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Presentation of IFRS conversion
impact for SIF Moldova at 31
December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 2
Message to shareholders
Dear shareholder,
One of the priority objectives of SIF Moldova’s Board of Directors is to
improve the quality of corporate governance for the benefit of all capital
market participants, also by increasing communication and improving the
quality of information presented to shareholders and investors.
In this respect, implementation of the "Corporate Governance Regulation
of SIF Moldova" in 2011 represents an assurance that good governance
mechanisms and principles have been properly assimilated and
implemented in running the company.
Internal compliance regulations and requirements are primarily aimed
at underpinning investment decisions in conditions of uncertainty caused
by changes in the financial environment surrounding national and
international markets, designed to lead to the development of growth
strategies and thus to improve efficiency. Ensuring internal compliance is a
complex activity that includes regulatory activities, risk management, staff
training, continuous adaptation of the organisational structure.
Our goal for the new mandate of the Board of Directors is to begin with an
independent validation of the methods/ objectives for decision
substantiation and formalisation, increasing the possibility of control by
shareholders and investors interested in SIF2 shares. Thus, we propose
the preparation and presentation of regular reports, exceeding the
mandatory reporting requirements (according to CNVM regulations),
designed to enable an up-to-date information and easy access to all
information used for preparation of mandatory reports.
An overview of business performance indicators can be found in the
periodic reports of the Board of Directors.
The Board of Directors seek a favourable context to achieve its major
objectives, i.e. amendment of the articles of incorporation and increase of
share capital, so as to make these objectives achievable and meet the
interests of as many shareholders of SIF Moldova as possible.
This report has been prepared by the management of SIF Moldova, with
the assistance of KPMG Romania1, in order to present the impact of IFRS
conversion on corporate governance, financial results and key financial
ratios of SIF Moldova, at individual and consolidated levels for the year
ended 31 December 2011.
1KPMG’s comments are identified distinctively in this report and marked as “KPMG comments”. KPMG
comments are based on the Company's individual financial statements at 31 December 2011 prepared in
accordance with RAS, the Company's individual financial statements at 31 December 2011 prepared in
accordance with IFRS and the consolidated financial statements of SIF Moldova Group at 31 December
2011 prepared in accordance with IFRS; all three sets of financial statements were audited by Deloitte
Audit.
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Legend:
RAS = Romanian accounting regulations (for SIF Moldova: Accounting regulations conforming with the Fourth
Directive of the European Economic Communities applicable to entities authorised, regulated and supervised by the
National Securities Commission - CNVM)
IFRS = International Financial Reporting Standards.
Note: all amounts are presented in RON, unless otherwise specified.
With this report, the Board of Directors aims to increase the understanding
of IFRS financial results by its shareholders so as to ensure a greater
control by shareholders on the achievement of the Board’s strategies and
to accustom analysts and investors to the differences between the two sets
of accounting regulations, in this transitional period from RAS to IFRS,
when IFRS financial statements are prepared for information purposes.
SIF Moldova is prepared to meet its obligations for the financial year
starting on 1 January 2013 in connection with the preparation of IFRS
financial statements (for its individual financial statements and/ or those of
the entities in its portfolio). We believe that financial reporting in
accordance with IFRS is more relevant for investors’ needs and better
meets users’ information requirements at a time when a global financial
communication language is widely supported and promoted in order to
increase financial reporting transparency and relevance.
We wish this report to serve as well as a guide to help Romanian
shareholders gain a better understanding of the information included in the
IFRS financial statements. The content of this report meets the information
requirements regarding the consolidated report of directors on the
consolidated financial statements prepared in accordance with IFRS.
Sincerely yours,
dr.ing.ec.Costel Ceocea
President General Manager of SIF Moldova
Message to the shareholders
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Corporate governance
Highlight of the main corporate governance rules implemented in the Company and
compliance by SIF Moldova with legal requirements regarding preparation of annual
financial statements, including measures taken to increase transparency and relevance of
financial reporting.
2
3
The impact of applying IFRS on the financial statements of SIF Moldova at 31
December 2011
Presentation of the impact of applying IFRS on the SIF Moldova’s individual financial
statements at 31 December 2011, explaining the main differences compared to the
financial statements prepared in accordance with RAS.
4
Comparative presentation of key economic ratios at 31 December 2011
Analysis of the main liquidity, activity and profitability ratios of the Company, computed
based on IFRS financial statement results and compared to the same ratios computed
based on RAS financial statement results, together with a comparison with the ratios
averaged for all SIFs.
5 Presentation of SIF Moldova portfolio structure at 31 December 2011
Analysis of SIF Moldova’s portfolio as regards the types of instruments held, the
activity sectors to which the Company is exposed to and the markets on which the
instruments held are traded.
6
Impact of IFRS transition on SIF Moldova Group at 31 December 2011
Presentation of SIF Moldova Group as regards the entities included in
consolidation, comparison of results in individual and consolidated financial
statements and analysis of the key economic ratios computed based on the
consolidated financial statement results.
1 Achievement of SIF Moldova’s objectives
Presentation of main directions of Company’s investment policy and target levels of
exposure for the main structural objectives at the end of 2011 together with the actual
values for the first quarter, first semester and third quarter of 2012.
Content
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The objective of SIF Moldova’s investment policy is to increase the asset value as a result of
investments made based on identification of undervalued companies or companies with growth potential
determined according to a fundamental analysis. The investment horizon is medium and long. The
Company’s management has adopted an investment approach that is consistent with the risk objectives
and has applied prudent diversification rules, in order to avoid excessive dependence on an asset or
issuer. In addition, diversification generally contributes to lower volatility by reducing the specific risk
(source: “Investment policies statement 2011-2013”).
The Company has developed coherent long and medium term investment policies and strategies, an
example being the multiannual strategy for 2011- 2013. The “Investment polices statement” is revised
annually, in line with the macro-economical developments, the evolution of financial markets as well as
depending on the degree to which the objectives have been achieved, whilst maintaining an ongoing
process of restructuring the Company’s assets .
Structural objectives included in the Investment policies statement 2011-2013 (% of total asset value
computed in accordance with CNVM’s Regulation 15/2004):
Source: Board of Directors activity report for 2011
1 Achievement of SIF Moldova’s
objectives
Increase the weight of listed shares
TARGET - minimum 70%
Decrease the weight of unlisted shares (BCR holding
excluded)
TARGET - maximum 2 %
Decrease the weight of listed/ unlisted shares with no
growth potential/ illiquid together with a volume increase
in speculative operations
Maintaining the liquidity level (government, deposits,
liquidities)
TARGET - minimum 5%
Decrease the weight of the financial sector, which will
continue to be the main sector
TARGET– minimum 50%
Increase the weight of the energy sector
TARGET – minimum 20%
Holdings of 0 to 10% in the share capital of portfolio
companies
TARGET – decrease to 70%
Holdings of 10 to 20% in the share capital of portfolio
companies
TARGET – increase up to 10%
2011
81.50%
2011
3.70%
2011
5.00%
2011
11.20%
2011
52.40%
2011
17.20%
2011
73.80%
2011
4.70%
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The objectives were defined in the multiannual strategy presented in the Investment policies statement 2011
– 2013, and the status of implementation at the end of 2011 financial year is part of the roadmap for
fulfillment of objectives until the end of the mandate. The most important objectives (increase the weight of
listed shares and decrease the weight of the financial sector) have been met; balancing of the energy sector
weight will be achieved later on, depending on the evolution of the Romanian state program of public
offerings in this sector. As regards the exposure corresponding to holdings between 0 – 10% and 10 – 20%
in the share capital of portfolio companies, the objectives have been revised by updating the Investment
policies statement in 2012, while the target to reduce the exposure to non-performing sectors has become
increasingly difficult to achieve, given the persistence of the economic crisis effects.
Structural objectives included in the Investment policies statement 2011-2013 (% of total assets value
computed in accordance with CNVM’s Regulation 15/2004):
Source: Q1 2012 report, H1 2012 report and Q3 2012 report
1 Achievement of SIF Moldova’s
objectives
Increase the weight of listed shares
TARGET - 82% +/- 5%
Decrease the weight in unlisted shares
(BCR holding excluded)
TARGET - maximum 2 %
Decrease the weight of listed/ unlisted
shares with no growth potential/ illiquid
together with a volume increase in
speculative operations
Maintaining the liquidity level
(government, deposits, liquidities)
TARGET – min. 5% - max.10%
T1 2012
84.52%
T1 2012
3.05%
T1 2012
4.56%
T1 2012
8.23 %
T1 2012
1.44%
S1 2012
77.14%
S1 2012
3.47%
S1 2012
4.47%
S1 2012
13.26%
S1 2012
1.40%
T3 2012
81.34%
T3 2012
3.91%
T3 2012
4.72%
T3 2012
8.82%
T3 2012
1.55%
Decrease the weight of the financial
sector, which will continue to be the main
sector
TARGET - 50% +/- 10%
Increase the weight of the energy sector
TARGET - 25%
Exposure to gold mining companies to
reduce risk from financial markets
volatility - maximum 5%
T1 2012
51.64%
T1 2012
19.85%
S1 2012
20.50%
T3 2012
21.17%
S1 2012
44.30%
T3 2012
48.60%
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The Board of Directors seeks a favourable context to achieve the major objectives, i.e.
amendment of the articles of incorporation and increase of the registered share capital, so that
these objectives become achievable and meet the interests of most shareholders of SIF Moldova.
