Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Board of Directors’
REPORT
Separate Financial Statements
2023
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Dear shareholders ,
Claudiu Doroș
CEO and President of the Board of Directors
In 2023 we had an exceptional year, we achieved a net result of 203.75 million lei, representing an increase of 73% compared to the previous year. Investment performance continued to be at a high level and resulted in a record 2.95 billion lei in assets under management, an increase of 24.7% over the previous year-end, in a volatile environment of global financial markets and geopolitical uncertainties that impacted investors’ sentiment.
A significant contribution to these results was generated by the positive evolution of the financial-banking and energy-industrial portfolios, the two pillars of stability and performance included in our active investment strategy. The financial performance of our company is underpinned by a strategic investment approach, carefully constructed and updated annually at EVERGENT Investments Board level, applied to a rigorous and comprehensive system of corporate governance .
We have practiced active management of our resources, both sectorally and within specialised portfolios, by persistently following the financial planning, investment and risk procedures specific to a regulated and supervised fund. We have continuously analysed the national market and the companies we invest in, in a global context, to optimise the weightings of each exposure within the portfolios and extract returns in volatile conditions. At the same time, we have ensured a level of liquidity for opportunities offered by certain market circumstances.
We continued to build investor confidence through outstanding and continued performance. Thus: EVERGENT's total return on assets (including dividends paid to shareholders) was 31.85% in 2023, compared to the annual return of the best performing AAF member funds in Romania, and over the last 10 years we have achieved a compound return of 140%.
In the last 15 years we have paid over 1 billion lei in dividends and share buybacks, directly benefiting our shareholders.
The financial performance of recent years and the long-term strategy prove that :
We return value to shareholders on a consistent and predictable basis
We are boosting the evolution of the company for the benefit of the shareholders
We generate
economic growth
and value for
the entire
stakeholder
spectrum
We achieved each of our three core objectives: evolution, growth and shareholder remuneration through: allocated dividends of 82.7 million lei and buyback programmes of 38.8 million lei. The dividend yield on the share price was 7.26%, calculated on ex dates .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Board Report 2023 Separate Financial statements
Company Performance
Total value of assets under management
2.95 billion lei
an increase by 24.7% compared to 2022
Net asset value
2.66 billion lei
an increase by 20.4% compared to 2022
Net asset value per share
2.9296
lei
an increase by 23% compared to 2022
Net result
203.75 million lei
The net result registered in 2023 is comprised of 124.73 million lei net profit and 79.02 million lei net gain on the sale of financial assets reflected in retained earnings. We have thus exceeded the target approved by shareholders in Budget 2023 by 158%
Value of investment in securities
197.2 million lei
2
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Therefore our main objectives are :
Portfolio Structure
Board Report 2023 Separate Financial statements
We
are
convinced
that
active
management
of
the
EVERGENT
Investments
portfolio
effectively
raises
capital
for
our
shareholders.
Thus,
the
listed
portfolio
is
constructed
through
a
dynamic
allocation,
different
from
the structure of the BVB indices. Therefore, we have the proven our ability to generate alpha
.
Reported to the total value of assets under management, the quoted equity portfolio has the largest share of 69.7%, while the share of unquoted equities is 8.9%. The financial-banking sector remains the main sector in the portfolio structure with 45.3% and the energy-industrial sector with 21.5% of the total value of assets.
Investment Strategy
Our
investment
philosophy
translates
into
continually
building
on
ideas
and
opportunities.
EVERGENT
Investments'
strategy generates long-term performance through calibrated investment policies on each managed portfolio
.
Given that sustainability is of paramount importance, we are committed to integrating ESG principles into our investment analysis, as well as into the company's risk profile and return on assets. By approaching realities and perspectives responsibly and transparently, we protect and multiply the value of the assets managed by the company, for the benefit of shareholders and all stakeholders EVERGENT Investments .
Increase of investments in the
Private equity Portfolio
– especially in agribusiness and real estate.
Increase of performance for Financial-Banking
and Energy – Industrial Portfolios
through their active management.
These portfolios are the main income generators and sources for new investments.
Capitalization of Sell Portfolio, through the sale of the portfolio of shares stemming from the privatization process.
Private equity type investments, the Company’s differentiator contribute to the long-term return on assets
under management and can compensate for the risk generated by the high volatility of
listed securities
in the
portfolio
.
We assign resources following a fundamental analysis process that identifies long-term resilient business
models. Consequently, we implement a customised strategy for each individual project. Our goal is to create
stronger companies and long-term sustainable value
.
3
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Iași Real- estate Project
Located
on
a
2.55
ha
plot
of
land
in
Bd.
Primăverii,
nr
2,
the
project
is
a
multifunctional
residential
development
with
offices
and
commercial
functions,
with
PUZ
approved
on
28
th
February
2022.
The
project,
with
a
development
value
of
more
than
100
million
euro,
is
a
major
urban
conversion
project
from
a
former
unused
industrial
area
to
the
newest
central
urban
hub
in
Iasi.
The
construction
phase
has
not
started
due
to
geopolitical
uncertainties
in
the
region
.
Project
Town planning indicators of PUZ for M1 area are the following: POT max 45%, CUT max 4 and Rh max
S/Ds+P+20E, and for M2 area: POT max 45%, CUT max 2,5 and Rhmax S/Ds +P+16E, with a total area
of 83,800 square meters of which 16,765 square meters of offices, 62,870 square meters for living area,
850 apartments, 4,191 sqm for additional services, 6,000 sqm green area and corresponding parking
lots, mainly underground.
4
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
R e a l - e s t a t e P r o j e c t
- w i t h 5 0 % h o l d i n g t h r o u g h S t r a u l e s t i L a c A l f a S A , t a r g e t s t h e c o n s t r u c t i o n i n 4 p h a s e s o f a r e s i d e n t i a l c o m p l e x t h a t i n c l u d e s 1 . 3 7 8 a p a r t m e n t s , l o c a t e d i n t h e N V a r e a o f B u c h a r e s t M u n i c i p a l i t y , i n t h e v i c i n i t y o f C o l o s s e u m R e t a i l P a r k w i t h e a s y a c c e s s t o t h e n o r t h e r n p a r t o f t h e c a p i t a l c i t y
.
P
h
a
s
e
1
b
u
i
l
d
i
n
g
a
n
d
s
a
l
e
w
i
t
h
1
6
0
a
p
a
r
t
m
e
n
t
s
i
s
c
o
m
p
l
e
t
e
d
.
P
h
a
s
e
2
i
n
c
l
u
d
e
s
a
n
u
m
b
e
r
o
f
398
apartments,
was
completed
in
December
2021
and
329
apartments
were
sold.
At
present
we
are
currently
running
the
construction
of
Phase
3
with
350
apartments,
according
to
nZeb
energy
efficiency
standards.
This
phase
will
be
completed
in
the
3
rd
quarter
of
2024.
P r o j e c t
Phase 1 - c o m p l e t e d
Phase 2 - c o m p l e t e d
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
BD Report 2 0 2 3 S e p a r a t e F i n a n c i a l S t a t e m e n t s
Running and/or Completed Projects
- with 100% holding through Agrointens SA and EVER Agribio SA (set-up in 2022 ) , t h e p r o j e c t i s a b o u t i n t e n s i v e a g r i c u l t u r e w i t h h i g h a d d e d v a l u e . W e a r e l e a d e r s i n b l u e b e r r y p r o d u c t i o n w i t h a p l a n t e d a r e a o f 1 0 5 h a . B l u e b e r r y p r o d u c t i o n i s a s c a l a b l e b u s i n e s s . W e a l r e a d y h a v e 5 0 h a o f l a n d i n p r e p a r a t i o n a t t h e E V E R A g r i b i o f a r m .
"Blueberry Farm” Project
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
-In "Veranda Mall" Project we have an indirect holding of 37% through Professional Imo Partners SA and Nord SA. The leasable area is approximately 34,000 sqm of commercial galleries. Veranda also has a multiplex cinema with 12 screening rooms. The company has fine-tuned a photovoltaic system located on the building that will cover 20-30% of the electricity used for heating, cooling and lighting the mall. This is part of the strategy to develop clean energy sources and is an important step towards decarbonisation and the fight against climate change. Decreasing energy consumption and developing cleaner energy sources are key to achieving the company's climate targets and addressing its dependence on external sources and reducing its carbon footprint. Veranda's business has steadily improved and surpassed pre-pandemic levels .
A3 Snagov Real Estate Project, full EVERLAND holding
- an integrated residential project in Snagov area shall be developed on an area of 5ha.
