financial assets                
Cash and current accounts 58,066 - - - 58,066
Distributions bank accounts 73,775,078 - - - 73,775,078
Deposits with banks 912,616,396 - - - 912,616,396
Equity investments - - - 13,696,597,396 13,696,597,396
Other financial assets 325,172 - - - 325,172
986,774,712  ‐  ‐  13,696,597,396  14,683,372,108 
Financial liabilities  
Other financial liabilities (36,954,282) - - - (36,954,282)
Payable to shareholders (74,166,644) - - - (74,166,644)
   (111,120,926)  ‐  ‐  ‐  (111,120,926) 
Net position  875,653,786  ‐  ‐  13,696,597,396  14,572,251,182 
For both 31 December 2023 and 31 December 2022, all financial assets except equity investments and
all financial liabilities are considered current as their residual contractual maturity dates are within one
year of the reporting dates. The amounts included in the table above at 31 December 2023 and 31
December 2022 are discounted as the difference between the discounted and undiscounted cashflows is
immaterial at both dates.
The transaction regarding Engie Romania SA which is further detailed in Note 18 – Non-current assets
was completed on 20 February 2024, as such, the participation is presented in the maturity table above
in the range of 1 month to 3 months – For more information please see Note 23 – Subsequent Events.
(d) Taxation risk 
The Fund had to comply with the Romanian tax legislation in force and with any direct applicable tax
legislation issued by the European Union. Interpretation of the text and practical implementation
procedures of the tax regulations could vary, and there is a risk that certain transactions, for example,
could be viewed differently by the tax authorities as compared to the Fund’s treatment.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 25
4. Risk management (continued) 
(d) Taxation risk (continued) 
Furthermore, the Romanian Government has several agencies that are authorised to conduct audits
(controls) of companies operating in Romania. These controls are similar in nature to tax audits
performed by tax authorities in many countries and may extend not only to tax matters but to other legal
and regulatory matters in which the applicable agency may be interested. It is possible that the Fund will
be subject to regular controls as new laws and regulations are issued. The frequent changes of Romanian
tax legislation without observing the transparency rules also increase the uncertainty and tax risk.
According to the changes to Law 296/2023 regarding some fiscal-budgetary measures to ensure
Romania's long-term financial sustainability, a new minimum corporate tax of 1% on adjusted turnover
is payable starting with 1 January 2024. Eligibility criteria for this new minimum tax was set at adjusted
turnover above EUR 50 million in the previous fiscal year. The new legislation also provides the
calculation method for the new minimum tax. Please see note 13 – Income tax for more information on
the impact for the Fund.
According to the latest changes brought to the Fiscal Code by GEO 115/14 December 2023 , starting with
1 January 2024, entities showing a tax profit will be able to offset only 70% of this tax profit with past
tax losses (assuming that tax losses are available for utilization). The remaining 30% of any tax profit
will be subject to Romanian corporate income tax at the 16%. Please see Note 16 – Deferred tax for more
information on the impact for the Fund.
(e) Operating environment  
Equity markets may be exposed to temporary higher levels of volatility triggered by uncertainty
surrounding political events either locally or globally. Such events may in particular affect the power
and gas sectors, which still represent an important part of the Fund’s portfolio. Commodity markets
may experience prolonged volatility given the uncertainty regarding global trade relationships and
increasing protectionism.
Considering the new structure of the Fund, following Hidroelectrica IPO, a significant part of the
portfolio operates in the infrastructure sector, where freight and passenger transportation is heavily
impacted by the macroeconomic situation which was also adversely impacted by the military conflict
between Russia and Ukraine which started in February 2022 and the declared state of war in the State
of Israel. Political uncertainty can have an impact on the Romanian economy and consequently on the
Fund’s portfolio companies. The high inflation rates seen throughout 2023 also had an impact on the
values of the holdings.
According to International Monetary Fund
1
, the baseline forecast is for global growth to slow from 3.5
percent in 2022 to 3.0 percent in 2023 and 2.9 percent in 2024, well below the historical (2000–19)
average of 3.8 percent. Global inflation is forecast to decline steadily, from 8.7 percent in 2022 to 6.9
percent in 2023 and 5.8 percent in 2024, due to tighter monetary policy aided by lower international
commodity prices. Core inflation is generally projected to decline more gradually, and inflation is not
expected to return to target until 2025 in most cases.
Management cannot predict all developments which could have an impact on the Romanian economy
and consequently what effect, if any, they could have on the performance of the Fund and its financial
statements. Management cannot reliably estimate the effects on the Fund’s financial statements of any
further deterioration in the liquidity of the financial markets and devaluation of financial assets
influenced by the increased volatility in the equity and currency markets.
1
World Economic Outlook Report – October 2023
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 26
4. Risk management (continued) 
(f) Operational risk 
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated
with the Fund’s processes, service providers, technology and infrastructure, and from external factors
other than credit, market and liquidity risks, such as those arising from legal and regulatory
requirements and generally accepted standards of corporate behavior. Operational risks arise from all
the Fund’s operations.
The Fund’s objective in managing operational risk is to maintain a proper balance between limitation of
financial losses and damage to the Fund’s reputation and overall cost effectiveness, avoiding control
procedures that restrict initiative and creativity.
(g) Capital management 
The Fund’s shareholders’ equity comprises share capital, reserves and retained earnings, net of
treasury shares. The shareholders’ equity was RON 2,342,179,293 at 31 December 2023 (31 December
2022: RON 14,569,543,542). The significant decrease seen in 2023 was determined by the RON 1.7225
gross dividend disbursement which was approved by shareholders on 18 August 2023 and paid
starting with 29 September 2023 – the dividend represented the entire consideration received from the
Hidroelectrica IPO.
The Fund is not subject to externally imposed capital requirements.
5. Financial assets and financial liabilities  
Accounting classifications and fair values  
The table below presents the carrying amounts and fair values of the Fund’s financial assets and
financial liabilities:
31 December 2023 
Other 
financial 
assets at 
amortised 
cost 
Fair value 
through profit 
or loss 
Other financial 
liabilities at 
amortised cost 
Total carrying 
amount  Fair value 
Cash and current
accounts 60,109 - - 60,109 60,109
Distributions bank
accounts 547,496,881 - - 547,496,881 547,496,881
Deposits with banks 191,368,978 - - 191,368,978 191,368,978
Equity investments - 1,784,396,314 - 1,784,396,314 1,784,396,314
Non-current assets
held for sale - 432,616,169 - 432,616,169 432,616,169
Other financial
liabilities - - (22,952,573) (22,952,573) (22,952,573)
Payable to
shareholders - - (546,457,941) (546,457,941) (546,457,941)
738,925,968   2,217,012,483   (569,410,514)  2,386,527,937   2,386,527,937  
Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 27
5. Financial assets and financial liabilities (continued) 
Accounting classifications and fair values (continued) 
31 December 2022 
Other 
financial 
assets at 
amortised 
cost 
Fair value 
through profit 
or loss 
Other 
financial 
liabilities at 
amortised 
cost 
Total carrying 
amount  Fair value 
Cash and current
accounts 58,066 - - 58,066 58,066
Distributions bank
accounts 73,775,078 - - 73,775,078 73,775,078
Deposits with banks 912,616,396 - - 912,616,396 912,616,396
Equity investments - 13,696,597,396 - 13,696,597,396 13,696,597,396
Other financial assets 325,172 - - 325,172 325,172
Other financial
liabilities - - (36,954,282) (36,954,282) (36,954,282)
Payable to
shareholders - - (74,166,644) (74,166,644) (74,166,644)
986,774,712   13,696,597,39 6   (111,120,926)  14,572,251,182   14,572,251,182  
Fair value hierarchy  
The Fund classifies the fair value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurement, the levels of the fair value hierarchy being
defined as follows:
● Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Fund
can access at the measurement date;
● Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
● Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
For the financial investments classified as Level 1, the Fund had adequate information available with
respect to active markets, with sufficient trading volume, for obtaining accurate prices.
The level in the fair value hierarchy within which the fair value measurement is classified is determined
based on the lowest level input that is significant to the fair value measurement. For this purpose, the
significance of an input is assessed against the fair value measurement in its entirety.
Fair value estimates obtained from models are adjusted for any other factors, such as liquidity risk or
model uncertainties, to the extent that the Fund believes that a third-party market participant would
consider these factors in pricing a transaction.
If a fair value measurement uses observable inputs that require significant adjustments based on
unobservable inputs, that financial instrument is classified on Level 3. Assessing the significance of an
input to the fair value measurement in its entirety requires significant judgment, considering factors
specific to the asset.
The Fund considers observable data to be market data that is readily available, regularly distributed or
updated, reliable and verifiable, not proprietary and provided by independent sources that are actively
involved in the relevant market.
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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 28
5. Financial assets and financial liabilities (continued) 
Fair value hierarchy(continued) 
The table below presents the fair value amount and hierarchy of financial instruments carried at
amortised cost as at 31 December 2023 and as at 31 December 2022:
31 December 2023 
Amortised 
cost  Level 1 
Level 
2  Level 3  Total 
Cash and current
accounts 60,109 60,109 - - 60,109
Distributions bank
accounts 547,496,881 547,496,881 - - 547,496,881
Deposits with banks 191,368,978 191,368,978 - - 191,368,978
Other financial liabilities (22,952,573) - - (22,952,573) (22,952,573)
Payable to shareholders
(546,457,941
) - - (546,457,941) (546,457,941)
Total  169,515,454  738,925,968  ‐  (569,410,514)  169,515,454 
31 December 2022 
Amortised 
cost  Level 1  Level 2  Level 3  Total 
Cash and current
accounts 58,066 58,066 - - 58,066
Distributions bank
accounts 73,775,078 73,775,078 - - 73,775,078
Deposits with banks 912,616,396 912,616,396 - - 912,616,396
Other financial assets 325,172 - - 325,172 325,172
Other financial liabilities (36,954,282) - - (36,954,282) (36,954,282)
Payable to shareholders (74,166,644) - - (74,166,644) (74,166,644)
Total  875,653,785   986,449,540   ‐    (110,795,755)  875,653,785  
Considering the nature of the amounts (very short maturities and immaterial counterparty credit risk)
the carrying amounts approximate the fair value of the instruments presented above.
The table below presents the classification of the financial instruments carried at fair value by fair value
hierarchy level, based on the inputs used in making the measurement:
31 December 2023  Level 1  Level 2  Level 3  Total 
Equity investments: 112,242,460 - 1,672,153,855 1,784,396,314
Power utilities: generation  - - 56,840,465 56,840,465
Infrastructure  - - 1,235,851,681 1,235,851,681
Heavy industry  - - 346,984,407 346,984,407
Aluminium  112,242,460 - - 112,242,460
Postal service
s
  - - 17,398,691 17,398,691
Others  - - 15,078,611 15,078,611
Non-current assets held for sale
(Power and gas utilities:
distribution, supply)*  - 432,616,168 - 432,616,168
Total  112,242,460  432,616,168  1,672,153,855  2,217,012,482 
*On 22 December 2023 the Fund and the majority shareholder of the Engie Romania SA, GDF
International S.A, entered into an agreement for the sale of the entire shareholding in the company as
described below. As such, the Fund has classified this holding as Level 2 as its value has been derived
from the agreed upon sale price.
Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 29
5. Financial assets and financial liabilities (continued) 
Fair value hierarchy(continued)
31 December 2022  Level 1  Level 2  Level 3  Total 
Equity investments: 114,429,001 - 13,582,168,395 13,696,597,396
Power utilities: generation  - - 11,148,800,000 11,148,800,000
Power and gas utilities: 
distribution, supply  - - 1,029,500,000 1,029,500,000
Infrastructure  - - 1,066,219,748 1,066,219,748
Heavy industry  - - 302,543,300 302,543,300
Aluminum  114,429,001 - - 114,429,001
Postal services  - - 21,700,000 21,700,000
Others  - - 13,405,347 13,405,347
Total  114,429,001  ‐  13,582,168,395  13,696,597,396 
Valuation process 
The Fund has an established control framework with respect to the measurement of fair values. This
framework includes a valuation department and a valuation committee, both independent of portfolio
management which have overall responsibility for fair value measurements.
The Fund’s Sole Director believes that the fair values of the equity investments presented in these
financial statements represent the best estimates based on available information and under the current
conditions.
The valuations are based on prevailing market, economic and other conditions at the valuation date
and correspond with the current context in the global financial markets. To the extent possible, these
conditions were reflected in the valuation. However, the factors driving these conditions can change
over relatively short periods of time. The impact of any subsequent changes in these conditions on the
global economy and financial markets generally, and on the Fund’s portfolio holdings specifically, could
impact the estimated fair values in the future, either positively or negatively.
The achievement of the forecasts included in the valuation reports critically depends on the
assumptions used, on the specific developments of the portfolio companies’ business, on government
legislation and, in case of electricity sector, on the decisions regarding the regulated tariffs for
electricity distribution as well as on the continuing restructuring process of the power sector. As a
result, the current valuation may not have identified, or reliably quantified the impact of all such
uncertainties and implications.
The valuation process is performed at least annually by the Fund with support from independent
external valuation service providers and has in scope all unlisted and listed illiquid companies, except
companies which are in in liquidation, dissolution, bankruptcy, insolvency, judicial reorganisation or
which ceased their activity which are valued at nil.
The valuation reports were prepared as at 31 October 2023 (for 31 December 2022: 31 October 2022),
based on the financial information available for the companies under valuation at 30 September 2023
(for Romaero SA and Mecon SA, which have been valued based on public information, the valuation
date is 30 June 2023) and took into consideration all relevant corporate events up to 31 December
2023.
On 22 December 2023 the Fund and the majority shareholder of the company, GDF International S.A,
entered into an agreement for the sale of the entire holding in Engie Romania S.A. The Fund updated
the valuation of this holding accordingly. The entire holding was sold on 20 February 2024 – Please see
Note 23 Subsequent events for more information.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 30
5. Financial assets and financial liabilities (continued) 
Valuation process (continued)
Following the subsequent events analysis performed by the Sole Director with the assistance of the
external valuators with the purpose of checking if any significant events occurred between the
valuation reports valuation date and the authorization date of these financial statements for the
unlisted and listed but illiquid portfolio, a new report was prepared for Complexul Energetic Oltenia SA
(valuation date:31 December 2023) which compared to the value from the 31 October 2023 valuation
report which was used in the 2023 Preliminary Annual Results Report, resulted in a fair value decrease
of RON 7.9 million – new valuation: RON 56.8 million.
For all other holdings, the Fund’s management has analysed the period between the date of the
valuation reports and the date when these annual financial statements were authorised for issue and
there was no information known or available to the Fund’s management which may have significant
impact on the fair values of the equity investments as at the reporting date, as they are presented in
these annual financial statements.
Considering the economic uncertainties, the risks and the volatility existing in the capital markets, the
Fund’s Sole Director closely monitors the evolution of the economic environment and the effects of the
economic measures on the Fund’s portfolio companies. The Fund’s Sole Director will perform a periodic
analysis of the available portfolio companies’ financial information and of multiples values of publicly
traded peer companies and will adjust the value of unlisted holdings accordingly, if the case.
The economic uncertainties are expected to continue in the foreseeable future and consequently, there
is a possibility that the assets of the Fund are not recovered at their carrying amounts in the ordinary
course of business. A corresponding impact on the Fund’s profitability cannot be estimated reliably as
of the date of these financial statements.
Valuation process Financial assets measured at fair value – Level 3 
The table below presents the movement in Level 3 equity investments during the year ended 31
December 2023 and the year ended 31 December 2022:
  
Period ended 
31 December 
2023 
Period ended 
31 December 2023 
Period ended 
31 December 
2022 
 
Equity 
investments
 
Non‐current assets 
held for sale
 
Equity 
investments
Opening balance  13,582,168,395  ‐  11,603,900,630 
Net unrealised gain recognised in
profit or loss 260,201,628
1,978,243,795
Reclassification to non-current assets
held for sale (588,800,000) 588,800,000 -
Net realised (loss)/gain recognised in
profit or loss (1,870,266,600) 61,200,000
Subscriptions to share capital
increase of portfolio companies 2,678,640 - 23,970
Disposals (9,281,212,040) (650,000,000) -
Reclassification to non-current assets
held for sale (432,616,168) 432,616,168 -
Closing balance  1,672,153,855  432,616,168  13,582,168,395 
The valuation for the Level 3 equity investments as at 31 December 2023 was prepared as follows:

Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 31
5. Financial assets and financial liabilities (continued) 
Valuation process Financial assets measured at fair value – Level 3 (continued) 
- 96.56% of the fair value of Level 3 equity investments was determined based on the valuation
report updated with the assistance of the external valuation services provider as at 31 October
2023;
- 3.40% of the fair value of Level 3 equity investments was determined based on the valuation
report updated with the assistance of the external valuation services provider as at 31 December
2023;
- 0.04% of the fair value of Level 3 equity investments representing listed but illiquid holdings was
determined based on the last available Bucharest Stock Exchange reference price - Considering
materiality aspects, IOR SA although considered illiquid, was valued using the market price;
- the holdings in companies in liquidation, dissolution, bankruptcy, insolvency, judicial reorganisation
or which ceased their activity were valued at nil.
As at 31 December 2023, the fair value for 2.3% of the Level 3 equity investments (31 December 2022:
for 90% of the Level 3 equity investments) was determined by applying the market comparison
technique using comparable trading multiples for EBITDA and Price/Earnings indicators, while the fair
value for almost 97.5% of the Level 3 equity investments (31 December 2022: for almost 10% of the
Level 3 equity investments) was determined by applying the income approach using the discounted cash
flow method.
The valuation for the Level 3 equity investments as at 31 December 2022 was prepared as follows:
- 99.7% of the fair value of Level 3 equity investments was determined based on the valuation
report updated with the assistance of the external valuation services provider as at 31 October
2022 incorporating the impact of any significant corporate action that took place until 31
December 2022;
- 0.3% of the fair value of Level 3 equity investments representing listed but illiquid holdings was
determined based on the last available Bucharest Stock Exchange reference price -Considering
materiality aspects, Romaero SA, Mecon SA and IOR SA although considered illiquid, were valued
using the market price;
- the holdings in companies in liquidation, dissolution, bankruptcy, insolvency, judicial reorganisation
or which ceased their activity were valued at nil.
For Level 3, the equity investments valuations were performed using valuation techniques that maximise
the use of relevant observable inputs and minimise the use of unobservable inputs, which ensures that
the underlying data is accurate, and that appropriate inputs were used in the valuation.
Significant unobservable inputs are the following:
Revenue multiple: is a tool used to appraise businesses based on market comparison to similar public
companies. Revenue based business value estimation may be preferred to earnings multiple valuation
whenever there is uncertainty regarding some of a company's expenses. The most common tendency is
to value a firm based on its sales whenever this number is the most direct indication of a company's
earning capacity.
EBITDA multiple:
represents the most relevant multiple used when pricing investments and it is
calculated using information from comparable public companies (similar geographic location, industry
size, target markets and other factors that valuers consider to be reasonable). The traded multiples for
comparable companies are determined by dividing the enterprise value of a company by its EBITDA
and further discounted for considerations such as the lack of marketability and other differences
between the comparable peer group and specific company.
Discount for lack of marketability: represents the discount applied to the comparable market multiples
to reflect the liquidity differences between a portfolio company relative to its comparable peer group.
Valuers estimate the discount for lack of marketability based on their professional judgement after
considering market liquidity conditions and company-specific factors.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 32
5. Financial assets and financial liabilities (continued) 
Valuation process Financial assets measured at fair value – Level 3 (continued) 
Discount for lack of control: represents the discount applied to reflect the absence of the power of
control considered under the discounted cash flow method, in order to derive the value of a minority
shareholding in the equity of subject companies.
Weighted average cost of capital: represents the calculation of a company’s cost of capital in nominal
terms (including inflation), based on the Capital Asset Pricing Model. All capital sources (shares, bonds
and any other long-term debts) are included in a weighted average cost of capital calculation.
Long‐term growth rate (g), also known as the terminal growth rate, is the rate at which a company’s
cash flows are expected to grow indefinitely into the future. It represents the long-term sustainable
growth that a company can achieve.
Price/Earnings multiple (“P/E”): Price/Earnings ratio is a market prospect ratio that calculates the
market value of an investment relative to its earnings by comparing the market price per share by the
earnings per share. It shows what the market is willing to pay for an investment based on its current
earnings. Investors often use this ratio to evaluate what an investment's fair market value should be by
predicting future earnings per share.
For the portfolio company CN Aeroporturi Bucuresti SA a significant unobservable input is linked to the
final outcome of the share capital increase process that the company needs to implement by
incorporating the plot of land. Assuming the share capital increase is performed at a reasonable
valuation of the plot of land, it is the Fund’s intention to participate with cash in order to preserve its
stake in the holding. The Fund will initiate any necessary legal actions to protect the interest of the
shareholders, as needed and depending on the future actions the company will take related to the
capital increase process. Please see Note 17 Equity investments – CNAB litigation section for more
information.
Fondul Proprietatea is not directly affected by climate related matters. However, Fondul owns holdings
in a number of portfolio companies which by the specific of their activity are impacted by climate
related matters. The assessment of climate-related factors and their impact on valuation require
comprehensive and detailed company-specific data related to a set of environmental, ecological,
economic, social and governance factors. The process of reaching a globally accepted set of standards to
incorporate ESG considerations into the valuation of a business is still in progress.
For the relevant portfolio companies, based on the information available, under income approach a
higher volatility embedded in the market risk premium was considered compared to previous year.
Given the lack of transparency regarding the ESG impact on the portfolio companies and peers’
profitability and future growth, gener
ally no adjustments were applied in the market multiples used as
within the market approach, as these were deemed to already reflect the investors perspective
regarding the companies’ profitability and risk related to ESG factors. Please note that at 31 December
2023 the income approach is the main method for most of the portfolio holdings (97.5%) as described
below.
The following tables set out information about the significant unobservable inputs used at 31
December 2023 and 31 December 2022 in measuring equity instruments classified as Level 3 in the fair
value hierarchy:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 33
5. Financial assets and financial liabilities (continued) 
Valuation process Financial assets measured at fair value – Level 3 (continued) 
Financial 
assets 
Fair value as at  
31 December 2023 
Main valuation 
technique 
Unobservable inputs 
range (weighted 
average) 
Relationship of unobservable inputs 
to fair value 
Total  1,672,153,855      
Unlisted
equity
instruments
and listed
illiquid
equity
instruments
1,629,935,366 Income approach
– discounted cash
flow method
(DCF)
EBIT estimated for each
company
Weighted average cost of
capital ranging from
11.4% - 16.91% (12.97%)
Discount for lack of
marketability ranging
from 11.4% - 16.1%
(15.77%)
Discount for lack of
control: 0% - 27%
(18.29%)
Long-term growth rate:
2.50% - 3% (2.50%)
The higher the EBIT estimates, the
higher the fair value.
The lower the weighted average cost of
capital, the higher the fair value.
The lower the discount for the lack of
marketability, the higher the fair value.
The lower the discount for the lack of
control, the higher the fair value.
The higher the long-term growth rate,
the higher the fair value.
Unlisted
equity
instruments
21,800,958 Market approach
- comparable
companies
(based on
EBITDA multiple)
EBITDA estimated for
each company
EBITDA multiple: 4.80
Discount for lack of
marketability: 16.1%
The higher the EBITDA estimates, the
higher the fair value.
The higher the EBITDA multiple, the
higher the fair value.
The lower discount for lack of
marketability, the hi
g
her the fair value.
Unlisted
equity
instruments
17,398,691 Market approach
- comparable
companies
(based on Price
/Earnings
multiple)
Price/Earnings value:
6.09
Discount for lack of
marketability: 22.1%
The higher the Price /Earnings
multiple, the higher the fair value.
The lower the discount for the lack of
marketability, the higher the fair value.
Listed
illiquid
equity
instruments
2,389,495 Asset based
approach
Discount for lack of
marketability: 30.1%
The lower discount for lack of
marketability, the higher the fair value.
The asset based approach implies
actual financial data obtained for the
company (public) based on which
quantitative un-observable adjustments
are made by the valuers. The
significance of the adjustment is
directly seen in the resulting value of
the company.
Unlisted
equity
instruments
- Market approach
- comparable
companies
(based on
Revenue
multiple)
Revenue multiple: 0.5
The costs with emission certificates
that were not provisioned were higher
than the estimated value of the
enterprise, thus the market method
approach resulted in a valuation of 0
Lei and the DCF method could not be
applied, because all future cash flows
were negative.
Listed
illiquid
equity
instruments
629,346 Bucharest Stock
Exchange
reference price
These shares are traded infrequently and have little price
transparency. Fair values for these equity instruments were
considered to be those used in the calculation of the net asset value
of the Fund, in accordance with the regulations issued by the
Financial Supervisory Authority.
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 34
5. Financial assets and financial liabilities (continued) 
Valuation process Financial assets measured at fair value – Level 3 (continued) 
Financial 
assets 
Fair value as at  
31 December 2022 
Main valuation 
technique 
Unobservable inputs 
range (weighted 
average) 
Relationship of unobservable 
inputs to fair value 
Total  13,582,168,395      
Unlisted
equity
instruments
12,198,937,936 Market approach
- comparable
companies
(based on
EBITDA multiple)
EBITDA estimated for
each company
EBITDA multiple ranging
from 3.49 - 10.23 (9.82)
Discount for lack of
marketability: 7.21% -
16.20% (7.98%)
The higher the EBITDA estimates, the
higher the fair value.
The higher the EBITDA multiple, the
higher the fair value.
The lower discount for lack of
marketability, the higher the fair
value.
Unlisted
equity
instruments
and listed
illiquid
equity
instruments
1,318,758,036 Income approach
- discounted cash
flow method
(DCF)
EBIT estimated for each
company
Weighted average cost of
capital ranging from 10%
- 20.6% (12.38%)
Discount for lack of
marketability ranging
from 11.4% - 16.2%
(15.82%)
Discount for lack of
control: 0% - 26.7%
(17.87%)
Long-term growth rate:
2.50% - 3% (2.50%)
The higher the EBIT estimates, the
higher the fair value.
The lower the weighted average cost
of capital, the higher the fair value.
The lower the discount for the lack of
marketability, the higher the fair
value.
The lower the discount for the lack of
control, the higher the fair value.
The higher the long-term growth rate,
the higher the fair value.
Unlisted
equity
instruments
21,700,000 Market approach
- comparable
companies
(based on Price
/Earnings
multiple)
Price/Earnings value: 5.5
(5.5)
Discount for lack of
marketability: 22.8%
(22.8%)
The higher the Price /Earnings
multiple, the higher the fair value.
The lower the discount for the lack of
marketability, the higher the fair
value.
Unlisted
equity
instruments
- Market approach
- comparable
companies
(based on
Revenue
multiple)
Revenue multiple: 0.36
Weighted average cost of
capital 13.6%
Long-term revenue
g
rowth rate: 2.50%
Irrespective of the evolution of the
unobservable inputs, the value of this
investment is zero due to the negative
equity value of this company
generated by a high level of net debts.
Listed
illiquid
equity
instruments
42,772,423 Bucharest Stock
Exchange
reference price
These shares are traded infrequently and have little price
transparency. Fair values for these equity instruments were
considered to be those used in the calculation of the net asset value
of the Fund, in accordance with the regulations issued by the
Financial Supervisory Authority.
As at 31 December 2023 and 31 December 2022, the Fund’s investments in companies in liquidation,
dissolution, bankruptcy, insolvency, judicial reorganisation or which ceased their activity are valued at
nil.
Although Fund’s management believes that its estimates of fair value for these equity investments are
appropriate, the use of different methodologies or assumptions could lead to different measurement of
fair value.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 35
5. Financial assets and financial liabilities (continued) 
Sensitivity analysis 
The below sensitivity analysis was performed for the equity investments representing 96.3% (31
December 2022: 99%) of the total unlisted portfolio and considered the most relevant unobservable
inputs impacting the holdings values and their reasonable possible variance. The analysis assumes that
all other variables remain unchanged.
Valuation techniques used 
 