The need to amend the articles of incorporation is determined by changes in the corporate law and
market practice, as well as by the legislative projects on the capital market (i.e. Emergency Government
Ordinance no. 32/2012). Amending the articles of incorporation will ensure harmonisation with the
legislation in force/ existing legislative proposals and will help streamline the decision making process.
The proposed share capital increase is mainly driven by the following factors:
– the need to maintain a financial balance of resources;
– the portfolio structure underpinning the multi-annual strategy to be proposed to the 2013 General
Shareholders Meeting (GSM) for the 2013 – 2017 mandate: consolidate the position in the non-
conventional energy sector, capitalise on investment opportunities in the areas where the
Company has developed expertise and in the activity sectors with potential for recovery after the
crisis effects;
– consolidate the position of shareholders interested in supporting the Company’s investment
programs and strategies;
– correlation with market conditions/ investment opportunities, as an essential requirement in
stimulating the investment programs.
The opportunity to reinitiate these proposals, that have already been included on the agenda of SIF
Moldova’s Extraordinary General Shareholders Meeting of 5/6 April 2012, is currently being analysed.
1 Achievement of SIF Moldova’s
objectives
Continue investing in foreign markets
while maintaining a majority weight of
Romanian equities in the portfolio -
maximum 15%
T1 2012
25.27%
S1 2012
24.76%
T3 2012
27.85%
Source: Q1 2012 report, H1 2012 report and Q3 2012 report
The weight of holdings in non-UCITS
and UCITS should not exceed 5% of
the total asset value (except the holding
in Fondul Proprietatea) - maximum 5%
T1 2012
2.63%
S1 2012
3.12%
T3 2012
3.22%
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SIF Moldova has developed and
implemented the Corporate
Governance Regulation in 2011.
The adoption of this regulation
represents an additional
assurance for an adequate
implementation of mechanism and
principles of good governance in
running the Company.
The “Apply or Explain” declaration,
an appendix to the Corporate
Governance Regulation,
represents SIF Moldova’s
management declaration on the
implementation of corporate
governance principles and
recommendations, including those
relating to the preparation and
dissemination of financial reporting
under IFRS.
Through its activities, the
Company is constantly seeking
compliance with the corporate
governance principles set out in
the Corporate Governance
Regulation, for the following
directions:
Corporate governance
structures
The corporate governance
structures, functions, powers and
responsibilities of the Board and of
the executive management were
defined in the Regulation.
In the process of internal
structures optimisation, the
internal regulations have been
reviewed and re-approved; the key
changes focused on the
independence of risk management
activities, as well as on the
definition and delegation of
temporary limits of authority to
non-executive directors. Also
envisaged was the harmonisation
and continuous adaptation of the
organisation chart, alongside the
corresponding staff restructuring;
to this end, the following changes
have been made:
– reduction in number of
employees, the number of
occupied positions reaching a
total of 46 (at the beginning of
the restructuring process
initiated during the current
Board mandate, the number of
positions was 119);
– dissolution of 5 departments
and 5 representative offices
during this year, in addition to
the 6 departments and 3
representative offices dissolved
at the previous change in the
organisation chart;
– integration of certain activities
and operations aimed at
reducing the cycle ‘analysis –
decision – implementation’, in
the context of a state of
uncertainty correlated with the
potential of the portfolio as well
as with the need to capitalise
on the opportunities specific
to the period;
– adoption of measures to
permanently adapt the
organisational structure and
departments’ duties and
responsibilities to ensure an
active and effective portfolio
management (the review of the
internal regulations has been
approved by CNVM);
– Development of internal
regulations and working
procedures, a process that
started in 2005; currently,
almost all activities are
regulated under internal
procedures;
– Continuous review and
submission for approval by
CNVM of the general working
procedures, as part of the
Company’s internal regulations.
The concern for the decision
making process optimisation
also results from the
implementation of “The
organisation and operation
regulation of SIF Moldova’s Board
of Directors “. Following the
implementation of the Corporate
Governance Regulation:
– transparent criteria and
procedures have been
implemented for electing the
members of the Board of
Directors and of the executive
management;
This chapter aims to highlight the corporate governance principles implemented within SIF
Moldova, as well as the Company’s efforts to optimise its internal structures and ensure
compliance with legal reporting requirements in order to increase the accuracy and
transparency of results reported in the individual and consolidated financial statements.
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Corporate governance
2.1 Corporate governance regulation
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– the level of expertise has been
increased through the set-up of
consultative committees within
the Board of Directors (audit
committee, investment policies-
strategies committee) and of an
executive committee (the
investment committee- an
interdisciplinary and inter-
compartmental working
committee);
– the Company’s staff attended
numerous trainings on
compliance;
– the Company’s directors and
managers have signed
administration/ management
contracts for the term of the
current mandate; these
documents are public;
– the directors have created
security interests by
concluding professional liability
insurance policies and
collaterals, according to
statutory provisions.
Respect for shareholders’ rights
The Company’s shareholder policy
is based on respect for
shareholders’ rights, ensuring fair
treatment thereof.
The General Shareholders
Meeting is the supreme governing
body of SIF Moldova, which is
called by the Board of Directors
according to legal and statutory
provisions. For each financial year,
the Company publishes on its
website information
on the financial calendar as well as
periodical reports (annual, half-
yearly and quarterly) and regular
reports on important events from
the Company’s activity.
Board of Directors organisation
and operation
The main objective of the Board of
Directors on medium and long
term, as defined and determined
by the specific circumstances of
SIF Moldova and by the
macroeconomic context in which it
operates, is to ensure a balance
between business continuity in
optimal conditions and fulfillment of
shareholders’ expectations.
The Board of Directors undertakes
its activity by holding deliberations
within the meetings called
according to the statutory legal
provisions; meetings are held at
least once a month in order to
monitor the Company's operations.
Election of Board of Directors’
members by vote of shareholders
in the General Shareholders
Meeting is based on a transparent
procedure by bringing to the public
attention the content of the
candidate’s application file and the
criteria to be met for occupying
the position of a director in an
investment company.
The Board of Directors currently
sets out the remuneration policy
for directors and managers, which
is subject to annual approval by
the General Shareholders Meeting.
The annual report of the Board of
Directors presents the total direct
and indirect remuneration of
directors and executive
management, resulting from the
positions held.
Transparency, financial reporting,
internal control and risk
management
As part of the process of dynamic
adaptation to the developments in
the environment in which it
operates, SIF Moldova has
designed, in cooperation with
independent consultants (Siti,
Finconet) the tools for decision-
making under risk and uncertainty
conditions (an integrated IT
system).
To complement this system, an
internal risk management structure
has been created (that has
evolved in time to become an
independent structure reporting
directly to the President – General
Manager); this structure has
developed a portfolio risk
management handbook and
specific working procedures to
identify and report proximities to
prudential limits imposed under
CNVM regulations or by the
governing bodies.
The specific working procedures
governing the information flow in
terms of preparation and
documentation of decision
alternatives proposed to
hierarchical levels with decisional
powers allow for:
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Corporate governance
2.1 Corporate governance regulation (continued)
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– development of analyses and
scenarios for decision
alternatives regarding the
implementation of the multi-
annual strategies in respect of
investment policies aimed at
restructuring and increasing
portfolio performance;
– identification of decision
intervals outlined by prudential
regulations, imposed by the
specificities of the capital
market activities by means of
risk measurement techniques;
– control over the decision
making stage.
The Company is currently
validating mathematical models
that will support the decision
making process and which are
aimed at achieving the targets set
under the multi-annual strategies.
Conflict of interests and insider
trading
The Board of Directors has
implemented a procedure to
identify and appropriately address
any conflict of interests, which
requires that all investments or
sales of securities should be made
only to the benefit of shareholders.
SIF Moldova has defined a set of
rules regarding the reporting
obligations for transactions with
the Company’s shares conducted
by directors and other individuals
involved; the list of persons with
access to privileged information is
permanently updated and sent to
CNVM.
Corporate information system
SIF Moldova has adopted a
procedure for the internal flow and
communication to third parties of
documents and information on
issuers, which can influence the
market price of securities issued
by these entities. The Board of
Directors periodically reviews the
process of ensuring data and
information privacy.
Corporate social responsibility
The Company is constantly
involved in social responsibility
activities, constantly supporting the
disadvantaged categories in the
community where it is operating.
Management system
SIF Moldova is managed under a
one-tier system specific to
undertakings for collective
investments regulated by CNVM,
in line with the articles of
incorporation. The corporate
governance structures of SIF
Moldova are represented by the
Board of Directors and by the
executive management.
Additional information on the
corporate governance policy of SIF
Moldova is available on the
Company’s website:
– description of corporate
governance structures; list of
members of Board of Directors
executive management, with a
brief CV for all members;
– updated articles of
incorporation;
– internal regulations comprising
the key aspects regarding
organisation and operation of
internal departments, a
document also submitted to
CNVM’s approval;
– „Apply or Explain” statement.