- we are currently working on PUZ documentation
Future Real-Estate Projects in Bucharest
- 99.99% holding through EVER- IMO.
Thank you, on behalf of EVERGENT Investments’ team!
Respectfully yours,
Claudiu Doroș
CEO and president of the Board 5
Image should be here
P r o j e c t Spătarul P r e d a
shall
be
developed
on
11.480
sqm
land
in
the
semi-central
area
of
Bucharest,
with
good
perspectives
in
the
residential
segment.
Image should be here
P r o j e c t Piscul M o ș u l u i
Another
project
in
preparation
on
a
19,000
sqm
plot
of
land,
located
in
an
area
with
residential
development
potential
in
the
North
of
the
Capital.
It
will
go
ahead
after
the
PUZ
coordinates
in
the
area
have
been
released
.
Image should be here
P r o j e c t Intrarea S t r ă u l e ș t i
We
are
currently
preparing
the
urban
planning
documents
for
a
residential
real
estate
project
on
a
16,000
sqm
plot
of
land
in
the
north
of
Bucharest,
an
area
that
will
be
a
new
premium
financial
and
residential
hub
.
Image should be here
T
h
r
o
u
g
h
E
V
E
R
I
M
O
w
e
c
o
n
t
i
n
u
e
t
h
e
d
e
v
e
l
o
p
m
e
n
t
o
f
t
h
e
p
r
i
v
a
t
e
-
e
q
u
i
t
y
p
o
r
t
f
o
l
i
o
i
n
t
h
e
r
e
s
i
d
e
n
t
i
a
l
r
e
a
l
-
e
s
t
a
t
e
s
e
c
t
o
r
b
a
s
e
d
o
n
a
p
o
r
t
f
o
l
i
o
o
f
l
a
n
d
s
.
T
h
e
n
o
r
t
h
e
r
n
a
r
e
a
o
f
B
u
c
h
a
r
e
s
t
i
s
g
r
o
w
i
n
g
r
a
p
i
d
l
y
a
n
d
e
x
t
e
n
s
i
v
e
l
y
,
b
o
t
h
i
n
t
h
e
r
e
s
i
d
e
n
t
i
a
l
a
n
d
o
f
f
i
c
e
s
e
g
m
e
n
t
s
.
E
V
E
R
I
m
o
a
i
m
s
t
o
d
e
v
e
l
o
p
r
e
a
l
-
e
s
t
a
t
e
p
r
o
j
e
c
t
s
i
n
t
h
i
s
r
e
s
i
d
e
n
t
i
a
l
h
u
b
o
f
g
r
e
a
t
f
u
t
u
r
e
,
a
s
w
e
l
l
.
Image should be here
BD Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
6
Image should be here
Board Report 2023 Separate Financial Statements
Contents
1. Activity Analysis
1.1. Performances
1.2. Portfolios. Strategies. Results. Objectives
1.2.1. Financial – Banking Portfolio
1.2.2 Energy-Industrial Portfolio
1.2.3. Private Equity Portfolio. EVERGENT Investments Group
1.2.4. Sell Portfolio
1.2.5. 2023 Investment Plan Implementation
1.2.6. Perspective elements regarding EVERGENT Investments’ activity. 2024 Targets. 2024 Uncertainties and Risks
2. Risk Management
2.1. Risk Management Policy
2.2. Risk Profile
2.3. Mai risks that the Company is exposed to
2.4. Crisis simulations
3. Financial Position and Performance
3.1. Comprehensive income. Management Expenses. Financial Position
3.2. Performance Indicators
3.3. Income and expense achievement degree
3.4. Tangible Assets
3.5. Personnel remuneration for financial year 2022
4. EVER Share
4.1. Dividend policy
4.2. Acquisition of own shares
5. Company Management
6. Human Resource Management
7. Internal Audit Department
8. Compliance Department
9. Legal Assistance, Consultancy and Representation Activity
10. Corporate Governance
10.1. Relationship with investors
10.2. Ensuring business continuity
10.3. Application of corporate governance principles in accordance with FSA Rule no. 2/2016
10.4. Involvement Policy
10.5. IT Safety
11. Aspects related to ESG. Social Responsibility
12. Activity for the prevention and fight against money laundering and the financing of terrorism de
13. Surveillance of the implementation of international capital market sanctions
14. Subsequent events
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
7
Image should be here
Board Report 2023 Separate Financial Statements
Annexes:
1. Annex 1 – Net asset statement on 31.12.2023
• Annex 1.1. Statement of EVERGENT Investments’ Assets and Liabilities (FSA Reg. no. 7/2020 – Annex 10)
• Annex 1.2. Statement of Assets and Detailed Statement of Investments of EVERGENT Investments (FSA Reg. no. 7/2020 – Annex 11)
2. Annex 2 – Separate financial statements on 31 st December 2023 prepared in accordance with Accounting regulations compliant with the International Financial Reporting Standards (IFRS) applicable to entities authorized, regulated and supervised by FSA in the Financial Instruments and Investments Sector, approved by FSA Rule no. 39/ 2015
3. Annex 3 – Statement of Litigations on 31.12.2023
4. Annex 4 - BVB, FSA Reports – 2023
5. Annex 5 – Statement regarding the application of corporate governance principles – according to FSA Reg. no. 9/2019
6. Annex 6 – Statement on the application of corporate governances principles – according to BVB Corporate Governance Code
7. Annex 7 - Remuneration report for the financial year 2023 in accordance with the Remuneration Policy approved by the EVERGENT Investments Ordinary General Meeting of Shareholders for the members of the management structure (managers and directors)
8. Annex 8 – Report on the activity carried out by the Appointing –Remuneration Committee in 2023
9. Annex 9 – Statement of the individuals responsible with the preparation of the individual financial statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
8
Image should be here
Board Report 2023 Separate Financial Statements
Annual report in accordance with: Law no. 24/2017 on the issuers of financial instruments and market operations. FSA Rule no. 5/2018 on the issuers of financial instruments and market operations, FSA Rule no. 39/2015 on the approval of accounting regulations compliant with International Financial Reporting Standards, applicable to entities authorized, regulated and supervised by FSA.
Report date: 25 th March 2024
Issuer name: EVERGENT Investments SA
Headquarters: Pictor Aman Street, no. 94 C, Bacău
Phone/fax/email: 0234576740 / 0234570062 / office@evergent.ro
Tax identification code: 2816642
EUID: ROONRC J/04/2400/1992
LEI: 254900Y1O0025N04US14
Subscribed and paid-up capital: 96,175,359.2 lei
Number of issued shares: 961,753,592
Nominal value: 0.1 lei/share
Shareholding structure: 100% private
Free float: 100%
FSA Registry number: PJR09FIAIR/040003
Regulated market on which issued securities are traded : Bucharest Stock Exchange, Premium category
International identifiers: Bucharest Stock Exchange: EVER; ISIN: ROSIFBACNOR0; Bloomberg FIGI: BBG000BMN55 6 ; Reuters RIC: ROEVER.BX
Field of activity
Legal Framework - EVERGENT Investments SA (“the Company” or “EVERGENT Investments”) EVERGENT Investments SA is classified, according to applicable regulations as Alternative Investments Fund of the Investment Companies Type – F.I.A.S., category: Retail Investor Alternative Investment Fund (RIAIF), with a diversified investment policy, closed-end, self-managed, authorized by the Financial Supervisory Authority with Permit no. 101/25.06.2021 and functions abiding by the provisions of Law no. 74/2015 on the managers of alternative investment funds, Law no. 24/2017 on the issuers of financial instruments and market operations, Law no. 243/2019 on the regulation of alternative investment funds, Companies’ Law no. 31/1990 and FSA regulations issued to apply primary law.
The purpose of the Company is to manage and increase the value of assets under management.
The main field of activity of the Company is financial investments.
Its activity object consists in:
a) portfolio management;
b) risk management;
c) other auxiliary and related activities to collective management, allowed by the law in force.