Change in the significant unobservable inputs 
used in the valuation  
Impact on the profit or loss as at 31 
December 
2023  2022 
Income approach - discounted cash
flow method
EBIT increase by 10% 153,760,689 118,420,343
EBIT decrease by 10% (152,657,797) (117,758,463)
Weighted average cost of capital increase with 0.50
percentage points (54,660,000) (48,450,000)
Weighted average cost of capital decrease with 0.50
percentage points 61,490,000 55,030,000
Discount for lack of marketability increase by 10% (30,220,000) (23,940,000)
Discount for lack of marketability decrease by 10% 30,220,000 23,940,000
Discount for lack of control increase by 10% (36,530,000) (28,650,000)
Discount for lack of control decrease by 10% 36,530,000 28,650,000
Long-term revenue growth rate increase with 0.50
percentage points
67,400,000 60,310,000
Long-term revenue growth rate decrease with 0.50
percentage points
(59,910,000) (53,110,000)
Market approach - comparable
companies (based on EBITDA
multiple)
EBITDA estimate increase by 10%
Not calculated –
immaterial to Fund at
31 December 2023
1,153,606,636
EBITDA estimate decrease by 10% (1,153,606,636)
EBITDA multiple increase by 10% 1,153,606,636
EBITDA multiple decrease by 10% (1,153,606,636)
Discount for lack of marketability increase by 10% (106,139,450)
Discount for lack of marketability decrease by 10% 106,139,450
In addition to the analysis presented above, the Sole Director has also prepared the following specific
analysis for the most significant unlisted holdings:
Company  Value 
% of equity portfolio 
at 31 December 2023 
Significant 
valuation input 
CN Aeroporturi Bucuresti SA 877,699,934 48.97% Passenger traffic
CN Administratia Porturilor
Maritime SA 328,299,993 18.32% Turnover
Societatea Nationala a Sarii SA 318,399,807 17.76% Net Sales
Total 1,524,399,734  85.05%   
The sensitivity analysis was based on the stress tests analysis performed with the assistance of the of the
external valuation services provider KPMG. The Equity value of the companies considered in the stress
test analysis was estimated based on the income approach (DCF methodology).
a) Changes in Passenger traffic  ‐ CN Aeroporturi Bucuresti SA 
Assumptions used in Base Case Valuation
During the forecasted period, up to FY 2027 it is estimated that the company’s revenues and traffic will
recover up to and exceed levels registered before the COVID 19 outbreak. The assessments are in line
with industry forecasts.
Scenarios considered and results  
For high and low case the passenger traffic was estimated in line with corresponding best/ worst case
scenarios published by industry specialists.
In the high and low scenarios, passenger traffic was estimated in accordance with the corresponding
high/low scenarios published in industry reports.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 36
5. Financial assets and financial liabilities (continued) 
Sensitivity analysis (continued) 
a) Changes in Passenger traffic  ‐ CN Aeroporturi Bucuresti SA (continued) 
For low case the Fund estimates that the value of the holding would decrease by 18.1% whereas in the
high case an increase of 15.8% is estimated.
b) Changes in Turnover ‐ CN Administratia Porturilor Maritime SA 
Assumptions used in Base Case Valuation 
For the forecast period up to FY 2025 the turnover was estimated based on adjusted figures while
maintaining the yearly increase budgeted by the company. For the remainder of the forecast period up
to FY 2027 the growth rate was considered in line with expected inflation rate assuming that that the
company will maintain its operating capacity
Scenarios considered and results 
For high case the analysis took into consideration the fact that the company will achieve the budget for
FY 2023 and in the context of the change expected in geopolitical context assumes the company will
increase its net sales in real terms during the period FY 2024 -FY 2028.
For low case the analysis maintained the projected turnover for FY 2023 however for the rest of the
forecast period, a 50% realization of projected turnover increases was used heading to an increase in
line with inflation rate in the terminal period.
For low case the Fund estimates that the value of the holding would decrease by 18.2% whereas in the
high case an increase of 15.8% is estimated.
c) Changes in Net sales ‐ Societatea Nationala a Sarii
 SA 
Assump
tions used in Base Case Valuation 
For the forecasted period up to FY 2025 the analysis considered net sales in line with expected results
considering a steady growth rate. For the rest of the forecasted period the analysis considered an
adjustment in yearly sales under the assumption that the company will be able to continue obtaining
partial revenues from former clients as well as prices increase in line with inflation.
Scenarios considered and results 
For high case forecast period up to FY 2025, the same growth rate was used as for the base case. For the
rest of the period the analysis considered that the company will be able to obtain new revenues from
former clients at full previous levels. For the rest of the forecast period, new contract revenues and
projected inflation were considered.
For low case the analysis, an increase in line with the expected inflation up to FY 2025 was considered.
For the remainder of the forecast period the analysis considered an adjustment in yearly sales under the
assumption that the company will be able to continue obtaining a quarter of the revenues from former
clients, as projected in the base case.
For low case the Fund estimates that the value of the holding would decrease by 8.4% whereas in the
high case an increase of 13.2% is estimated.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 37
6. Net (loss)/gain from equity investments at fair value through profit or loss 
Year ended 
31 December 2023 
Year ended 
31 December 2022 
Net unrealised gain from equity investments at fair
value through profit or loss
316,280,361
2,216,096,111
Net unrealised (loss) from equity investments at
fair value through profit or loss
(58,265,275)
(254,615,801)
Realised (loss) from equity investments at fair
value through profit or loss
(1,870,266,600)
(117,724,229)
Total  (1,612,251,514)           1,843,756,081  
The amounts presented above refer to the net gain and loss for the period at portfolio holding level.
The net unrealised gain from equity investments at fair value through profit or loss the year ended 31
December 2023 was mainly generated by the change in fair value for the holdings in CN Aeroporturi
Bucuresti SA (unrealised gain of RON 164,699,934), Complexul Energetic Oltenia SA(unrealised gain of
RON 56,840,465), CN Administratia Porturilor Maritime SA (unrealised gain of RON 45,299,993) and
Societatea Nationala a Sarii SA (unrealised gain of RON 44,699,807). The unrealised gain from equity
investments at fair value through profit or loss for the year ended 31 December 2022 was mainly
generated by the change in fair value for the holding in Hidroelectrica SA (unrealised gain of RON
2,107,876,030), as a result of the strong performance registered by the company in the period in the
electricity market context.
The net unrealised loss from equity investments at fair value through profit or loss for the year ended
31 December 2023 was mainly generated by the decrease in the fair value of the holding in Romaero SA
as a result of the financial difficulties registered by the company during 2023, this company becoming
insolvent in on January 17, 2024 (unrealised loss of RON 41,974,112 compared to 31 December 2022).
The caption also contains the fair value movement registered for Engie Romania SA prior to its
classification as non-current asset held for sale (unrealised loss of RON 8,083,832). The unrealised loss
from equity investments at fair value through profit or loss for the year ended 31 December 2022 was
generated by the negative change in fair value for the holding in Engie Romania SA (unrealised loss of
RON 82,000,000), Enel Energie SA (unrealised loss of RON 39,500,000) and E-Distributie companies
(unrealised loss of RON 68,600,000).
The realised loss from equity investment at fair value through profit or loss for the year ended 31
December 2023 was generated by the negative change in fair value for Hidroelectrica SA following the
fair value adjustment to IPO price (RON 1,870,266,600 decrease) prior to the sale of the Fund’s entire
stake in the company – For more details please see Note 17 – Equity. investments.
7. Gross dividend income 
Period ended 
31 December 2023 
Period ended 
31 December 2022 
Hidroelectrica SA 867,437,770 764,040,021
Societatea Nationala a Sarii SA 55,996,590 29,345,514
CN Aeroporturi Bucuresti SA 31,486,581 -
CN Administratia Porturilor Maritime SA 5,728,126 6,677,532
OMV Petrom SA - 133,564,153
Others 2,117,861 1,271,181
Total  962,766,928 934,898,400
The dividend income was subject to 8% Romanian withholding tax during the year ended 31 December
2023 and subject to 5% Romanian withholding tax during the year ended 31 December 2022. In cases
where the relevant shareholding of the Fund was above 10% of total share capital of the paying
company, for at least one year prior to the dividend payment date, a withholding tax exemption is
applied.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 38
7. Gross dividend income (continued) 
According to the Annual Cash Distribution Policy of the Fund, the special cash distributions received
from portfolio companies are not subject to Fund’s dividend distribution to shareholders. The Sole
Director may propose the distribution to shareholders of such amounts after considering the on-going
measures imposed by the Discount Control Mechanism and the available cash.
For the purpose of the Annual Cash Distribution Policy of the Fund, the special cash distributions are
the amounts distributed by the portfolio companies from other sources than the annual net profit
included in the latest annual financial statements. From the total gross dividend income for the year
ended 31 December 2023 a total amount of RON 87,369,624 represented special cash distributions
(year ended 31 December 2022: RON 275,800,239).
8. Interest income 
The interest income recorded for the year ended 31 December 2023 of RON 157,467,146 (year ended
31 December 2022: RON 25,065,131) was mainly generated by the cash inflows from Hidroelectrica
IPO. The proceeds from this transaction were placed in various short-term instruments for the period
between the IPO settlement date and the Payment date of the dividend distribution approved by the
shareholders on 18 August 2023, which occurred on 29 September 2023. These instruments included
bank deposits, treasury bills and government bonds. The remaining interest income for 2023 as well as
the amounts recorded for the year ended 31 December 2022 were generated by other cash placements
performed by the Fund under the regular cash management process.
9. Net realised gain/(loss) from non‐current assets held for sale  
On 14 December 2022 Enel Spa announced that it entered into an exclusivity agreement with Greek
company Public Power Corporation (PPC) in relation to the potential disposal of all the equity held by
Enel Group in Romania. On 14 March 2023 the Fund received a notice from Enel Spa in relation to the
exercise by the Fund of the tag along right under the Privatisation Agreement entered into between S.C
Electrica SA and Enel on 11 June 2007 relating to the acquisition of and subscription for shares in the
subsidiary for Electricity Distribution and Supply Electrica Muntenia Sud S.A., in relation to Fondul
Proprietatea’s shareholding in Enel Energie Muntenia S.A. and E-Distributie Muntenia S.A. The tag along
notice is triggered following the entry by Enel and the company PPC into an agreement for the sale of
all the equity stakes held by the Enel Group in Romania. As of 31 March 2023, the Fund reclassified, in
accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” requirements,
its entire holdings in the companies Enel Energie Muntenia SA, Enel Energie SA, E-Distributie Banat SA,
E-Distributie Dobrogea SA, E-Distributie Muntenia SA, as non-current assets held for sale at their total
valuation at reclassification date of RON 588,800,000. On 19 April 2023, the Fund signed a Sale and
Purchase Agreement (“SPA”) with PPC by which it agreed to sell its entire stake in the Enel group
companies for a consideration of RON 650,000,000. The sale was completed on 26 October 2023 –
Please see Note 18 – Non-current assets held for sale for further details.
The realised gain in 2023 of RON 61,200,000 from the disposal of the non-current assets held for sale
represents the difference between the total proceeds from the disposal (RON 650,000,000.) and the fair
value at the reclassification date of the non-current assets held for sale disposed of (RON 588,800,000). 
In January 2022, the Fund publicly announced that it had taken the decision to proceed with the partial
sale of the investment in OMV Petrom SA (listed company) through an accelerated bookbuild offering.
Consequently, as at 31 December 2021, the Fund reclassified, in accordance with IFRS 5 “Non-current
Assets Held for Sale and Discontinued Operations” requirements, the part of the holding in OMV Petrom
SA of RON 1,135,225,000 subject to the bookbuild offering, as non-current assets held for sale. The sale
offering was completed on 19 January 2022 for 2,275,000,000 shares and the gross proceeds received
from the disposal amounted to RON 978,250,000– Please see Note 18 – Non-current assets held for sale
for further details.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 39
9. Net realised gain/(loss) from non‐current assets held for sale (continued) 
The realised loss in 2022 of RON 156,975,000 from the disposal of the non-current assets held for sale
represents the difference between the total proceeds from the disposal (RON 978,250,000) and the fair
value at the reclassification date of the non-current assets held for sale disposed of (RON
1,135,225,000).
10. Net  gain from other financial instruments at fair value through profit or loss 
The amounts presented in this category at 31 December 2023 represent the net gain/(loss) generated
by the change in fair value for the government bonds held by the Fund during the year ended 31
December 2023.
The net gain/(loss) from other financial instruments at fair value through profit or loss for the year ended
31 December 2022 includes the realised gain from the change in the fair value of the receivable related
to the unpaid share capital from the Romanian State which was classified at fair value through profit or
loss, in amount of RON 189,182,422.
On 1 February 2022, the Romanian State, represented by the Ministry of Finance paid RON 189,182,422
to the Fund, as payment for the unpaid shares owned by the Romanian State in the Fund.
For the period ended 31 December 2022 this caption also includes net gain of RON 61,345,112 from the
change in fair value of the preferential rights linked to the share capital increase of OMV Petrom SA as
mentioned in the annual financial statements published for the previous year.
11. Operating expenses  
 Period ended 
31 December 2023  
 Period ended 
31 December 2022  
Transaction costs (i)  242,865,533  19,087,916 
Operating expenses, out of which:            224,440,567           106,153,485
-FTIS administration fees (ii) 202,152,281 79,364,514
-Third party services (iii) 9,346,053 9,578,923
-FSA monthly fees (iv) 8,844,362 14,337,444
-Board of Nominees (“BON”) remunerations and
related taxes (v) 1,703,556 1,386,213
-Other BON related costs (vi) 1,000,127 822,451
-Other operating expenses 968,933 249,424
-Depositary bank fee 425,255 414,516
467,306,100  125,241,401 
(i) Transaction costs 
For the year ended 31 December 2023, these costs were mainly related to costs for the listing of
Hidroelectrica SA and include bank, legal and other consultant fees.
For the year ended 31 December 2022 these fees were mainly related to the sale of the OMV Petrom
holding, consisting of brokerage fees, market fees and legal fees linked to the sale in total amount of RON
14 million and costs related to ongoing listing projects in amount of RON 5 million.
(ii) FTIS administration fees  
The administration fees include the base fee and the distribution fee. The distribution fee related to
dividend distributions to shareholders is recognised through profit or loss while the distribution fee
related to the buy-backs is recognised directly in equity as buy-backs acquisition cost.
The administration fees recorded during the year ended 31 December 2023 and the year ended 31
December 2022 are presented in the table below:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 40
11. Operating expenses (continued) 
(ii) FTIS administration fees (continued) 
 
Period ended 
31 December 2023 
Period ended 
31 December 
2022 
Base fee 36,785,547 57,328,011
Distribution fee related to dividend distributions to
shareholders 165,366,734 19,321,869
Performance fee - 2,714,634
Administration fees recognised in profit or loss  202,152,281  79,364,514 
Distribution fees related to buy-backs recognised in
equity  35,695,074 27,866,008
Total administration fees 237,847,355  107,230,522 
Distribution fees related to the buy-backs refer to treasury shares acquired during the year through daily
transactions or public tender offers (2023: 225,000,000 shares through the public offer completed in
March and 1,670,000,000 shares through the public offer completed in December, 2022: 325,000,000
shares through the public offer concluded in June).
The administration fees are invoiced and paid on a quarterly basis. The performance fee is no longer
applicable after 31 March 2022, in accordance with the provisions of the Management Agreement in
force.
The distribution fees related to buy-backs recognised in equity are included in caption Treasury Shares
in the Statement of Financial position for both 31 December 2023 and 31 December 2022.
(iii) Third party services  
Third party services recorded during the period included the following categories of expenses:
 
Period ended 
31 December 2023 
Period ended 
31 December 2022 
Legal consultancy and litigation assistance 2,745,690 2,581,126
Portfolio valuation services 1,254,903 2,352,068
Public relations services 863,143 958,321
Investors' relations expenses 839,561 994,845
Financial auditor’s fees 819,701 807,152
Regulatory and compliance expenses 485,841 476,107
Tax compliance and advisory services 440,344 406,094
Corporate brokerage fee 411,964 290,994
GSM organization 314,424 152,062
Software maintenance 261,104 240,641
Other services 909,378 319,513
 9,346,053    9,578,923  
Other services mainly include other consultant fees, internal audit fees and Central Depositary
distribution fees.
The financial audit fees are recorded in the year they relate to. The financial auditor of Fondul
Proprietatea for the financial years ended 31 December 2022 and 31 December 2023 is Ernst & Young
Assurance Services SRL.
The table below contains information regarding total audit fees for the years ended 31 December 2023
and 31 December 2022.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 41
11. Operating expenses (continued) 
(iii) Third party services (continued) 
Financial auditor's fee (including VAT) 
Year ended 
31 December 2023 
Year ended 
31 December 2022 
Statutory audit 659,206 662,092
Non-audit services 160,496 145,059
Total fees 819,701  807,152 
Non-audit service fees are related to the annual limited assurance report specifically requested by the
FSA regarding buy-back programmes funding.
(iv) FSA monthly fees 
During 2023 and 2022, the FSA fee was 0.0078% per month applied on the total net asset value. The
decrease seen between the two periods is due to the fact that the Fund’s total net asset value
significantly decreased following Hidroelectrica IPO proceeds distribution and also due to buybacks
performed.
(v) BON remunerations and related taxes 
Remunerations and related taxes included the remunerations paid to the members of the Board of
Nominees as well as the related taxes and contributions payable to the Romanian State budget (see 
Note 22(a) Related parties for further details).
(vi) Other BON related costs 
Other costs incurred by the Fund in relation to the members of the Board of Nominees comprised:
Period ended 
31 December 2023
Period ended 
31 December 2022
Costs with accommodation, transport, meals etc. 496,042 214,676
Professional insurance costs 414,988 518,061
Advisory services 89,097 89,714
1,000,127 822,451 
12. Finance cost 
On 17 May 2023, for cash management purposes, the Fund entered into a short-term loan facility
agreement with BRD – Groupe Societe Generale SA for a total committed amount of RON 284,000,000.
The amounts presented in this category for the year ended 31 December 2023 represent the
commitment fee charged by the credit institution for this facility. The utilisation period for this facility
ended on 30 June 2023 and the final maturity of the facility was on 31 July 2023 – no amounts were
drawn by the Fund.
The amounts registered in the year ended 31 December 2022 represent the commitment fees for the
previous loan facility which the Fund had signed with BRD – Groupe Societe Generale SA – total amount
of RON 45,000,000 which remained undrawn and expired on 29 June 2022.
13. Income tax  
No current tax and no deferred tax were recorded during the year ended 31 December 2023 and the
year ended 31 December 2022.
 
Period ende d 
31 December 2023 
Period ended 
31 December 2022 
Reconciliation of effective tax rate
Net (loss)/profit for the period (904,097,086) 2,769,448,871
Withholding tax on the dividend income  (6,980,407)  (6,678,208) 
(Loss)/Profit excluding income tax  (897,116,679) 2,776,127,079 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 42
13. Income tax (continued) 
Income tax  benefit/(expense) using the standard 
tax rate (16%)  143,538,669  (444,180,333) 
Impact on the income tax of: 
Non-taxable income (other than dividend income) 1,694,222,139 714,787,810
Taxation applied on dividend income 147,062,301 142,905,536
Non-deductible expenses (2,016,608,781) (383,704,645)
Elements similar to revenues (taxable equity items) (9,135,678) (1,787,623)
Fiscal result impact in the current period 33,940,944 (34,698,953)
Tax on income (i.e. withholding tax on the dividend
income)  (6,980,407)  (6,678,208) 
The fiscal result impact as at 31 December 2023 of RON 33,940,944 represents the current tax on profit
for the year ended 31 December 2023 which was offset by the Fund’s tax losses carried forward
The fiscal result impact as at 31 December 2022 of RON 34,698,953 represents the unrecognised
deferred tax asset for the tax losses recorded for the year ended 31 December 2022.
Non-taxable income and non-deductible expenses are mainly generated by fair value gains / losses and
by dividend income related to the equity portfolio companies in which the Fund has held more than
10% stake for more than one year continuously.
As at 31 December 2023 and 31 December 2022 there is no income tax due or to be recovered from the
State Budget by the Fund.
See Note 16 Deferred tax for details regarding the deferred tax computation and recognition.
As described in Note 4 Risk management – (d) Taxation risk the fiscal authorities introduced a new
minimum tax rate based on adjusted turnover to be paid starting with 1 January 2024. Based on the
analysis performed by the Sole Director, as the Fund’s adjusted turnover is below EUR 50 million in the
fiscal year 2023, the Fund falls outside the area of applicability of the new minimum tax for the financial
year which will end on 31 December 2024.
14. Basic and diluted (loss)/earnings per share 
Basic earnings per share is calculated by dividing the profit or loss for the period by the weighted
average number of ordinary paid shares in issue during the period, excluding the average number of
ordinary shares purchased by the Fund and held as treasury shares (based on their settlement date). As
at 31 December 2023 and 31 December 2022, none of the Fund’s issued shares or other instruments
had dilutive effect, therefore basic and diluted earnings per share are the same.
Period ended 
31 December 2023 
Period ended 
31 December 
2022 
(Loss)/Profit for the period (904,097,086) 2,769,448,871
Weighted average number of ordinary
shares 5,289,087,696 5,937,410,145
Basic and diluted earnings per share   (0.1709)  0.4664 
 
 
 
 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 43
15. Cash and current accounts, deposits with banks and distribution accounts 
31 December 2023  31 December 2022 
Petty cash 416 416
Current accounts with banks 59,693 57,650
Cash and current accounts  60,109  58,0 66  
31 December 2023  31 December 2022 
Bank deposits with original maturities
of less than three months 191,272,158 911,699,816
Interest accrued on bank deposits 96,820 916,580
Deposits with banks  191,368,978   912,616,396 
31 December 2023  31 December 2022 
Distributions bank accounts 546,066,907 73,775,078
Interest accrued on distributions bank
accounts 1,429,974 -
Distributions bank accounts  547,496,881  73,775,078 
The cash held in the distributions bank accounts can only be used for payments to shareholders. Such
payments are subject to a general statute of limitation, respectively the shareholders may request the
payments only within a three-year term starting with the distribution payment date, except for specific
instances that are individually assessed. Please see Note 3 – Material accounting policies (e) Cash,
current accounts and deposits with banks.
16. Deferred tax  
As at 31 December 2023 and 31 December 2022 there is no temporary difference between the carrying
amount and tax base of assets and liabilities that could result in amounts that are deductible/ taxable
when determining taxable profit or tax loss of future periods. In consequence, as at 31 December 2023
and 31 December 2022, the net deferred tax position is nil as the Fund did not recognise any deferred
tax asset or deferred tax liability.
As at 31 December 2023 the unused fiscal loss carried forward amounts to RON 485,047,689 out of which
RON 288,393,894 will expire on 31 December 2027 and RON 196,653,795 will expire on 31 December
2029. As described in Note 4 Risk management – (d) Taxation risk, starting with 1 January 2024, the
Fund will be able to offset only 70% of any tax profit with past tax losses. The remaining 30% of any tax
profit will be subject to Romanian corporate income tax at the 16% rate meaning that the Fund might be
liable to pay income tax starting with the end of the first quarter of 2024 if the Fund will be showing a
taxable profit for this period.. The actual amounts which will be due to the state budget will depend on
the amount of taxable/non-taxable elements recorded during the year 2024.
As at 31 December 2022 the unused fiscal loss carried forward amounts to RON 717,393,241 out of which
RON 500,524,785 was to expire on 31 December 2027 and RON 216,868,456 was to expire on 31
December 2029.
There was no movement in the deferred tax position during the year ended 31 December 2023 and year
ended 31 December 2022. The deferred tax balances during both these periods were zero.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 44
17. Equity investments  
All Fund’s equity investments are classified at fair value through profit or loss.
The equity instruments of the Fund are valued at fair value as follows:
● At fair value, determined either by reference to published prices on the stock exchange where shares
are traded (listed and liquid securities) or assessed using valuation techniques in accordance with
International Valuation Standards (unlisted and listed illiquid securities);
● Valued at nil, for holdings in companies in liquidation, dissolution, bankruptcy, insolvency, judicial
reorganisation or which ceased their activity.
Portfolio  
As at 31 December 2023 and 31 December 2022 the Fund’s portfolio comprised the following holdings:
31 December 2023  31 December 2022 
CN Aeroporturi Bucuresti SA 877,699,934 713,000,000
Engie Romania SA 432,616,168 440,700,000
Administratia Porturilor Maritime SA 328,299,993 283,000,000
Societatea Nationala a Sarii SA 318,399,807 273,700,000
Alro SA 112,242,460 114,429,001
Complexul Energetic Oltenia SA 56,840,465 -
Zirom SA 28,584,600 28,843,300
Posta Romana SA 17,398,691 21,700,000
Romaero SA - 41,974,112
Hidroelectrica SA  (sold) - 11,148,800,000
E-Distributie Banat SA (sold) - 212,900,000
E-Distributie Muntenia SA (sold) - 183,900,000
E-Distributie Dobrogea SA (sold) - 170,400,000
Enel Energie SA (sold) - 21,600,000
Other 44,930,365 41,650,983
Total equity investments 2,217,012,482 13,696,597,396
Reclassified as non-current assets held for sale (432,616,168) ‐ 
Total equity investments as per statement of 
financial position  1,784,396,314  13,696,597,396 
None of the equity investments are pledged as collateral for liabilities.
As 31 December 2023 and 31 December 2022 the Fund had the following subsidiaries, all of which are
incorporated in Romania:
31 December 2023  31 December 2022 
Zirom SA 28,584,600 28,843,300
Alcom SA 10,071,875 10,407,436
Comsig SA n/a -
38,656,475  39,250,736 
As at 31 December 2022 Comsig SA was in administrative liquidation process, which was finalised
being deregistered from the National Trade Registry on 28 March 2023.
As 31 December 2023 and 31 December 2022 the Fund had two associates, both incorporated in
Romania:
31 December 2023  31 December 2022 
Societatea Nationala a Sarii SA 318,399,807 273,700,000
Plafar SA 1,987,896 2,199,600
320,387,703  275,899,600 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 45
17. Equity investments (continued) 
Portfolio (continued)
Please see Note 22(b) and (c)– Related parties for information on the transactions and balances
registered with these companies
The movement in the carrying amounts of equity investments at fair value through profit or loss during
the year ended 31 December 2023 and the year ended 31 December 2022 is presented below:
 