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Corporate governance
2.1 Corporate governance regulation (continued)
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According to legal provisions in
effect, SIF Moldova S.A., an entity
registered with the CNVM as a
non-UCITS, is responsible for
preparation and presentation of the
following sets of financial
statements :
– financial statements prepared
according to Accounting Law
no. 82/1991, as republished
and CNVM’s Order no. 13/
03.02.2011 approving CNVM’s
Regulation no.4/2011 for
approval of Accounting
regulations conforming to the
Fourth Directive of the
European Economic
Communities applicable to
entities authorised, regulated
and supervised by CNVM,
within 150 days after the end of
the fiscal year;
– Individual financial statements
to meet the requirements of
Order no. 116 for approval of
Instruction 6/2011 regarding the
implementation of IFRS as
adopted by the European Union
by entities authorised, regulated
and supervised by CNVM,
within 180 days after the end of
the fiscal year;
– annual consolidated financial
statements, prepared in
accordance with IFRS as
adopted by the European
Union, in accordance with
CNVM’s Decision no.
176/15.09.2010 and the
procedure provided under
Regulation no. 1606/2002
issued by the European
Parliament and the European
Council of 19 July 2002, within
8 months after the end of the
fiscal year.
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Corporate governance
2.2 Legal requirements regarding preparation of financial statements
2.3 Financial reports for the financial year ended 31 December 2011
In order to meet the legal requirements for preparation and presentation of financial statements and also to
increase the accuracy and transparency of information presented in the financial statements, SIF Moldova has
met users’ information requirements by preparing and posting on the Company’s website, www.sifm.ro, the
following sets of financial statements for the year ended 31 December 2011:
Financial statements prepared in accordance with the Accounting
regulations conforming to the Fourth Directive of the European
Economic Communities applicable to entities authorised, regulated
and supervised by CNVM, for the financial year ended 31 December
2011 (prepared by SIF Moldova and audited by Deloitte Audit)
The financial statements were presented to and approved by the General
Shareholders Meeting on 6 April 2012.
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Corporate governance
2.3 Financial reports for the financial year ended 31 December 2011
(continued) Individual financial statements prepared in accordance with IFRS as
adopted by the European Union, for the financial year ended 31
December 2011 (prepared with the assistance of KPMG Romania and
audited by Deloitte Audit)
The individual financial statements prepared in accordance with IFRS were
approved by the Board of Directors on 28 June 2012 and were
made available to shareholders, investors and regulatory and supervisory
authorities on the Company's website on 29 June 2012, earlier than the
statutory deadline required by CNVM.
The priority given by SIF Moldova to compliance with assumed corporate
governance principles and ongoing communication with stakeholders has led
to the preparation and publication of the financial statements in accordance
with IFRS starting on 29 June 2012, considering that, according to CNVM
Instruction 6/15.12.2011, amended by CNVM under ruling no. 14/21.06.2012,
the deadline for the preparation of audited IFRS financial statements by
entities regulated and supervised by CNVM was 30 September 2012.
This set of financial statements is the first set of IFRS financial statements of
SIF Moldova and was prepared in accordance with the requirements of IFRS
1 First time adoption of IFRS.
Consolidated financial statements prepared in accordance with IFRS,
for the financial year ended 31 December 2011 (prepared with the
assistance of KPMG Romania and audited by Deloitte Audit)
The consolidated financial statements of SIF Moldova Group have been
approved by the Board of Directors on 28 August 2012 and were made
available to users on 30 August 2012.
This set of consolidated financial statements represent the first set of IFRS
financial statements of SIF Moldova Group (consisting of SIF Moldova SA
and its subsidiaries) and was prepared in accordance with the requirements
of IFRS 1 First-time Adoption of IFRS.
Deloitte Audit issued an unqualified audit opinion on all sets of financial statements prepared for the financial
year ended 31 December 2011.
KPMG comment
These sets of financial statements are the first sets of individual and consolidated financial statements
prepared by SIF Moldova in accordance with IFRS. The transition date was 1 January 2010 and full
information was presented for the financial years ended 31 December 2010 and 31 December 2011.
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KPMG comment
IFRS training programs for SIF Moldova staff
In the context of IFRS conversion, SIF Moldova has initiated the process of staff training on International
Financial Reporting Standards with the assistance of KPMG Romania.
The training program involving the staff of SIF Moldova consisted of two phases:
• attendance to the seminar organised in Bucharest by KPMG between 7 - 8 May 2012 on the topic of
IFRS financial statement preparation by investment entities; and
• attendance to the customised IFRS training course organised by KPMG at the Company’s premises
in September 2012, which was followed by evaluation of participants. The purpose of this training
course was to provide to the Company’s employees information on the most important provisions of
IFRS and on the impact of IFRS conversion on the Company.
SIF Moldova pays a particular attention to staff training, placing
great emphasis on ongoing professional training for its employees
in order to maintain the expertise acquired over many years of
specialisation. Personnel training in various fields of activity is
aimed at ensuring an increased responsiveness of the
organisation to the prolonged effects of the financial crisis, an
essential process in decision making in uncertainty conditions
(fundamental analysis, technical analysis, quantitative analysis,
risk management, macroeconomics, etc.) and for compliance
purposes (internal audit, internal control). The training process is
continuous and takes place with the assistance of consultants/
experts active on the national and international capital markets.
During 2012, SIF Moldova employees have obtained complex
qualifications and have gained a broad multidisciplinary
experience in specific fields, by taking part in multiple training
courses and evaluations (e.g. staff training for quality
management certification, training prior to the preparation of
working procedures), for which optimal logistics as well as partial
or full coverage of associated costs were ensured (investment
consultant, technical consultant, financial auditor, valuator, etc.)
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Corporate governance
2.4 Principles regarding staff training
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3 The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
KPMG comment
The objective of the IFRS financial statements is to provide financial information about the reporting entity
that is useful to investors, borrowers and other creditors in making decisions about providing resources to
the entity.
SIF Moldova has prepared for the first time individual financial statements in accordance with
IFRS for the year ended 31 December 2011.
IFRS does not prescribe a standard format for presenting the financial statements prepared by the Company.
IAS 1 Presentation of financial statements sets out minimum elements that need to be presented in the balance
sheet and the income statement. Also, the following principles have to be complied with in the process of
preparing the IFRS financial statements: going concern, faithful presentation, compliance with IFRS,
comparative information, consistency of presentation, offsetting, materiality and aggregation, accrual basis of
accounting.
By comparison, the format of the balance sheet and the income statement prepared in accordance with RAS is
strictly defined in the regulations issued by CNVM, which also prescribe the requirement to use a specific chart
of accounts. Thus, differences may arise between IFRS financial statements and RAS financial statements
generated by different rules and principles regarding presentation of information. The complete list of notes to
the IFRS financial statements is presented in the table below.
Note Description Note Description
1 Reporting entity 17 Investment property
2 Basis of preparation 18 Property, plant and equipment and intangible assets
3 Significant accounting policies 19 Other assets
4 Management of significant risks 20 Dividend payable
5 Financial assets and financial liabilities 21 Provisions for risks and expenses
6 Dividend income 22 Deferred tax liabilities
7 Interest income 23 Other liabilities
8 Other operating revenue 24 Equity and reserves
9 Net gain on sale of assets 25 Earnings per share
10 Net gain on revaluation of assets at fair value through
profit or loss 26 Commitments and contingent liabilities
11 Impairment losses on assets 27 Transactions and balances with related parties
12 Other operating expenses 28 Reconciliation of profit determined under RAS with profit
determined under IFRS
13 Income tax expense 29 Reconciliation of equity determined under RAS with equity
determined under IFRS
14 Cash and cash equivalents 30 Substantiation of transition to IFRS
15 Deposits with banks 31 Events after the reporting date
16 Financial assets
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 15
3
3.1 Comparative analysis of assets at 31 December 2011
691,008,496
1,105,423,492
RAS IFRS
Total assets
Note: All amounts are presented in RON, unless otherwise specified
KPMG comment
Total assets under IFRS are higher than
total assets under RAS mainly due to the
positive differences in fair value recorded
in equity in relation to financial
instruments classified as available for
sale financial assets in accordance with
IFRS.
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
This chapter presents a comparison between the captions in the individual financial
statements prepared in accordance with RAS and IFRS for SIF Moldova, explaining the main
differences. Each difference resulting from IFRS conversion is detailed in the following
sections.
The detailed accounting policies applied by SIF Moldova in preparing the IFRS financial
statements are available in note 3 to the financial statements published on the Company’s
website.
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Cash and cash equivalent 14 476,570 476,570 -
Deposits with banks 15 129,363,105 129,363,105 -
Financial assets at fair value through
profit or loss 16a 8,204,381 8,611,260 406,879
Available for sale financial assets 16b 533,437,298 947,280,998 413,843,700
Held-to-maturity investments 16c 1,362,653 1,362,653 -
Investment property 17 - 4,274,849 4,274,849
Intangible assets 18 1,277,508 1,277,508 -
Property, plant and equipment 18 15,098,350 10,987,918 (4,110,432)
Other assets 19 1,788,631 1,788,631 -
Total assets 691,008,496 1,105,423,492 414,414,996
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 16
KPMG comment
In accordance with the provisions of IAS 39 Financial Instruments: Recognition and Measurement,
financial assets at fair value through profit or loss are measured at fair value, any gain or loss in fair value
being reflected in profit or loss.
SIF Moldova classified in this category short-term shares and fund units, purchased with the intention to
benefit from short-term price fluctuations.
The difference of RON 406,879 resulting from the application of IFRS is generated by the positive change
in fair value for unlisted fund units, differences that are not recorded according to RAS provisions.