Image should be here
Image should be here
INVESTMENT COMPANY TYPE EVERGENT Investments is an AIFM positioned mainly on Romanian market, as a closed fund for retail investors (FIAIR), investing mainly in shares, with an average risk degree and temporary liquidity investments in fixed rate instruments.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
9
Image should be here
Board Report 2023 Separate Financial Statements
1. Activity Analysis
1.1. Performances
Value of assets under management
Indicator
2021
2022
2023
2023/2022 %
Total assets (mil lei)
2,553
2,365
2,949
+24.7
Net asset (mil lei)
2,383
2,215
2,666
+20.4
NAVPS (lei)
2.49
2.38
2.93
+23.0
Market price (lei)
1.22
1.37
1.27
-7.3
* Calculation method for net asset of EVERGENT Investments SA – page 11
NAVPS / EVER price
Portfolio structure
Assets structure
(% of total assets value)
2021
2022
2023
Shares, of which:
79.1
82.2
78.6
- listed
70.2
71.4
69.7
- unlisted
8.9
10.8
8.9
Non UCITS +UCITS (fund units)
12.3
11.2
9.3
Monetary instruments (deposits, availabilities)
6.3
4.5
10.2
Other assets
2.3
2.1
1.9
Image should be here
0.0000
0.5000
1.0000
1.5000
2.0000
2.5000
3.0000
3.5000
Dec'22
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
Dec'23
NAVPS (RON)
EVER Price (RON)
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
10
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
N O . O F C O M P A N I E S
3 4
3 0
3 0 3 0
2 0 2 1
2 0 2 2
2 0 2 3
Portfolio structure on 31 st December 2023 (% of total assets value)
Number of companies in the portfolio
Sectorial exposure
Sectorial exposure (% of total assets value)
2021
2022
2023
Financial
44.8
42.2
45.3
Energy
13.2
17.3
14.0
Industrial
8.8
8.7
7.5
Real-estate
6.6
7.6
6.7
Other sectors
5.7
6.4
5.1
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
1.9
8.9
9.3
10.2
69.7
other assets
unlisted shares
fund units
money instruments
listed shares
Image should be here
Image should be here
Objective:
Decrease the number of holdings and increase the exposure per issuer, in order to increase the efficiency of the management act .
Image should be here
Image should be here
Objective:
Maintaining the main weight in shares, namely listed shares
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
11
Image should be here
Board Report 2023 Separate Financial Statements
Sectorial exposure – 31 st December 2023 (% of total assets value)
Top companies/holdings in the portfolio – 31 st December 2023
TOP COMPANIES IN THE PORTFOLIO
% holding of the issuer’s share capital
> 1% of total assets value
BANCA TRANSILVANIA
5.99
39,3
OMV PETROM
0.95
11,5
AEROSTAR
15.17
6,9
BRD - GROUPE SOCIETE GENERALE
0.92
3,9
STRĂULEȘTI LAC ALFA
50.00
2,3
PROFESSIONAL IMO PARTNERS
31.42
2,3
ROMGAZ
0.33
2,2
EVERLAND
99.99
1,7
AGROINTENS
99.99
1,5
EVER IMO
99.99
1,5
CASA
99.77
1,2
TRANSILVANIA INVESTMENTS ALLIANCE
4.78
1,1
TOTAL
75,4
Method of calculation of the net asset value of EVERGENT Investments S
A
The assessment of EVERGENT Investments SA assets is made with the application of assessment methods that are specific for each assets category, in accordance with the provisions of FSA Regulation no. 9/2014 and FSA Regulation no. 10/2015 on the management of alternative investment funds, with its later amendments and additions.
The company annually revises its assets assessment policies and procedures and informs investors about them, according to legal provisions. Thus, through current report on 28 th February 2024, we have informed the market about the revision of the policies and procedures for the assessment of assets and the fact that they are available on the website
www.evergent.ro
, namely:
1. “Assessment policies and procedures for assets and for calculating the net asset unit value per share”.
2. “Assessment rules and procedures for EVERGENT Investments’ assets”.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
5.1
6.7
7.5
14.0
21.4
45.3
other sectors
real-estate
industrial
energy
other assets
financial
Image should be here
Image should be here
Objective:
Optimization of the financial- banking and energy- industrial sectors as stability pillars of the portfolio
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
12
Image should be here
Board Report 2023 Separate Financial Statements
By decision of the Board of Directors, it was decided that the equity interests of issuers for which the market is not active should be valued in accordance with the law at fair value as determined by a valuation report prepared in accordance with the international valuation standards in force. The decision is based on the internal analysis carried out by applying IFRS 13 "Fair Value Measurement", which revealed that, for the shares of these companies, valuation by marking to market is not relevant because the market is not active.
Thus, the decision-making was based on internal analyses of the liquidity of shares of issuers listed on the regulated market or on the AeRO market. For each of these, whether or not the respective share market is an active market, the recommendations of IFRS 13 "Fair Value Measurement" on "active market", defined as "a market in which transactions in the asset or debt in question take place at a volume and frequency sufficient to provide price information on a consistent basis", were followed. EVERGENT Investments maintains this assessment method for a period of at least one calendar year.
Issuers' shares, which are valued at fair value determined by valuation report, are presented in a separate category, "listed shares - no active market" in the "Statement of Assets and Liabilities of EVERGENT Investments", Annex 10, prepared in accordance with ASF Regulation no. 7/2020, in the monthly net asset report to the BVB which is also posted on its website.
On 31.12.2023, listed securities for which the analysis has shown that the market is not active and which have therefore been valued at fair value as determined by a valuation report are : Nord SA [NORD], Professional Imo Partners SA [PPLI], Brikston Construction Solution SA [BKS] and Mecanica Ceahlău SA [MECF].
The four issuers have maintained in 2023 the selected valuation method (fair value through valuation report prepared in accordance with international valuation standards).
In summary, the most representative inactive market benchmarks identified for each of the 4 issuers are:
1. Nord SA - As regards the liquidity of NORD securities, trading volume was low, only 0.03% of total shares accumulated in the last six months, with price volatility between 10% and 50%.
2. Professional Imo Partners SA – the number of transactions in this issuer's shares was very low, ranging from a minimum of 2 transactions to a maximum of 5 transactions per month in the last six months, the volume of transactions was low, only 0.01% of the total shares, with a price volatility above 50%.
3. Brikston Construction Solution SA – there were only 36 transactions in BKS shares in the last 6 months, the cumulative half-year trading volume was only 0.26% of total shares, sporadic transactions.
4. Mecanica Ceahlău SA – there were only 137 trades in MECF shares in the last 6 months, trading volume was low and declining during 2023, with a price volatility cap of 50%. Cumulatively, over the past 6 months, the average number of shares traded per month was only 0.028% of the total issued.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
13
Image should be here
Board Report 2023 Separate Financial Statements
2023/2022 Comparative evolution within the sector
EVERGENT Investments has the best dividend yield of 7.3% within its sector and ranks second in terms of market capitalization with 1.22 billion lei at the end of 2023.
mil lei
LION
EVER
TRANSI
SIF4
INFINITY
Net asset 31.12.2023
3,982.79
2,665.95
1,718.36
2,277.07
2,792.75
Net asset 31.12.2022
3,238.77
2,214.74
1,358.16
1,854.56
2,105.60
NAV evolution 23/22%
22.97%
20.37%
26.52%
22.78%
32.63%
Liquidities 31.12.2023*
408.81
311.24
60.20
208.35
69.09
Liquidities 31.12.2022*
26.62
105.77
47.17
139.59
15.12
Liquidity evolution 23/22%
1,435.73%
194.26%
27.62%
49.26%
356.94%
Result of the period 31.12.2023
337.25
124.73
228.32
212.97
67.68
Result of the period 31.12.2022
95.47
82.85
63.72
-33.22
164.81
Capitalization 31.12.2023
1,314.45
1,221.43
704.96
1,188.74
950.00
Capitalization 31.12.2022
1,233.25
1,317.60
596.83
941.57
860.00
Capitalization evolution 23/22%
6.58%
-7.30%
18.12%
26.25%
10.47%
NAVPS 31.12.2023
7.8630
2.9296
0.7952
2.9918
5.8795
Price 31.12.2023
2.590
1.270
0.326
1.515
1.900
Price/NAVPS discount 31.12.2023
-67.1%
-56.6%
-59.0%
-49.4%
-67.7%
Price/NAVPS discount 31.12.2022
-61.9%
-42.5%
-56.3%
-50.7%
-61.2%
2022 Dividend
0.000
0.090
0.014
0.000
0.000
DY%
0.00%
7.26%
4.76%
0.00%
0.00%
No. shares
507,510,056
961,753,592
2,162,443,797
784,645,201
500,000,000
Net asset 31.12.2023
3,982.79
2,665.95
1,718.36
2,277.07
2,792.75
*availabilities, deposits, state titles
1.2. Portfolios. Strategies. Results
EVERGENT Investments has four portfolios defined: FINANCIAL – BANKING, ENERGY- INDUSTRIAL, SELL and PRIVATE EQUITY. The management of portfolio holdings was made on the lines of the multiannual coordinates and 2023 Activity Program, namely:
✓ Increase for Private-Equity Portfolio- “private equity” type-approach within existent major holdings (real-estate, agriculture, other sectors).