Period ende d 
31 December 
2023
Period ended 
31 December 2022
Opening balance
   
13,696,597,396          12,577,678,606  
Net (loss)/gain from equity investments at fair
value through profit or loss – see Note 6
(1,612,251,514) 1,843,756,082
Subscriptions to share capital increase of
portfolio companies
2,678,640   17,451,559  
Fair value net gain of preferential rights
exercised and converted to shares – see Note 10 - 61,345,112
Disposals (see below) (9,281,212,040) (803,633,963)
Reclassification to non-current assets held for
sale – see note 18
(1,021,416,168) -
Closing balance 1,784,396,314          13,696,597,396  
Listing of Hidroelectrica SA  
On 31 March 2022, the shareholders of Hidroelectrica SA approved the initiation of the listing of the
Company’s shares on the Bucharest Stock Exchange following a public offering of the Company’s shares
held by the Fund. On 22 June 2023, the FSA issued Decision no. 641/ 22.06.2023 by which it approved
the documentation regarding the initial public offering of Hidroelectrica SA shares.
On 23 June the prospectus of the offering was published which contained an indicative price range
between RON 94 and RON 112 as well as a discount for retail investors in the first five business days of
the offer period. The offer period was set between 23 June 2023 and 4 July 2023. Citigroup Global
Markets Europe AG, Erste Group Bank AG, Jefferies GmbH, and Morgan Stanley Europe SE acted as Joint
Global Coordinators in connection with the offering. The Fund granted the Joint Global Coordinators an
option (the “Over-Allotment Option”), representing up to 15% of the Offer Shares, exercisable within 30
calendar days following the Admission to trading.
The expected size of the offer, including any Over-Allotment Option, was for up to 89,708,177 Offer
Shares to be sold by the Fund, representing up to its entire holding of 19.94% of Hidroelectrica total
issued share capital. On 5 July 2023, the Fund announced its agreement to sell 89,708,177 shares,
representing 19.94% of Hidroelectrica SA total issued share capital, under the following structure:
Category of shares  No. of shares sold  IPO price (RON)  Total gross proceeds (RON) 
Base Deal shares
  78,007,110    8,064,301,072 
● Retail Tranche – with discount  15,525,118  RON 100 .88  
● Retail Tranche – no discount  2,416,517  RON 104  
● Institutional Tranche  60,065,475  RON 104
Over‐Allotment shares
  11,701,067    1,216,910,968 
● Institutional Tranche  11,701,067  RON 104  
Total  89,708,177  9,281,212,040 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 46
17. Equity investments (continued) 
Listing of Hidroelectrica SA (continued)  
On 10 July the Fund received gross proceeds of RON 8,064,301,072 (excluding any Over-Allotment
Option). On 12 July 2023 the Fund issued a Convening Notice of the Ordinary General Meeting of
Shareholders in which it proposed that a dividend be approved in order to disburse these funds.
Admission and start of trading on BVB under the symbol “H2O” took place on 12 July 2023 and
Hidroelectrica SA shares were included in the BET index of the BVB immediately following the
admission.
The Stabilisation Period ended on 19 July 2023, following the notification received by the Fund
according to the details presented in the current report published on the same date. Further to this, on
21 July 2023, the Fund collected the additional gross proceeds in the amount of RON 1,216,910,968 and
the sale of the 11,701,067 additional shares in Hidroelectrica SA was completed. The Fund holds no
more shares in Hidroelectrica SA.
CN Aeroporturi Bucuresti SA (“CNAB”) litigation 
Details regarding the proposed share capital increase  
CNAB called a GSM that took place on 25 October 2021 through the convening notice published in the
Official Gazette of Romania Part IV no. 3873/20.09.2021, for the approval of a share capital increase
with the plots of land inside Baneasa airport, brought as Romanian State’s contribution in kind to the
company's share capital. The proposed value for the relevant plots of land to be contributed to the
share capital was RON 3,814,809,171. This was the third time the share capital increase process was
initiated by the Romanian state since 2001.
On 26 October 2021 (the second calling for the shareholders’ meeting) the share capital increase was
approved with only the Romanian State voting in favor, as follows:
• The share capital increase approved was RON 4,768,511,460.
• RON 3,814,809,170 represents in kind contribution of the Romanian State, calculated as the
value of the land parcels as evaluated by the valuer appointed by the Trade Registry.
• The amount of RON 953,702,290 represents the value of shares offered to be subscribed by
Fondul Proprietatea for maintaining the 20% participation to the share capital. The preference
rights may be exercised by the Fund within 60 days calculated starting with the date when the
shareholders’ resolution is published in the Official Gazette of Romania.
• After the 60 days period expires, the share capital would be increased with the value of the
paid-up shares (the Romanian State’s contribution in kind being considered as already
completed).
• If the Fund would not subscribe, the unsubscribed shares would be cancelled.
Valuation report prepared by ANG Consulting SRL  
Fondul Proprietatea expressed its opinion (on 21 September 2021), through a current report published
after the agenda of the meeting was made public, strongly disputing the fundamentally flawed land
valuation report. The land valuation report carried out in 2021 attributes a very high value to the plots
of land, despite a previously approved valuation report from 2017, which had set the value of the same
land at RON 269 million. In Fondul’s view, this huge discrepancy in valuation was created using
unrealistic and inaccurate commercial indicators in the disputed valuation report (prepared by ANG
Consulting SRL, valuation company assigned by the Trade Registry) such as:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 47
17. Equity investments (continued) 
CN Aeroporturi Bucuresti SA (“CNAB”) litigation (continued)  
Valuation report prepared by ANG Consulting SRL (continued) 
• The estimated traffic of 3,118,000 passengers/ year, although CNAB provided the valuator with
an estimate of 460,000 passengers/ year, information ignored by the valuator. Baneasa Airport
had around 25,500 passengers in 2019 (pre-pandemic year), which means the valuator chose to
overestimate the potential passengers’ traffic, ignoring company forecasts and comparing
Baneasa airport to actual traffic numbers on City Airport London and City Airport Belfast.
• The estimated revenues of Baneasa Airport are 30 times higher than the average revenues of
the airport between 2014-2020. In addition, it is important to note that Baneasa airport has
been incurring losses since 2014.
• The valuator did not include any estimated negative cash flows until the end of the forecast
period, 2069. This implies the expectation that the terminal, the equipment, and the runway
will not be repaired, changed, or modernized for almost 50 years.
Legal actions against CN Aeroporturi Bucuresti SA  
To protect the interest of the Fund and its shareholders, Fondul Proprietatea started court cases for the
annulment of the EGSM Resolution, and for the suspension of the entire process until the claim for
annulment case is irrevocably closed. Following the hearing that took place on 13 January 2022, the
Bucharest Court of Appeal admitted the request of suspension filed by the Fund and ordered the
suspension of the effects of the increase until the claim for the annulment of the EGSM Resolution is
irrevocably settled.
In the main litigation related to the claim for annulment of the aforementioned EGM resolution, on 25 May
2023, Ilfov Court (Tribunalul Ilfov) dismissed, in the first instance, the Fund’s claim as unfounded. The
Fund filed the appeal against the decision. The Bucharest Court of Appeal postponed the final decision until
7 March 2024.
The Sole Director has analysed the legal argumentation and related outcomes of the Appeal together with
the external counsels appointed to represent the Fund. In the view of the Sole Director, the arguments that
are likely to be admitted by the court and lead to a favourable ruling on the appeal are the following: (i)
nullity grounds related to the convening notice (lack of precise, correct and complete information
necessary to identify the land parcels), (ii) breach of the special legal regime of the land parcels that are
subject of the capital increase, (iii) the flawed valuation report of the land parcels and (iv) FP should have
obtained 20% of the shares issued as a result of the capital increase, without any contribution, as CN
Aeroporturi Bucuresti already owned the land parcels when FP was established.
On 7 March 2024 the Bucharest Court of Appeal admitted the appeal filed by the Fund, annulling
Resolution no. 15/ 26 October 2021 of C.N. Aeroporturi Bucuresti S.A. The decision issued by the Bucharest
Court of Appeal is final.
Once the details regarding the Decision of the Court of Appeal will be made available as well as depending
on the actions carried out by CN Aeroporturi Bucharest, the Fund will reevaluate all ongoing legal actions
or other potential new legal actions necessary to protect the interests of the Fund's shareholders.
In addition to the main litigation described above, the Fund has also entered into the following court
proceedings in order to protect the shareholders’ interests:
- Opposition against the registration of EGSM Resolution no. 15/26.10.2021 with the Trade Register
- on 11 February 2022, the Ilfov Court has suspended the opposition pending a final decision in the
main file;
- Action against the Certificates of attestation of the right of ownership (RO: “Certificate de atestare a
dreptului de proprietate”) - the first hearing is scheduled on 3 April 2024;

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 48
17. Equity investments (continued) 
CN Aeroporturi Bucuresti SA (“CNAB”) litigation (continued)  
Legal actions against CN Aeroporturi Bucuresti SA (continued) 
- Action against the valuation report issued by ANG Consulting SRL - on 20 February 2024, the judge
decided that another specialized section of the same Court is entitled to have jurisdiction on solving
the case;
- Action for annulment of the EGSM Resolution no. 14/24.09.2019 for the annulment of the decision
based on which ANG Consulting SRL performed the valuation.
Please see Note 23 – Subsequent events for further details regarding this topic. 
Valuation of CN Aeroporturi Bucuresti SA  
In the Fund’s Preliminary Annual Results Report for the year ending 31 December 2023 published on 29
February 2024, CN Aeroporturi Bucuresti SA was valued using the same assumptions and valuation
methodology as in the previous valuation reports prepared during 2023 based on the argumentation
presented above.
18. Non‐current assets held for sale 
Please see the table below for the movement in non-current assets held for sale registered in the years
ended 31 December 2023 and 31 December 2022.
 
Period ended 
31 December 2023 
Period ended 
31 December 2022 
Opening balance  ‐  1,135,225,000 
Reclassification to non-current assets held for sale
(Enel companies) 588,800,000 -
Net realised gain/(loss) from non-current assets held
for sale at fair value through profit or loss –see Note 9 61,200,000 (156,975,000)
Disposals - see Note 9 (650,000,000) (978,250,000)
Reclassification to non-current assets held for sale
(Engie Romania SA) 432,616,168 -
Closing balance  432,616,168  ‐ 
Enel companies – sale completed during the current period
On 14 December 2022 Enel Spa announced that it entered into an exclusivity agreement with Greek
company Public Power Corporation (PPC) in relation to the potential disposal of all the equity held by
Enel Group in Romania. On 14 March 2023 the Fund received a notice from Enel Spa in relation to the
exercise by the Fund of the tag along right under the Privatisation Agreement entered into between S.C
Electrica SA and Enel on 11 June 2007 relating to the acquisition of and subscription for shares in the
subsidiary for Electricity Distribution and Supply Electrica Muntenia Sud S.A., in relation to Fondul
Proprietatea’s shareholding in Enel Energie Muntenia S.A. and E-Distributie Muntenia S.A. The tag along
notice is triggered following the entry by Enel and the company PPC into an agreement for the sale of
all the equity stakes held by the Enel Group in Romania. As of 31 March 2023, the Fund reclassified, in
accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” requirements,
its entire holdings in the companies Enel Energie Muntenia SA, Enel Energie SA, E-Distributie Banat SA,
E-Distributie Dobrogea SA, E-Distributie Muntenia SA, as non-current assets held for sale at their total
valuation at reclassification date of RON 588,800,000.
On 19 April 2023, the Fund, as seller, and PPC, as buyer, have concluded an agreement for the sale of all
the equity stakes held by the Fund in E-Distributie Muntenia SA, Enel Energie Muntenia SA, E-
Distributie Dobrogea SA, E-Distributie Banat SA, and Enel Energie SA in exchange for a total
consideration of RON 650,000,000. The SPA was concluded following the entry by Enel Spa and PPC
into the agreement for the sale of all the equity stakes held by the Enel Group in Romania.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 49
18. Non‐current assets held for sale (continued) 
The change in fair value of RON 61,200,0000 is presented in Note 9 - Net realised gain/(loss) from non-
current assets held for sale.
 Sale Price 
E-Distributie Banat SA 212,899,138
E-Distributie Dobrogea SA 170,399,628
E-Distributie Muntenia SA 223,501,978
Enel Energie Muntenia SA 21,599,628
Enel Energie SA 21,599,628
650,000,000 
The transaction was finalised on 26 October 2023 when the Fund collected all proceeds from the
transaction.
Engie Romania SA  
On 11 December 2023 The Fund received a binding offer from GDF International S.A., the majority
shareholder of Engie Romania SA, in relation to a potential sale of Fondul Proprietatea entire
shareholding in Engie Romania S.A., for a consideration of EUR 87 million. The fund changed the
valuation method accordingly to binding offer price. Furthermore to the information presented above,
The Fund and the majority shareholder entered on 22 December 2023 into an agreement for the sale of
the entire shareholding in Engie Romania S.A. in exchange for a total consideration of RON
432,616,167.75. The valuation method was changed from Fair value (binding offer price) to Fair value
(SPA price).
Considering that all the requirements set forth in IFRS 5 “Non-current Assets Held for Sale and
Discontinued Operations” were met, the Fund classified the holding as a non-current asset held for sale.
The transaction was finalised on 20 February 2024, please see Note 23 Subsequent events for updated
information.
OMV Petrom SA – sale completed during the previous period 
As per previous year financial statements, In January 2022, the Fund publicly announced that it had
taken the decision to proceed with the partial sale of the investment in OMV Petrom SA (listed
company) through an accelerated bookbuild offering. Consequently, as at 31 December 2021, the Fund
reclassified, in accordance with IFRS 5 requirements, the part of the holding in OMV Petrom SA subject
to the bookbuild offering, as non-current assets held for sale. The sale offering was completed on 19
January 2022 for 2,275,000,000 shares. The Fund’s remaining stake in the company (shares:
1,688,548,078) was sold through daily share sales and one more accelerated bookbuilding offering
which was completed on 16 December 2022. For more details regarding this set of transactions please
see the Fund’s financial statements for the year ended 31 December 2022 which are available on the
Fund’s website.
19. Liabilities  
(a) Payable to shareholders 
Total dividends payable at 31 December 2023 amount to RON 546,457,941 (31 December 2022: RON
74,166,644)
Dividends payable at 31 December 2023 are mostly related to the distribution approved by the Fund’s
shareholders on 18 August 2023 by which the Hidroelectrica IPO proceeds were distributed (RON:
85% out of total dividends payable).
The movement during the period is presented in the table below:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 50
19. Liabilities (continued) 
(a) Payable to shareholders (continued) 
 
31 December 2023  31 December 2022 
Opening balance  74,166,644  408,245,702 
Gross distributions approved during the period out of
which 9,450,090,560 774,290,893
‐Annual dividend
s
269,837,832 774,290,893 
‐Special dividends 9,180,252,728 -
Payments of net distributions (dividends) performed
from the dedicated bank accounts (8,233,176,892) (1,074,343,988)
Withholding tax payable to state budget (744,605,695) (22,853,319)
Distributions for which the statute of limitation
occurred (16,676) (11,172,644)
Closing balance  546,457,941  74,166,644 
(b) Other liabilities and provisions 
31 December 2023  31 December 2022 
Withholding tax on dividends
44,149,354 1,934,140
FTIS Administration fees 21,297,284 14,961,308
Financial Supervisory Authority fees 188,014 1,141,614
Intermediaries and other transaction related payables 17,668 7,591,736
Payables related to treasury shares under settlement - 12,583,133
Other liabilities 1,676,600 1,694,646
67,328,920  39,906,577 
The increase seen in the caption Withholding tax on dividends is linked to the withholding tax payable
registered for the RON 1.7225 gross dividend per share approved by the shareholders on 18 August
2023 and not collected by shareholders at the reporting date. As per Romanian legislation the entire
withholding amount related to the uncollected dividends was paid to the State budget on 25 January
2024.
The FTIS Administration fees relate to the distribution fee recorded following the finalisation on 5
December 2023 of the public tender offer through which the Fund bought back 1.670.000.000 shares in
the form of shares and share equivalent GDRs.
For 31 December 2023 other liabilities caption comprises mainly accruals recorded for fees due to The
Bank of New York Mellon (tender offer and GDR cancelation fee), portfolio valuation services related
accruals and other accruals related to the services received by the Fund. For 31 December 2022 the
other liabilities caption mainly includes accruals related to the portfolio valuation services.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 51
20. Shareholders’ equity 
(a) Share capital 
The movement in the paid share capital is presented below:
 
 Year ended 31 
December 2023  
 Year ended 31 
December 2022  
Opening balance  3,233,269,111  3,145,160,001 
Cancellation of treasury shares (285,489,924) (101,073,312)
Collection of unpaid shares - 189,182,422
Closing balance  2,947,779,187  3,233,269,111 
During the year ended 31 December 2023, the paid in share capital of the Fund decreased by RON
285,489,924 following the cancellation on 12 October 2023 of 549,019,085 treasury shares acquired by
the Fund within the thirteenth buyback programme.
During the year ended 31 December 2022, the paid in share capital of the Fund decreased by RON
101,073,312 following the cancellation on 19 October 2022 of 194,371,754 treasury shares acquired by
the Fund within the twelfth buyback programme.
On 1 February 2022, the Romanian State, represented by the Ministry of Finance paid RON
189,182,422 to the Fund, as payment for the unpaid shares owned by the Romanian State in the Fund
(as at 31 December 2021, the Romanian State held 363,812,350 unpaid shares, each share having a
nominal value of RON 0.52). This payment was performed in exercise of the Romanian State’s rights
under Law 247/2005 on the reform in the fields of property and justice, as well as some adjacent
measures. Consequently, starting 1 February 2022, the new value of the Fund’s subscribed and paid-up
share capital was RON 3,334,342,422.84 (divided into 6,412,196,967 shares with a nominal value of
RON 0.52/share).
The table below presents the Fund’s shares balance and their nominal value:
    31 December 2023    31 December 2022  
Number of shares in issue 5,668,806,128 6,217,825,213
Number of paid shares 5,668,806,128 6,217,825,213
Nominal value per share (RON) 0.52 0.52
The shareholders structure as at 31 December 2023 was as follows:
 
  31 December 2023  31 December 2022 
Shareholder categories 
% of subscribed 
and paid share 
capital 
% of voting 
rights 
% of subscribed 
and paid share 
capital 
% of 
voting 
rights 
Romanian institutional investors 24.41% 38.91% 37.31% 40.88%
Romanian private individuals 23.42% 37.32% 21.16% 23.19%
Romanian State 6.53% 10.42% 5.96% 6.53%
Foreign private individuals 3.25% 5.18% 3.13% 3.43%
Foreign institutional investors 2.93% 4.67% 11.25% 12.33%
The Bank of New York Mellon
(depository bank for the Fund’s
GDRs) 2.20% 3.50% 12.52% 13.65%
Treasury shares 37.26% 0.00%  8.66% 0.00%
Total  100.00%   100.00%  100.00%  100.00% 
Source: Depozitarul Central SA (Central Depositary) 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 52
20. Shareholders’ equity 
(b)  Other reserves 
31 December 2023  31 December 2022 
Other reserves (i) 908,845,064 230,576,693
Legal reserve (ii) 646,653,823 666,868,485
Distributions for which the statute of limitation occurred 151,946 151,945
Losses from cancellation of treasury shares (negative
equity reserves) (iii) (908,845,064) (230,576,693)
646,805,769  667,020,430 
(i) The amounts allocated to other reserves are to be used to cover the losses (negative reserves)
recorded from cancellation of shares acquired through the buy-back programmes.
During the GSM held on 21 April 2023, the Fund’s shareholders also approved the allocation to other
reserves of an amount of RON 908,845,064 from the 2022 net audited accounting profit to be used for
covering the negative reserves estimated to arise in 2023 from the cancellation of treasury shares
acquired during 2022 through the thirteenth buy-back programme.
During the General Shareholder Meeting held on 21 April 2023 the shareholders approved that the
amount of RON 230,576,693, which was allocated to other reserves based on the 20 April 2022 GSM, be
used to cover the negative reserve generated from the cancellation of shares acquired during 2021
through the twelfth buy-back programme.
(ii)As required by the Romanian Companies’ Law, a minimum 5% of the profit for the year must be
transferred to the legal reserve until the reserve equals at least 20% of the issued share capital. The
legal reserve cannot be used for distributions to shareholders.
During the 21 April 2023 meeting, the shareholders approved the decrease of the legal reserve of
Fondul Proprietatea by RON 20,214,661.57 from RON 666,868,485 representing 20.63% of the share
capital to RON 646,653,823 representing 20.00% of the share capital. Following the decrease, the
corresponding amount was transferred to retained earnings and remains available for future use by
shareholders.
As at 31 December 2023 the legal reserve amount represented 21.94% of the value of the issued share
capital. The increase over the required minimum percentage is due to the treasury share cancelation
finalised on 12 October 2023 as described at sub-point a) from this section.
(iii)Losses from cancellation of treasury shares comprise the negative reserves related to the losses on
the cancellation of treasury shares acquired at an acquisition value higher than the nominal value.
These amounts will be covered from the other reserves specifically set up for this purpose (described at
point (i)) and in accordance with the resolution of the General Shareholders Meeting.
All buy-backs performed at an acquisition price higher than the nominal value generate negative
reserves.
The table below shows the changes in other reserves and negative reserves, from the main category of
Other reserves, recorded as result of the GSM decisions taken during the year ended 31 December
2023:

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 53
20. Shareholders’ equity (continued) 
(b) Other reserves (continued) 
 
Other 
reserves  Negative reserves 
1 January 2023  230,576,693  (230,576,693) 
Coverage of the negative reserve balance existing as at 31
December 2022 from other reserves, according to
Resolution no.2 of 21 April 2023 Ordinary General
Shareholders’ Meeting (230,576,693) 230,576,693
Allocation to other reserves from 2022 net audited
accounting profit of amounts which will be used to cover the
negative reserves arising from the cancelation of shares
acquired during the 13
th
buy-back programme according to
Resolution no. 3 of 21 April 2023 Ordinary General
Shareholders’ Meeting 908,845,064 -
Negative equity reserve arising on the cancellation of shares
acquired during the 13
th
buy-back programme (recorded on
12 October 2023) according to share capital decrease
Resolution no. 2 of 21 April 2023 Extraordinary General
Shareholders’ Meeting - (908,845,064)
31 December 2023  908,845,064  (908,845,064) 
The table below shows the changes in other reserves and negative reserves, from the main category of
Other reserves, recorded as result of the GSM decisions taken during the year ended 31 December
2022:
 
Other 
reserves  Negative reserves 
1 January 2022  671,941,938  (671,941,938) 
Coverage of the negative reserve balance existing as at 31
December 2021 from other reserves, according to
Resolution no.5 of 20 April 2022 Ordinary General
Shareholders’ Meeting (671,941,938) 671,941,938
Allocation to other reserves from 2021 net audited
accounting profit of amounts which will be used to cover the
negative reserves arising from the cancelation of shares
acquired during the 12
th
buy-back programme according to
Resolution no. 6 of 20 April 2022 Ordinary General
Shareholders’ Meeting 230,576,693 -
Negative equity reserve arising on the cancellation of shares
acquired during the 12
th
buy-back programme (recorded on
19 October 2022) according to share capital decrease
Resolution no. 1 of 20 April 2022 Extraordinary General
Shareholders’ Meeting - (230,576,693)
31 December 2023  230,576,693  (230,576,693) 
 
 
 
 

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 54
20. Shareholders’ equity (continued) 
(c) Treasury shares 
The table below summarises the details regarding the fourteenth buy-back programme, respectively
the buy-back programme carried during 2023:
Program 
GSM date approving 
the buy‐back 
programme   Starting date  Completion date 
Acquisition price 
range as approved 
by GSM 
Fourteenth buy‐back  15-Nov-2022 1-Jan-2023 31-Dec-2023 0.2 – 3 RON per share
The fourteenth buy-back programme refers to the acquisition by the Fund of a maximum number of
3,500,000,000 shares and/or equivalent global depository receipts corresponding to the Fund’s shares.
The movement in the number of treasury shares (including the equivalent shares of GDRs bought-back)
during the year ended 31 December 2023 and 31 December 2022 is presented in the tables below:
 Period ended 
31 December 2023  
Treasury shares 
number ‐ 
openin
g
 balance 
Acquisitions 
during the 
period 
Cancellations 
during the 
period 
Treasury shares 
number ‐ closing 
balance 
Thirteen buy‐back  549,019,085 - (549,019,085) -
Fourteenth buy‐back  - 2,112,378,889 - 2,112,378,889
   549,019,085 
   
2,112,378,889  
   
(549,019,085) 
   