2 3.1 Comparative analysis of assets (continued)
3 KPMG comment
In accordance with the provisions of IAS 39 Financial Instruments: Recognition and Measurement, financial
assets are classified into the following categories:
Financial assets at fair value through profit or loss – financial assets held for trading, derivatives,
and any other asset designated into this category upon initial recognition;
Loans and receivables – non-derivative financial assets with fixed and determinable payments that
are not quoted in an active market;
Held-to-maturity investments - non-derivative financial assets with fixed and determinable
payments and fixed maturity that the entity has the positive intention and ability to hold to maturity;
Available for sale financial assets – all financial assets that are not classified in another category
are classified as available for sale. Also, any financial asset may be designated into this category
upon initial recognition.
Financial assets at fair value through profit or loss
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Financial assets at fair value through
profit or loss 16a 8,204,381 8,611,260 406,879
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 17
KPMG comment
Available-for-sale financial assets are those financial assets that are not classified as loans and
receivables, held-to-maturity investments or financial assets at fair value through profit or loss. These
assets are measured at fair value, changes in fair value (excluding impairment) being recognised in other
comprehensive income within equity.
In applying the provisions of IAS 39 Financial Instruments: Recognition and Measurement, SIF Moldova
classified in this category shares and fund units, other than those acquired with the intention to benefit
from short-term price fluctuations.
The difference of RON 413,843,700 between the value under IFRS and the value under RAS is the
cumulated result of the following restatement adjustments:
RON (103,093,311) cancellation of RAS reserve related to equity instruments received and for
witch no consideration was paid (as under IFRS such shares distributed proportionately to all
shareholders are not economic benefits);
RON 214,108,726 cancellation of impairment loss allowances set up under RAS;
RON (92,540,926) cancellation of reserves set up as an effect of applying Law no. 133/1996 on
transformation of Private Property Funds into financial investment companies
RON 425,084,161 recording shares at fair value in accordance with IFRS provisions. This amount
includes both positive and negative changes in fair value recorded against other comprehensive
income (other than impairment losses), unlike RAS provisions under which only negative changes
are recorded;
RON 3,018,727 recording the effects of applying IAS 29 Financial reporting in hyperinflationary
economies for available for sale financial assets measured at cost;
RON (7,410,264) recording in profit or loss the impairment loss allowances on available-for-sale
financial assets measured at cost, based on the impairment indicators defined by SIF Moldova for
the application of IAS 39 Financial instruments: recognition and measurement provisions;
RON (25,979,184) recording in profit or loss the impairment loss allowances related to available-
for-sale financial assets measured at fair value and for which a significant and prolonged decline of
market prices has been observed;
RON 655,771 recording in other comprehensive income the positive changes in fair value of the
fund units classified as available for sale financial assets.
2 3.1 Comparative analysis of assets (continued)
Available for sale financial assets
3
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Available for sale financial assets 16b 533,437,298 947,280,998 413,843,700
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 18
KPMG comment
In accordance with the provisions of IAS 40 Investment property, an investment property is a property
(land or a building — or part of a building — or both) held (by the owner or by the lessee under a finance
lease contract) to earn rentals or for capital appreciation or both, rather than for use in the production or
supply of goods or services or for administrative purposes or sale in the ordinary course of business.
This category of assets does not exist under RAS.
SIF Moldova classified as investment property buildings held for rental and selected the fair value
measurement model, allowed under IFRS. According to this model, investment properties are not
depreciated but are revalued periodically and the revaluation results are accounted for in profit or loss.
The value of investment property amounting to RON 4,274,849 has been reclassified from the value of
property, plant and equipment, for the purpose of preparing the IFRS financial statements.
Regarding the property, plant and equipment, SIF Moldova selected the revaluation model allowed by
IAS 16 Property, plant and equipment, with no significant differences compared with the amounts
recorded under RAS for this category.
The difference of RON 4,110,432 related to property, plant and equipment arises from the
reclassification of RON 4,274,849 in investment property category together with the cancellation of the
corresponding depreciation recorded under RAS after the reclassification as investment property,
amounting to RON (164,417).
2 3.1 Comparative analysis of assets (continued)
Investment property and property, plant and equipment
3
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Investment property 17 - 4,274,849 4,274,849
Property, plant and equipment 18 15,098,350 10,987,918 (4,110,432 )
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 19
3.2 Comparative analysis of liabilities and equity
124,853,096
566,155,400
134,713,904
970,709,588
Total liabilities Total equity
Total equity and liabilities
RAS IFRS
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KPMG comment
The differences between total liabilities under
RAS and IFRS mainly arise from the
application of IAS 12 Income taxes.
The main differences related to equity are
generated by the positive differences of fair
value recorded for available-for-sale financial
assets and by the different profit obtained by
SIF Moldova under the two reporting
frameworks.
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Dividend payable 20 24,036,072 24,036,072 -
Provisions for risks and expenses 21 14,678,961 14,678,961 -
Deferred tax liabilities 22 38,045,369 47,906,177 9,860,808
Other liabilities 23 48,092,694 48,092,694 -
Total liabilities 124,853,096 134,713,904 9,860,808
Share capital 24 51,908,959 487,811,190 435,902,231
Retained earnings 676,202,433 237,717,597 (438,484,836)
Reserves from revaluation of property, plant
and equipment 13,378,078 9,076,661 (4,310,417)
Reserves from revaluation of available for
sale financial assets (175,343,070) 236,104,140 411,447,210
Total equity 566,155,400 970,709,588 404,554,188
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 20
-4.
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3.2 Comparative analysis of liabilities and equity (continued)
Deferred tax liabilities
Share capital
3
KPMG comment
In accordance with the provisions of IAS 12 Income taxes, deferred tax liabilities or assets are
recorded for the temporary differences between the carrying amount and tax base of the Company’s
assets and liabilities. Deferred tax liabilities or deferred tax assets are recorded either against profit or
loss or against other comprehensive income, depending on the accounting treatment of the item that
generated them.
The difference of RON 9,860,808 represents the cumulated effect of the following restatement
adjustments:
cancellation of provisions for taxes set up in accordance with RAS of RON 38,045,369 related to
shares received without any consideration paid, shares from the initial portfolio, dividends
prescribed in previous years, revaluation surplus, fiscal facilities, and
recording the deferred tax liability computed in accordance with IFRS and amounting to RON
47,906,177.
KPMG comment
The Romanian economy was considered to be hyperinflationary until 31 December 2003, as defined in
IAS 29 Financial reporting in hyperinflationary economies (the cumulative inflation rate over a three
year period exceeded 100%). Thus, the historical cost of non-monetary assets and non-monetary
liabilities was corrected up to the date specified by multiplying it with the relevant inflation index.
The difference of RON 435,902,231 related to share capital arises from the application by the
Company of the provisions of IAS 29 Financial reporting in hyperinflationary economies. The
hyperinflation adjustment was recorded against retained earnings.
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Deferred tax liabilities 22 38,045,369 47,906,177 9,860,808
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Share capital 24 51,908,959 487,811,190 435,902,231
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 21
KPMG comment
The differences between retained earnings under RAS and IFRS are the cumulative effect of recording
all the restatement adjustments with an impact on the profit or loss or other comprehensive income in
previous periods and also in the current period.
The difference of RON (438,484,836) between retained earnings under IFRS and retained earnings
under RAS arises from:
RON (435,902,231) recording the effects of hyperinflation on share capital, in accordance with the
provisions of IAS 29 Financial reporting in hyperinflationary economies;
RON 5,107,261 cancellation of revaluation reserves on property, plant and equipment classified
as investment property in accordance with the provisions of IAS 40 Investment property and
measured at fair value with the differences recorded in profit or loss in the IFRS financial
statements;
RON (86,598,381) cancellation of RAS reserve related to equity instruments received without any
consideration paid, net of deferred taxes;
RON 54,654,240 cancellation of the cumulated impairment loss allowances recorded by the
Company under RAS, net of tax provisions set up by the Company;
RON (105,520,668) cancellation of the initial reserve set up as an effect of applying Law no.
133/1996 on the transformation of Private Property Funds into financial investment companies;
RON 3,018,727 recording the effects of applying IAS 29 Financial reporting in hyperinflationary
economies on available-for-sale financial assets measured at cost;
RON (8,276,813) recording the impairment loss allowances on available-for-sale financial assets
measured at cost, based on the impairment indicators defined by SIF Moldova for the application
of IAS 39 Financial instruments: recognition and measurement provisions;
RON (16,634,093) recording the impairment loss allowances related to available-for-sale
financial assets measured at fair value and for which a significant and prolonged decline of market
prices has been observed;
RON 8,911,977 recording of deferred tax liabilities in accordance with the provisions of IAS 12
Income taxes;
RON 137,401,681 the effect of restatement adjustments on the profit or loss for the financial year
ended 31 December 2011;
RON 5,353,464 other restatement adjustments.
-4.
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3.2 Comparative analysis of liabilities and equity (continued)
Retained earnings
3
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Retained earnings 676,202,433 237,717,597 (438,484,836)
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 22
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3.2 Comparative analysis of liabilities and equity (continued)
Reserves from revaluation of property, plant and equipment
Reserves from revaluation of available -for-sale financial assets
3
KPMG comment
The difference of RON (4,310,417) related to reserves from revaluation of property, plant and
equipment arises from:
RON (5,107,261) cancellation adjustments for the revaluation reserves corresponding to items
classified as investment property in accordance with the provisions of IAS 40 Investment
property;
RON 796,844 other adjustments.