✓ Performance increase for Financial – Banking and Energy-Industrial Portfolio – listed portfolios that provide liquidity to EVERGENT Investments assets, representing the main income and sources generators for new investments.
✓ Restructure for SELL Portfolio– sale of the historic share portfolio stemming from the privatization process.
EVERGENT Investments is a long-term investor; therefore investment performance is a key objective in our business. Our investment philosophy is focused on growth, in a wider universe of opportunities through the possibility of investing in real estate assets, in corporate bonds not admitted to trading, shares of limited liability companies whose annual financial statements are audited in accordance with the law and other instruments.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
14
Image should be here
Board Report 2023 Separate Financial Statements
As an investment perspective in the coming years, we will continue our exposure in agribusiness and real estate, but we can also develop our activity in areas that intersect with the two major themes of global and national interest: technological evolution and environmental protection.
Context
The fourth quarter of 2023 delivered high returns in the equity markets, with the BVB once again at the top of the rankings.
Although not as good as the third quarter, the fourth quarter of 2023 still brought significant stock market gains for BET-BK and its constituent stocks.
The BET-BK index gained 12.48%, similar to the German DAX (+13.56%) and the US S&P 500 (11.24%), but below the Hungarian BUX (15.56%).
The Polish WIG20 index had the highest quarterly increase, up 35.82%. The worst performers were the Slovak SAX index, down 1.05%, and the Bulgarian SOFIX index, up only 5.6%.
Among the countries with the highest stock market appreciation in 2023 are some Eastern European countries, which were hit the previous year by the outbreak of war in Ukraine. Hungary, Poland, Romania and Bulgaria all recorded significant annual increases.
Index
%
Q4 evolution 2023
%
12 months’ evolution
BET
7.20
31.78
BET-BK
12.48
35.13
BUX
15.56
50.10
Nasdaq Composite
13.56
43.42
DAX
13.56
24.64
CAC 40
10.27
20.71
PX
7.56
18.93
SAX
-1.05
-3.04
SOFIX
5.6
31.78
S&P 500
11.24
24.23
WIG 20
35.82
46.26
1.2.1. Financial-Banking Portfolio
The financial-banking sector is the main investment pillar of EVERGENT Investments, accounting for 45.3% of total assets at 31 st December 2023, up from 42.2% in the same period last year.
Following the shocks induced by the pandemic crisis and the worsening geopolitical situation in the region following the conflict in Ukraine, the macroeconomic environment has been marked by strong inflationary pressures, an accelerating trend of rising market interest rates and increased volatility. At the end of 2023, the global macroeconomic climate improved marginally, due to a moderation of inflationary pressures. The annual inflation rate accelerated its faster-than-expected decline in the first two months of the fourth quarter of 2023, falling to 6.72% in November from 8.83% in
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
15
Image should be here
Board Report 2023 Separate Financial Statements
September, under the impact of further significant declines in food and energy price dynamics, as well as the effect of lower fuel prices amid the decline in oil prices .
The banking sector has managed to maintain an adequate financial and prudential position without transmitting or amplifying risks to the real sector. In Romania, the banking system shows good capitalisation and liquidity buffers. The Romanian banking system has prudential indicators of solvency, profitability and balance sheet structure better than the European average, which are placed in the best prudential ranges set by the European Banking Authority (EBA).
BNR statistics indicate a general decline in net interest margins in the banking sector in November 2023, influenced by a number of factors, including the deterioration of activity in the real economy, monetary policy decisions and signals (Eurozone, US and Romania) and the climate in international financial markets. Data from the National Bank of Romania show that non-government credit grew for the seventh consecutive month in November, with the monthly pace accelerating at 0.6% to RON 384.2 billion, a historical high. Loan-to-deposit ratio fell from 69.64% in October to 69.16% in November.
According to BNR, the non-performing loan rate fell for the fourth month in a row in November, at a monthly pace of 0.05 percentage points, to 2.42%. On the other hand, there is a risk of an increase in the domestic NPL ratio in the coming quarters, amid lower annual economic activity dynamics and the upward trend in real financing costs.
BNR quotes the following as the main challenges for banking sector developments in 2024: heightened risk perceptions in international financial markets, the difficult global and European macroeconomic climate (in the context of continuing geopolitical tensions), the critical state of public finances and the domestic electoral context, the prospect of rising non-performing loans (NPLs), continued digital transformation, persistently high regulatory requirements, and climate change and their impact.
Risks to the evolution of the exchange rate of the leu remain high, due to the still significant size of the external imbalance and the uncertainties associated with the fiscal consolidation process, but also due to the narrowing domestic interest rate differential compared to developed countries.
BANCA TRANSILVANIA (TLV) – the largest banking institution in the system, remains the main holding providing stability and growth to the EVERGENT Investments portfolio.
Banca Transilvania is the largest bank in Romania and South-Eastern Europe. As a universal bank, it covers all customer segments and business lines in the financial sector. It ended 2023 with 4 million customers, 6 million cards, 10,000 employees and a 21% market share. The bank is developing state- of-the-art online banking solutions and a strong nationwide branch network.
Banca Transilvania is the strongest Romanian brand, with an elite AAA+ rating according to Brand Finance's Romania 50 2023. With a brand value increasing by 25% in 2023 compared to the previous year, BT reached a value of 494 million euros, ranking 4th in the top of the most valuable Romanian brands. At the same time, for the second consecutive year, BT is in the top 10 strongest banking brands worldwide.
TLV shares have generated shareholder value year after year and are included in the FTSE Global Equities Index Series (2020), making it one of the most liquid issuers listed on the BVB. Banca Transilvania maintained a very good ESG Risk Rating of Low Risk during 2023, following Sustainalytics analysis. BT's rating was 15.1 in 2023, compared to 17 in 2022, Low Risk in both years and ranks BT 106th (compared to 133rd in 2022) out of over 1,000 banks analysed globally .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16
Image should be here
Board Report 2023 Separate Financial Statements
Since 2023, the bank is rated by two international rating agencies, Moody's and Fitch. Capital requirements are increasingly stringent in Romania and the European Union, so the accreditations support BT's efforts to maintain the best possible cost of capital.
EVERGENT Investments has implemented an internal exposure management mechanism, subject to TLV share price fluctuations, so that legal and prudential limits on ownership per issuer (40%), per Group (50%) and in the bank's share capital (10%) are abided by.
The increase in the share price in the market triggered the activation of the internal mechanism at the end of 2023, with marginal sales of the TLV share portfolio held.
Banca Transilvania achieved a net profit of RON 2.49 billion at the end of 2023, up 14% compared to the profit achieved at the end of 2022. At the end of December 2023, ROE exceeded the banking system average of 20.4%, reaching 24.4% on an individual basis, according to the bank's reports .
During 2023, 12.86% bonus shares were distributed to shareholders, as has been the practice in recent years. The bank also distributed dividends from 2022 profits, as well as from other years' reserves, in the total amount of RON 902.5 million, with a gross dividend/share of RON 1.13 .
In order to meet the legal requirements for MREL-eligible debt, valid at European level, Banca Transilvania sold bonds amounting to EUR 990 million until August 2023. In November 2023, it completed its first Dublin-listed ESG bond issue with a social and a green component for EUR 500 million with an interest rate of 7.25%, which was subscribed within hours .
BRD - SOCIETE GENERALE (BRD) – is the third largest bank in Romania, with an established business model oriented towards the retail segment. BRD recorded remarkable financial results at the end of 2023.
The bank has performed very well financially year after year and remains a strong and resilient bank. The business model is moderate risk focused exclusively on the domestic market and diversified lending. The bank aims to grow in a healthy and steady way, supporting the transition of the Romanian economy towards sustainability .
BRD Groupe Société Générale received the "Best Trade Finance Provider" award from the US publication Global Finance in the annual "The World's Best Trade Finance Providers 2024" competition, which recognises the best providers of trade finance products and services in over 100 countries and territories.
In recent years, the bank has distributed 70% of its annual profits as dividends to shareholders.
From the profit made in 2022, the bank approved the distribution of dividends at the AGM on 14 December 2023. Dividends were paid to shareholders on 26 th January 2024. The dividend distributed per share was 0.9226 lei/share, corresponding to a payout of 50% of the net profit made and with a dividend yield of 5%. The bank also announced on 08 th February 2024 that it will pay shareholders a gross dividend of 1.4070 lei/share, representing a payout of 60% of 2023 profit.
In 2023, the bank granted new loans worth almost 7.7 billion lei, up 13% from the end of 2022, leading to a 13% increase in gross operating income.