2,112,378,889  
 Period ended 
31 December 2022  
Treasury shares 
number ‐ 
opening balance 
Acquisitions 
during the 
period 
Cancellations 
during the 
period 
Treasury shares 
number ‐ closing 
balance 
Twelfth buy‐back  194,371,754 - (194,371,754) -
Thirteen buy‐back  - 549,019,085 - 549,019,085
194,371,754    549,019,085   (194,371,754)              549,019,085  
The movement of treasury shares carrying amounts during the years ended 31 December 2023 and 31
December 2022 is presented in the tables below:
 Period ended 
31 December 2023  
Opening 
balance 
Cost of treasury 
shares acquired 
Cancellation of 
treasury shares   Closing balance 
Thirteen buy‐back  1,194,334,988 - (1,194,334,988) -
Fourteenth buy‐back  - 1,873,193,280 - 1,873,193,280
   1,194,334,988   1,873,193,280   (1,194,334,988)  1,873,193,280  
 
 Period ended 
31 December 2022   Opening balance 
Cost of treasury 
shares acquired 
Cancellation of 
treasury shares   Closing balance 
Twelfth buy‐back  331,650,005 - (331,650,005) -
Thirteen buy‐back  - 1,194,334,988 - 1,194,334,988
331,650,005   1,194,334,988                            ‐    1,194,334,988  
On 13 February 2024 the Fund’s shareholders approved a new buy-back programme for the year 2024.
The programme will start with the date the approving resolution is published in the Official Gazette and
will end on 31 December 2024. The price was set to be between RON 0.2/share and RON 1/share. Total
number of shares approved is 1.000.000.000 and the programme execution is subject to available
funds.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 55
20. Shareholders’ equity (continued) 
(d) Dividend distributions  
During the 20 April 2022 General Shareholders Meeting, the Fund’s shareholders approved the
distribution of a gross dividend of RON 0.1250 per share from 2021 profit. The shareholders registered
in the shareholders’ registry with the Central Depositary on 3 June 2022 had the right to receive a gross
dividend of RON 0.1250 per share, proportionally with their participation in the paid in share capital of
the Fund. The payment started on 27 June 2022.
During the 21 April 2023 General Shareholders Meeting, the Fund’s shareholders approved the
distribution of a gross dividend of RON 0.05 per share from 2022 financial year profit. The
shareholders registered in the shareholders’ registry with the Central Depositary on 12 May 2023 had
the right to receive a gross dividend of RON 0.05 per share, proportionally with their participation in
the paid in share capital of the Fund. The payment started on 6 June 2023.
During the 18 August 2023 General Shareholders Meeting, the Fund’s shareholders approved the
distribution of a gross dividend of RON 1.7225 per share from retained earnings. The shareholders
registered in the shareholders’ registry with the Central Depositary on 8 September 2023 had the right
to receive dividends, proportionally with their participation in the paid in share capital of the Fund. The
payment started on 29 September 2023. The dividend payment was funded by the Hidroelectrica SA
IPO proceeds.
Only the shareholders registered in the shareholders’ registry with the Central Depositary on the
registration date approved by the Fund’s shareholders have the right to receive the related gross
dividend, proportionally with their participation in the paid-in share capital of the Fund.
(e) Accounting loss coverage 
As per these annual financial statements, prepared in accordance with the IFRS, the Fund incurred an
accounting loss of RON 904,097,086 for the financial year ended 31 December 2023. The accounting
loss will be covered from various retained earnings elements, subject to shareholders’ approval during
30 April 2024 GSM.
(f) Dividend distribution proposal for 2024 
Although there is no distributable profit according to the Fund’s statutory annual financial statements
for the year ended 31 December 2023, the Sole Director of the Fund proposes to the shareholders the
payment of a special dividend during 2024. Thus, once the coverage of the accounting loss mentioned
above (which legally impedes any distribution) is approved by the Fund’s shareholders, the Fund’s Sole
Director proposal, subject to shareholders’ approval, is a cash distribution of RON 0.06 per share from
previous years unallocated profits.
21. Contingencies 
(a) Litigations 
At 31 December 2023, the Fund was involved in certain litigations, either as defendant or claimant.
After analysing the requirements of IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”,
the Fund considers that there are no litigations which may have significant effects on the Fund’s
financial position or profitability.
(b) Other contingencies  
Other contingencies of the Fund included the receivables from World Trade Center Bucuresti SA, the
potential payable regarding CN Aeroporturi Bucuresti SA share capital increase and the potential payable
regarding Aeroportul International Timisoara SA share capital increase, as detailed below.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 56
21. Contingencies (continued) 
(b) Other contingencies (continued)
(i) Receivables from World Trade Center Bucuresti SA 
Title II, Article 4 of Government Emergency Ordinance no. 81/2007 stipulated the transfer of World
Trade Center Bucuresti SA receivables from the Authority for State Assets Recovery to the Fund,
amounting to USD 68,814,198 (including the original principal and related interest and penalties) on 29
June 2007.
Between 2008 and 2010, the Fund recovered from World Trade Center Bucuresti SA, USD 510,131, EUR
148,701 and RON 8,724,888. Given the uncertainties regarding the recoverability of the amounts due
by World Trade Center Bucuresti SA, the above amounts were recognised on receipt basis in the Fund’s
financial statements. The amounts recovered from the enforcement procedure were accounted for by
the Fund as contributions of the Romanian State to the share capital of the Fund, decreasing the
receivable related to the unpaid capital.
In August 2013, World Trade Center Bucuresti SA filed a claim against the Fund asking the Fund to pay
back all the amounts received through the enforcement procedure during 2010 and 2011 (EUR
148,701, USD 10,131 and RON 8,829,663).
On 7 July 2016, the Bucharest Court admitted the claim filed by World Trade Center Bucuresti SA and
obliged Fondul Proprietatea to pay back the amounts recovered from the enforcement procedure (EUR
148,701, USD 10,131 and RON 8,829,663) and the related legal interest calculated for these amounts.
During the period from July to August 2016, the Fund performed the payment of these amounts and the
related legal interest to World Trade Center Bucuresti SA. The Court decision is irrevocable.
On 18 February 2020, the Court ruled in favour of the Fund in the case started against the Romanian
State, represented by Ministry of Public Finance, for recovering the contributions of the Romanian State
to the share capital of the Fund. The decision was issued in the first stage and Ministry of Public Finance
appealed it. On 18 September 2020, Bucharest Court of Appeal admitted the appeal of Ministry of
Public Finance. The Fund filed the second appeal which was rejected by the High Court of Cassation and
Justice on 1 April 2021.
The Fund has initiated legal actions against World Trade Center Bucharest SA and the Ministry of
Finance for recovering the amounts, which are pending with the Court.
(ii) CN Aeroporturi Bucuresti SA share capital increase 
Please see Note 17 – Equity investments, section CN Aeroporturi Bucuresti SA (“CNAB”) litigation for
information regarding this litigation.
(iii) Aeroportul International Timisoara SA share capital increase 
During the GSM held on 9 June 2023, the majority shareholder approved a share capital increase of RON
25.2 million, by issuing 2,523,850 new shares at a nominal value of RON 10 per share, to finance a
proposed investment project. In order to avoid dilution, Fondul Proprietatea would have to subscribe to
504,770 new shares, representing RON 5.04 million.
Fondul Proprietatea challenged the validity of the GSM decision, and the Court decided to suspend the
effects of the share capital increase until there is a final verdict on the issues raised in the initial claim. As
the company did not appeal the Court’s decision, the effects of the GSM decision approving the share
capital increase are suspended until the final decision of the court in the annulment file above-mentioned.
The legal proceedings initiated by the Fund in the file for the annulment of the GSM decision regarding the
share capital increase are still in early stages. The Fund will provide further details on the development of
the legal proceedings regarding Aeroportul International Timisoara SA share capital increase as and when
relevant.

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FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 57
22. Related parties 
(a) Key management 
(i) Board of Nominees (“BON”) 
  
 Period ended 
31 December 2023  
 Period ended 
31 December 2022  
BON gross remunerations, out of which:  1,703,556  1,386,213 
Contributions to social security fund retained from
gross remuneration 167,172 147,503
Contributions to health insurance fund retained from
gross remuneration 66,876 58,994
Income tax 146,964 117,966
Net remunerations paid to BON members  1,322,544  1,061,750 
Other costs incurred by the Fund in relation to the members of the Board of Nominees are detailed in
note 11 – Operating expenses - (vi) Other BON related costs.
There were no loans between the Fund and the members of the Board of Nominees neither in 2023 nor
in 2022. There are no post-employment, long term or termination benefits related to the remuneration
of the members of the Board of Nominees.
(ii) Sole Director  
FTIS is the Sole Director and Alternative Investment Fund Manager of the Fund starting with 1 April
2016. Please see Note 1 – General information for more details.
The transactions carried out between the Fund and FTIS Luxemburg were the following:
Transactions 
 Period ended 
31 December 2023  
 Period ended 
31 December 2022  
Administration fees 237,847,355 107,230,522
The transactions carried out between the Fund and FTIS Bucharest Branch were the following:
Transactions 
 Period ended 
31 December 2023  
 Period ended 
31 December 2022  
Rent expense charged to the Fund 85,612 76,860
Operating cost charged to the Fund
32,223 28,410
117,834  105,270 
During the year ended 31 December 2023, the Fund recorded RON 827,839 (31 December 2022: RON
529,138) representing expenses incurred by FTIS Bucharest Branch on its behalf.
These expenses were primarily related to expenses in the interest of protecting and promoting the
image of the Fund and its securities (investor relations). The recharge of these expenses to the Fund
followed the provisions of the management agreement in place at the respective moment and was
subject to Board of Nominees’ approval.
The outstanding liabilities owed by the Fund were as follows:
Amounts due to:  31 December 2023  31 December 2022 
FTIS Luxembourg 21,297,284 14,961,308
FTIS Bucharest Branch 203,407 9,327
21,500,690  14,970,636 
There are no other elements of compensation for key management besides those described above.

Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 58
22. Related parties (continued) 
(b) Subsidiaries 
As described in Note 17 – Equity investments, the Fund has the following subsidiaries at 31 December
2023 and 31 December 2022:
Ownership 
interest
 31 December 
2023  
 31 December 
2022  
Zirom SA 100% 100%
Alcom SA 72% 72%
Comsig SA n/a 70%
During the 21 June 2022 EGM, Zirom SA shareholders approved a capital decrease of 1,542,083 shares
from 7,542,083 shares to 6,000,000 shares in order to partially cover the company’s accumulated
accounting losses of RON 75,420,830 (amount at the date of the GSM).
As at 31 December 2023 and 31 December 2022, the Fund had no commitment to provide financial or
other support to its subsidiaries, including commitments to assist the subsidiaries in obtaining financial
support.
The gross dividend income recorded from subsidiaries in 2023 was in amount of RON 934,651 and was
received from Alcom SA ( 2022: 824,054 received from Alcom SA). At 31 December 2023 and 31
December 2022 there were no dividends receivable from the subsidiaries.
(c) Associates 
As described in Note 17 – Equity investments, the Fund has the following associates at 31 December 2023
and 31 December 2022:
Ownership interest 31 December 2023   31 December 2022  
Societatea Nationala a Sarii SA
49% 49%
Plafar SA 49% 49%
The gross dividend income recorded from associates for 2023 was in amount of RON 55,996,590 and
was received from Societatea Nationala a Sarii SA (2022: 29,345,514 received from Societatea
Nationala a Sarii SA). At 31 December 2023 and 31 December 2022 there were no dividends receivable
from the associates.
23. Subsequent events 
13 February 2024 EGSM 
On 13 February 2024, the Fund’s shareholders decided the following:
● To approve a new buy-back programme to be carried out during the year 2024 between the date
when the resolution related to this approval is published in the Official Gazette of Romania, Part IV
and until 31 December 2024. The proposed price interval is between RON 0.2 and RON 1.0, and
currency equivalent in case of GDR buy-backs. The maximum number of shares to be bought back
through the proposed programme is 1,000,000,000 shares.
● To approve the sale by Fondul Proprietatea of its shareholding in the share capital of Engie Romania
S.A. at a price of RON 432,616,167.75 (date of resolution price).
The third point on the agenda, regarding the approval of a mandate for executing discretionary disposals
exceeding 20% of the total value of the non-current assets less receivables of the Fund, was rejected by
shareholders.

Graphics
FONDUL PROPRIETATEA SA
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
(all amounts are in RON unless otherwise stated)
Annual financial statements for the year ended 31 December 2023 59
23. Subsequent events (continued) 
Convening notice of the 26 March 2024 OGSM 
On 5 February 2024, the Fund published a convening notice with the following proposals:
● the approval of the terms of, along with the execution of, the Management Agreement between Fondul
Proprietatea and Franklin Templeton International Services S.a r.l. for a duration of one year starting
1 April 2024 and until 31 March 2025.
● the approval of the Remuneration Policy of Fondul Proprietatea in force starting 1 April 2024 to
reflect the provisions of the Management Agreement, subject to point 1 on the OGM agenda being
approved.
● the approval of 2024 Budget of Fondul Proprietatea.
● the appointment for a period of three years of two members in the Board of Nominees of Fondul
Proprietatea following the expiration of two mandates.
On 23 February the Convening notice was supplemented at the request of the Ministry of Finance which
holds more than 5% of Fondul Proprietatea’ s share capital by adding alternative voting options to the
first two point on the agenda mainly regarding a lower base fee level for the Sole Director.
On 22 February 2024, the Ministry of Finance, acting as a shareholder, submitted a request to complete
the AGM agenda of 26 March 2024 with new items, proposing a base fee of 1.35% instead of 2.00% and
an updated strategy for the Fund for the period 1 April 2024 to 31 March 2025, so as to include the
preservation of the current portfolio.
CNAB litigation 
As described at Note 17 – Equity Investment – CNAB litigation, in the main litigation related to the claim
for annulment of the EGSM Resolution regarding the share capital increase of CNAB, the Fund filed the
appeal against the 25 May 2023 Ilfov Court’s decision. Following the hearing, the Court decided to
postpone the issuance of a final decision for 7 March 2024.
On 7 March 2024 the Bucharest Court of Appeal admitted the appeal filed by the Fund, annulling EGSM
Resolution no. 15/ 26 October 2021 of C.N. Aeroporturi Bucuresti S.A. The decision issued by the
Bucharest Court of Appeal is final.
Sale of Engie Romania SA 
On 22 December 2023 the Fund as seller and GDF International SA as purchaser entered into an
agreement for the sale of the entire shareholding in Engie Romania SA in exchange for a total
consideration of RON 432,616,167.75. The sale under the agreement was approved by the Fund’s
shareholders during 13 February 2024 GSM and it was finalised on 20 February 2024.
Following the transaction, the Fund collected all proceeds and no longer holds any shares in Engie
Romania SA.

Graphics
1
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Annex 2 Statement of Assets and Obligations of Fondul Proprietatea SA as at 31
December 2023, prepared in accordance with FSA Regulation nr. 7/2020 (Annex no. 11)
Item
31 December 2022
31 December 2023
Differences
% of the
net asset
% of the
total asset
Currency Total RON
% of the net
asset
% of the total
asset
Currency Total RON RON
I. Total assets
100.7850%
100.0000%
14,683,910,693.57
126.1171%
100.0000%
2,963,925,348.77
(11,719,985,344.80)
1 Securities and money market instruments, out of which:
1.1503%
1.1415%
167,608,857.01
5.3331%
4.2286%
125,333,174.29
(42,275,682.72)
1.1
securities and money market instruments admitted or traded on a regulated
market from Romania, out of which:
1.1503%
1.1415%
167,608,857.01
5.3331%
4.2286%
125,333,174.29
(42,275,682.72)
1.1.1 listed shares traded in the last 30 trading days
1.0789%
1.0706%
157,201,424.02
4.8028%
3.8082%
112,871,805.08
(44,329,618.94)
1.1.2 listed shares not traded in the last 30 trading days
0.0714%
0.0709%
10,407,432.99
0.5303%
0.4204%
12,461,369.21
2,053,936.22
1.1.3 other similar securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.1.4 bonds
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.1.5 other title debts
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.1.6 other securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.1.7 money market instruments
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.1.8 allotment rights admitted at trading
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2
Securities and money market instruments admitted or traded on a regulated
market from a member state, out of which:
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.1 listed shares traded in the last 30 trading days
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.2 listed shares not traded in the last 30 trading days
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.3 other similar securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.4 bonds
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.5 other title debts
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.6 other securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.7 money market instruments
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.2.8 allotment rights admitted at trading
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3
Securities and money market instruments admitted on a stock exchange from a
state not a member or negotiates on another regulated market from a state not
a member, that operates on a regular basis and is recognized and opened to the
public, approved by the Financial Supervisory Authority (FSA), out of which:
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.1 listed shares traded in the last 30 trading days
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.2 listed shares not traded in the last 30 trading days
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.3 other similar securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.4 bonds
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.5 other title debts
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.6 other securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.7 money market instruments
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
1.3.8 allotment rights admitted at trading
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
2 New issued securities
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
3
Other securities and money market instruments mentioned in art. 83
paragraph (1) letter a) of the O.U.G. no. 32 / 2012 of which:
92.8582%
92.1349%
13,528,983,081.84
89.3410%
70.8399%
2,099,638,503.52
(11,429,344,578.32)
- shares not admitted at trading
92.8582%
92.1349%
13,528,983,081.84
89.3410%
70.8399%
2,099,638,503.52
(11,429,344,578.32)
- redeemed debentures
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- unlisted bonds
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- allotment rights not admitted at trading
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-

Graphics
2
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Item
31 December 2022
31 December 2023
Differences
% of the
net asset
% of the
total asset
Currency Total RON
% of the net
asset
% of the total
asset
Currency Total RON RON
- rights not admitted at trading
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- other financial instruments
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
4 Bank deposits, out of which:
6.2639%
6.2151%
912,616,396.35
8.1427%
6.4568%
191,368,977.81
(721,247,418.54)
4.1 bank deposits made with credit institutions from Romania
6.2639%
6.2151%
912,616,396.35
8.1427%
6.4568%
191,368,977.81
(721,247,418.54)
- in RON
6.2639%
6.2151%
912,616,396.35
8.1427%
6.4568%
191,368,977.81
(721,247,418.54)
4.2 bank deposits made with credit institutions from an EU state
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
4.3
Bank deposits made with credit institutions from an non-EU state
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5 Derivatives financial instruments traded on a regulated market, out of which:
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5.1
derivatives financial instruments traded on a regulated market from Romania
(forward, futures and options, swaps, etc.)
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5.2
derivatives financial instruments traded on a regulated market from a EU state
(forward, futures and options, swaps, etc.)
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5.3
derivatives financial instruments traded on a regulated market from a non-EU
state (forward, futures and options, swaps, etc.)
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5.4
derivatives financial instruments traded on a regulated market (forward,
futures and options, swaps, etc.)
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
6
Current accounts and petty cash, out of which:
0.5067%
0.5027%
73,833,144.34
23.2383%
18.4258%
546,127,016.32
472,293,871.98
- in RON
0.5067%
0.5027%
73,828,741.75
23.2380%
18.4256%
546,122,004.92
472,293,263.17
- in EUR
0.0000%
0.0000%
EUR
323.22
1,599.10
0.0001%
0.0000%
EUR
252.30
1,255.09
(344.01)
- in GBP
0.0000%
0.0000%
GBP
136.69
763.80
0.0001%
0.0001%
GBP
314.73
1,801.04
1,037.24
- in USD
0.0000%
0.0000%
USD
440.10
2,039.69
0.0001%
0.0001%
USD
434.91
1,955.27
(84.42)
7
Money market instruments, other than those traded on a regulated market,
according to art. 82 letter g) of the O.U.G. no. 32/2012, din care:
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
-treasury bills with original maturities of less than 1 year
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
8 Participation titles of F.I.A./O.P.C.V.M.
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
9 Dividends or other receivable rights
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- in RON
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- in EUR
0.0000%
0.0000%
EUR
-
-
0.0000%
0.0000%
EUR
-
-
-
- in USD
0.0000%
0.0000%
USD
-
-
0.0000%
0.0000%
USD
-
-
-
10 Other assets out of which:
0.0059%
0.0058%
869,214.03
0.0620%
0.0489%
1,457,676.83
588,462.80
- guarantee deposited to the broker for the buyback tender offer
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- receivables related to the cash contributions to the share capital increases
performed by portfolio companies
0.0002%
0.0002%
30,030.00
0.0000%
0.0000%
-
(30,030.00)
- receivables related to transactions under settlement
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- tax on dividends to be recovered from the State Budget
0.0020%
0.0020%
294,926.41
0.0000%
0.0000%
-
(294,926.41)
- intangible assets
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- advance payments for intangible assets
0.0006%
0.0006%
88,311.09
0.0000%
0.0000%
-
(88,311.09)
- other receivables
0.0020%
0.0019%
299,602.65
0.0619%
0.0489%
1,457,676.83
1,158,074.18
- in RON
0.0020%
0.0019%
299,602.65
0.0619%
0.0489%
1,457,676.83
1,158,074.18
- in EUR
0.0000%
0.0000%
EUR
-
-
0.0000%
0.0000%
EUR
-
-
-
- in USD
0.0000%
0.0000%
USD
-
-
0.0000%
0.0000%
USD
-
-
-
- prepaid expenses
0.0011%
0.0011%
156,343.88
0.0000%
0.0000%
-
(156,343.88)

Graphics
3
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Item
31 December 2022 31 December 2023 Differences
% of the
net asset
% of the
total asset
Currency Total RON
% of the net
asset
% of the
total asset
Currency Total RON RON
II Total liabilities
0.7850%
0.7789%
114,372,608.92
26.1172%
20.7086%
613,786,861.26
499,414,252.34
1 Liabilities in relation with the payments of fees due to the A.F.I.A.
0.1027%
0.1019%
14,961,308.43
0.9144%
0.7251%
21,490,311.32
6,529,002.89
- in RON
0.0000%
0.0000%
-
0.0082%
0.0065%
193,027.50
193,027.50
- in EUR
0.1027%
0.1019%
EUR
3,024,074.95
14,961,308.43
0.9062%
0.7185%
EUR
4,281,205.29
21,297,283.82
6,335,975.39
2 Liabilities related to the fees payable to the depositary bank
0.0002%
0.0001%
21,935.87
0.0003%
0.0002%
6,004.77
(15,931.10)
3 Liabilities related to the fees payable to intermediaries
0.0404%
0.0400%
5,880,160.97
0.0008%
0.0006%
17,668.29
(5,862,492.68)
- in RON
0.0156%
0.0154%
2,267,852.50
0.0008%
0.0006%
17,668.29
(2,250,184.21)
- in EUR
0.0136%
0.0135%
EUR
400,000.00
1,978,960.00
0.0000%
0.0000%
EUR -
-
(1,978,960.00)
- in USD
0.0112%
0.0111%
USD
352,424.91
1,633,348.47
0.0000%
0.0000%
USD -
-
(1,633,348.47)
- in GBP
0.0000%
0.0000%
GBP
-
-
0.0000%
0.0000%
GBP -
-
-
4 Liabilities related to commissions and other bank services
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
5 Interest payable
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
6 Issuance expense
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
7 Liabilities in relation with the fees/commissions to FSA
0.0078%
0.0078%
1,141,613.52
0.0080%
0.0063%
188,013.73
(953,599.79)
8 Audit fees
(0.0011%)
(0.0011%)
(160,638.87)
0.0000%
0.0000%
-
160,638.87
9 Other Liabilities, out of which:
0.5486%
0.5445%
79,945,096.21
25.1937%
19.9764%
592,084,863.15
512,139,766.94
- short term credit facility
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- liabilities to the Fund's shareholders related to the dividend distribution
0.5091%
0.5051%
74,166,644.07
23.2522%
18.4370%
546,457,941.28
472,291,297.21
- liabilities related to the return of capital
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- liabilities related to Government securities under settlement
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- provisions
0.0000%
0.0000%
-
0.0000%
0.0000%
-
-
- remunerations and related contributions
0.0002%
0.0002%
31,751.00
0.0014%
0.0011%
31,751.00
-
- VAT payable to State Budget
0.0000%
0.0000%
4,874.96
0.0002%
0.0001%
4,036.71
(838.25)
- tax on dividends payable to State Budget
0.0153%
0.0152%
2,233,527.00
1.8786%
1.4896%
44,149,354.00
41,915,827.00
- other liabilities out of which:
0.0240%
0.0240%
3,508,299.18
0.0613%
0.0486%
1,441,780.16
(2,066,519.02)
- in RON
0.0240%
0.0240%
3,508,299.18
0.0612%
0.0485%
1,437,303.02
(2,070,996.16)
- in EUR
0.0000%
0.0000%
EUR
-
-
0.0002%
0.0002%
EUR
900.00
4,477.14
4,477.14
- in USD
0.0000%
0.0000%
USD
-
-
0.0000%
0.0000%
USD -
-
-
- in GBP
0.0000%
0.0000%
GBP
-
-
0.0000%
0.0000%
GBP -
-
-
10 Payables related to buybacks under settlement
0.0864%
0.0857%
12,583,132.79
0.0000%
0.0000%
-
(12,583,132.79)
III Net Asset Value (I - II)
100.0000%
99.2211%
14,569,538,084.65
99.9999%
79.2914%
2,350,138,487.51
(12,219,399,597.1
4)