KPMG comment
The reserve from revaluation of available-for-sale financial assets is generated from the application of
IAS 39 Financial instruments: recognition and measurement provisions regarding measurement at fair
value for this category of financial assets. The difference of RON 411,447,210 arises from:
RON 175,343,070 cancellation of reserve recorded under RAS for decreases of value;
RON 235,448,369 recording the fair value differences determined in accordance with IFRS, net
of deferred tax;
RON 655,771 other adjustments related to available-for-sale financial assets.
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Reserves from revaluation of property,
plant and equipment 13,378,078 9,076,661 (4,310,417)
Balance sheet position
Note to the
IFRS financial
statements
RAS IFRS Difference
Reserves from revaluation of available-
for-sale financial assets (175,343,070) 236,104,140 411,447,210
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 23
3.3 Comparative analysis of comprehensive income
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Revenue
Dividend income 6 18,088,642 20,818,818 2,730,176
Interest income 7 3,719,234 3,719,234 -
Other operating revenue 8 12,086,398 12,336,209 249,811
Other income 233,445 233,445 -
Gain from investments
Net gain on sale of assets 9 252,228,320 419,761,823 167,533,503
Net loss from re-measurement of financial
assets at fair value through profit or loss 10 (800,257) (592,898) 207,359
Expenses
Impairment losses on assets 11 (5,185,520) (12,889,744) (7,704,224)
Expenses relating to provisions for risks and
charges (13,896,057) (13,896,057) -
Other operating expenses 12 (34,324,702) (35,184,416) (859,714)
Other expenses (151,760) (151,760) -
Profit before income tax 231,997,743 394,154,654 162,156,911
Income tax expense 13 (39,075,148) (63,830,481) (24,755,333)
Profit for the period 192,922,595 330,324,173 137,401,578
Other comprehensive income
Increases/ (Decreases) in reserves from
revaluation of property, plant and equipment,
net of deferred tax
15,216
Change in fair value of available-for-sale
financial assets, net of deferred tax (118,723,568)
Decrease in reserve arising from sale of
available-for-sale financial assets (421,062,838)
Other comprehensive income (539,771,190)
Total comprehensive income for the period (209,447,017)
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The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 24
3.3 Comparative analysis of comprehensive income (continued)
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192,922,595
330,324,173
RAS IFRS
3
KPMG comment
The difference between the profit under
RAS and the profit under IFRS
amounting to RON 137,401,578 is mainly
generated by recording in the IFRS
income statement the gains from disposal
of available-for-sale financial assets, as a
result of different acquisition costs
recorded under the two reporting
frameworks.
Net profit for the period
Total comprehensive income for the period
KPMG comment
Comprehensive income is the change in equity
of an entity during a period, determined by
transactions, events and circumstances, other
than transactions with shareholders
(shareholders’ contributions and distributions
to shareholders). Other comprehensive income
includes all those transactions that determine
changes in equity and have not been
recognised in profit or loss.
SIF Moldova recorded “In other
comprehensive income” the negative fair value
reserve arising from the decrease in value of
instruments classified as available-for-sale.
192,922,595
-209,447,017
RAS IFRS
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 25
KPMG comment
In accordance with IAS 18 Revenues, dividend income is recognised at a value gross of withholding
taxes. In the financial statements prepared in accordance with RAS, the dividend income has been
recognised by the Company at a value net of corresponding withholding tax.
The difference of RON 2,730,176 related to dividend income arises from the effect of applying the
provisions of IAS 18 Revenues, this amount being equal to the dividend withholding tax.
8
3.3 Comparative analysis of comprehensive income (continued)
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Dividend income
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Dividend income 6 18,088,642 20,818,818 2,730,176
Other operating income and expenses
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Other operating income 8 12,086,398 12,336,209 249,811
Other operating expenses 12 (34,324,702) (35,184,416) (859,714)
3
Note: All amounts are presented in RON, unless otherwise specified
KPMG comment
The difference of RON 249,811 related to other operating income is the result of reclassification
adjustments to the category of impairment losses on assets.
In the case of other operating expenses, the difference of RON (859,714) arises from:
RON 164,417 cancellation of property, plant and equipment depreciation corresponding to assets
classified as investment property in accordance with IAS 40 Investment property;
RON (1,024,130) reclassification to the category of impairment losses on assets.
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 26
KPMG comment
In accordance with the provisions of IAS 39 Financial instruments: recognition and measurement, upon
disposal of a financial asset a gain or a loss is recognised for the difference between the carrying amount
of the asset and the sum of the following items: (1) the amount of consideration received (including any
new asset obtained less any new assumed liability) and (2) the amount of any gains or losses recorded in
other comprehensive income and corresponding to the derecognised financial asset. Also, in accordance
with the provisions of IFRS, financial assets are initially recognised at fair value, and the best evidence of
fair value is the existence of a quoted price in an active market.
The difference of RON 167,533,503 is mainly related to the recognition in the IFRS financial statements
of net gains on disposal of available-for-sale financial assets up to the fair value of the consideration
received, for those assets for which gains have been recognised in RAS financial statements up to the
levels of cash received.
8
3.3 Comparative analysis of comprehensive income (continued)
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Net gain on sale of assets
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Net gain on sale of assets 9 252,228,320 419,761,823 167,533,503
3
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 27
8
3.3 Comparative analysis of comprehensive income (continued)
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Net loss on revaluation of financial assets at fair value through profit or loss
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Net loss on revaluation of financial assets
at fair value through profit or loss 10 (800,257) (592,898) 207,359
Impairment losses on assets
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Impairment losses on assets 11 (5,185,520) (12,889,744) (7,704,224)
3
KPMG comment
The difference of RON 207,359 related to net loss on revaluation of financial assets at fair value through
profit or loss arises from recording the positive differences of fair value for fund units classified at fair
value through profit or loss, in accordance with IFRS.
KPMG comment
The difference of RON (7,704,224) related to impairment losses on assets arises from:
RON (8.478.543) recording the impairment loss allowances on available-for-sale financial assets;
RON (774.319) reclassification adjustments of impairment losses from other operating income
and/ or expenses.
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 28
8
3.3 Comparative analysis of comprehensive income (continued)
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Income tax expense
Position in comprehensive income
Note to the
IFRS financial
statements
RAS IFRS Difference
Income tax expense 13 (39,075,148) (63,830,481) (24,755,333)
3
KPMG comment
The Company applied the provisions of IAS 12 Income taxes to record income and expenses related to
current and deferred income taxes. Following the application of IFRS principles, a difference of RON
(24,755,333) compared to the income tax expense recorded under RAS regulations has arise and was
generated by:
RON (2,730,176) additional income tax recorded as a result of reflecting dividend income at
gross value;
RON (22,025,157) adjustments to record the deferred tax liabilities determined by reference to
the provisions of IAS 12 Income tax expense.
Note: All amounts are presented in RON, unless otherwise specified
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 29
Position in comprehensive income RAS IFRS Difference
Dividend income 18,088,642 20,818,818 2,730,176
Interest income 3,719,234 3,719,234 -
Other operating income 12,319,843 12,569,654 249,811
Gain from investments 251,428,063 419,168,925 167,740,862
Total income 285,555,782 456,276,631 170,720,849
Dividend income
7%
Interest income
1% Other operating income
4%
Gain from investments
88%
RAS
Dividend income
4%
Interest income
1%
Other operating income
3%
Gain from investments
92%
IFRS
3.3 Comparative analysis of comprehensive income (continued)
3
Comparative presentation of income structure
Note: All amounts are presented in RON, unless otherwise specified
KPMG comment
As indicated by the charts and the information
in the table above, although the total income
under IFRS is higher by RON 170,720,849
than the total income recorded under RAS, the
related structure is comparable under the two
reporting frameworks, with gains from
investments prevailing.
The impact of applying IFRS on
the financial statements of SIF
Moldova at 31 December 2011
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 30
4 Comparative presentation of
key economic ratios at 31
December 2011
4.1 Liquidity ratios
The liquidity ratios are used to determine the ability of the entity to pay off, at some point in
time, the payment obligations assumed through its current assets. Liquidity indicates the
ability of an asset to be converted into cash with minimum loss of value.
Current ratio measures the
entity's ability to meet short-term
liabilities.
Current ratio is calculated as
current assets of the Company
divided by its short-term liabilities.
The higher the current ratio value
is the better the ability to pay off
its short-term liabilities, without
using long-term financial
resources. Otherwise, if the value
obtained is less than one, the
company will have to seek for
external funding resources.
Irrespective of the sector in which
the entity operates, the optimal
value of current ratio is consider
to be around 2. For a correct
interpretation of the current
liquidity ratio, it should be
compared with the industry
averages or with the level of the
ratio for competitors.
Quick ratio measures the entity’s
ability to meet short-term liabilities
through the most liquid current
assets of the company.
KPMG comment
For the financial year ended 31 December 2011 the current ratio,
determined both on the basis of the information from financial
statements prepared in accordance with RAS and on the basis of
information from financial statements prepared in accordance with
IFRS, has a value higher than 2, which is considered an optimal
value.
The value of the current ratio is equal to the quick ratio as SIF
Moldova has no inventories.
Note: This indicators were calculated based on the information from the financial statements of SIF
Moldova.
2.43 2.43 2.44 2.44
0
0.5
1
1.5
2
2.5
Current ratio Quick ratio
RAS IFRS
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 31
KPMG comment
For the financial year ended 31 December 2011 the long term
asset turnover, determined both on the basis of the information
from financial statements prepared in accordance with RAS and
on the basis of the information from financial statements prepared
in accordance with IFRS, reflects a turnover less than one.