Thus, 2023 performance was excellent, and net income marked a robust 24% y/y growth .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
17
Image should be here
Board Report 2023 Separate Financial Statements
BRD's capital position is sound, with a capital adequacy ratio of 21.5% in December 2023 (on an individual basis, with own funds including 40% of the profit for H1 2023, an upfront incorporation already approved by BNR), according to the report published by the bank.
Transilvania Investments Alliance (TRANSI)
Holdings of TRANSI shares represented 1.14% of the total assets of EVERGENT Investments as at 31.12.2023. The Company aims to increase the value of assets under management by maximising aggregate returns and continuing the process of portfolio restructuring, improving portfolio liquidity and promoting attractive shareholder remuneration instruments. Transilvania Investments aims to maximise the potential offered by the main lines of business, i.e. tourism, real estate, industry and private equity.
BVB
EVERGENT Investments contributes to the development of the Romanian capital market, and the 4.33% ownership, an important position in the BVB shareholding, brings value to our shareholders by supporting BVB projects.
In 2023, the largest initial public offering (IPO) in Europe took place on the Bucharest Stock Exchange: RON 9.3 billion (EUR 1.8 billion) through the listing of 20% of Hidroelectrica.
The total trading value recorded in 2023 on all markets, with all types of financial instruments, exceeded 38 billion lei, up 58% from the previous year.
Average daily liquidity on all types of instruments listed on the Main Market (PP) and the Multilateral Trading Facility (MTF) reached 153 million lei. This represents a 60% increase from 2022, underlining investor confidence in the efficiency and transparency of the capital market.
The Bucharest Stock Exchange (BVB) share price rose 86% in 2023, to 65.6 lei/share, corresponding to a capitalization of 528 million lei (106.2 million euros). During 2023, BVB shares traded between a low of 35.6 lei (3 January 2023) and a high of 73 lei (17 - 19 November 2023).
The main BET index climbed 32% and the BET-TR 40%. The BET-TR index had the best performance in the region in 2023.
A record €5.5 billion was raised through 34 share and bond listings.
The BVB will continue in 2024 the projects launched in recent years, such as the Central Counterparty, the BVB Research Hub portal and the project of ESG analysis coverage of listed companies.
Recalibration of the unit trust portfolio
During 2023, EVERGENT Investments continued to reduce its exposure per fund unit, with holdings in three funds being redeemed. Full redemptions of holdings in the funds were made: FIA Multicapital Invest, FDI STAR Focus and FDI STAR Next.
This provided new liquidity resources to support ongoing investment programmes, with a focus on the financial-banking, energy and private equity sectors. The gradual capitalisation of holdings in fund units, as part of liquidity management, makes an important contribution to meeting the resource requirements for the current investment programmes.
1.2.2. Energy-Industrial Portfolio
The share of the Energy-Industrial portfolio was 20.8% of total assets at 31 st December 2023,
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
18
Image should be here
Board Report 2023 Separate Financial Statements
compared to 24.8% at 31 st December 2022.
EVERGENT Investments' strategy is to invest in projects and economic activities that have a significant positive impact on the climate and the environment, that respect social and governance principles according to their potential to grow and provide sustainable and possibly higher returns compared to other investment opportunities in the market.
EVERGENT Investments focuses on the growth rates of company profits, but also on the sustainability of these profits. EVERGENT Investments assesses investments for sustainability according to an internally developed methodology that analyses environmental, social and governance criteria. The sustainability assessment of investments is carried out on the basis of publicly available data in the case of listed companies or data obtained from the management of unlisted issuers. The information from the own ESG assessment supports the investment decision and complements the other elements of the analysis, representing an advantage/disadvantage in selecting an investment. EVERGENT Investments is constantly considering the possibility of allocating capital to projects in economic sectors that support the transition to a sustainable, low-carbon economy. We believe that this area can include agriculture and renewable energy industries (hydro, photovoltaic).
OMV PETROM (SNP) - OMV Petrom S.A.'s management proposed a gross basic dividend of 0.0413 lei/share for the financial year 2023, which translates into an annual increase of 10%, at the upper limit of the 5-10% range set out in the dividend policy. It also announced its intention to propose a special dividend in 2024.
Consolidated sales revenue of 38,808 million lei in 2023 decreased by 37% compared to 2022, negatively influenced by lower gas and oil prices and lower volumes of electricity sales, only partially offset by higher volumes of natural gas sales. The operating result in 2023 decreased to RON 7,554 million, compared to RON 12,039 million in 2022, largely due to lower market prices and lower asset availability as a result of planned maintenance activities, mainly at Petrobrazi refinery and Brazi power plant.
In 2023 net profit was 4,030 mil lei compared to 10,301 mil lei in 2022.
The decrease in profitability in 2023 was due to lower contributions from all business segments, mainly as a result of lower refining margins and lower utilization rates due to the overall refinery turnaround in the Refining and Marketing segment, lower prices in the Exploration and Production segment, and lower natural gas margins from both third-party transactions and natural gas transactions from own production in the Gas and Power segment.
Solidarity contributions on refined crude oil in the amount of 1,485 million lei for the year 2022 and in the amount of 1,244 million lei for the year 2023 were recorded in the profit and loss account of the year 2023.
We believe that the Neptun Deep project will keep the company's profitability high in the long term. Under the current regulatory framework, OMV Petrom has the ability to achieve profitability above 2023 in the long term.
OMV Petrom, together with its partner Romgaz, has made the final investment decision for the development of the Neptun Deep project in the Black Sea. OMV Petrom is the operator of the project with a 50% stake
Estimated key aspects related to the Neptun Deep project (100%):
• Total investment for development is estimated at up to 4 bn. to be spent mostly between 2024 and 2026
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19
Image should be here
Board Report 2023 Separate Financial Statements
• First production is expected in 2027
• Plateau production is estimated at around 140 thousand boe/day for almost 10 years
• Estimated recoverable volumes are currently about 100 bcm (~700 mil. bep)
• Unit production price is estimated at an average of 3 USD/bep (for the life span of the deposit).
OMV Petrom announced in its Strategy 2030 its intention to invest more in renewable energy production and to develop a network of electric charging stations. Strategy 2030 foresees investments of €11 billion by 2030, of which €3.7 billion for low-carbon and zero-carbon projects.
We estimate prospects for profit growth in 2024 compared to 2023 on the back of lower taxes and increased refinery and power plant capacity.
Massive investments in green energy will allow the company to maintain high profitability over the long term by offsetting the reduction in oil production.
OMV Petrom has superior cash generation capacity and a strong balance sheet, allowing it to finance these investments and distribute dividends with higher yields .
HIDROELECTRICA (H2O) The company is 100% green energy producer, with the intention to invest only in renewable energy.
Hidroelectrica's dividend policy indicates a minimum payout of 90%, with the possibility of special dividends. Dividends accounted for 131% of net profit in 2019 - 2022.
While H2O will maintain its role as a key player in the generation market, the change in strategy towards a more balanced activity between generation and supply should have a positive medium-term impact on the company's profitability .
Hidroelectrica preliminarily estimates a net profit of 6.3 billion lei for 2023, 42% higher than in 2022. The estimated profit for 2023 represents a new historical record for the company. By contrast, for 2024, the company forecasts a reduction of more than 20% in net profit, compared to the preliminary 2023 figure of 4.83 billion lei. Although the price of electricity is expected to decrease, the company expects to achieve high profits: a net profit of 4.8 billion lei for 2025 and a net profit of 4.7 billion lei for 2026.
The company’s strategy focuses on three objectives:
• Optimizing the existent hydro portfolio
By 2030, the company intends to refurbish 1.1 Gw, or 17% of hydro assets, adding 240 Mw of installed capacity (+4%) and may extend asset life by 30 years.
• Developing renewable capacities
The company’s business plan aims to add 206 Mw hydro capacity and 59 Mw wind/solar capacity by 2027.
The company plans to increase its long-term capacity by more than 0.1 GW in hydro capacity, 1GW in onshore and offshore wind capacity and more than 2 GW onshore and floating solar capacity.
• Extension of the supply activity
The company intends to increase its supply activity from 3.7 TWh in 2022 to 8 Twh in 2027
ROMGAZ (SNG) Romgaz preliminarily estimates for 2023 a net profit of 2.8 billion lei compared to 2.5 billion lei in 2022 and forecasts for 2024 a net profit of 2.6 billion lei.