Graphics
4
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Unitary Net Asset Value
Item 31 December 2023 31 December 2022 Differences
Net Asset Value
2,350,138,487.51
14,569,538,084.65
(12,219,399,597.14)
Number of outstanding shares
3,556,427,239
5,668,806,128
(2,112,378,889)
Unitary net asset value
0.6608
2.5701
(1.9093)
DETAILED STATEMENT OF INVESTMENTS AS AT 31 DECEMBER 2023
1. Securities admitted or traded on a regulated market in Romania, out of which:
1.1 Listed shares traded in the last 30 trading days (working days)
Issuer Symbol
Date of the
last trading
session
No of shares
held
Nominal
value
Share
value
Total value
Stake in the
issuer's
capital
Stake in Fondul
Proprietatea
total assets
Stake in Fondul
Proprietatea
net asset
Valuation method
Alro SA
ALR
29-Dec-23
72,884,714
0.5
1.5400
112,242,459.56
10.21%
3.7870%
4.7760%
Closing Price
IOR SA
IORB
29-Dec-23
2,622,273
0.1
0.2400
629,345.52
0.47%
0.0212%
0.0268%
Reference price (Closing Price)
ROMAERO SA
RORX
28-Dec-23
1,311,691
2.5
0.0000
0.00
18.87%
0.0000%
0.0000%
Value based on the valuation report as
at 30 June 2023 (applying the income
approach using the discounted cash
flow method)
Total
112,871,805.08
3.8082%
4.8028%
1.2. Shares not traded in the last 30 trading days (working days)
Issuer Symbol
Date of the last
trading session
No of shares
held
Nominal
value
Share
value
Total value
Stake in the
issuer's
capital
Stake in Fondul
Proprietatea
total assets
Stake in Fondul
Proprietatea
net asset
Valuation method
Alcom SA
ALCQ
10-Feb-17
89,249
2.5
112.8514
10,071,874.60
71.89%
0.3398%
0.4286%
Value based on the valuation report as at 31 October 2023
(applying the income approach using the discounted cash
flow method)
MECON SA
MECP
3-Apr-23
60,054
11.6
39.7891
2,389,494.61
12.51%
0.0806%
0.1017%
Value based on the valuation report as at 30 June 2023
(applying the asset-based approach)
Total
12,461,369.21
0.4204%
0.5303%
1.3. Shares not traded in the last 30 trading days (working days) for which the financial statements are not obtained within 90 days from the legal filing dates
Not the case
1.4. Allocation rights admitted to trading
Not the case
1.5. Preferred rights admitted to trading
Not the case
1.6. Bonds admitted to trading issued or guaranteed by local government authorities / corporate bonds
Not the case
1.7. Bonds admitted to trading issued or guaranteed by central government authorities

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5
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Not the case
1.8. Other securities admitted to trading on a regulated market
Not the case
1.9. Amounts under settlement related to the securities admitted or traded on a regulated market in Romania
Not the case
2. Securities admitted or traded on a regulated market from a member state of EU, out of which:
2.1. Shares traded in the last 30 trading days (working days)
Not the case
2.2. Bonds admitted to trading issued or guaranteed by local public administration authorities, corporate bonds
Not the case
2.3. Bonds admitted to trading issued or guaranteed by central government authorities
Not the case
2.4. Other securities admitted to trading on a regulated market in other EU member state
Not the case
2.5. Amounts being settled for securities admitted to or traded on a regulated market in other EU member state
Not the case
3. Securities admitted or traded on a regulated market from a non-member state of EU
3.1. Shares traded in the last 30 trading days (working days)
Not the case
3.2. Issued bonds admitted to trading or guaranteed by local government authorities, corporate bonds traded in the last 30 days (working days)
Not the case
3.3. Other securities admitted to trading on a regulated market in a non-member state of EU
Not the case
3.4. Amounts being settled for securities admitted to or traded on a regulated market in a non-member state of EU
Not the case
4. Money market instruments traded or listed on regulated markets in Romania
Not the case

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6
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Amounts being settled for money market instruments admitted or traded on a regulated market in Romania
Not the case
5. Money market instruments traded or listed on regulated markets from other EU member state
Not the case
Amounts under settlement related to money market instruments admitted or traded on a regulated market in another EU Member State
Not the case
6. Money market instruments traded or listed on regulated markets from a non-member state of EU
Not the case
Amounts under settlement related to money market instruments admitted or traded on a regulated market in a non-EU Member State
Not the case
7. Newly issued securities
7.1. Newly issued shares
Not the case
7.2. Newly issued bonds
Not the case
7.3. Preferential rights (after registration with the Central Depository, prior to admission to trading)
Not the case
8. Other securities and money market instruments mentioned in art. 83 paragraph (1) letter a) of the O.U.G. no. 32/2012
8.1 Other securities mentioned in art. 83 paragraph (1) letter a) of the O.U.G. no. 32/2012
8.1.1. Shares not admitted to trading
Issuer
No. of shares
held
Nominal
value
Share
value
Total value
Stake in
the
issuer's
capital %
Stake in
Fondul
Proprietatea
total assets
Stake in
Fondul
Proprietate
a net asset
Company status Valuation method
Aeroportul International Mihail Kogalniceanu -
Constanta SA
23,159
10
88.553
2,050,798.93
20.00%
0.0692%
0.0873%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
Aeroportul International Timisoara - Traian Vuia SA
32,016
10
187.4062
5,999,996.90
20.00%
0.2024%
0.2553%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
CN Administratia Canalelor Navigabile SA
203,160
10
76.6062
15,563,315.59
20.00%
0.5251%
0.6622%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the market comparison technique
using comparable trading multiples for EBITDA)
CN Administratia Porturilor Dunarii Fluviale SA
27,554
10
111.2944
3,066,605.90
20.00%
0.1035%
0.1305%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the market comparison technique
using comparable trading multiples for EBITDA)

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7
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
Issuer
No. of shares
held
Nominal
value
Share
value
Total value
Stake in
the
issuer's
capital %
Stake in
Fondul
Proprietatea
total assets
Stake in
Fondul
Proprietate
a net asset
Company status Valuation method
CN Administratia Porturilor Dunarii Maritime SA
21,237
10
149.3166
3,171,036.63
20.00%
0.1070%
0.1349%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the market comparison technique
using comparable trading multiples for EBITDA)
CN Administratia Porturilor Maritime SA
6,466,226
10
50.7715
328,299,993.36
19.99%
11.0765%
13.9694%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
CN Aeroporturi Bucuresti SA
2,875,443
10
305.2399
877,699,933.78
20.00%
29.6128%
37.3467%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
Complexul Energetic Oltenia SA
5,314,279
10
12.1935
64,799,660.99
11.81%
2.1863%
2.7573%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
Engie Romania SA
2,390,698
10
180.9581
432,616,167.75
11.99%
14.5961%
18.4081%
Unlisted companies, in
function
Fair value/ share (SPA Price)
Gerovital Cosmetics SA
1,350,988
0
0
0.00
9.76%
0.0000%
0.0000%
Bankruptcy
Priced at zero
Plafar SA
132,784
10
14.9709
1,987,895.99
48.99%
0.0671%
0.0846%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
Posta Romana SA
14,871,947
1
1.1699
17,398,690.80
6.48%
0.5870%
0.7403%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the market comparison technique
using comparable trading multiples for
price/Earnings)
ROMPLUMB SA
1,595,520
3
0
0.00
33.26%
0.0000%
0.0000%
Bankruptcy
Priced at zero
Salubriserv SA
43,263
3
0
0.00
17.48%
0.0000%
0.0000%
Bankruptcy
Priced at zero
Simtex SA
132,859
3
0
0.00
30.00%
0.0000%
0.0000%
Juridical reorganisation
Priced at zero
Societatea Electrocentrale Craiova SA
513,754
10
0
0.00
21.55%
0.0000%
0.0000%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the market comparison technique
using comparable trading multiples for EV/Revenue)
Societatea Nationala a Sarii SA
2,011,456
10
158.2932
318,399,806.90
48.99%
10.7425%
13.5481%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
World Trade Center Bucuresti SA
198,860
79
0
0.00
19.90%
0.0000%
0.0000%
Insolvency
Priced at zero
Zirom SA
6,000,000
10
4.7641
28,584,600.00
100.00%
0.9644%
1.2163%
Unlisted companies, in
function
Value based on the valuation report as at 31 October
2023 (applying the income approach using the
discounted cash flow method)
Total
2,099,638,503.52
70.8399%
89.3410%
8.1.2. Shares traded under systems other than regulated markets
Not the case
8.1.3. Unlisted shares valued at zero value (no updated financial statements submitted to the Trade Register)
Issuer
No of
shares
held
Nominal
value
Share
value
Total
value
Stake in the
issuer's capital
Stake in Fondul
Proprietatea total
assets
Stake in Fondul
Proprietatea net
asset
World Trade Hotel SA
17,912
1
0.0000
0.00
19.90%
0.0000%
0.0000%
Total
0.00
0.0000%
0.0000%
8.1.4. Bonds not admitted to trading
Not the case

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8
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
8.1.5. Amounts being settled for shares traded on systems other than regulated markets
Not the case
8.2. Other money market instruments mentioned in art. 83 paragraph (1) letter a) of the O.U.G. no. 32/2012
Commercial papers
Not the case
9. Available cash in the current accounts and petty cash
9.1. Available cash in the current accounts and petty cash in RON
Bank Current value
Stake in Fondul Proprietatea
total assets
Stake in Fondul
Proprietatea net asset
BRD Groupe Societe Generale*
547,496,880.99
18.4720%
23.2964%
BRD Groupe Societe Generale - amounts under
settlement**
(1,429,973.94)
(0.0482%)
(0.0608%)
Banca Comerciala Romana
48,824.39
0.0016%
0.0021%
CITI Bank
1,397.64
0.0000%
0.0001%
ING BANK
1,510.52
0.0001%
0.0001%
Raiffeisen Bank
1,575.58
0.0001%
0.0001%
Unicredit Tiriac Bank
1,373.58
0.0000%
0.0001%
Petty cash
416.16
0.0000%
0.0000%
Total
546,122,004.92
18.4256%
23.2381%
*The amount held with BRD Groupe Societe Generale represents cash held in the distributions bank accounts which can only be used for payments to shareholders.
**The amount under settlement according with the bank statement as at 31 December 2023
9.2. Available cash in the current accounts and petty cash in foreign currency
Bank Currency
Current
value
NBR
exchange
rate
Current value (in
RON)
Stake in Fondul
Proprietatea total
assets
Stake in Fondul
Proprietatea net asset
BRD Groupe Societe Generale
EUR
252.30
4.9746
1,255.09
0.0000%
0.0001%
BRD Groupe Societe Generale
GBP
314.73
5.7225
1,801.04
0.0001%
0.0001%
BRD Groupe Societe Generale
USD
434.91
4.4958
1,955.27
0.0001%
0.0001%
Total
5,011.40
0.0002%
0.0003%
10. Bank deposits by categories: within credit institutions from Romania / EU Member States / non-member EU states
Bank deposits in RON
Name of the bank
Starting
date
Maturity
date
Initial value
Daily
interest
Cumulative
interest
Current value
(RON)
Stake in Fondul
Proprietatea total
asset
Stake in Fondul
Proprietatea net
asset
Valuation method
Unicredit Tiriac Bank
28-Dec-23
03-Jan-24
45,400,000.00
6,683.89
26,735.56
45,426,735.56
1.5327%
1.9329%
Bank deposit value
cumulated with the daily
related interest for the
period from starting date
Banca Comerciala Romana
28-Dec-23
03-Jan-24
45,400,000.00
6,683.89
26,735.56
45,426,735.56
1.5327%
1.9329%
CITI Bank
29-Dec-23
04-Jan-24
45,200,000.00
6,528.89
19,586.67
45,219,586.67
1.5257%
1.9241%
BRD Groupe Societe Generale
29-Dec-23
03-Jan-24
10,072,158.12
1,328.97
3,986.90
10,076,145.02
0.3400%
0.4287%
ING BANK
29-Dec-23
04-Jan-24
45,200,000.00
6,591.67
19,775.00
45,219,775.00
1.5257%
1.9241%
Total
191,272,158.12
96,819.69
191,368,977.81
6.4568%
8.1427%

Graphics
9
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
11. Derivative financial instruments traded on a regulated market
11.1. Future contracts
Not the case
11.2. Options
Not the case
11.3. Amounts under settlement for derivative financial instruments traded on a regulated market
Not the case
12. Derivative financial instruments traded outside of the regulated markets
12.1. Forward contract
Not the case
12.2. Swap contract
Not the case
12.3. Contracts for differences
Not the case
12.4. Other derivative contracts regarding securities, currencies, interest or profitability rates or other derivative instruments, financial indices or financial indicators /
other derivative contracts regarding goods to be settled in cash or which may be settled in cash at the request of one of the parties
Not the case
13. Money market instruments, other than those traded on a regulated market, according with art. 82 letter g) of the O.U.G. no. 32/2012
Treasury bills
Not the case
14. Participation titles in the O.P.C.V.M. / AOPC
14.1. Participation titles denominated in RON
Not the case
14.2. Participation titles denominated in foreign currency
Not the case
14.3. Amounts under settlement regarding participation titles denominated in RON
Not the case