The efficiency ratios have similar values under both reporting
frameworks analysed, the differences being explained by the
different level of assets in the financial statements prepared in
accordance with RAS as compared to the level of assets in the
financial statements prepared in accordance with IFRS (see
Chapter 3).
4.2 Activity ratios
Fixed asset turnover is the ratio
of income from current activities to
the value of long term assets.
Long term asset turnover
measures the effectiveness of a
entity’s use of its long term assets
by analysing the turnover obtained
by a certain amount of assets.
Asset turnover is the ratio of
turnover to the total assets.
Asset turnover is the ratio that
measures the turnover obtained by
a certain amount of total assets.
Activity ratios measure the effectiveness of the company’s use of assets.
4 4 Comparative presentation of
key economic ratios at 31
December 2011
Note: This indicators were calculated based on the information from the financial statements of SIF
Moldova.
0.61
0.49 0.47 0.41
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
RAS
IFRS
Long term asset
turnover
Total asset
turnover
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 32
4.3 Profitability ratios
Return on equity (ROE) is the ratio of
profit before interest and income tax to
equity.
Return on equity is one of the most
important ratios used to measure an
entity’s performance. The main
objective of any business is to
maximise the shareholders’
investment. Therefore, a high value of
ROE shows that the shareholders’
investment was converted by the
entity’s management into a large profit.
Return on assets (ROA) is the ratio
of net profit to total assets of the entity
and measures the efficiency of the
assets used in terms of profits
obtained, showing how many RON are
obtained for every leu invested in the
entity’s assets.
Return on assets is, together with
return on equity, one of the most
important ratios of an entity’s
profitability.
Profitability ratios reflect the efficiency of an entity's activities, meaning its capacity to
generate profit using the available resources
4 Comparative presentation of
key economic ratios at 31
December 2011
KPMG comment
For the financial year ended 31 December 2011 the return on
equity ratio and the return on assets ratio, determined both on the
basis of the information from financial statements prepared in
accordance with RAS and on the basis of the information from the
financial statements prepared in accordance with IFRS, indicate
that the shareholders investment has generated a high profit.
The return on equity was obtained, both for the analysis based on
the information from financial statements prepared in accordance
with RAS and for the analysis based on the information from
financial statements prepared in accordance with IFRS, taking
into account that SIF Moldova S.A. has no medium and long term
liabilities.
Note: This indicators were calculated based on the information from the financial statements of SIF
Moldova.
40.98
27.92 29.88
Return on equity (ROE) Return on assets (ROA)
Ratios expressed in %
RAS IFRS
40.60
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 33
4.3 Profitability ratios (continued)
Earnings per share is the ratio of
net profit or loss of an entity for a
financial year to the number of
ordinary shares in issue during the
period.
From a financial point of view
earnings per share is an important
ratio when comparing a company
results over a certain period of time
or when comparing the entity results
with the results of other entities in the
same industry.
For a proper interpretation of this
ratio its evolution over a period of
several years should be considered.
0.3717
0.6364
RAS IFRS
RON/share
4 Comparative presentation of
key economic ratios at 31
December 2011
Note: This indicators were calculated based on the information from the financial statements of SIF
Moldova.
KPMG comment
For the financial year ended 31 December 2011 the level of
earnings per share determined on the basis of information from
financial statements prepared in accordance with IFRS is higher
than the level of earnings per share obtained on the basis of
information from the financial statements prepared in accordance
with RAS due to the higher profitability recorded under IFRS.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 34
4 Comparative presentation of
key economic ratios at 31
December 2011
4.4 SIF Moldova share price evolution
The graph below shows the evolution of SIF Moldova share prices between January 2011
and October 2012.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
SIF Moldova shares are traded since 1 November 1999 on
the Bucharest Stock Exchange, tier I.
The records of the Company's shares and shareholders are
kept, in accordance with the legislation in force, by the
Central Depository.
Information at 31 December 2011:
Market capitalisation:
RON 560,616,755 (EUR 129 million)
Price: RON 1.0800
EPS: RON 0.37
PER: 2.91
P/BV: 0.99
52 m: 0.7180 RON/share
52 M: 1.5080 RON/share
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 35
Profitability ratios (%)
Profitability ratios reflect the efficiency of an entity's activities, meaning its capacity to generate profit using the
available resources. For the purpose of this analysis, the following ratios were taken into account: return on
assets, return on equity, earnings per share.
4.5 Comparative presentation of key financial ratios of SIF Moldova
against the average for the other financial investment companies (SIFs)
This section aims to analyse SIF Moldova’s key ratios computed based on IFRS results by
comparing them against the average ratios for the other financial investment companies.
For the purpose of this analysis information from the individual financial statements prepared
in accordance with International Financial Reporting Standards for the following entities was
used: SIF Banat-Crisana S.A., SIF Moldova S.A., SIF Transilvania S.A., SIF Muntenia S.A.,
SIF Oltenia S.A.
22.68
17.11
40.60
29.88
Return on equity(ROE) %
Return on assets(ROA) %
SIF Moldova S.A. Average SIF-uri
.
4 Comparative presentation of
key economic ratios at 31
December 2011
0.31
0.636 Earnings per share
(lei/share)
SIF Moldova S.A. Average SIF-uri
Based on the comparative analysis,
SIF Moldova profitability ratios have
higher levels than the average ratios
computed for all five investment
companies (SIFs). It can be concluded
that SIF Moldova investment policy
has generate a higher profitability than
the average in the field in which it
operates.
Note: The ratios were obtained based on the information from IFRS financial statements of each SIF
s
s
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 36
0.27
0.24
0.47
0.41
Fixed asset turnover
Asset turnover
SIF Moldova S.A. Average SIF-uri
4.5 Comparative presentation of key financial ratios of SIF Moldova
against the average for the other financial investment companies (SIFs)
(continued)
Activity ratios
Activity ratios measure the effectiveness of the entity’s use of assets.
4 Comparative presentation of
key economic ratios at 31
December 2011
Note: The ratios were obtained based on the information from IFRS financial statements of each SIF
Based on the comparative analysis,
SIF Moldova activity ratios have higher
levels than the average ratios
computed for all five investment
companies (SIFs). It can be concluded
that the SIF Moldova investment policy
led to a more effective use of its
assets compared to the average in the
field in which it operates.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 37
5 Presentation of SIF Moldova
portfolio structure at 31
December 2011
Quoted shares 81.53%
Unquoted shares 3.70%
Fund units 1.28%
Monetary instruments
11.22%
Bonds 2% Other assets
1.61%
RAS
Quoted shares 80.10%
Unquoted shares 4.46%
Fund units 1.35%
Monetary instruments
11.75%
Bonds 0.68%
Other assets 1.66%
IFRS
The charts below present a comparative analysis of the structure of assets managed by SIF
Moldova, based on information from financial statements prepared in accordance with IFRS
and RAS.
KPMG comment
The analysis indicates that the asset weight differs for “Unquoted shares” and “Bonds”, otherwise the
percentage are almost identical. The difference in value for unquoted shares is due to the use of valuation
techniques to determine the fair value for IFRS reporting purposes for some of these shares.
The target set for increasing the weight of quoted shares to at least 70% of the assets managed by SIF
Moldova has been achieved also according to the information from IFRS financial statements, this weight
standing at 82.93% at 31 December 2011.
The target set for decreasing the weight of unquoted shares to less than 2% of the assets managed by
SIF Moldova has been reached according to the information from IFRS financial statements, unlike RAS
where the proportion is 3.7%.
5.1 Portfolio structure by type of instruments held
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 38
The chart below presents the structure of SIF Moldova’s portfolio based on the number of issuers, as follows::
in the financial statements prepared in accordance with RAS the portfolio structure is divided into: quoted
shares and unquoted shares;
in the financial statements prepared in accordance with IFRS the portfolio structure is divided into: shares
with an active market and shares without an active market.
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89
111 121
99
IFRS RAS
Shares portfolio structure depending on the type of market
Without an active
market
Active market
5 Presentation of SIF Moldova
portfolio structure at 31
December 2011
KPMG comment
Under IFRS, a financial instrument has an active market if for that financial instrument quoted prices are
readily and regularly available and those prices represent regularly market transactions on an arm’s
length basis.
It can be observed that the number of issuers that have an active market (under IFRS) is lower than the
number of quoted entities (under RAS), due to differences in classification of shares under the two
financial reporting systems.
Thus, there are certain shares in SIF Moldova’s portfolio which are listed on a stock exchange but for
which quoted prices representing regularly market transactions on an arm’s length basis are not readily
and regularly available. For the purpose of IFRS financial statements, these shares were classified as
shares without an active market and were measured at cost less impairment.
5.2 Portfolio structure based on the trading market
Quoted
Unquoted
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 39
Presentation of SIF Moldova
portfolio structure at 31
December 2011
RAS IFRS
Financial 59% 62%
Manufacturing 16% 12%
Pharmaceutical 5% 3%
Retail 1% 2%
Energy 11% 17%
8% 4% Other
5 5.3 Portfolio structure by sector of activity
5.4 Portfolio structure by sector of activity against the average for the
other SIFs
KPMG comment
The financial sector includes
securities held in banks, as well
as in companies performing
services of financial
intermediation or management
of financial markets.