The commissioning of the new Iernut power plant will increase revenues from energy sales, but will also increase operational and CO2 and green certificate costs. In addition, interest costs for the external financing needed to support ongoing operations and investments will increase in 2025-2026.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
20
Image should be here
Board Report 2023 Separate Financial Statements
Romgaz's main revenues, from the sale of gas from domestic production, are estimated for 2024 at 6.96 billion lei, down by more than 10% compared to 2023, due to a 2.5% decrease in quantities delivered and a 7.8% decrease in prices. Last year, Romgaz's production decreased by 3% compared to 2022.
Revenues from the sale of electricity are forecast to decrease by almost 35% to 265.13 million lei for 2024, as the company expects to shut down the old Iernut power plant in September 2024 for commissioning work on the new plant, scheduled to be completed by the end of 2024.
Romgaz proposes an investment budget of 4,733 million lei for 2024, of which 70% (3,293 million lei) will be financing granted to the subsidiary Romgaz Black Sea Ltd., which owns 50% of the Neptun Deep project.
Although Romgaz's balance sheet is not as strong as OMV Petrom's, the company could remain a generous dividend payer with a dividend payout ratio of 50%.
NUCLEARELECTRICA (SNN) The draft income and expenditure budget for 2024 foresees a gross profit of 1,509.7 million lei, down 47% compared to the preliminary 2023 and a net profit of 1,272 million lei, down 47.8% compared to the preliminary 2023.
The results are obtained on the basis of total revenues of 4,661.6 million lei, down 41.7%, and total expenditure of 3,151.9 mil. lei, a decrease by 38.8%.
Total revenues were estimated at 4,661.6 million lei, down 41.7% compared to the preliminary 2023, of which operating revenues 4,434.2 thousand lei (-41.5%) and financial revenues 227.4 million lei (- 44.9%). Operating revenues of 4,434.2 million lei include revenues from sold production in the amount of 4,324 million lei (-41.8%), of which revenues from the sale of products representing electricity and heat in the amount of 4,316.3 million lei (-41.9%).
The draft revenue and expenditure budget provides for the sale in 2024 of a total of 10 453 GWh of electricity at an average selling price of 416.10 lei/MWh.
AEROSTAR (ARS) is a leader in Romania for the manufacture of aviation products, an acknowledged supplier in the supply chain of several global programs. The final products in which the parts, subassemblies and equipment manufactured by Aerostar end up are Airbus, Boeing, Bombardier, Dassault or Gulfstream aircraft. AEROSTAR is the main independent supplier of maintenance services in Romania and in the region for the Airbus 320 and Boeing 737. At the same time, it is the first rank supplier for the Ministry of National Defence in the field of defence systems in the aero, land and naval category.
The solidity of the business model and the efficient management are the guarantee of successfully overcoming the challenges that the aeronautical and air transport field have faced.
Net profit was 93 million lei as at 31.12.2023, up 3.1%. In 2023, the manufacturing of aviation products maintained the upward trend, due to the partial recovery of international air travel traffic and as a result of the resumption of orders for new aircraft.
As of 31.12.2023, Aerostar achieved a turnover of 506.3 million lei, an increase of 8.4% compared to the same period last year, due to an 11.7% increase in sales from the manufacture of aviation products and a 16.5% increase in maintenance services for commercial aircraft The company sold products and services of 95.4 million lei on the domestic market and 410.9 million lei on the foreign market.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
21
Image should be here
Board Report 2023 Separate Financial Statements
Approximately 81% of turnover is export sales. Aerostar's customers are located in Europe, Asia, Africa, USA and Canada. Compared to the same period last year, the percentage of export sales is increasing in Europe (+32%), where it offers maintenance services for civil aviation, aviation products (landing gear systems, mechanical parts, assemblies and sub-assemblies), electronic equipment and ground equipment.
The American company Lockheed Martin, in partnership with Aerostar S.A., announced in January 2024 that they have opened a Black Hawk helicopter maintenance centre in Bacau, Romania.
The maintenance centre - the first in Europe - will help create and sustain highly skilled jobs in Romania and ensure increased availability and lower operational costs for the S-70 Black Hawk helicopters operated by the Ministry of Interior.
1.2.3. Private equity Portfolio . EVERGENT Investments Group
On 31 st December 2023, the assets of the 8 subsidiaries of EVERGENT Investments registered a value of 197.6 million de lei, representing 6.70% of EVERGENT Investments’ total assets.
Members of EVERGENT Investments Group:
No
Subsiriary name
EVERGENT Investments’ holding
- parent compay %
Weight of total assets % 31.12.2023
Company type (closed/ listed)
Activity
1
EVERLAND SA Bacău
100.00
1.73
Unlisted
2
EVER-IMO SA București
100.00
1.47
Unlisted
3
CASA SA Bacău
99.77
1.16
Unlisted
4
REGAL SA Galați
93.89
0.24
Unlisted
Real estate
5
MECANICA CEAHLĂU SA
Piatra Neamț
73.30
0.51
BVB–REGS (MECF)
6
AGROINTENS SA
București
100.00
1.50
Unlisted
7
EVER Agribio SA Săucești, Bacău
100.00
0.09
Unlisted
Agriculture
8
VISIONALFA Investments
SA Bacău
100.00
0.00
Unlisted
Financial services (temporary cease of activity )
Total
6.70
In line with its Investment Strategy and Policy , EVERGENT Investments has a strategy of a mixed allocation of resources to the capital market, in parallel with the implementation of private equity projects that will provide additional long-term returns.
Private equity investments aim to focus on the real estate and agribusiness sectors where opportunities with medium to long-term growth potential are identified. Complementary opportunistic investments can be made in other areas of particular interest .
Indirect investments in the real estate sector, through a company controlled by EVERGENT Investments, target all segments - residential, office, industrial, commercial, etc. - either through residential development of key properties in the EVERGENT Investments portfolio or through new projects
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
22
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Rules applied as per AIFM legislation
✓ Private equity type investments through which control is obtained on unlisted companies is in the line with the multiannual investment strategies and legal risk and prudential limits of EVERGENT Investments, without representing the main investment activity. ✓ EVERGENT Investments is a shareholder with a holding of over 99% in all unlisted shares. In the selection of monitoring of investments in unlisted companies, EVERGENT INVESTMENTS applies a high level of diligence; its staff holds the adequate professional skills and abilities for the activities that are specific in the investment fields: financial analysis, legal, commercial and technical analysis, negotiation, conclusion of agreements and contracts. ✓ These assets are assessed in compliance with the evaluation policies and procedures, their value being reported monthly
“ Private equity “ type approach implies an active involvement in entrepreneurial projects, which leads to an increase of managed assets profitability and offers the possibility to compensate the risks of possible involutions of EVERGENT Investments ownership interest in listed companies.
Some of the investments presented in the paragraphs below are in their development stage, while others are going through the maturity period of a business’ life cycle.
1.2.3.1. Agrointens SA –"Extension of Blueberry Farm" Blueberry farm project
(
www.agrointens.ro
)
Agrointens SA is a company whose activity consists in the exploitation and valorisation of blueberry crops.
Description: The project object is the set-up and development of blueberry farms. At present the farms in Viștea and Mandra – Brașov county, Popești and Rătești Argeș county are in various development stages. At the end of the reporting period, the planted area was 105 ha.
EVERGENT Investments’ investment: 10.1 million euro.
Corporate events:
✓ OGMS on 05.04.2023 approved :
2022 financial statement accompanied by the report of the independent financial auditor; discharge of office, performance indicators.
✓ EGMS on 06.04.2023 approved :
Increase the share capital of AGROINTENS SA by the amount of 1,750,000 lei (the equivalent of 350,000 euro at a rate of 5 lei/euro) to finance the investment "Expansion of the AFINE farm investment", according to the financial projections approved in the EGMS/22.12.2022.
✓ EGMS on 21.04.2023 approved:
1. Revocation of Decision No 3 on items 7 and 8 of the Convening Notice EGMS/05(06).04.2023 on the guarantees corresponding to the credit facility, based on the revised credit offer document of the bank on the guarantee segment.
2. Approval of the guarantees corresponding to the credit facility approved by the EGMS of 06.04.2023, which ordered the "Approval of the contracting of the credit facility for investment credit, in the amount of 1,500,000 lei", according to the supporting materials presented at the EGMS.
✓ OGMS ON 17.07.2023 approved :
Election of the Board of Directors up to 31.10.2023.