Graphics
10
fondulproprietatea.ro
Annex 2 Statement of Assets and Obligations as
at 31 December 2023, prepared in accordance
with FSA Regulation 7/2020
14.4. Amounts under settlement regarding participation titles denominated in foreign currency
Not the case
15. Dividends or other receivable rights
15.1. Dividends receivable
Not the case
15.2. Shares distributed without cash consideration
Not the case
15.3. Shares distributed with cash consideration
Not the case
15.4. The amount to be paid for shares distributed in exchange of cash consideration
Not the case
15.5. Preference rights (before admission to trading and after the trading period)s
Not the case
Evolution of the net asset and the net asset unitary value in the last 3 years
Item 31 December 2021 31 December 2022
31 December
2023
Net Asset
13,244,639,868.31
14,569,538,084.65
2,350,138,487.51
NAV/share
2.2624
2.5701
0.6608
Leverage of Fondul Proprietatea
Method type Leverage level Exposure amount
a) Gross method
94.67%
2,224,976,689.21
b) Commitment method
100.00%
2,350,138,487.51
Franklin Templeton International Services S.à r.l acting in its capacity of Sole Director and
alternative investment fund manager of Fondul Proprietatea SA
BRD Groupe Societe Generale
Johan Meyer
Victor Strambei
Permanent representative
Manager Depositary Department
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1
fondulproprietatea.ro
Annex 3 Statement of persons responsible
Annex 3 Statement of persons responsible
Provisions of Accounting Law no. 82/1991, Art.30 and FSA Regulation no. 5/2018,
Art.223, par. A (1), letter c
The annual financial statements for the financial year 31 December 2023 prepared for:
Entity: Fondul Proprietatea SA
Address: Bucharest, District 1, 76–80, Buzesti Street, 7th Floor
Trade Registry Number: J40/21901/28.12.2005
Form of property: 22 (joint ownership with public capital under 50%, domestic and foreign
public and private capital companies)
CAEN code and name: 6430 “Trusts, funds and similar financial entities”
Sole Registration Code: 18253260
The undersigned, Johan Meyer, Permanent Representative with Franklin Templeton
International Services S.à r.l as Sole Director of Fondul Proprietatea SA, and Cadaru Catalin,
Financial reporting manager, undertake the responsibility for the preparation of the annual
financial statements as at 31 December 2023 and confirm that:
a) the accounting policies used for the preparation of the annual financial statements are in
compliance with the applicable accounting regulations;
b) the annual financial statements give a true and fair view of the financial position and
performance (including the assets, liabilities and profit or loss) and of other information
regarding the business conducted;
c) the company is conducting its business on a going concern basis;
d) the Annual Sole Director’s Report of Franklin Templeton International Services S.à r.l
regarding the management and administration of Fondul Proprietatea SA for the year
2023, includes an accurate overview of the developments and performance of Fondul
Proprietatea SA, as well as a description of the main risks and uncertainties related to
the business.
Johan Meyer
Permanent Representative
Catalin Cadaru
Fund Administration and Oversight Senior Manager
Franklin Templeton International Services S.À R.L, in its capacity of Sole Director and
Alternative Investment Fund Manager of Fondul Proprietatea SA
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1
fondulproprietatea.ro
Annex 4 Compliance with the corporate governance
requirements
Annex 4 Compliance with the corporate governance requirements
Compliance with the provisions of the Corporate Governance Code issued by the BVB
Code Provisions
Complies
Does not
comply/partially
complies
Reason for
non-
compliance
A.1. The Fund has the Constitutive Act and the internal regulation which includes terms of reference/ responsibilities for
Board and for the sole director.
A.2. Provisions for the management of conflict of interest are included in the internal regulation. In any event, the
members of the Board should notify the Board of any conflicts of interest which have arisen or may arise and should
refrain from taking part in the discussion (including by not being present where this does not render the meeting non-
quorate) and from voting on the adoption of a resolution on the issue which gives rise to such conflict of interest.
A.3. The Board of Nominees has five members.
A.4. All members of the Board of Nominees are non-executive and independent. Each member of the Board of Nominees
submitted a statement that he is independent at the moment of his nomination for election or re-election as well as
when any change in his status arises, by demonstrating the ground on which he is considered independent in character
and judgement in practice.
A.5. A Board member’s other relatively permanent professional commitments and engagements, including executive and
non-executive Board positions in companies and not-for-profit institutions, should be disclosed to shareholders and to
potential investors before appointment and during his/ her mandate.
A.6. Any member of the Board should submit to the Board, information on any relationship with a shareholder who
holds directly or indirectly, shares representing more than 5% of all voting rights. This obligation concerns any kind of
relationship which may affect the position of the member on issues decided by the Board.
A.7. The Fund has appointed a Board secretary responsible for supporting the work of the Board.
A.8. The annual report informs on whether an evaluation of the Board has taken place under the leadership of the
chairman or the Nomination and Remuneration Committee and, if it has, summarize key action points and changes
resulting from it. The Fund has a policy regarding the evaluation of the Board containing the purpose, criteria, and
frequency of the evaluation process.
A.9. The annual report contains information on the number of meetings of the Board and the committees during the past
year, attendance by each member (in person and in absentia) and a report of the Board and committees on their
activities.
A.10 The annual report contains information on the precise number of the independent members of the Board of
Nominees.
A.11. The Board of Nominees set up the Nomination and Remuneration Committee formed of non-executives, which will
lead the process for the AIFM appointments and make recommendations to the Board. All members of the Nomination
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2
fondulproprietatea.ro
Annex 4 Compliance with the corporate governance
requirements
Code Provisions
Complies
Does not
comply/partially
complies
Reason for
non-
compliance
and Remuneration Committee are independent.
B.1 The Board of Nominees set up the Audit and Valuation Committee, all members being non-executive and
independent. The majority of members, including the chairman, have proven an adequate qualification relevant to the
functions and responsibilities of the committee. The chairman of the Audit Committee has proven adequate auditing or
accounting experience.
B.2. The Audit and Valuation Committee is chaired by an independent non-executive member.
B.3. Among its responsibilities, the Audit and Valuation Committee undertakes an annual assessment of the system of
internal control.
B.4. The assessment considers the effectiveness and scope of the internal audit function, the adequacy of risk
management and internal control reports to the Audit and Valuation Committee, management’s responsiveness, and
effectiveness in dealing with identified internal control failings or weaknesses and submission of relevant reports to the
Board.
B.5. The Audit and Valuation Committee reviews conflicts of interests in transactions of the Fund and its subsidiaries
with related parties.
B.6. The Audit and Valuation Committee evaluates the efficiency of the internal control system and of the risk
management system.
B.7. The Audit and Valuation Committee monitors the application of statutory and generally accepted standards of
internal auditing. The Audit and Valuation Committee receives and evaluates the reports of the internal audit team.
B.8. The Audit and Valuation Committee provides the Board annual or ad-hoc reports.
B.9. No shareholder may be given undue preference over other shareholders with regard to transactions and
agreements made by the Fund with shareholders and their related parties.
B.10. The Fund has in place a related party transaction procedure.
B.11. The internal audits are carried out by a separate structural division and by retaining an independent third-party
entity.
B.12. To ensure the fulfilment of the core functions of the internal audit activities, all reports are provided to the Board
via the Audit and Valuation Committee.
C.1. The Fund has published a remuneration policy on its website and include in its annual report a remuneration
statement on the implementation of this policy during the annual period under review.
D.1. In addition to information required by legal provisions, the Fund includes on its corporate website a dedicated
Investor Relations section, both in Romanian and English, with all relevant information of interest for investors,
including:
D.1.1. Principal corporate regulations: the Constitutive Act, general shareholders meeting procedures;
D.1.2. Professional CVs of the members of its governing bodies, Board member’s other professional commitments,
including executive and non-executive Board positions in companies and not-for-profit institutions;
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3
fondulproprietatea.ro
Annex 4 Compliance with the corporate governance
requirements
Code Provisions
Complies
Does not
comply/partially
complies
Reason for
non-
compliance
D.1.3. Current reports and periodic reports (quarterly, semi-annual and annual reports) – at least as provided at item
D.8 – including current reports with detailed information related to non-compliance with the Code of BVB;
D.1.4. Detailed information related to general meetings of shareholders;
D.1.5. Information on corporate events, such as payment of dividends and other distributions to shareholders, or other
events leading to the acquisition or limitation of rights of a shareholder, including the deadlines and principles applied
to such operations. Such information should be published within a timeframe that enables investors to make investment
decisions;
D.1.6. The name and contact data of a person who should be able to provide knowledgeable information on request;
D.1.7. Corporate presentations (e.g. IR presentations, quarterly results presentations, etc.), financial statements
(quarterly, semi-annual, annual), auditor reports and annual reports.
D.2. The Fund has an annual cash distribution policy, as a set of directions the Fund intends to follow regarding the
distribution of net profit. The annual cash distribution policy is published on the corporate website.
D.3. The Fund has adopted a policy with respect to forecasts. The forecast policy is published on the corporate website.
D.4. The rules of general meetings of shareholders do not restrict the participation of shareholders in general meetings
and the exercising of their rights. Amendments of the rules should take effect, at the earliest, as of the next general
meeting of shareholders.
D.5. The external auditors should attend the shareholders’ meetings when their reports are presented there.
D.6. The management of the Fund presents to the annual general meeting of shareholders a brief assessment of the
internal controls and significant risk management system, as well as opinions on issues subject to resolution at the
general meeting.
D.7. Any professional, consultant, expert or financial analyst may participate in the shareholders’ meeting upon prior
invitation from the management of the Fund. Accredited journalists may also participate in the general meeting of
shareholders unless the management of the Fund decides otherwise.
D.8. The quarterly and semi-annual financial reports include information in both Romanian and English regarding the
key drivers influencing the activity of the Fund.
D.9. The Fund organises at least four meetings/ conference calls with analysts and investors each year. The information
presented on these occasions is published on the Fund’s website.
D.10. If the Fund supports various forms of artistic and cultural expression, sport activities, educational or scientific
activities, and considers the resulting impact on the innovativeness and competitiveness of the Fund part of its business
mission and development strategy, it publishes the policy guiding its activity in this area.
Graphics
1
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Annex 5 Actual vs. budget analysis for the year
ended 31 December 2023
Purpose
This paper presents the most significant variances of the main income and expense categories of
Fondul Proprietatea SA (“the Fund”/ “FP”) for the year ended 31 December 2023 compared to
the same period budgeted and derived from the 2023 Annual Budget, approved by shareholders
through Resolution no. 9 / 15 November 2022 of the Shareholders’ Ordinary General Meeting of
Fondul Proprietatea S.A.
Presentation
The actual vs. budget analysis for the year ended 31 December 2023 was prepared based on
IFRS accounting records (statutory basis of accounting), according to FSA
1
Norm 39/28
December 2015, as subsequently amended.
For the actual vs. budget analysis, the income and expense items were categorised to match the
budget presentation. The foreign exchange gains/ losses, the gains/ losses from financial
instruments at fair value through profit or loss, the gains/ losses on sale of financial
instruments, other items of income/ expenses and expenses/ income from reversal of
impairment adjustments and provisions are presented on a net basis.
According to the accounting policy, the distribution fees related to buy-backs and other related
costs, such as, brokerage fees and regulatory fees are recognised in other comprehensive
income.
According to the main assumptions of the 2023 Budget, there are certain categories of income
and expenses which cannot be budgeted, such as: foreign exchange gains and losses, revenues
and expenses from impairment adjustments, fair value changes, gains or losses and other
expenses related to disposal of financial instruments, and other items of income/ expenses.
Consequently, this actual vs. budget analysis presents an overview of the non-budgeted items
and a detailed explanation for the budgeted items.
According to the 2023 Budget approved by the Fund’s shareholders reclassifications/
reallocations between expense categories may take place during the year with the condition
that the total of these expenses (excluding non-budgeted expenses) will meet the overall
budgetary limits approved by the General Shareholders Meeting, with the exceptions mentioned
in the Budget paper. For the 2023 Budget, no reallocations between expense categories were
required.
The current paper was prepared using a new presentation of budgeted income and expense
items, which differs from the 2023 Budget presentation, as approved by the shareholders
during November 2022 GSM. For comparability, the 2023 Budget captions have been re-
mapped to the new categories included in the 2024 Budget submitted for shareholders’
approval during the March 2024 GSM.
Please see Annex 2 to this report for a reconciliation between the old and new presentation of
the 2023 Budget used in the current actual vs. budgeted paper.
1
Romanian Financial Supervisory Authority
Graphics
2
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Results
A. Total actual net result
The table below presents an overview of the budgeted/ non-budgeted results for 2023:
All amounts in RON
Actual 2023
Budget 2023
(Re-mapped )
Variance
RON
RON
RON
%
Budgeted items
566,864,568
262,996,461
303,868,107
>100%
Non-budgeted items
(1,470,961,654)
-
(1,470,961,654)
Total (loss)/profit for
the period
(904,097,086)
262,996,461
(1,167,093,547)
<-100%
The actual net result of the Fund for the year 2023 was loss of RON 904.1 million, while the
actual result corresponding to the budgeted items was a profit of RON 566.9 million.
The difference between the two amounts mentioned above is largely due to the non-budgeted
net losses from equity instruments at fair value through profit or loss, generated by the
valuation of Hidroelectrica SA. Following the completion of the offering period, the company
was valued based on the IPO subscription price (weighted average between final IPO price
(RON 104/ share) and the discounted price for the retail (RON 100.88/ share)). The total impact
was a loss of RON 1.87 billion by reference to the 31 December 2022 valuation.
This decrease was partially offset by other non-budgeted fair value net gains from equity
instruments/non-current assets held for sale at fair value through profit or loss, the fair value
net gain generated by the non-current assets held for sale after reclassification date and the
non-budgeted Net dividend income from special dividends recorded in the financial year ended
31 December 2023.
B. Variances for the budgeted net profit
This section presents a detailed analysis of the budgeted items by comparison with the actual
results for the same elements. Therefore, the net result under this section should be read as the
net result corresponding to the budgeted elements while the reconciliation to the total net
result is presented in the previous section.
Net result overview
The actual net profit for the year 2023 was RON 566.8 million, compared to a budgeted profit of
RON 262.9 million. The following sections include detailed explanations about the main
variances.
B.1 Income from current activity
All amounts in RON
Actual 2023
Budget 2023
(Re-mapped)
Variance
RON
RON
RON
%
I. BUDGETED INCOME FROM
OPERATING ACTIVITY
1,033,991,254
663,623,839
370,367,415
+55.8%
Net dividend income
875,357,374
658,128,682
217,228,692
+33%
Interest income
157,467,146
3,594,651
153,872,495
>100%
Other income (e.g. BNY Mellon
income)
1,166,734
1,900,506
(733,772)
-39%
During the year 2023, the actual income from current activity amounted to RON 1,033.9 million
being higher than the budgeted figures by RON 370.4 million. Please see the sections below for
additional information regarding each significant income type.
Graphics
3
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
a) Net dividend income
Actual net dividend income for the year 2023 exceeds the budgeted figures by RON 217.2
million. As a general assumption, the special dividends are not budgeted by the Fund. The
special net dividends recorded during 2023 amount to RON 80.4 million.
Portfolio
Company
Actual 2023
Budget 2023
(Re-mapped )
Variance
Reason for variance
RON
RON
RON
Hidroelectrica SA
780,681,803
564,601,016
216,080,787
Increase due to the higher 2022 profit
compared with the estimates. The
2023 budget assumption was a similar
level dividend as approved in 2022.
OMV Petrom SA
-
60,458,464
(60,458,464)
The company was sold during 2022
(assumption not included in the 2023
Budget which was prepared before
the company was sold).
CN Aeroporturi
Bucuresti SA
31,486,581
-
31,486,581
According with the Company’s 2022
budget, the assumption was that no
dividends will be distributed.
Societatea
Nationala a Sarii
SA
55,996,590
32,459,069
23,537,521
Increase due to the higher 2022 profit
compared with the company’s 2022
budget used in 2023 Budget
assumption.
CN Administratia
Porturilor
Maritime SA
5,728,126
-
5,728,126
According with the Company’s 2022
budget, the assumption was that no
dividends will be distributed.
Others
1,464,273
610,133
854,140
Actual amounts mainly include
dividends received from Alcom SA and
Societatea Electrocentrale Craiova SA.
Total annual
net dividends
875,357,373
658,128,682
217,228,691
Total special net
dividends
80,429,147
-
n/a
Includes the WHT amount deducted
from Hidroelectrica special dividends
(RON 6,940,477) as the WHT
exemption was no longer applicable –
the dividends were collected after the
sale of the company.
Total net
dividends
955,786,520
658,128,682
n/a
b) Interest income
Actual total income from current activity for the year 2023 exceeds the budgeted income also
due to interest income which was higher by RON 153.8 million. The increase was mainly
generated by the interest-bearing money-market instruments acquired using the proceeds from
the sale of Hidroelectrica SA. These instruments were bought for the period between the IPO
closing and the distribution payment date, in line with the Fund’s Cash Management Policy and
to effectively meet the cash requirements set by the shareholders following the approval of the
RON 1.7225 gross dividend per share during the 18 August 2023 GSM.
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4
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
B.2 Expenses from current activity
All amounts in RON
Actual 2023
Budget 2023
(Re-mapped )
Variance
RON
RON
RON
%
II. BUDGETED EXPENSES FROM
OPERATING ACTIVITY
224,404,521
94,910,675
129,493,846
>100%
Administration fees recognised
in profit or loss
202,152,281
55,000,606
147,151,675
>100%
Board of Nominees related
expenses
2,703,683
3,970,723
(1,267,040)
-32%
Taxes, fees and commissions
10,350,521
15,699,152
(5,348,631)
-34%
Legal and litigation assistance
2,635,320
7,786,595
(5,151,275)
-66%
Valuation and other portfolio
related expenses
2,038,992
4,103,262
(2,064,270)
-50%
Audit and other regulatory
reporting expenses
1,404,239
2,083,478
(679,239)
-33%
Investor relations expenses
904,484
2,635,057
(1,730,573)
-66%
Public relations expenses
863,143
1,373,641
(510,498)
-37%
GSM organisation and other
shareholder related expenses
314,424
761,355
(446,931)
-59%
Other expenses
1,037,433
1,496,806
(459,373)
-31%
During the year 2023, the actual expenses from current activity amounted to RON 224.4 million
being higher than the budgeted figures by RON 129.5 million. Please see the sections below for
additional information regarding each expense type.
a) Administration fees recognised in profit or loss
All amounts in
RON
Actual 2023
Budget 2023
(Re-mapped )
Variance
Reason for variance
RON
RON
RON
Recognised in
profit or loss
202,152,281
55,000,606
147,151,675
Base fee
36,785,547
50,074,378
(13,288,831)
The market capitalization of the
Fund decreased significantly
after the Hidroelectrica IPO
proceeds distribution Ex-Date.
Distribution fee for
dividend
distribution/
return of capital
165,366,734
4,926,228
160,440,506
The significant increase was
generated by the distribution
fee related to the gross dividend
in amount of RON 9,180 billion.
Recognised in
other
comprehensive
income
35,695,074
7,865,038
27,830,036
Distribution fee for
buy-back
programmes
35,695,074
7,865,038
27,830,036
The higher distribution fees are
due to the finalisation of the
March 2023 and December
2023 Tender Offers and higher
daily buyback volumes in the
following 20 trading days.
Total
administration
fees
237,847,355
62,865,644
174,981,711
Graphics
5
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
The additional unbudgeted fees and costs related to the Tender Offers settled in March 2023
and in December 2023 (e.g. FSA fees, broker fees, legal expenses) are also booked directly in
other comprehensive income together with the cost of the underlying treasury shares.
For this category of expenses, the shareholders granted the Fund Manager the power to exceed
the budget even if this will result in exceeding the total expenses approved in the 2023 Budget.
b) Board of Nominees related expenses
The actual expenses under this category were lower than the budgeted levels, as detailed in the
table below. The exception is the Diligent software cost (Other expenses captions) which
increased mainly due to the fact that new users were included in the application license.
All amounts in RON
Actual 2023
Budget 2023
(Re-mapped )
Variance
RON
RON
RON
%
Board of Nominees remuneration
1,703,556
1,703,566
(10)
0%
Insurance expenses
414,988
597,147
(182,159)
-31%
Travel expenses for taking part in Board
meetings and GSMs
392,955
939,644
(546,689)
-58%
Other expenses
103,087
60,991
42,096
+69%
Advisory services
89,097
669,375
(580,278)
-87%
Board of Nominees related expenses
2,703,683
3,970,723
(1,267,040)
-32%
c) Taxes, fees and commissions
This category includes mainly FSA monthly fees (85.5% from the total Taxes, fees and
commissions) estimated based on NAV (0.0936% of NAV per year). During 2023 the average
NAV was RON 9,449.6 million, lower than the NAV used in the 2023 Budget (RON 15,190.7
million). The variation seen for this category between actual and budgeted figures (RON 5.3
million) is almost entirely due to the lower FSA monthly fee following the NAV decrease after
the Hidroelectrica IPO completion and subsequent dividend distribution.
As described in the first section of this report, following the new presentation of the budget, the
expenses related to Central Depository fees and depository bank fees have been included in this
category.
d) Legal and litigation assistance
These expenses include legal services provided by external legal advisors, as well as legal
representation expenses for litigations and stamp taxes payable for litigation actions in which
the Fund is involved/ takes part to defend its interests as well as government relations strategy
costs.
The actual expenses under this category were lower by RON 5.1 million compared to the budget.
e) Valuation and other portfolio related expenses
This category is now presented separately to provide more transparent information regarding
the Fund’s valuation process and other portfolio related expenses. This category also includes
expenses related to various reports prepared by external consultants which assist the Fund in
various portfolio related matters (e.g. report on airport passengers traffic).
The actual expenses under this category were lower by RON 2.0 million compared to the budget.
The variance mainly stems from the fact that the Fund did not prepare year end valuation
reports and other periodic updates/ analysis for the companies that were sold/ committed to
being sold during the year (e.g. Hidroelectrica SA and Enel group companies).
Graphics
6
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
f) Audit and other regulatory reporting expenses
In addition to the statutory audit fees, this category includes all fees related to regulatory
reporting requirements (e.g. non-audit services that may be required, tax compliance expenses,
SAF-T reporting).
The actual expenses under this category were lower by RON 0.7 million compared to the budget
mainly due to some regulatory reports not being required during 2023.
g) Investor relations expenses
This category mainly includes road-show expenses, quarterly earnings events costs, investor
day organisation expenses, website up-keep expenses and other investor linked marketing
expenses.
IR expenses are necessary for any listed company and cover the broad costs to effectively
communicate with the Fund’s existing investors, as well as attracting new investors to the
equity story of the Fund. The IR efforts have been one of the cornerstones in the Discount
Control Mechanism, being very effective in maintaining a high investor interest in the Fund
despite many significant negative political developments and challenging regulations.
The actual expenses under this category were lower by RON 1.7 million compared to the budget
as the Fund organised fewer such events than was estimated as part of the 2023 Budget
preparation.
h) Public relations expenses
This category mainly includes the Fund’s public relations agency monthly retainer fee, expenses
related to media partnerships and PR project-based activities for promoting Fondul
Proprietatea and its objectives and also expenses related to media monitoring. These expenses
are intended to increase the visibility of Fondul Proprietatea in the media and inform the public
about its business objectives, including implementation of better corporate governance in
portfolio companies, listings of portfolio companies and development of the capital market.
Throughout the communication efforts, the media is exposed to various irregularities in
portfolio companies, generating media pressure, which in turn determines the main
shareholder, the Romanian State to act differently. Communication activities support unlocking
the real potential of portfolio companies, thus being in the interest of the Fund’s shareholders.
Also, presenting the Fund in the international media as an attractive investment opportunity in
Romania contributes to educating the international public about the Fund and potentially
attracting new investors to the Fund.
The actual expenses under this category were lower by RON 0.5 million compared to the budget.
i) GSM organisation and other shareholder related expenses
The main component of this category is related to GSM organisation, such as hiring a venue,
protocol expenses, copying documents and other organisational costs.
The actual expenses under this category were lower by RON 0.4 million compared to the budget
as the fees related to organising the GSM’s held during 2023 were lower than estimated as part
of the Budget preparation.
j) Other expenses
This category includes the following type of expenses related to the Fund: rent and utility
expenses, advisor fees for strategic consultants on various subjects and maintenance fees
related to Fund’s accounting and reporting software.
The actual expenses under this category were lower by RON 0.5 million compared to the budget
and the saving mainly relates to the consultant fees.
Graphics
7
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
B.3 Expenses related to listing of portfolio holdings
This category includes expenses related to intermediaries and advisors, including services in
connection listing projects (Hidroelectrica and Salrom).
Total actual expenses related to Hidroelectrica IPO amounted to RON 242,777,993 which were
lower than the budgeted figures of RON 300,165,184, the main savings coming from lower base
and discretionary fees paid to the consortium of financial institutions that assisted the Fund in
the transaction.
The budgeted figures for the year 2023 also include amounts related to the listing of Salrom.
Actual expenses related to the listing of this company recorded during 2023 were in amount of
RON 180 thousand which were lower compared to the budgeted figures as no material
developments occurred with this listing project.
For this category of expenses, the shareholders granted the Fund Manager the power to exceed
the budget even if it resulted in exceeding the total expenses approved in the 2023 Budget.
C. Capital Expenditure
During 2023 the Fund’s investments in intangible assets included the updates to the accounting
and reporting software, following the implementation of the new SAF-T reporting requirements.
***
D. Other information
Please note that together with the approval of 2023 Budget in November 2022, the shareholders
granted the Fund Manager the power to:
• exceed the expenses budgeted for investment management and administration fees;
• exceed the expenses budgeted for commissions and fees (FSA fees and Depositary bank fees), to
the extent arising from the Fund’s actual average NAV, the value of assets under custody and/
or volume of portfolio and buy-backs trades in 2023 being higher than the ones assumed in the
2023 Budget;
• incur on behalf of the Fund all expenses necessary (e.g. intermediary fees of brokers or
investment banks, market authorities’ fees, lawyers, public notaries, other advisors’ costs, as
well as other related expenses, commissions or fees) related to the execution of acquisitions
and disposals of equity investments (including listing projects) or participation in share capital
increases of portfolio companies;
• incur on behalf of the Fund all expenses related to the buy-back of the Fund’s shares or the
equivalent global depositary receipts corresponding to shares of the Fund and their subsequent
cancellation (after the approval by shareholders), under any buy-back programme approved
by shareholders;
• incur on behalf of the Fund any expenses related to bank loans/ credit facilities contracted by
the Fund, with Board of Nominees approval;
• incur on behalf of the Fund any expenses related to the potential change of the Fund Manager
and Sole Administrator of the Fund (expense incurred by the Board of Nominees);
• incur on behalf of the Fund any expenses resulting from the implementation of any regulation
applicable to the Fund.
even if this will result in exceeding the total expenses approved in the 2023 Budget.
Graphics
8
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Annex 1: 2023 Actual vs. Budget Results
All amounts in RON
Actual 2023
Budget 2023
(Re-mapped )
Variance
RON
RON
RON
%
I. BUDGETED INCOME FROM
OPERATING ACTIVITY
1,033,991,254
663,623,839
370,367,415
+55.8%
Net dividend income
875,357,374
658,128,682
217,228,692
+33%
Interest income
157,467,146
3,594,651
153,872,495
>100%
Other income (e.g. BNY Mellon income)*
1,166,734
1,900,506
(733,772)
-39%
II. BUDGETED EXPENSES FROM
OPERATING ACTIVITY
224,404,521
94,910,675
129,493,846
>100%
Administration fees recognised in profit
or loss
202,152,281
55,000,606
147,151,675
>100%
Board of Nominees related expenses
2,703,683
3,970,723
(1,267,040)
-32%
Taxes, fees and commissions
10,350,521
15,699,152
(5,348,631)
-34%
Legal and litigation assistance
2,635,320
7,786,595
(5,151,275)
-66%
Valuation and other portfolio related
expenses
2,038,992
4,103,262
(2,064,270)
-50%
Audit and other regulatory reporting
expenses
1,404,239
2,083,478
(679,239)
-33%
Investor relations expenses
904,484
2,635,057
(1,730,573)
-66%
Public relations expenses
863,143
1,373,641
(510,498)
-37%
GSM organisation and other shareholder
related expenses
314,424
761,355
(446,931)
-59%
Other expenses
1,037,433
1,496,806
(459,373)
-31%
III. GROSS BUDGETED OPERATING
PROFIT
809,586,733
568,713,164
240,873,569
+42%
Expenses related to listing of portfolio
holdings
242,722,165
305,716,703
(62,994,538)
-21%
III. GROSS BUDGETED PROFIT
566,864,568
262,996,461
303,868,107
>100%
Income tax expense
-
-
IV. NET BUDGETED PROFIT
566,864,568
262,996,461
303,868,107
>100%
BUY-BACK PROGRAMME COSTS -
REGOGNISED IN EQUITY**
56,469,374
8,233,176
48,236,198
>100%
Distribution fees for buy-back
programmes recognised in equity
35,695,074
7,865,038
27,830,036
>100%
Other costs related to buy-back
programmes
20,774,299
368,138
20,406,161
>100%
CAPITAL EXPENDITURE
131,128
555,762
424,634
-76%
Capital expenditure
131,128
555,762
424,634
-76%
For presentation purposes:
*The Bank of New York Mellon – the depositary bank in relation to the global depositary receipts (“GDR”) facility
**The distribution fee and other costs related to the buy-backs, such as, brokerage fees and regulatory fees, are recognised directly in
equity as buy-backs acquisition cost while the distribution fee related to dividend distributions to shareholders is recognised through
profit and loss
Graphics
9
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Annex 2 – Reconciliation between the previous and new budget presentation
Previous presentation
Re-mapping
New presentation
Budget 2023
(RON)
Moved from
(RON)
Moved to
(RON)
Comments regarding main
changes
Budget 2023
(Re-mapped ) (RON)
Category
(a)
(b)
(c)
Category
(d)= (a)+(b)+(c)
Budgeted income
663,623,839
Budgeted income
663,623,839
Net dividend income
658,128,682
-
-
Net dividend income
658,128,682
BNY Mellon income
1,900,506
-
-
BNY Mellon income*
1,900,506
Interest income
3,594,651
-
-
Interest income
3,594,651
Budgeted expenses
400,627,378
Budgeted expenses
400,627,378
Expenses related to
transactions with
portfolio holding
306,891,257
(1,174,554)
-
Expenses related to market strategy
consultancy services moved to
valuation expenses.
Expenses related to listing
of portfolio holdings
305,716,703
Investment
management and
administration fees
55,000,606
-
-
Administration fees
recognised in profit or loss
55,000,606
Commissions and
fees (including FSA
fees)
14,518,786
(272,935)
1,453,301
Depository bank fees moved from
bank fees to this category. LSE annual
fee moved from stock exchange
expense category to this category.
Taxes, fees and
commissions
15,699,152
Legal and litigation
assistance (including
stamp duty expenses
for litigations)
8,134,445
(934,945)
587,095
Government relations consultant fees
moved from this category to other
expenses. Trade Register and Official
Gazette expenses moved to this
category from commissions and fees.
Legal and litigation
assistance
7,786,595
Board of Nominees
and related expenses
3,970,723
-
-
Board of Nominees related
expenses
3,970,723
Audit, portfolio
holdings valuation
4,248,930
(4,248,930)
2,083,478
Category divided. Tax compliance
and tax advisory expenses moved
Audit and other regulatory
reporting expenses
2,083,478
Graphics
10
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Previous presentation
Re-mapping
New presentation
Budget 2023
(RON)
Moved from
(RON)
Moved to
(RON)
Comments regarding main
changes
Budget 2023
(Re-mapped ) (RON)
Category
(a)
(b)
(c)
Category
(d)= (a)+(b)+(c)
and other
professional services
from external service providers to
this category.
4,103,262
Category divided. Expenses related to
market strategy consultancy services
moved to this category.
Valuation and other
portfolio related expenses
4,103,262
Investor relations
and Public relations
expenses
3,924,698
(3,924,698)
2,635,057
Category divided.
Investor relations
expenses
2,635,057
1,373,641
Category divided.
Public relations expenses
1,373,641
Expenses related to
contracts with
external service
providers
1,202,770
(1,202,770)
Expense mostly moved to audit and
other regulatory reporting expenses.
-
-
GSM organisation /
correspondence with
the shareholders /
registrar services and
services related to
distributions to
shareholders
879,433
(118,078)
-
GSM organisation and
other shareholder related
expenses
761,355
Expenses related to
taxes and fees owed
to the Stock
Exchange Authorities
513,664
(513,664)
Expense mostly moved to taxes, fees
and commissions category.
-
-
Bank fees and
distribution to
shareholders fees
(including depositary
fees)
476,647
(476,647)
Expense mostly moved to taxes, fees
and commissions category.
-
-
Other expenses
865,419
(865,419)
1,496,806
Government relations consultant fees
moved from legal fees to this
category.
Other expenses
1,496,806
Gross budgeted
profit/(loss)
262,996,461
(13,732,640)
13,732,640
Gross budgeted
profit/(loss)
262,996,461
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11
fondulproprietatea.ro
Annex 5 Actual vs. budget analysis for
the year ended 31 December 2023
Previous presentation
Re-mapping
New presentation
Budget 2023
(RON)
Moved from
(RON)
Moved to
(RON)
Comments regarding main
changes
Budget 2023
(Re-mapped ) (RON)
Category
(a)
(b)
(c)
Category
(d)= (a)+(b)+(c)
Income tax
-
Income tax
-
Net budgeted
profit/(loss)
262,996,461
Net budgeted
profit/(loss)
262,996,461
Distribution fee and
other costs related
to buy-backs
recognised in other
comprehensive
income
8,233,176
(8,233,176)
7,865,038
Category divided.
Distribution fees for buy-
back programmes
recognised in equity
7,865,038
368,138
Category divided.
Other costs related to buy-
back programmes
368,138
Capital Expenditure
555,762
Capital Expenditure
555,762
Total re-mapped
(21,965,816)
21,965,816
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fondulproprietatea.ro
Annex 6 Constitutive Act of Fondul
Proprietatea in force as at 31 December 2023
Annex 6 Constitutive Act of Fondul
Proprietatea in force as at 31 December 2023
CONSTITUTIVE ACT UPDATED AS AT 5 OCTOBER 2023, BASED ON FINANCIAL SUPERVISORY
AUTHROITY’S AUTHORIZATION NO. 140 OF 5 OCTOBER 2023, EFFECTIVE STARTING WITH
12 OCTOBER 2023
CHAPTER I
Name of the company, legal form, headquarters and duration
ARTICLE 1
Name of the Company
(1) The name of the Company is "Fondul Proprietatea" - S.A.
(2) All invoices, offers, orders, tariffs, prospectuses and other documents used in business, issued
by the Company shall indicate the name, the legal form, the registered office, the registration
number with the Commercial Registry and the sole registration code (CUI), the subscribed share
capital, and the paid share capital”.
ARTICLE 2
Legal form of the company
(1) "Fondul Proprietatea" - S.A., hereinafter referred to as Fondul Proprietatea, is a Romanian legal
person, set up as a joint-stock company.
(2) Fondul Proprietatea is organized, operates and ceases its activity under the legal provisions in
force.
(3) Fondul Proprietatea is set up as an alternative investment fund (A.I.F.), addressed to retail
investors, constituted as investment company of the closed-end-type.
ARTICLE 3
Company headquarters
(1) The registered office of Fondul Proprietatea is located in Bucharest, 76-80 Buzesti Street, floor
7
th
, Sector 1; the headquarters may be changed to any other location in Romania, by decision of the
asset management company (Alternative Investment
Fund Manager), according to article 21
paragraph (4) xii).
(2) The Company may set up secondary headquarters such as branches, representative offices,
working points or other units with no legal personality, under the terms provided by law.
ARTICLE 4
Company duration
(1) The duration of Fondul Proprietatea is until 31 December 2031.
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Annex 6 Constitutive Act of Fondul
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(2) The duration may be extended by the extraordinary general meeting of shareholders, with
additional periods of 5 years/each.
CHAPTER II
Purpose and business object of the company
ARTICLE 5
Company purpose
The purpose of Fondul Proprietatea is the management and administration of the portfolio.
ARTICLE 6
Business object
(1) Fondul Proprietatea has as main object of activity the management and administration of the
portfolio.
(2) The main domain of activity of Fondul Proprietatea is the one described by CAEN Code 643 –
mutual funds and other similar financial entities, and the main activity is financial investments -
CAEN Code 6430.
(3) The business object of Fondul Proprietatea is the following:
a) management and administration of the portfolio;
b) other additional and adjacent activities, according to the regulations in force.
CHAPTER III
Share capital, shares
ARTICLE 7
Share capital
(1) The subscribed and paid-up share capital of Fondul Proprietatea is in the amount of RON
2,947,779,186.56, divided in 5,668,806,128 ordinary nominative shares, having a nominal value of
RON 0.52 each.
(2) The identification data of each shareholder, the contribution to the share capital of each
shareholder, the number of shares to which a shareholder is entitled to and the participation quota
out of the total share capital are included in the shareholders’ register kept by a computerized
system by the Central Depository.
(3) The capacity of shareholder of Fondul Proprietatea, as well as, in the case of legal persons or
entities without legal personality, the capacity of legal representative of that respective shareholder
is established on the basis of the list of shareholders from the reference/registration date received
by Fondul Proprietatea from Depozitarul Central S.A. or, as the case may be, for dates different from
the reference/registration date, on the basis of the following documents submitted to Fondul
Proprietatea by the shareholder and issued by Depozitarul Central S.A. or by the participants as
defined by the applicable laws and regulations, which provides custody services: a) the statement
of account showing the capacity of shareholder and the number of shares held; b) documents
evidencing the registration of the information on the legal representative with Depozitarul Central
S.A./ respective participants.
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Annex 6 Constitutive Act of Fondul
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ARTICLE 8
Share capital increase and decrease
(1) The extraordinary general meeting of the shareholders shall decide, under the conditions of the
law, on the share capital increase and decrease of Fondul Proprietatea, in accordance with the
provisions of art. 12 (3) letter c) and d) of this constitutive act.
(2) The share capital may be increased, in accordance with the provisions of the law:
a) by issuing new shares in exchange for cash contributions;
b) by incorporating reserves, except for the legal reserves and of the reserves created out of the re-
evaluation of the patrimony, as well as of the benefits and issuing premiums.
(3) The share capital increase stated for in paragraph 2 shall be registered at the Trade Register
Office, on the basis of the decision made by the General Meeting of the Shareholders of Fondul
Proprietatea.
(4) Any share capital decrease shall be performed in accordance with the provisions of the law.
(5) The share capital may be decreased by:
a) decreasing the number of shares;
b) decreasing the nominal value of shares; and
c) other means provided by the law.
(6) In case the Alternative Investment
Fund Manager notices that, due to accrued losses, the
amount of the net assets, established as the difference between the total assets and total liabilities
of Fondul Proprietatea, is less than half of the value of the subscribed share capital, Fund Manager
is bound to call the extraordinary general meeting of the shareholders, which will decide if Fondul
Proprietatea requires to be dissolved. In case the extraordinary general meeting of the
shareholders does not decide the dissolution of Fondul Proprietatea, then Fondul Proprietatea is
bound to proceed, at the latest by the termination of the fiscal year subsequent to the one in which
the losses were determined, to a share capital decrease with an amount at least equal to that of the
losses which could not be covered by reserves, in case in this time the net assets of Fondul
Proprietatea were not reconstituted up to a value at least equal to half of the share capital.
(7) Share capital decrease shall be performed only after two months as of the publication in the
Official Gazette of Romania, Part IV, of the resolution of the extraordinary general meeting of the
shareholders.
ARTICLE 9
Shares
(1) The shares of Fondul Proprietatea are nominative, of equal value, issued in dematerialized form,
established by registration in the account, and grants equal rights to their holders under the
conditions provided by art. 11. The existing fully paid-up ordinary shares of Fondul Proprietatea
are admitted to trading on the regulated market operated by Bursa de Valori Bucuresti S.A. and may
be admitted to trading on other markets, with the approval of the extraordinary general meeting of
shareholders.
(1^1) Fondul Proprietatea’s Global Depositary Receipts (i.e., GDRs), having the shares of Fondul
Proprietatea as underlying securities, are listed on the Specialist Fund Market of London Stock
Exchange and may be admitted to trading on other markets, with the approval of the extraordinary
general meeting of shareholders.
(2) The nominal value of a share is RON 0.52.
(3) The shares are indivisible with respect to Fondul Proprietatea, acknowledging only one holder
for each share. In case a share becomes the property of more persons, Fondul Proprietatea / the
Central Depository is not bound to register the transfer as long as those persons will not appoint a
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Annex 6 Constitutive Act of Fondul
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sole representative to exercise the rights arising from the share.
(4) The partial or total transfer of the shares amongst the shareholders or third parties is done
according to the terms, conditions and procedure provided by law.
(5) Fondul Proprietatea may buy back its own shares in accordance with the conditions laid down
in legislation in force.
(6) The right to dividends are held by the shareholders registered in the shareholders’ register,
according to the applicable legal and/or regulatory provisions.
ARTICLE 10
Bonds
Fondul Proprietatea is authorized to issue bonds in accordance with the provisions of the law.
Fondul Proprietatea is not allowed to conclude loan agreements for investment reasons.
ARTICLE 11
Rights and obligations arising from shares
(1) Each share fully paid by the shareholders, according to the law, grants them the right to vote in
the general meeting of the shareholders, according to the provisions of paragraph (2), the right to
elect and to be elected in the management bodies, the right to take part in the profit distribution,
according to the provisions of this constitutive act and the legal dispositions, respectively other
rights provided by the constitutive act.
(2) The shares issued by Fondul Proprietatea grant the right to vote, each share grants one voting
right.
(3) Holding one share implies the rightful adhesion to this constitutive act.
(4) The rights and obligations follow the shares in case ownership thereof passes to another
person.
CHAPTER IV
General meeting of the shareholders
ARTICLE 12
General meetings of the shareholders
(1) The general meeting of the shareholders may be ordinary and extraordinary.
(2) The ordinary general meeting of the shareholders has the following competencies, duties and
functions:
a) to discuss, approve and amend the annual financial statements after reviewing the reports of the
Alternative Investment Fund Manager and financial auditor;
b) to establish the distribution of the net profit and to establish the dividends;
c) to appoint the members of the Board of Nominees (“BoN”) and to cancel their appointment;
d) to appoint the Alternative Investment Fund Manager in accordance with the law and to cancel its
appointment;
e) to appoint and cancel the appointment of the financial auditor and to set the minimum duration
of the financial audit agreement;
f) to approve the remuneration policy applicable to the members of the Board of Nominees and to
the Alternative Investment Fund Manager, that includes the level of remuneration of the members
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Annex 6 Constitutive Act of Fondul
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of the Board of Nominees and of the Alternative Investment Fund Manager, and to set the level of
the remuneration of the financial auditor for financial audit services;
f^1) to vote on an annual basis on the remuneration report for the previous fiscal year; such a vote
shall be of an advisory nature and Fondul Proprietatea shall explain in the following remuneration
report how the vote by the general meeting has been taken into account;
g) to rule over the management of the Alternative Investment Fund Manager and to evaluate
his/her performances and to discharge him/her from its management,
h) to decide on the action in a court of law against the Alternative Investment Fund Manager or, as
the case may be, against the financial audit, for damages caused to Fondul Proprietatea;
i) to approve the strategies and the development policies of Fondul Proprietatea;
j) to establish the annual income and expenditure budget for the following financial year;
k) to decide upon the pledge, lease or the creation of the movable securities or mortgages on the
assets of Fondul Proprietatea, according to the legislation in force;
l) to approve significant related parties’ transactions, if their value is greater than 5% of the net
asset value, at the proposal of the AIFM;
m) to decide on any other aspects regarding Fondul Proprietatea, according to the legal duties.
(3) The extraordinary general meeting of the shareholders is entitled to decide on the following:
a) set-up or closing of some secondary units: branches, agencies, representative offices or other
such units with no legal personality;
b) share capital increase;
c) share capital decrease or re-completion thereof by issuing new shares;
d) conversion of shares from one category to another;
e) conversion of a category of bonds to another category or to shares;
f) issue new bonds;
g) approves the admission for trading and nominates the regulated market on which the shares of
Fondul Proprietatea will be traded;
h) the execution of contracts for acquiring, selling, exchanging or for creating pledges, having as
subject non-
current assets of Fondul Proprietatea, whose value exceeds, individually or
cumulatively during a financial year, 20% of the total value of the non-current assets of Fondul
Proprietatea, less receivables;
i) change of the management system of Fondul Proprietatea;
j) limitation or cancellation of the preference right of the shareholders;
k) approves the Investment Policy Statement;
k^1) approval of: (i) the dissolution and liquidation of the Company; or (ii) the extension of the
duration of the Company, in all cases according to the legislation in force;
l) any other amendment of the constitutive act or any other resolution requiring the approval of the
extraordinary general meeting of the shareholders, according to applicable law or to this
Constitutive Act.
ARTICLE 13
Summoning the general meeting of the shareholders
(1) The general meeting of the shareholders is called by the Alternative Investment Fund Manager
whenever required. Prior to the convocation of the general meeting of the shareholders, the
Alternative Investment Fund Manager shall communicate to the Board of Nominees the intention to
call the general meeting and shall introduce on the list of matters for the meeting all matters
requested by the Board of Nominees.
(2) The ordinary general meeting of the shareholders meets at least once a year, within 4 months