It can be noted that the target
set in the investment policies of
the Company to reduce the
exposure on the financial sector
but maintaining this sector as
main sector was achieved both
under RAS and IFRS.
Note: The ratios were obtained based on the information from IFRS financial statements of each SIF
4%
2%
3%
12%
17%
62%
11%
4%
2%
13%
7%
63%
0% 10% 20% 30% 40% 50% 60% 70%
Other
Commercial
Pharmaceutical
Manufacturing
Energy
Financial
Medie SIF-uri SIF MoldovaAverage SIFs
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 40
Company RAS IFRS
1. BRD 8,000,891 244,934,680
2. ERSTE BANK 4,671,867 233,717,960
3. FONDUL PROPRIETATEA 78,395,686 96,701,105
4. BANCA TRANSILVANIA 25,838,211 78,395,686
5. SNTGN TRANSGAZ 56,233,556 38,597,337
6. OMV PETROM 52,088,790 33,313,714
7. BIOFARM 96,701,105 25,838,211
8. TESATORIILE REUNITE 13,032,754 21,733,038
9. MECANICA CEAHLAU 33,313,714 15,203,268
10. AEROSTAR 37,080,376 14,441,645
TOTAL 405,356,951 802,876,644
Top 10 companies in total
portfolio of shares 78% 86%
Top 10 companies in the portfolio held at 31 December 2011, according to the shares value recorded
in the financial statements are presented in the table below
5 Presentation of SIF Moldova
portfolio structure at 31
December 2011
5.5 Top 10 companies in portfolio
KPMG comment
The analysis indicates that based on the values recorded in the financial statements prepared in
accordance with RAS the largest holding is in Biofarm, followed by Fondul Proprietatea, while based on the
values recorded in the financial statements prepared in accordance with IFRS the largest holdings are in
BRD and Erste Bank. These differences result from different measurement rules under the two financial
reporting frameworks (mainly in relation to increases in fair value of shares, which are recognised in the
financial statements prepared in accordance with IFRS but are not recognised in the financial statements
prepared in accordance with RAS).
The proportion of Top 10 companies in total portfolio is higher under IFRS, particularly as a result of
recognition of the positive fair value differences, in accordance with the provisions of IAS 39 Financial
instruments: Recognition and measurement.
Note: All amounts are presented in RON
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 41
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
SIF Moldova has prepared its first consolidated financial statements in accordance with IFRS
for the year ended 31 December 2011. The consolidated financial statements for the year
ended 31 December 2011 comprise the Company and its subsidiaries ("the Group"),
together with the Group's interests in associates.
Subsidiaries are entities controlled by the Group. Control is the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are
included in the consolidated financial statements since the control begins and until its termination. The
accounting policies of subsidiaries have been changed in order to align them with those of the Group.
Associates are those companies in which the Group has significant influence, but not control over the financial
and operating policies. The consolidated financial statements include the Group's share of results of associates
using the equity method from the date on which the Group began to exercise significant influence until the date
on which such influence ceases. SIF Moldova has no associates at 31 December 2011.
The Group policies regarding basis of consolidation and the complete list of subsidiaries are included in the
notes to the consolidated financial statements of the Company.
KPMG comment
Usually control exists in the following situations:
owning more than half of the voting power
power over more than half of the voting rights by virtue of an agreement with other investors
power to govern the financial and operating policies of the entity under a statute or an agreement
power to appoint or remove the majority of the members of the board of directors
power to cast the majority of votes at meetings of the board of directors or equivalent governing
body
The existence of significant influence is usually evidenced in one or more of the following ways:
ownership of 20% or more of the voting rights
representation on the board of directors
participation in policy-making processes, including participation in decisions about dividends or
other distributions
material transactions between the investor and the investee
interchange of managerial personnel
provision of essential technical information
6.1 Principles of consolidation
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 42
Note Name Note Name
1 Reporting entity 17 Deposits with banks
2 Basis of preparation 18 Financial assets
3 Basis of consolidation 19 Investment property
4 Significant accounting policies 20 Property, plant and equipment and intangible
assets
5 Financial risk management 21 Other assets
6 Acquisitions and disposals of subsidiaries 22 Borrowings
7 Financial assets and liabilities 23 Dividends payable
8 Dividend income 24 Provisions for risks and expenses
9 Interest income 25 Deferred income payable
10 Other operational income 26 Other payables
11 Net income from sale of assets 27 Equity and reserves
12 Net loss/ (Net gain) from revaluation of assets
held at fair value through profit or loss account 28 Earnings per share
13 Impairment losses on assets 29 Contingent assets and liabilities
14 Other operating expenses 30 Related parties
15 Income tax 31 Subsequent events
16 Cash and cash equivalents
The table below presents the full list of notes to the consolidated financial statements of the SIF Moldova
Group:
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
Ownership
100 %
20 %
50 %
0 %
Control
Common
control
Significant
influence*
Limited
influence or no
influence
Influence
6.2 Levels of influence over other entities
(*) Ownership of 20% -50% of share capital of a company does not automatically lead to the existence of significant influence over that
company; the analysis performed also takes into account a number of qualitative factors.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 43
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
6.3 Area of consolidation for SIF Moldova
SIF
Moldova
CASA
Mecanica Ceahlău
Comppil
Oltcotton
Gastroinvest
Regal
Ţesătoriile
Reunite
Comppil
Târgu Mureş
59.19%
Mecanica
Ceahlău
Piatra Neamţ
55.12%
Gastroinvest
Iaşi
95.69%
Ţesătoriile
Reunite
Bucureşti
88.14%
Oltcotton
Drăgăneşti
51.11%
Casa
Bacău
99.96%
Regal
Galaţi
92.86%
Note: The percentages shown represent the ownership of SIF Moldova in the share capital of the entities
presented at 31 December 2011.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 44
6.4 Summary financial data for SIF Moldova Group
RON ‘000 SIF Moldova
Mecanica Ceahlău
Țesătoriile Reunite Regal Gastro
invest Oltcotton Casa Comppil Total
Total assets 1,105,423 49,063 19,093 6,114 2,045 1,872 1,621 946 1,186,179
Net assets 970,710 39,436 20,278 5,858 1,997 548 1,599 736 1,041,162
Equity 487,811 23,991 1,196 1,750 490 1,162 2,750 389 519,539
Turnover 456,277 31,794 2,621 1,753 332 287 45 1,047 494,156
Profit/ (Loss) 330,324 7,200 (359) 17 51 (148) (198) 59 336,946
The table below highlights the main balance sheet and profit and loss account captions for
each of the entities included in the consolidation. The figures presented in this section are in
accordance with IFRS.
SIF Moldova 93.2%
Mecanica 3.8%
Țesătoriile 1.9%
Regal 0.6%
Gastroinvest 0.2%
.Oltcotton 0.1%
Casa S.A. 0.2%
Comppil 0.1%
Subsidiaries 6.8%
Net assets
SIF Moldova 92.3%
Mecanica 6.4%
Țesătoriile 0.5%
Regal 0.4%
Gastroinvest 0.1%
Oltcotton 0.1%
Casa S.A. 0.0%
Comppil 0.2%
Subsidiaries 8%
Turnover
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
The structure of net assets and turnover for SIF Moldova Group
KPMG comment
Out of total net assets for
the Group, 93.2% are net
assets of SIF Moldova,
while subsidiaries account
for only 6.8%.
Out of all Group
subsidiaries, Mecanica
Ceahlău has the highest
turnover, representing 6.4%
of the total Group turnover.
Note: All amounts are presented in RON.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 45
6.5 Brief presentation of SIF Moldova’s subsidiaries
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 49,063,154 46,899,937 4.61%
Turnover 31,793,840 22,829,140 39.27%
Profit/(Loss) 7,199,614 1,941,193 270.89%
ROE % 21.33 11.05 10.28 pp
ROA % 14.67 4.14 10.53 pp
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 2,045,140 1,984,113 3.08%
Turnover 332,760 211,042 57.67%
Profit/(Loss) 51,185 39,308 30.22%
ROE % 3.09 2.27 0.82 pp
ROA % 2.50 1.98 0.52 pp
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The main object of activity is the production
of fabrics of worsted and worsted yarns.
Tesatoriile Reunite was founded in 1933.
Currently it consists of two manufacturing
units of which one weaving and the other
textile finishing, located in Bucharest.
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 19,093,459 19,302,980 (1.09%)
Turnover 2,621,147 3,158,931 (17.02%)
Profit/(Loss) (359,299) 4,670,350 (107.69%)
ROE % (1.28) 23.03 (24.31 pp)
ROA % (1.88) 24.19 (26.07 pp)
Founded in 2000, SC Gastroinvest
S.A.’s main business is renting and sub
renting of own or leased real estate.
Mecanica Ceahlău
Țesătoriile Reunite
Gastroinvest
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
Note: All amounts are presented in RON.
The object of activity of the Company is
manufacturing of agricultural machinery
and forest exploration.
Established in 1921, SC Mecanica Ceahlău
S.A. Piatra - Neamt is today one of the
most famous companies producing
agricultural machinery both in Romania and
abroad.
The machinery produced by Mecanica
Ceahlău covers the whole range of
agricultural works from soil preparation for
sowing to harvesting.
Mecanica Ceahlău
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 46
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 6,114,332 6,515,205 (6.15%)
Turnover 1,752,651 2,729,024 (35.78%)
Profit/(Loss) 16,785 387,602 (95.67%)
ROE % 0.29 7.55 (7.26 pp)
ROA % 0.27 5.95 (5.68 pp)
The main objects of activity of the
Company are catering business -
restaurants, pastry production and sale and
letting of own property.