✓ EGMS on 18.07.2023 approved :
1. Updated financial projections July 2023 and revision of the related indicators of the project "Blueberry Farm Investment Extension", including the change of the IRR value from 15.7% to 14.3% according to the technical milestones in the background materials of the EGMS agenda items.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
23
Image should be here
Board Report 2023 Separate Financial Statements
2. Increase of share capital of AGROINTENS SA with a maximum amount of 2,000,000 lei (equivalent to 400,000 euro at an exchange rate of 5 lei/euro) for finance the investment “Extension of Blueberry Farm” to be carried out in stages and subject to the following principles:
a. Cash contribution through the exclusive contribution of the majority shareholder EVERGENT Investments SA in the amount of 1,000,000 lei, with the deadline for subscription and payment within maximum 3 working days from the date of adoption of the EGMS Decision.
b. Cash contribution by shareholders' contribution, at the company's reasoned request, with the subscription and payment phase to take place by 31 st December 2023.
3. Share capital increase with the amount of 1,000,000 lei, with the purpose of financing the first stage of operational and development activities of project “Extension of Blueberry Farm Investment” The share capital is increased from 43,269,120 lei to 44,269,120 lei, through the issue of 100,000 new shares at a nominal value of 10 lei/share, by contribution of shareholder EVERGENT Investments SA.
✓ EGMS on 7.08.2023 approved :
1. the contracting from Banca Transilvania a working capital loan, through the Rural Invest Programme, in the amount of 1,300,000 lei (the sum in words: one million three hundred thousand lei), for an initial period of 36 months, for the company's current expenses, under the credit terms negotiated with the Bank and in compliance with the conditions laid down in GEO No 24/2022 and the implementation procedure and state aid scheme associated with the programme, and the related guarantees.
2. The contracting from Banca Transilvania of a non-recourse export factoring credit facility, with a factoring facility value of EUR 170,000, and related guarantees.
✓ OGMS on 30.10.2023 approved :
The election of a new Board of Directors for a new 4 years’ mandate.
✓ EGMS on 28.11.2023 approved :
1. Acknowledgement of the updated financial projections and revision of indicators for the “blueberry farms development”. act
2. Increase of share capital with the amount of 2.5 million lei in order to finance the company’s activity.
✓ EGMS on 15.12.2023 approved :
Income and expense budget for 2024.
Financial results on 31.12.2023
Indicators – Agrointens (thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
27,692
12,753
46
Total expenses
(24,818)
(22,450)
90
Net profit/(loss)
2,874
(9,697)
n/a
The loss registered is in line with the stage of implementation of the financial development model, establishment of the Rătești farm and adverse weather conditions in 2023.
1.2.3.2. EVERLAND SA –Iași Real-estate Project
Premises:
The company was set up with the aim of exploiting investment opportunities in the real estate sector in order to create value for shareholders. The company owns assets located in the central area of Iasi, with a significant potential for real estate development in all residential, office and commercial segments:
✓ land held, an area of around 2.55 ha;
✓ administrative building (GF+8) with a built area of 4,000 mp.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
24
Image should be here
Board Report 2023 Separate Financial Statements
Status:
✓ PUZ approved by Iasi local council on 28.02.2022
✓ The maximum developed built area is 83,000 sqm, the value of the project is estimated at over 100 million euros;
Financial results on 31.12.2023
Indicators – EVERLAND SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
120
210
175
Total expenses
(586)
(577)
98
Net profit/(loss)
(465)
(368)
79
The loss was generated by current expenditure to start the building project.
The company owns 100% of the shares of A3 SNAGOV SRL, established in 2021, a company operating in the real estate development sector.
Corporate events:
06.04.2023: OGMS
1. Approval of 2022 financial statements accompanied by the report of the independent financial auditor and annual activity report of the sole associate.
2. Approval that the loss registered in 2022 be recovered from the profits of future years.
3. Approval of the discharge of office of the sole associate for financial year 2022.
4. Approval of the activity program and Income and Expense Budget for financial year 2023.
5. Approval of key performance indicators for the managers of the company for: achieved 2022, proposed for 2023.
1.2.3.3. CASA SA
The company manages own estate property and delivers real-estate management services for real- estate owned by EVERGENT Investments.
Financial Results on 31.12.2023
Indicators– CASA SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
6,264
4,514
72
Total expenses
(5,967)
(8,251)
138
Net profit/(loss)
297
(3,737)
n/a
Corporate events:
20.02.2023 – EGMS approved:
Project “Acquisition and refurbishment of Pictor Aman building", financial projections and investment structure, as well as the acquisition of floors 4 to 8.
Increase of the share capital of CASA SA, with cash contribution of the shareholder EVERGENT Investments SA in the amount of 15.3 million lei, without share premium, for the financing of the investment related to the project through the issuance of 6,120,000 shares with a nominal value of 2.5 lei/share.
Update and amendment of the company's Articles of Association in accordance with the new share capital and share holdings.
21.04.2023 – OGMS approved:
The financial statements for the year ended 31 st December 2022, accompanied by the opinion of the financial auditor and the report on the activities of the Board of Directors for the year 2022.
2023 Program of Activity and Income and Expense Budget
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
25
Image should be here
Board Report 2023 Separate Financial Statements
Award of individual bonus for the year 2022 for company management, performance criteria (KPI) for company management for the year 2023.
29.09.2023 – OGMS approved:
Revocation of a director's mandate as a result of resignation from office as of 01.08.2023.
Election of a new member of the Board of Directors.
1.2.3.4. Mecanica Ceahlău SA
(
www.meanicaceahlau.ro
)
The company manufactures agricultural equipment for soil tillage and distribution: Steyr tractors, Project herbicide equipment and Stoll front loaders. In 2021, the company introduced irrigation drums to its product portfolio.
Financial results on 31.12.2023
Indicators – Mecanica Ceahlau SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
46,300
40,207
87
Total expenses (less income tax)
(43,600)
(43,895)
101
Net profit/(loss)
2,300
(3,903)
n/a
The net result was strongly impacted by the sharp drop in sales of machinery and tractors due to the lack of capital resources of farmers. The difficult situation in which farmers find themselves is due to a combination of factors: climatic conditions of soil drought, grain imports from Ukraine, low grain prices on international markets, accelerated increase in input prices and financing costs.
Corporate events:
20.04.2023 – OGMS approved: Directors' report, financial statements for the financial year 2022, Directors' discharge, work programme, BVC and performance indicators 2023
30.05.2023 – OGMS approved: general remuneration limits for directors and officers of the company, according to Art. 153 index 18 of the Law no. 31/1990 on companies;
Expiry of the dividends for the financial year 2019 established by the AGOA of 22.04.2020, not paid until 13.07.2023 and their recording in the company's accounts in accordance with the applicable regulations.
30.05.2023 - EGMS approved: Ratification of the Decision of the Board of Directors no. 1 of 13.04.2023, at the request of Banca Transilvania, for the extension and increase of the counter- guarantee letter and the contracting of a credit line, representing 16.84% of the total fixed assets of the company, less related receivables and guarantees.
Purchase of a robotic MIG/MAG welding system for a maximum value of EUR 250,000 plus VAT.
To contract a financial loan/leasing for a maximum amount of EUR 200,000 for the financing of the robotic welding system and to grant a mandate to the Managing Director to represent the company with full and unlimited powers in the relationship with the Bank and any other third institutions/persons involved, including before the Notary Public, being authorized to carry out any necessary formalities, to present, negotiate and sign any necessary documents, his signature being fully enforceable against the company .
Submission by the company of an application for funding through the PNRR programme for a photovoltaic system with a maximum capacity of 4.99 MWh.
The cumulative level of guarantees whose total book value is in the amount of 4,768,880 lei representing the cumulative percentage of 21.78% of the total fixed assets of the company, less receivables.
28.12.2023 – OGMS approved: main activity directions and IEB for 2024.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26
Image should be here
Board Report 2023 Separate Financial Statements
1.2.3.5. REGAL SA
At the reporting date, the company still owns 3 commercial premises plus administrative headquarters.
Financial results on 31.12.2023
Indicators – REGAL ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
4,047
4,223
104
Total expenses (less income tax)
(4,024)
(3,978)
99
Net profit/(loss)
(477)
(249)
n/a
The income obtained during the reporting period corresponds to the reduced number of commercial premises that the company manages, without jeopardizing the continuation of the activity, but with an impact on the profitability of the company. During 2023 the asset "Teren Francezi" was sold.
Corporate events:
11.04.2023 - OGMS approved the directors' report, the financial statements for the financial year, the dividend distribution for the financial year 2022, the discharge of the directors, the work programme, the BVC and the performance indicators 2023.
17.07.2023 – EGMS approved: dissolution of the secondary office, updating and amendment of the articles of association, sale of company assets.