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Annex 6 Constitutive Act of Fondul
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from the end of the financial year.
(3) The date of the meeting may not be less than 30 days from the publication of the convocation in
the Official Gazette of Romania, Part IV.
(4) The general meeting of the shareholders, either ordinary or extraordinary, shall be called
whenever required, according to the legal provisions in force and with the dispositions of the
constitutive act, by publication of the calling notice in the Official Gazette of Romania, Part IV, and a
national daily newspaper or in a local newspaper largely read in the locality where the headquarter
of the company resides at least 30 days prior to the proposed date of meeting.
(5) One or more shareholders, individually or jointly, representing at least 5% of the share capital
of Fondul Proprietatea, may request the Alternative Investment Fund Manager by a written address
signed by the holder(s) to introduce in the agenda new matters, within 15 days of the publication of
the calling notice.
(6) The calling notice, any other matter added to the agenda at the request of the shareholders or of
the Board of Nominees, the annual financial statements, the annual report of the Alternative
Investment Fund Manager, the report of the Board of Nominees as well as the proposal to distribute
dividends are made available to the shareholders, at the headquarters of Fondul Proprietatea at the
date of convocation of the general meeting, and are also published on the internet page, for free
access to information by the shareholders. Upon request, copies of these documents shall be issued
to the shareholders.
(7) The calling notice includes all elements required according to legislation and regulations in
force.
(8) In case the agenda includes proposals to amend the constitutive act, the notice shall include the
full text of the proposals. In case the agenda includes the appointment of the members of the Board
of Nominees, the notice shall mention that the list including information regarding the name, the
residence and professional training of the persons proposed for the position of member of the
Board of Nominees is available to the shareholders, to be further reviewed and completed by
shareholders.
(9) The notice for the first general meeting of the shareholders may provide also the day and hour
of the second meeting, having the same agenda as the first, in order to cover the situation in which
the first meeting cannot take place if the quorum is not being met.
(10) The general meeting of the shareholders shall meet at the headquarters of Fondul Proprietatea
or in another place indicated in the notice.
(11) The Board of Nominees may request to the Alternative Investment Fund Manager the calling of
the general meeting, and if the Fund Manager does not observe the written request of the Board of
Nominees within 5 working days from receiving it, the Board of Nominees may call upon the
general meeting of the shareholders by following the same procedures as set out in this Article.
(12) The chairperson of Board of Nominees may request to the Alternative Investment Fund
Manager the calling of the general meeting according to article 16 paragraph (4) second sentence.
(13) The Alternative Investment
Fund Manager immediately call the general meeting of the
shareholders, upon written request of the shareholders, individually or jointly, representing at least
5% of the share capital, in case the request includes dispositions that fall under the responsibility of
the general meeting of shareholders.
(14) In the case provided by paragraph (13), the general meeting of the shareholders shall be called
within at most 30 calendar days and shall meet within at most 60 calendar days as of the date when
the Alternative Investment Fund Manager received the request of the shareholders.
(15) In the situation provided by paragraphs (13) and (14), in case the Alternative Investment Fund
Manager does not call the general meeting of shareholders, the shareholders who requested the
calling of the general meeting may request the same to the Board of Nominees. Should the Board of

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Annex 6 Constitutive Act of Fondul
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Nominees is also not responding to their request in 10 working days from the receipt of the
request, the court of law from the headquarters of Fondul Proprietatea, by summoning the
Alternative Investment Fund Manager, may authorize the calling of the general meeting by the
shareholders which formulated the request.
ARTICLE 14
Organization of the general meeting of the shareholders
I. Quorum and voting rights
(1) Upon the first calling, for the validity of the deliberations of the ordinary general meeting of the
shareholders it is required that the shareholders representing at least a fourth of the total shares
with right to vote to attend. The decisions of the ordinary general meeting of the shareholders are
taken with the majority of votes held by the shareholders attending or being represented.
(2) In case the ordinary general meeting of the shareholders cannot operate due to lack of quorum
under paragraph (1), the meeting that will meet upon a second convocation may deliberate on the
items included in the agenda of the first meeting, irrespective of the met quorum, taking decision by
majority of the expressed votes.
(3) For the validity of the deliberations of the extraordinary general meeting of the shareholders
the following are required:
a) upon the first convocation, the attendance of the shareholders representing at least a fourth of
the shares having voting rights, and the decisions are taken with majority of votes held by the
shareholders attending or being represented;
b) upon the second convocation, the general meeting of the shareholders may deliberate on the
items included in the agenda of the first meeting in the presence of the shareholders representing
at least one fifth of the total number of the shares having voting rights, taking decisions by majority
of votes held by the shareholders attending or being represented.
(4) The attendance of shareholders representing at least 50% of the total number of the voting
rights, both at the first and the second convocation, is required for the validity of deliberations of
the extraordinary general meeting of the shareholders to adopt a decision regarding:
(i) a share capital increase;
(ii) the anticipated dissolution of Fondul Proprietatea, made under the conditions of the law.
(5) For the validity of the deliberation of the extraordinary general meeting of shareholders
regarding a share capital decrease, the attendance of the shareholders representing:
(i) at least a fourth of the shares having voting rights upon the first convocation; and
(ii) at least one fifth of the total number of the shares having voting rights, upon the second
convocation is required.
(6) The decision to amend the main business object of Fondul Proprietatea, to decrease or increase
the share capital, to change the legal form, to merge, de-merge or dissolute, is taken with a majority
of at least two thirds of the voting rights related to the shares having voting rights of the
shareholders attending or being represented.
II. Procedure of the meetings
(7) On the day and hour established in the convocation, the general meeting of the shareholders
shall be opened by the permanent representative of the Alternative Investment Fund Manager or, in
its absence, by the one holding its place. The permanent representative of the Alternative
Investment Fund Manager or a person appointed by it shall be the chairman of the meeting. The

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members of the Board of Nominees shall participate at the meetings, as well.
(8) The general meeting shall elect, from amongst the attending shareholders, 1 up to 3 secretaries,
who will check the attendance list of the shareholders, indicating the share capital represented by
each of them, the minutes drawn up by the technical secretary to determine the number of the
submitted shares and the fulfilment of the formalities requested by law and by the constitutive act
for holding the general meeting of the shareholders.
(9) A minute of the meeting, signed by the president and by Secretaries, shall determine the
fulfilment of the calling formalities, the date and place of the general meeting of the shareholders,
attending shareholders, the members of the Board of Nominees present, the number of shares, a
summary of the debates, the decisions taken, and upon request of the shareholders, the statements
made thereby in the meeting.
(10) The documents referring to the convocation and the shareholders’ attending list shall be
attached to each minute.
(11) The permanent representative of the Alternative Investment Fund Manager may appoint, from
amongst the employees of the Alternative Investment
Fund Manager, one or more technical
secretaries, to fulfil their duties according to the legal provisions.
(12) The decisions of the general meetings of the shareholders are drawn-up based on the minutes
and is signed by the permanent representative of the Alternative Investment Fund Manager or by a
person appointed thereby. The minutes shall be recorded in the general meetings of the
shareholders’ register.
(13) Considering the extremely large number of shareholders of Fondul Proprietatea the
shareholders may participate in person, by proxy with a special power of attorney or may express
their voting right by correspondence or by electronic voting; the procedures and forms for the
proxy, correspondence and electronic voting shall be set by the Alternative Investment Fund
Manager, in accordance with the applicable legislation and are made available to the shareholders
at least by the date of publishing of convening notice for general meeting of shareholders.
(14) Considering the introduction of the voting right by correspondence, which right may be
exercised and it is recommended to be exercised by any of the shareholders, the statutory quorum
that needs to be met for the valid holding of any type of general meeting of the shareholders is
calculated by including the votes deemed validly sent by correspondence.
(15) Also in the case of the vote by correspondence, each shareholder is entitled to pronounce
himself in writing, with respect to the issues included in the agenda, casting a vote "for", "against"
or "abstained". The expressed votes that are not cancelled are considered.
(16) All shareholders who, at the reference date, are registered in the shareholders’ register, kept
according to the law, have the right to participate to the general meetings of the shareholders.
(17) In order to ensure the effective and real possibility of all shareholders to be informed on the
contents of the documents and the proposals of the ones requiring the organization of the general
meeting of the shareholders, by care of the Alternative Investment Fund Manager, such will be
available, at the headquarters of Fondul Proprietatea, as well as on the internet page of Fondul
Proprietatea, at least 30 days prior to the date provided for holding the meeting. In the case the
calling of the general meeting is made by the Board of Nominees, the Alternative Investment Fund
Manager has the obligation to fulfil all the above-mentioned formalities at the request of the Board
of Nominees. In case the communication with the shareholder is not realized in this way, for
objective reasons, the Board of Nominees may announce in the calling notice a different address
than the registered address of Fondul Proprietatea, where the above-mentioned documents will be
made public on the website of Fondul Proprietatea, in accordance with the applicable legislation.
(18) In the ads informing on the convocation of the general meeting of shareholders of Fondul
Proprietatea it will be indicated, by the Alternative Investment Fund Manager the reference date in

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Annex 6 Constitutive Act of Fondul
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relation to which the shareholders will be entitled to participate and vote. Also, the date by when
the shareholders may send their votes, as well as the procedure for voting by correspondence,
regarding any of the issues subject to approval shall also be set. If the calling of the general meeting
is made at the request of the Board of Nominees the above mentioned duties shall be fulfilled by the
Board of Nominees. The deadline by when votes by correspondence may be registered at least 5
working days subsequent to the date of publication of the informative material and is prior to the
convocation date of the general meeting of the shareholder by at least 48 hours.
(19) The votes of the shareholders will be sent electronically or by letter to the headquarters of
Fondul Proprietatea, in a clear and precise form, noting "for", "against" or "abstained" in relation to
each issue subject to approval for which the shareholder intends to cast a vote.
(20) The votes transmitted electronically shall be cancelled if they do not observe the procedure set
by the Alternative Investment Fund Manager drawn up according to the Financial Supervisory
Authority
regulations and such votes will not be taken into consideration in calculating the
attending quorum.
III. Exercising the voting right in the general meeting of the shareholders
(21) The shareholders may be represented in each general meeting by other shareholders or by
third parties subject to evidence that voting authority has been delegated by the shareholder for
that particular general meeting.
(22) The decisions of the general meetings of the shareholders are taken by open vote, except for
the cases the law or this constitutive act does not provide differently.
(23) Only the shareholders registered in the company shareholders’ register at the reference date
established by the Alternative Investment Fund Manager or the Board of Nominees, as the case may
be, when calling the general meeting of the shareholders shall be entitled to participate to the
meeting and vote after proving their identity.
(24) Secret vote is compulsory for electing and revoking the Alternative Investment Fund Manager,
the members of the Board of Nominees, the financial auditors and for taking some
measures/decisions regarding the liability of the Alternative Investment Fund Manager or of the
members of the Board of Nominees and of the financial auditors of Fondul Proprietatea.
(25) The procedures referring to the secret vote, where applicable will be approved by the
Alternative Investment
Fund Manager and will be made public on the website of Fondul
Proprietatea at the date of convening notice at least by the date of publishing of convening notice
for general meeting of shareholders.
(26) The decisions of the general meeting of the shareholders are binding for all shareholders, even
for the absent shareholders or who voted against or abstained.
(27) The shareholders who do not have capacity to act, as well as the legal entities may be
represented by their legal representatives who, in their turn, may grant power of attorney to other
persons for that particular general meeting of the shareholders.

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CHAPTER V
The Board of Nominees
ARTICLE 15
Organisation
(1) The ordinary general meeting of the shareholders shall appoint the Board of Nominees, formed
of 5 members, and shall establish their remuneration.
(2) Any shareholder will have the right to make proposals on the members of the Board of
Nominees. The nomination will be accompanied by (a) the questionnaire regarding the
independence of the candidate, completed and signed by the candidate, whose template shall be
available in the informative materials, and (b) a letter of intent setting out the reasons supporting
the candidacy; following that, this questionnaire and the letter of intent will be brought to the
attention of the shareholders. The members of the Board of Nominees may be shareholders of
Fondul Proprietatea or other persons designated by the shareholders and they must have the
proper experience and knowledge in order to be able to receive the Alternative Investment Fund
Manager reports and of the consultants and, based on the information received, judge the merits of
the management of Fondul Proprietatea within the limits of the objectives and principles set by the
investment policy as well as by the applicable laws and regulations. Also, the members of the Board
of Nominees have to be qualified properly in order to decide (if there is need with the support of an
independent consultant) if the transactions proposed by the Alternative Investment Fund Manager
needing the approval of the Board of Nominees are made to the advantage of the shareholders.
(3) The mandate of the members of the Board of Nominees is of 3 years, period to be extended by
right, by the first meeting of the General Meeting of the Shareholders.
(4) The Board of Nominees elects from amongst its members a chairman of the Board.
ARTICLE 16
Functioning
(1) The meetings of the Board of Nominees are held at least once every quarter, however they may
be called upon whenever needed. The call for the meeting of the Board of Nominees is made by the
chairman, any of its members or upon the request of the Alternative Investment Fund Manager. The
Board of Nominees shall meet in at most 7 days as of the calling.
(2) The Chairperson of the Board of Nominees or, during his/her absence, a member of the Board of
Nominees appointed through vote by the other members to chair the meeting, ensures the proper
unfolding of the meetings. The meetings of the Board of Nominees shall be held at the headquarters
of Fondul Proprietatea or at such other location as may be agreed among the members of the Board
of Nominees or by means of electronic communications (e.g. telephone, videoconference).
(3) The Board of Nominees takes valid decisions provided the absolute majority of its members.
The members of the Board of Nominees may be represented to the meetings of the Board of
Nominees only by other members of the Board of Nominees on the basis of a special written
empowerment, presented in its original form at the beginning of the meeting. One member of the
Board of Nominees may represent only one absent member. The decisions of the Board of
Nominees shall be taken with the absolute majority of the votes of its members and are signed by
all the members which participated to the meeting. If so
me of the members of the Board of
Nominees have been represented, the empowerment will be annexed to the minute of the meeting.
(4) If the absolute majority condition cannot be fulfilled to have the quorum for taking a decision,

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the chairperson of the Board of Nominees shall give notice for a second meeting of Board of
Nominees, having the same agenda as the first, in order to discuss this agenda. If the absolute
majority condition cannot be fulfilled to have the quorum for taking a decision for three consecutive
times, the chairperson of the Board of Nominees shall ask the Alternative Investment Fund Manager
to convoke the general meeting of the shareholders in order to properly decide on the respective
decisions; in case that the Alternative Investment Fund Manager does not convoke it, any of the
members of the Board of nominees will be in his right to convoke the general meeting.
(5) In case of vacancy of the seat of one or more members of the Board of Nominees, the general
meeting of the shareholders shall immediately convoke for the appointment of new members. For
the period in time by the decision of the general meeting, the other members of the Board of
Nominees will nominate members ad interim to fulfil the vacant positions. The decision of the
Board of Nominees on nominating members ad interim will be communicated to the Alternative
Investment Fund Manager, the auditor and will be filed with the Trade Register.
ARTICLE 17
Attributions of the Board of Nominees
The Board of Nominees has the followings duties and functions:
(1) Following the information received from the Alternative Investment Fund Manager with regard
to the summoning of the
ordinary and/or extraordinary general meeting of the shareholders
requests, if it deems necessary, the insertion of supplementary matters in the text of the calling
notice of the general meeting of shareholders;
(2) Receives from the Alternative Investment Fund Manager the information in connection with the
answers to the written requests submitted before the date of the general meeting of the
shareholders, by the shareholders on topics regarding Fondul Proprietatea’ s activity;
(3) Receives from the Alternative Investment Fund Manager the annual financial statements, the
annual activity report presented by the Alternative Investment Fund Manager and the financial
auditors’ report, before being made available to the shareholders and analyses them, being able to
formulate an opinion to be presented to both the Alternative Investment Fund Manager and the
general meeting;
(4) Receives from the Alternative Investment Fund Manager for analysis the annual report and the
management policy of Fondul Proprietatea and presents an opinion to the Alternative Investment
Fund Manager and to the general meeting of the shareholders regarding such;
(5) Receives from the Alternative Investment Fund Manager for analysis the yearly income and
expenditure budget before it is submitted to the approval of the general meeting of shareholders
and presents an opinion to the Alternative Investment Fund Manager and to the general meeting of
the shareholders regarding such;
(6) Receives from the Alternative Investment Fund Manager for analysis the strategy in accordance
with the Fondul Proprietatea’ s investment policy before to be submitted to the approval of the
general meeting of the shareholders and presents an opinion to the Alternative Investment Fund
Manager and to the general meeting of the shareholders;
(7) Receives from the Alternative Investment
Fund Manager for analysis and approves the
framework for carrying out Fondul Proprietatea’ s operations, as well as any other Fondul
Proprietatea’s regulations issued by Alternative Investment Fund M
anager according to legal
provisions in force, capital market rules and regulations;
(8) Receives from the Alternative Investment Fund Manager for analysis the proposal to the

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ordinary general meeting of the shareholders for the conclusion of the financial audit agreement
and presents an opinion to the Alternative Investment Fund Manager and to the general meeting of
the shareholders;
(9) Reviews on a regular basis the investment policy of Fondul Proprietatea and presents an
opinion to the Alternative Investment Fund Manager and to
the general meeting of the
shareholders as any time it deems necessary, but in any case, at least once a year to the annual
ordinary meeting;
(10) Receives the report of the internal auditor and presents an opinion to the Alternative
Investment Fund Manager and to the general meeting of the shareholders;
(11) Monitors the following, based on information and reports received from the Alternative
Investment Fund Manager:
• the list of all portfolio investments and percentage breakdown by each investment type;
• a list of major transactions occurring in the Fondul Proprietatea portfolio for the period
under review;
• the total profit of the portfolio companies and comparison with the appropriate market
benchmark;
• comparison of the obtained profit with the initial objective;
• the extent of compliance with the investment policy, including, specifically, the degree to
which any performance objectives set out therein are achieved, as well as any variations
and actions taken to achieve such objectives and improve investment results;
• the performance evaluation report.
The Board of Nominees shall draft and present to the general meeting of the shareholders an
annual report regarding the monitoring activity performed or a monitoring report for another
period agreed by the general meeting of shareholders.
(12) Represents the general meeting of the shareholders in relation with the Alternative
Investment
Fund Manager from the communication point of view between the two corporate
bodies, except for the cases expressly regulated by this constitutive act as a direct communication
between the general meeting and the Alternative Investment Fund Manager;
(13) Verifies the report of the Alternative Investment
Fund Manager and the exercise of the
permanent monitoring over the management of Fondul Proprietatea by the Alternative Investment
Fund Manager, and verifies if the operations carried on by the Alternative Investment Fund
Manager are in compliance with the applicable law, the constitutive act and/or with any relevant
decision of the general meeting of the shareholders;
(14) Under the conditions of art. 13 paragraphs (11) and (14) calls upon the general meeting of the
shareholders;
(15) Participates to the meetings of the general shareholders’ meetings and presents in this
meeting reports in all cases provided by this constitutive act or with regard to any issue it deems to
be relevant for the shareholders;
(16) Proposes to the general meeting of shareholders the prior approval or rejection of the
execution of contracts for acquiring, selling, exchanging or for creating pledges, having as subject
non-
current assets of Fondul Proprietatea, whose value exceeds, individually or cumulatively
during a financial year, 20% of the total value of the non-current assets of Fondul Proprietatea, less
receivables;
(17) Recommends to the General Meeting of the Shareholders the termination of the management
contract for the case when the Board of Nominees is considered is to the benefit of the
shareholders;
(18) Recommends to the general meeting of the shareholders on any other issues the Board of
Nominees is considered relevant to the shareholders;

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(19) Following of proposal of Alternative Investment Fund Manager, recommends to the
Extraordinary General Meeting of the Shareholders the appointment of the public offer
intermediate, as well as on his remuneration, when it will become necessary that such a company
be appointed related to the admission to trading of Fondul Proprietatea;
(20) Approves the delegation by the Alternative Investment Fund Manager of certain activities. The
delegation shall be effective in accordance with the legal provisions in force;
(21) Is responsible for monitoring the Alternative Investment
Fund Manager performance
according to the Management Agreement.
ARTICLE 18
The obligations of the members of the Board of Nominees
(1) The members of the Board of Nominees have diligence and loyalty duties towards the
shareholders of Fondul Proprietatea.
(2) The members of the Board of Nominees are held liable towards the general meeting of the
shareholders of Fondul Proprietatea, in accordance with the mandate rules. The decisions of the
members of the Board of Nominees will be taken after due enquiries into the relevant
circumstances existing at the specific moment at which such decisions have been taken.
(3) The members of the Board of Nominees cannot disclose the confidential information and the
commercial secrets of Fondul Proprietatea, to which those persons have access. Such obligation
remains in force as well as after the termination of the mandate.
(4) If a member of the Board of Nominees has, directly or indirectly, adverse interest to the interest
of Fondul Proprietatea, in a certain operation, that member must give notice of such situation to the
other members and to the internal auditors and not take part in any deliberation regarding that
operation.
(5) The same obligation must be observed by the member of the Board of Nominees, who
acknowledges that in a certain operation, his/her wife or husband, relative or related persons by
the 4
th
grade inclusive are interested.
(6) The prohibitions stipulated in paragraphs (4) and (5) regarding the participation, deliberation
and voting of the members of the Board of Nominees, are not applicable if the vote refers to:
a) the offer of shares or obligations of Fondul Proprietatea for subscription, to a member of the
Board of Nominees or to the persons mentioned in paragraph (5);
b) the granting by a member of the Board of Nominees or by the persons mentioned in paragraph
(5) of a loan or establishing a guarantee in favour of Fondul Proprietatea.
(7) The member of the Board of Nominees not observing the provisions of paragraphs (4) and (5) is
held liable for the damages caused to Fondul Proprietatea.
(8) It is forbidden the crediting by the Fondul Proprietatea of the members of the Board of
Nominees, through operations such as:
a) granting loans;
b) granting financial facilities for or after the conclusion by Fondul Proprietatea with the members
of delivery operations of goods, providing of services or performance of works;
c) direct or indirect guarantee, in whole or in part, of any loans granted to the member of the Board
of Nominees, concomitant or after granting the loan;
d) direct or indirect guarantee, in whole or in part, of performance by the members of any other
personal obligation of those towards third parties;
e) direct or indirect guarantee, in whole or in part, of any receivables having as object a loan
granted by a third party to the members of the Board of Nominees or other personal service of
those members.