SC Regal S.A. was founded in 1990 by
Decision of Prefecture Galati as a joint
stock company under Law no. 15/1991 and
Law no. 31/1990.
The company has its own pastry-
confectionery laboratory that provides
customers with a wide range of products of
the highest quality.
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 1,621,442 1,799,654 (9.90%)
Turnover 44,782 10,301 334.73%
Profit/(Loss) (198,066) (189,955) 4.27%
ROE % (12.39) (10.35) (2.04 pp)
ROA % (12.22) (10.56) (1.66 pp)
Oltcotton S.A. operates as an
independent company with its own
legal personality based on the
constitutive act since 1991.
The object of the company is fiber
preparation and spinning of cotton and
cotton type fiber.
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 1,871,902 1,882,362 (0.56%)
Turnover 287,298 727,200 (60.49%)
Profit/(Loss) (147,759) (135,227) 9.27%
ROE % (26.97) 4.82 (31.79 pp)
ROA % (7.89) (7.18) (0.71 pp)
Established in 1999 as a joint stock
company under Law no. 31/1990, the
main activity of the Company is in
business and management consulting.
Regal
Oltcotton
Casa
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6.5 Brief presentation of SIF Moldova’s subsidiaries (continued)
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
Note: All amounts are presented in RON.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 47
Key indicators (IFRS)
RON 2011 2010 Change
Total assets 945,608 811,100 16.58%
Turnover 1,047,231 802,899 30.43%
Profit/(Loss) 59,424 50,748 17.10%
ROE % 9.56 8.43 1.13 pp
ROA % 6.28 6.26 0.02 pp
The Company was founded in 1997
and its main activity is wholesale of
furs, skins and hides.
Comppil operates five centers in the
country: Ludus, Reghin, Sighisoara,
Târnăveni and Targu Mures and the
Company's products are sold on the
domestic market (70%) and on the
external market (30%).
Comppil*
6.5 Brief presentation of SIF Moldova’s subsidiaries (continued)
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
*Note: All amounts are presented in RON. The participation was sold in 2012. Please see note 31 from the
consolidated financial statements.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 48
The table below presents the comparative breakdown of assets based on individual and
consolidated financial statements prepared in accordance with IFRS.
85.69%
11.70%
0.99% 0.78%
0.83%
Individual financial statements
v
6.6 Comparative analysis of assets
Position in the statement of financial position Individual Consolidated Differences
Cash and cash equivalents 476,570 4,445,585 3,969,015
Deposits with banks 129,363,105 139,432,323 10,069,218
Financial assets at fair value through profit and loss 8,611,260 9,475,533 864,273
Available for sale financial assets 947,280,998 900,329,098 (46,951,900)
Held to maturity investments 1,362,653 1,362,653 -
Investment property 4,274,849 5,265,805 990,956
Intangible assets 1,277,508 2,331,817 1,054,309
Property, plant and equipment 10,987,918 59,250,495 48,262,577
Other assets 1,788,631 25,018,733 23,230,102
Total assets 1,105,423,492 1,146,912,042 41,488,550
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
KPMG comment
The IFRS accounting policies of subsidiaries have been aligned with those of the Group.
The difference between total assets in the individual and consolidated financial statements is 3.7%,
representing the cumulative effect of consolidation of subsidiaries’ assets with SIF Moldova’s assets after
specific consolidation adjustments to eliminate transactions and balances between entities within the
Group.
Note: All amounts are presented in RON
78.50%
12.16%
5.17% 0.83% 3.35%
Available for salefinancial assets
Bank deposits
Property, plantand equipment
Financial assets atfair value throughprofit and loss
Other assets
Consolidated financial statements
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 49
6.7 Comparative analysis of equity and liabilities
Position in the statement of financial position Individual Consolidated Differences
Borrowings - 3,799,397 3,799,397
Dividends payable 24,036,072 24,063,140 27,068
Provisions for risks and expenses 14,678,961 15,024,108 345,147
Deferred tax liability 47,906,177 42,556,325 (5,349,852)
Current tax payable 29,011,540 29,317,076 305,536
Other liabilities 19,081,154 25,192,901 6,111,747
Total liabilities 134,713,904 139,952,947 5,239,043
Share capital 487,811,190 487,811,190 -
Retained earnings 237,717,507 275,961,314 38,243,717
Reserves from the revaluation of property, plant and
equipment
9,076,661 11,505,507 2,427,846
Reserves from the revaluation of financial assets available
for sale 236,104,140 210,642,546 (25,461,594)
Total equity attributable to owners of the Company - 985,919,557 985,919,557
Non-controlling interests - 21,039,538 21,039,538
Total equity 970,709,588 1,006,959,095 36,249,507
134,713,904
970,709,588
139,952,947
1,006,959,095
Total liabilities Total equity
Individual Consolidated
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
KPMG comment
Total consolidated equity is separated in total equity attributable to owners of the Company and to non-
controlling interests. Non-controlling interests represent the portion of a subsidiary’s equity that is not
attributable, directly or indirectly, to the parent.
The difference between the individual and consolidated financial statements is determined by the
cumulative effect of consolidation of subsidiaries’ liabilities with those of SIF Moldova after specific
consolidation adjustments to eliminate transactions and balances between entities within the Group.
Note: All amounts are presented in RON
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 50
Position in the statement of comprehensive income Individual Consolidated Differences
Income
Dividend income 20,818,818 20,564,595 (254,223)
Interest income 3,719,234 4,535,568 816,334
Other operating revenue 12,336,209 49,819,186 37,482,977
Other income 233,445 - (233,445)
Gain from investments
Net gain on sale of assets 419,761,823 419,768,719 6,896
(Net loss)/ Net gain from re-measurement of financial assets
at fair value through profit or loss (592,898) (816,480) (223,582)
Expenses
Impairment losses on assets (12,889,744) (12,769,321) 120,423
Expenses relating to provisions for risks and charges (13,896,057) (13,901,959) (5,902)
Other operating expenses (35,184,416) (65,214,649) (30,030,233)
Other expenses (151,760) - 151,760
Operating profit 394,154,654 401,985,659 7,831,005
Finance costs - (640,534) (640,534)
Profit before income tax 394,154,654 401,345,125 7,190,471
Income tax (63,830,481) (64,522,187) (691,709)
Profit for the period 330,324,173 336,822,983 6,498,765
Other comprehensive income
Increases/ (Decreases) in reserves from revaluation of
property, plant and equipment, net of deferred tax 15,216 (74,595) 89,811
Transfer of revaluation reserve to retained earnings on
disposal of property, plant and equipment - (106,307) (106,307)
Change in fair value of available-for-sale financial assets, net
of deferred tax (118,723,568) (124,816,163) (6,092,595)
Decrease in reserve arising from sale of available-for-sale
financial assets (421,062,838) (421,062,838) -
Other comprehensive income (539,771,190) (546,059,902) (6,288,712)
Total comprehensive income for the period (209,447,017) (209,236,964) 210,053
6.8 Comparative analysis of comprehensive income
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
Note: All amounts are presented in RON
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 51
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
6.8 Comparative analysis of comprehensive income (continued)
KPMG comment
The net profit for the year differs insignificantly between the two sets of financial statements, i.e. by only
RON 6,498,765.
The differences between the statement of comprehensive income in the consolidated financial statements
compared to the individual financial statements are mainly due to the following factors:
the volume of income and expenses generated by the consolidated entities;
the different nature and object of activity of SIF Moldova compared with its subsidiaries.
Note: All amounts are presented in RON
-200,000,000
-100,000,000
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
Income Expenses Profit for the year
Individual Consolidated
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 52
6.9 Comparative analysis of key economic ratios
Liquidity ratios (number of times)
Liquidity ratios Individual Consolidated
Current ratio 2.44 3.05
Quick ratio 2.44 3.05
Activity ratios (number of times)
Activity ratios Individual Consolidated
Fixed asset turnover 0.47 0.50
Asset turnover 0.41 0.43
Profitability ratios (%)
Profitability ratios Individual Consolidated
Return on equity (ROE) 40.60 39.86
Return of assets (ROA) 29.88 29.30
Earnings per share 0.64 0.65
6 Impact of IFRS transition on
SIF Moldova Group at 31
December 2011
KPMG comment
The comparative analysis of the
two sets of ratios indicates that
the subsidiaries included in the
consolidation had an
insignificant influence on SIF
Moldova Group ratios, with a
slight improvement in liquidity
ratios, activity ratios as well as
in earnings per share.
Presentation of IFRS conversion impact for SIF Moldova | SIF Moldova | 53
SIF Moldova is prepared to continue the preparation of IFRS financial statements both
at individual and consolidated levels. We believe that financial reporting in accordance
with IFRS is more relevant to investors’ needs and better meets users’ information
requirements in the context of supporting and promoting a global financial
communication language, aimed at increasing transparency and relevance of financial
reports.
However, according to CNVM Instruction no. 6/2011, financial statements prepared in
accordance with IFRS for the financial year ended 31 December 2011 are intended
solely for the information of shareholders and CNVM, and must not be relied upon as
the basis of investment decisions.
Also, the financial statements prepared in accordance with IFRS for the year ended 31
December 2011 do not affect the rights of shareholders for dividends and have no
impact in terms of taxation.
Conclusions