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(9) The provisions of paragraph (8) are applicable and the operations in which the husband or wife,
relatives or related persons by the 4
th
grade inclusive of the members of the Board of Nominees are
interested; also, if the operation concerning a civil or a commercial company at which one of the
persons above mentioned is director or holds, solely or together with one of the persons above
mentioned, a quota of at least 20% of the value of the subscribed share capital.
(10) The provisions of paragraph (8) are not applicable for the case when the operation is
concluded by Fondul Proprietatea during its current business, and the clauses of the operations are
not more favourable to the persons specified in paragraphs (8) and (9) than the ones usually
practiced by Fondul Proprietatea towards third parties.
(11)
The Board of Nominees shall promptly decide on all requests for approval from the
Alternative Investment Fund Manager within a reasonable time frame to allow the Alternative
Investment Fund Manager to comply with its own obligations.
CHAPTER VI
Provisions regarding the company’s management
ARTICLE 19
Organisation
(1)
Shareholders of Fondul Proprietatea designate the Alternative Investment Fund Manager
(AIFM) for the purpose of managing it. The AIFM has also the sole director role.
(2) The Alternative Investment Fund Manager is elected by the general meeting of the shareholders,
with the observance of the legal provisions and of this constitutive act.
(3) The mandate of the AIFM is of 2 years. The AIFM will call an Ordinary General Meeting of
Shareholders to be held at least 6 months before the expiry of the mandate of the AIFM and will
ensure that the agenda for such meeting will include points granting the options to (i) approve the
renewal of the AIFM’s mandate and (ii) appoint a new AIFM in accordance with the legal provisions
in force, with the shareholders being granted the opportunity to propose candidates for such
position; the agenda will also include provisions for the authorization of the negotiation and
execution of the relevant inve
stment management agreement and fulfilment of all relevant
formalities for the authorization and legal completion of such appointment.
(4) The AIFM must expressly accept such position, by executing the management agreement and
must have in place professional liability insurance.
(5) The Management Agreement can be modified or replaced in accordance with articles 12 and 14,
with the approval of the shareholders. Any replacement document or addendum of the
Management Agreement will be signed on behalf of Fondul Proprietatea by the chairman of the
Board of Nominees or by a member of the Board of Nominees empowered by the chairman.
(
6) The rules for remuneration of the Alternative Investment Fund Manager and the size of
administration fees are included in the remuneration policy and the remuneration policy is
approved by ordinary general meeting of shareholders, at least once at four years. The annual size
of the administration fees is included in annual budget and approved by the ordinary general
meeting of shareholders according to the legislation in force.
ARTICLE 20
Functioning
The Alternative Investment Fund Manager
shall appoint a natural person as its permanent
representative. The Alternative Investment Fund Manager can change the permanent

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representative in accordance with the applicable law. All changes will be registered with the Trade
Registry.
ARTICLE 21
Attributions of the Alternative Investment Fund Manager
(1) The management of Fondul Proprietatea is ensured by the Alternative Investment Fund
Manager, which fulfils the necessary and useful operations for the fulfilment of the company’s
business object, except of the operations reserved by the law for the general meeting of the
shareholders and has all the obligations attributed to it by the applicable law.
(2) The Alternative Investment Fund Manager exercises its attributions under the control of the
general meeting of the shareholders and the monitoring of the Board of Nominees, according to
article 17.
(3) In addition to the duties provided by the applicable law, the Alternative Investment Fund
Manager shall propose for the prior approval of the Board of Nominees and further, of the general
meeting of the shareholders of Fondul Proprietatea, the general strategy in accordance with the
investment policy of Fondul Proprietatea and it is responsible for the implementation of the
investment policy and for achieving a proper balance between the profits and the risks related to
the Fondul Proprietatea portfolio. The Alternative Investment Fund Manager undertakes to inform
the Board of Nominees regularly, and as and when required by the Board of Nominees, about any
significant changes in the activities of Fondul Proprietatea and within the structure of its portfolio.
(4) In excess of the duties provided by the applicable law, the Alternative Investment Fund Manager
shall be liable to:
(i) establish a reference date for shareholders entitled to vote within the general meeting, under the
law, and draft the text of the announcement on the convocation of the general meeting, after
obtaining the prior approval of the Board of Nominees and after it added to the agenda the matters
requested by the Board of Nominees;
(ii) upon the written request of any shareholder submitted before the date of the general meeting of
the shareholders, to give responses regarding the aspects concerning the business of Fondul
Proprietatea; such responses shall be notified to the Board of Nominees;
(iii) ensure that, if requested by any of the shareholders, a copy of or extract of the minutes of the
general meeting shall be given to them and also, after the announcement of the ordinary annual
general meeting of the shareholders is published, make available to the shareholders the financial
statements of the company and the reports of the AIFM and of the company’s financial auditors;
(iv) prepare the annual financial statements, draft the annual activity report, examine the financial
auditors’ report, present them to the Board of Nominees before submitting such documents to the
general meeting of the shareholders and make proposals on the distribution of the profit to the
general meeting of the shareholders, after obtaining the prior approval of the Board of Nominees;
(v) manages the relationship with the Central Depository with regard to its shareholders register
functions;
(vi) prepare an annual report on the management and the business policy of Fondul Proprietatea,
to be presented to the Board of Nominees for approval prior to its submission to the general
meeting of the shareholders;
(vii) proposes for the prior approval of the Board of Nominees and further, of the general meeting
of the shareholders, of the yearly income and expenditure budget and business plan;
(
viii) approves the outsourcing of certain activities, within the limits of the approved budget,
respectively the delegation of the performance of certain activities, subject to the observance of the

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applicable legislation;
(ix) based on the proposal of the Board of Nominees to submit to the approval of the extraordinary
general meeting of shareholders the execution of contracts for acquiring, selling, exchanging or for
creating pledges, having as subject non-current assets of Fondul Proprietatea, whose value exceeds,
individually or cumulatively during a financial year, 20% of the total value of the non-current assets
of Fondul Proprietatea, less receivables;
(
x) execute contracts for acquiring, selling, exchanging or for creating pledges, having as
subject non-current assets of Fondul Proprietatea, whose value does not exceed, individually or
cumulatively during a financial year, 20% of the total value of the non-current assets of Fondul
Proprietatea, less receivables, without the approval of the ordinary or extraordinary general
shareholders’ meeting;
(xi) propose to the ordinary general meeting of the shareholders the conclusion of the financial
audit agreement according to the legal provisions in force, upon obtaining the prior approval of the
Board of Nominees, as well as approve the procedure of internal audit and the audit plan;
(xii) decide the relocation of the registered office, provided that the registered office shall at all
times be registered in Romania;
(xiii) make available to the Board of Nominees the reports, as well as other necessary documents
for exercising the monitoring duties, in accordance with art. 17 paragraph (11);
(xiv) inform at once the Board of Nominees of any litigation or infringement of legislation regarding
Alternative Investment
Fund Manager, any operation which might be an infringement to the
investment policy and about the plans/ correction measures for approaching these matters;
(xv) ask for the calling of the general meeting which shall decide properly whenever an issue
appears on which the Board of Nominees has a disagreement with the Alternative Investment Fund
Manager, which cannot be resolved amiably;
(xvi) proposes to Board of Nominees the recommendation for the Extraordinary General Meeting of
the Shareholders for the appointment of the investment firm/investment bank who shall manage a
public offer, as well as on its remuneration, when it will become necessary that such a company be
appointed related to the admission to trading of Fondul Proprietatea;
(xvii) approve any related parties transactions, and, if the related parties transactions’ value is
greater than 0.25% of the net asset value, to ask for the Board of Nominees’ approval, and, if the
related parties transactions’ value is greater than 5% of the net asset value, to convene the GSM.
(5) For the avoidance of any doubt, in fulfilling the obligations listed under paragraph (4) of this
Article 21, the Alternative Investment Fund Manager acts mainly in its capacity as sole director
according to the applicable Romanian legislation.
ARTICLE 22
The obligations of the Alternative Investment Fund Manager
(1) The Alternative Investment Fund Manager has a diligence and loyalty duty towards Fondul
Proprietatea. Such duty is exercised taking into consideration the interest of the shareholders
generally, and not of some of them.
(2) The Alternative Investment Fund Manager is held liable towards Fondul Proprietatea, according
to the law. The decisions of the Alternative Investment Fund Manager are taken after due enquiries
regarding the relevant circumstances existing at the moment of which those decisions are taken.
(3) The Alternative Investment
Fund Manager cannot disclose confidential information or
commercial secrets of Fondul Proprietatea, to which it has access. Such obligation remains also
after the termination of the mandate.
(4) If the Alternative Investment Fund Manager, respectively its permanent representative and its

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employees, have in a certain operation, directly or indirectly, adverse interest to the interest of
Fondul Proprietatea, the Alternative Investment Fund Manager must give notice to the internal
auditors and Board of Nominees of this issue and not take part in any deliberation concerning the
specific situation.
(5) The same obligation must be observed by the Alternative Investment
Fund Manager,
respectively by its permanent representative and its employees if, in a certain operation, is being
aware that an affiliate of the Alternative Investment Fund Manager or the wife or husband, relatives
or related persons by the 4
th
grade inclusive of the representative and its employees, are interested.
ARTICLE 23
Representation of Fondul Proprietatea
(1) In relations with third parties, Fondul Proprietatea is represented by the Alternative Investment
Fund Manager, respectively by its permanent representative.
(2) The Alternative Investment
Fund Manager may delegate the representative powers, in
accordance with the applicable law.
CHAPTER VII
The audit of Fondul Proprietatea
ARTICLE 24
The internal auditors and the financial audit
(1) The financial statements of Fondul Proprietatea are subject to financial audit in accordance with
the applicable laws and regulations. Also, Fondul Proprietatea shall organise its internal audit in
accordance with the legal provisions in force.
(2) The internal audit activity for Fondul Proprietatea will be rendered by a third party on a
contractual basis, in accordance with the applicable legal provisions.
(3) The internal audit is independent of the management of Fondul Proprietatea, and the internal
auditors shall objectively exercise this activity.
(4) The internal audit shall evaluate and shall propose the improvement of the risk management,
the control and internal rules within Fondul Proprietatea.
(5) The internal auditors shall not be subject of any interference in determining the purpose of the
internal audit and in exercising their activity.
(6) The internal auditors shall have an impartial, correct attitude and shall avoid the conflicts of
interest.
(7) The internal audit shall transmit the plans of the internal audit activity and the necessary
resources, inclusive the significant interim changes, to the Board of Nominees for information, as
well as to the Alternative Investment
Fund Manager for approval within the limits of its
competencies.
(8) The internal audit shall establish the policies and procedures for exercising the internal audit
activity within Fondul Proprietatea, comprising amongst others, the analysis of the decisions taken
by the company’s management and the control of their compliance with the statutory requirements
and/or with other documents approved by the general meeting of the shareholders.
(9) The internal audit shall coordinate its activity with the financial auditor, in order to ensure the
proper fulfilment of the audit objectives and to minimize any duplication of attributions.
(10) The internal audit shall present periodical
reports to the Board of Nominees of Fondul
Proprietatea and the Alternative Investment Fund Manager regarding the purpose of the internal

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audit activity, authority, responsibility and performance according to its internal audit plan. The
reports shall include also the significant risks and aspects of the control and management, as well
as other necessary problems or as requested by the Board of Nominees and the Alternative
Investment Fund Manager.
(11) The internal audit shall verify if the management of Fondul Proprietatea has taken appropriate
measures concerning the reported significant risks or if the Alternative Investment Fund Manager
has accepted the risk of not taking any measure and shall inform the Board of Nominees and the
general meeting of the shareholders if the Alternative Investment Fund Manager has accepted the
reported significant risks.
(12) The internal audit shall establish the procedures for monitoring the implementation of the
measures taken by the management of Fondul Proprietatea.
(13) The internal auditors shall notify the Board of Nominees and the Alternative Investment Fund
Managers with respect to any flaws in the management or breaches of the legal provisions or of the
constitutive act, where such are identified by the internal auditors; the significant cases shall be
notified to the general meeting of the shareholders.
(14) The internal auditors shall take into consideration the complaints of the shareholders when
drafting the reports addressed to the general meeting of the shareholders.
(15) The attributions, duties and the functioning way of the internal auditors, as well as their rights
and obligations are completed with the legal provisions in this area.
CHAPTER VIII
Business of Fondul Proprietatea
ARTICLE 25
Financing its own business
For the fulfilment of the business object and in accordance with the attributions established, Fondul
Proprietatea uses the financial sources established pursuant to the law, banking credits and other
financial sources. Fondul Proprietatea is not allowed to conclude loan agreements for investment
reasons.
ARTICLE 26
Financial year
The financial year begins on 1 January and terminates on 31 December of each year.
ARTICLE 27
Accounting evidence and annual financial statements
(1) The accounting is kept in Romanian language and in national currency.
(2) Fondul Proprietatea must draft the annual financial statements according to legal provisions in
force and to the applicable accounting and financial reporting standards.
ARTICLE 28
Calculation and distribution of the profit
(1) The result of the financial year is determined at the end of the year and represents the final

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balance of the profit and loss account.
(2) The net accounting profit of Fondul Proprietatea, as reflected in the audited financial
statements, shall be distributed according to the decision of the general meeting of the
shareholders and to the legal provisions in force.
(3) Fondul Proprietatea creates the legal reserves and any other reserves, pursuant to the law.
(4) The payment of dividends owed to the shareholders is made by Fondul Proprietatea, according
to the law.
(5) The dividends are distributed to the shareholders proportional with the number of paid shares
held at the relevant record date.
(6) In case of loss of the net asset, the general meeting of the shareholders shall analyse the causes
and decide properly, according to the law.
ARTICLE 29
Registries
Fondul Proprietatea shall maintain, by care of the Alternative Investment
Fund Manager, all
registries provided by the law. The shareholders registry is kept by the Central Depository SA.
CHAPTER IX
Association, change of the legal form, dissolution and liquidation, litigation
ARTICLE 30
Association
(1) Fondul Proprietatea may set-up, solely or together with other Romanian or foreign natural
persons or
legal entities, other companies or legal entities, according to the law and to this
constitutive act.
(2) The conditions for the participation of Fondul Proprietatea at the setting-
up of new legal
entities shall be regulated by the constitutive acts, which to be approved by the general meeting of
the shareholders.
ARTICLE 31
Dissolution
(1) The dissolution of Fondul Proprietatea shall take place in the following cases:
a) impossibility of performing the company’s business object;
b) declaring the company’s nullity;
c) by decision of the extraordinary general meeting of the shareholders, in accordance with
article 14;
d) as consequence of losses, as reflected in the audited financial statements, if the net asset
value, determined as difference between the total asset and company’s debts, represents less
than half of the value of the subscribed share capital and if, not later than the termination of the
financial year subsequent to the one during which the losses have been ascertained, the
general meeting of the shareholders fails to decrease the share capital with an amount at least
equal with the one of losses which could not be covered from reserves or to reconstitute the

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company’s net asset up to the value at least equal with half of the subscribed share capital;
e) opening of the bankruptcy procedure;
f) the number of shareholders reduces under the legal minimum;
f^1) expiration of the duration of Fondul Proprietatea, if the extraordinary general meeting of
shareholders of Fondul Proprietatea does not decide the extension of the duration, in
accordance with Article 4;
g) other causes provided by the law or by this constitutive act.
(2) The dissolution of Fondul Proprietatea cannot take place before the finalisation of the
procedures for granting indemnities to the rightful persons.
(3) The dissolution decision of Fondul Proprietatea must be registered with the commercial
registry and published in the Official Gazette of Romania, Part IV.
ARTICLE 32
Liquidation
(1) The dissolution of Fondul
Proprietatea has as consequence the opening of the liquidation
procedure and, irrespective of the reasons for dissolution of the Company, Fondul Proprietatea will
be wound up only after finalising the related procedures, in accordance with the law.
(2) The shareholders cannot, directly or indirectly, redeem their shares from Fondul Proprietatea’s
assets prior to the start of the liquidation procedure.
(3
) The liquidation of Fondul Proprietatea and distribution of the patrimony are made in
accordance with the law.
ARTICLE 33
Calculation method of the net asset
(1) For the calculation of the net assets value of Fondul Proprietatea, the portfolio holdings are
valued and included in the Fund’s net asset at the values established according to the accounting
and legal regulations in force. The net asset value of the Fund is determined as the difference
between the total assets value and the aggregate value of the Fund's debts and deferred income. In
the calculation of the aggregate value of debts are included both current and non-current debts, as
well as the provisions booked by Fondul Proprietatea.
(2) The total value of the assets is calculated according to the legal regulations in force, by
cumulating:
a) non-current assets;
b) current assets;
c) derivatives;
d) deferred expenses.
(3) The total value of debts, provisions and deferred income is determined based on information
provided by Fund’s own accounting organised and managed in accordance with the legal provisions
in force.
(4) The calculation of the net assets value is prepared by the Fund’s Sole Director and certified by
the depositary bank on a monthly basis, for the last calendar day of the month, and for the dates
when a share capital increase or decrease takes place respectively the dates when such share
capital increase or decrease is recorded to Trade Registry
ARTICLE 34

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Annex 6 Constitutive Act of Fondul
Proprietatea in force as at 31 December 2023
Prudential rules concerning the investment policy
(1) The investment policy is established by the Alternative Investment Fund Manager, with the
observance of the investment limitation provided by the legal provisions in force for a diversified
closed-ended alternative investment fund set up as a joint stock investment company addressed to
retail investors and of this Constitutive Act.
(2) Fondul Proprietatea shall be subject to the investment restrictions and can invest only in the
categories of assets according to the provisions applicable to a diversified closed-ended alternative
investment fund set up as a joint stock investment company addressed to retail investors according
to legislation in force.
(3) Subject to the terms of this Constitutive Act, of the Management Agreement and the applicable
law, all decisions in relation to the acquisition of, disposal of, and exercise of all rights and
obligations in relation to the assets of Fondul Proprietatea shall be at the sole discretion of the
Alternative Investment Fund Manager.
(4) Prudential rules concerning the investment policy will be approved by the shareholders
through Investment Policy Statement.
(5) The detailed presentation of the investment policy and the rules for pricing the assets of the
Company, drafted in line with Romanian and European legislation in force, are included in rules of
the Fund and are published by the AIFM on the website of the Company.
ARTICLE 35
Conditions for the replacement of the depositary
(1) Fondul Proprietatea shall conclude a depositary agreement with a deposita
ry legal entity
authorised and supervised by the Financial Supervisory Authority, which performs the depositary
operations of securities, as well as any operations in connection with those. The activities to be
developed by the deposita
ry and the conditions for its replacement shall be provided in the
depositary agreement.
(2) The depositary agreement shall mandatorily include clauses related to the replacement of the
depositary and rules for ensuring shareholders’ protection in such situations, as well as other
mandatory clauses in accordance with the applicable regulations.
ARTICLE 36
Identity, requirements regarding the qualification, professional experience and integrity of the
management members
(1) The Alternative Investment
Fund Manager, respectively its permanent representative shall
cumulatively fulfil with the minimum requirements regarding the integrity, qualification and
professional experience provided in the legislation and in other specific provisions; the identity of
the Alternative Investment Fund Manager is the one registered with the National Office of Trade
Registry, based on the decision of the general meeting of the shareholders regarding its election.
ARTICLE 37
Litigations
The litigations of any type shall be amiably resolved and if this is not possible, they shall be solved
by the competent arbitral or judicial courts.

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Annex 6 Constitutive Act of Fondul
Proprietatea in force as at 31 December 2023
CHAPTER X
Final provisions
ARTICLE 38
Final provisions
The provisions of this constitutive act are completed by the provisions of
Company Law No.
31/1990, republished, as further amended and completed, and other applicable legal provisions in
force as well as by the provisions of the capital market legislation governing the issuers whose
shares are admitted on trading.

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Annex 7 Annual Cash Distribution Policy of
Fondul Proprietatea in force as at
31 December 2023
Annex 7 Annual Cash Distribution Policy of
Fondul Proprietatea in force as at
31 December 2023
- Updated as of 18 December 2023 -
1. Scope
In order to comply with the requirements of Bucharest Stock Exchange Code of Corporate
Governance and in accordance with the Investment Policy Statement (“IPS”), Fondul Proprietatea
SA (the “Fund”) decided to adopt this Annual Cash Distribution Policy (“ACDP”).
The scope of this Policy is to set a series of guidelines and principles on the cash distributions made
by the Fund.
2. General principles
In accordance with the IPS, the Alternative Investment Fund Manager (the “Fund Manager”) may
propose cash distributions for shareholders’ approvals. The level of such cash distributions is
proposed by the Fund Manager by applying this ACDP and in correlation with the other on-going
Discount Control Mechanism measures (e.g. buy-backs).
The Fund Manager intends to recommend to shareholders for their approval cash distributions, on
an annual basis, subject to applicable law and necessary approvals, to any restrictions under
Romanian legal or tax regulations and subject to available financing sources.
Under exceptional market conditions or circumstances (e.g. events that may significantly impact
the discount), the Fund Manager may propose a change of the mix of cash distribution and share
buy-backs to allocate more of the distributable cash towards share buy-backs, if it considers this to
be in the best interest of the Fund’s shareholders to enhance shareholder value.
ACDP does not limit additional cash distributions and share buy-backs that can be recommended
by the Fund Manager separately, subject to available financing sources, regulatory and corporate
approvals and depending on the discount level, in accordance with the IPS and the Discount
Control Mechanism.
The Fund Manager will include in its periodical reports (annual report, quarterly reports and semi-
annual report) as well in the announcement (‘current report’) for completing a certain material
transaction the use of proceeds from such transaction.
3. Cash distributions
Under current Romanian legislation and of the Constitutive Act, each fully paid share gives its
owner the right to receive cash distributions (in the form of dividends or other types of cash
distributions, such as return of capital). Unpaid shares and treasury shares will not be entitled to
receive cash distributions.

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Annex 7 Annual Cash Distribution Policy of
Fondul Proprietatea in force as at
31 December 2023
Cash distributions are paid to the shareholders on a pro rata basis, proportionately to their
participation in the paid share capital of the Fund.
a. Dividend distributions
In the absence of exceptional market conditions or circumstances, and subject to any restrictions
under Romanian legal or tax regulations and subject to available financing sources, in case of
dividend distributions (where permitted by applicable law), the distributable amount is calculated
by the Fund Manager and proposed for shareholders’ approval as sum of the following elements:
i. the Fund’s annual dividend income from portfolio companies, except special cash
distributions,
ii. plus interest on cash balances,
iii. less operating and financing expenses and taxation and
iv. less compulsory allocations to reserves according to the regulations in force.
For the purpose of this policy, the special cash distributions are the amounts distributed by the
portfolio companies from other sources than the annual net profit included in the latest annual
financial statements.
The Fund Manager may propose the level of any dividends by considering the on-going measures
imposed by Discount Control Mechanism and the available cash.
Any dividend distribution will be based on audited financial statements and will be submitted to
shareholders approval generally during the Annual GSM. The Fund Manager does not intent to
propose interim or quarterly dividends.
The dividends computed in accordance with the principles above can be distributed from the
annual profits and/ or from other equity elements (e.g. retained earnings) by observing the
applicable legal requirements.
b. Return of capital
In case of a return of capital, the distributable amount is subject to the restrictions under Romanian
legislation and regulations in force and to available funding and will be based on the Fund
Manager’s best estimate according to the latest available financial statements at the time of
proposing the respective distribution for the shareholders’ approval.
According to Article 29 of the Romanian Law no. 243/2019 on alternative investment funds,
amending and supplementing certain normative acts the return of capital can be done as
mentioned below:
With the purpose to decrease its share capital, the Fund may perform, only once during the
financial year, share capital returns pro rata with the contributions made by the investors,
subject to the approval of the extraordinary general meeting of shareholders, in accordance
with the Romanian legal provisions in force.
By way of exception from the provisions above, with the purpose to decrease its share
capital, the Fund can perform additional share capital returns pro rata with the shares held
by the investors, if the following conditions are cumulatively met:
a) the share capital return is approved by the Fund shareholders meeting held
according to the provisions of Romanian legislation in force;

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Annex 7 Annual Cash Distribution Policy of
Fondul Proprietatea in force as at
31 December 2023
b) the share capital return to shareholders is made exclusively from the own sources
of the Fund;
c) the Fund has recorded profit in the last 3 financial years, according to its annual
financial statements audited according to the law.
The Fund may repurchase its own shares with the purpose to decrease its share capital if
the following conditions are cumulatively met:
a) the buy-back programme is approved by the Fund shareholders meeting held
according to the provisions of Romanian legislation in force;
b) the payment of the shares thus purchased will be made exclusively from the own
sources of the Fund.
4. Payment of Cash Distributions
The cash distributions will be proposed by the Fund Manager and paid in compliance with the
General Shareholders Meeting Resolutions under the terms and conditions provided by Romanian
law. The Fund publishes information on the payment of dividends and other cash distributions to
shareholders on the Fund’s website (www.fondulproprietatea.ro) in compliance with the effective
laws.
5. Review of the Annual Cash Distribution Policy
The ACDP may be revised by the Fund Manager after the consultation with the Board of Nominees,
on an annual basis, in compliance with the applicable law and regulations or in case of new
regulations or mandatory legal provisions regarding the scope of the policy. The current Policy is
published on the Fund’s website (www.fondulproprietatea.ro) and any update to the Policy shall
be disseminated to the market and uploaded on the website.