1.2.3.6. EVER IMO SA
Real-estate projects in the North area of Bucharest
The company owns in the northern area of Bucharest, for real estate developments, two plots of land with a total area of 3.5 ha and in the semi-central area a plot of land of 1.1 ha.
Financial results on 31.12.2023
Indicators– EVER IMO SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
2,925
3,091
106
Total expenses (less income tax)
(6,616)
(6,167)
93
Net profit/(loss)
(3,691)
(3,076)
n/a
The company will re-enter a revenue growth cycle as projects at various stages of planning approval are started on the land it owns.
Corporate events:
15.05.2023 – OGMS approved the Directors' report, the financial statements for the financial year 2022, the discharge of the Directors, activity program, Budget and performance indicators for 2023 .
1.2.3.7. EVER Agribio SA
The company was established in September 2022 for agricultural and renewable energy activities on the 50 ha land it owns in Săucești commune, county of Săucești. Bacău, on which it will set up a blueberry plantation.
Financial results on 31.12.2023
Indicators – EVER Agribio SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
0
53
n/a
Total expenses (less income tax)
(1,143)
(881)
77
Net profit/(loss)
(1,143)
(828)
n/a
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
27
Image should be here
Board Report 2023 Separate Financial Statements
Corporate events:
10.04.2023 – OGMS approved the Directors' report, the financial statements for the financial year 2022, the discharge to the Directors, the work programme, the BVC and the performance indicators 2023 .
01.08.2023 – OGMS approved the revocation of a director's mandate following resignation and the appointment of a new director.
1.2.3.8. Visionalfa Investments SA
Through EGMS on 25.07.2023, the company declared its fiscal inactivity for a period of 3 years, starting from the date of registration of the mention with the ORC. In fact, it was set up for a project that never materialised and never operated.
Note: Private Equity portfolio also monitors the following companies:
✓ Nord SA, stock symbol NORD (holding 18.19% of the share capital) and Professional Imo Partners SA, stock symbol PPLI (holding 31.42% of the share capital) which participate directly/indirectly in the implementation of the project "Veranda Mall" Bucharest ;
✓ Străulești Lac Alfa SA, unlisted company (holding 50% of the share capital) implementing the project "Atria Urban Resort" Bucharest ;
✓ Agroserv Măriuța SA, stock symbol MILK (holding 11.44% of the share capital);
✓ mWare Solutions SA, unlisted company (holding 5.56% of the share capital ).
1.2.3.9. "Veranda Mall" real estate project, shopping centre
(
www.verandamall.ro
)
Description: The investment project consisted in the construction of the "VERANDA MALL" shopping centre in Bucharest and its operation through Veranda Obor SA. The shopping centre is a proximity mall, located in a densely populated shopping area, Obor-Colentina. "Veranda Mall" was inaugurated on 27 October 2016.
Project characteristics: GLE (built-up area) approx. 67,000 sqm; GLA (leasable area) approx. 34,000 sqm after extension; no. of tenant shops: 100; occupancy: 97%
Investment: EVERGENT Investments' investment value amounts to 14.3 million euro. EVERGENT Investments holds indirectly in Veranda Obor SA a stake of approx. 37% through Professional Imo Partners SA (PPLI) and Nord SA (NORD), companies listed on the BVB - ATS segment.
Current status - The company's performance has rebounded after the Covid-19 pandemic, reflected both in the mall traffic and turnover .
1.2.3.10. Străulești Lac Alfa SA
"ATRIA URBAN RESORT" Residential real estate project
(
www.atriaresort.ro
)
EVERGENT Investments invests in the real estate project "ATRIA URBAN RESORT", developed through the company Străulești Lac Alfa SA. The project aims to build 1.378 apartments in 4 phases, on an area of land approx. 9 ha, located in the north-western part of Bucharest, next to Colosseum Retail Park, with easy access to the northern part of the capital.
Investment: EVERGENT Investments is a shareholder in the company Străulești Lac Alfa SA, together with CityRing Property SRL and Mr Liviu Lepădatu who also manages the development of the real estate project. The total investment of EVERGENT Investments is 8.3 million euro. The financing of the project is secured, both with equity and with a bank loan, a bond loan, and the estimated realization value of the project is over 100 million euro.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
28
Image should be here
Board Report 2023 Separate Financial Statements
Current status:
✓ Phase 1, 160 apartments: sold
✓ Phase 2 (398 apartments):
• around 83% of the total number of apartments were sold or preliminary contracts were entered for them
✓ Phase 3 (350 apartments) – building started in the 4 th quarter of 2022
• around 31% of the total number of apartments were contracted
Financial results on 31.12.2023
Indicators – Straulesti Lac Alfa SA ( thousand lei)
2023 Budget
Achieved 2023
Achieved 2023 / 2023 Budget (%)
Total income
78,721
75,486
96
Total expenses (less profit tax)
44,172
38,438
87
Net profit
29,297
32,148
110
Corporate events:
15.05.2023 – OGMS approved: 2022 BD report, 2022 financial statements, assignment of 2022 profit, discharge of office for the managers, 2023 activity program.
15.05.2023 – EGMS approved: Offer and contract price with Macon Grup SRL for the external network works Phase 3 .
22.09.2023 – OGMS approved: contract offer with City Garden Distribution SRL for the landscaping services Phase 3.
21.12.2023 – EGMS approved:
Modification of the multiannual financial projections following the rectification of the 2023 Revenue and Expenditure Budget (BER) and the update of the Phase 3 and Phase 4 budgets.
Increase in the price of the service contract concluded by the company with Cityring Development SRL, linked to the achievement of certain performance indicators.
Approval of the company's Income and Expenditure Budget for 2024.
Increase in the value of the works execution contract with Macon Grup SRL.
1.2.3.11. Agroserv Măriuța SA (MILK)
(
www.laptariacucaimac.ro
)
Agroserv Mariuta SA is a company that carries out a mixed agricultural activity: crop cultivation, animal husbandry and processing of cow's milk and dairy products.
The company has an integrated business model, selling dairy products through Key Accounts, own stores and online. The company's product portfolio includes milk, yoghurt, cream, curd, sana. All the brand's products (except cheese) are packaged in glass.
In 2023, the company launched new products, namely two types of Kefir and two types of sliced cheeses. The company also obtained a €9.5 million loan to refinance existing loans and support future investment projects, namely the biogas plant and the glass packaging sanitisation line.
1.2.3.12. mWare Solutions SA
(
www.bigconnect.io/
)
mWare Solutions SA is a major local player in the deep-tech IT sector, providing integrated Big Data, artificial intelligence and digitization solutions for both the public and private sectors, mainly for data-intensive industries such as telecommunications, financial-banking, energy, agriculture or healthcare.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
29
Image should be here
Board Report 2023 Separate Financial Statements
The company has developed a proprietary platform that introduces the capability to analyse unstructured data within organizations using a semantic data understanding model based on neural networks, with native deep-learning and machine learning capabilities to uncover new insights into decision making, customer understanding, new metrics and possibilities for automating organizational processes based on artificial intelligence.
Mware Solutions has developed a complete package for digitization, which includes in addition to the existing BigConnect products, an Enterprise edition database and a low-code framework for application development, which currently represents a complete and much more competitive alternative to the technology packages offered by other players in the market.
In 2023, the company registered and increase of turnover of over 75% compared to the previous year.
The IT sector is of major importance in the Romanian economy, with a share of over 7.5% in the Gross Domestic Product. Expectations for this sector are for double-digit growth in the coming years, supported by the emergence and implementation of new technologies (AI, Big Data, IoT) and the NRRP through component C7 - Digital Transformation with a budget allocation of €1.88 billion.
1.2.4. Sell Portfolio
The SELL portfolio has been constructed based on the criteria of liquidity, performance and low growth potential of its constituent holdings. In order to achieve the investment objectives set out in the "Investment Strategy and Policy of EVERGENT Investments S.A.", in 2023 steps continued to be taken to reduce the weight of the SELL Portfolio in the total assets of the company. Thus, as at 31 st December 2023, the proportion of the SELL portfolio was 0.16% of the total value of assets, compared with 0.37% as at 31 st December 2022, the strategy applied being restructuring through sale.
In 2023 EVERGENT Investments' holdings in the following companies were sold in full:
• Casa de Bucovina Club de Munte (BCM);
• Martens SA (MABE).
• Șantierul Naval Constanța
The cumulated amount of 3.37 million lei obtained from the sale of the three companies feeds the investment needs of EVERGENT Investments S.A.
Through activities specific to the Sell Portfolio, EVERGENT Investments' active participation in General Meetings of Shareholders of the portfolio companies was ensured, questions were submitted to the Boards of Directors, the legality of resolutions of General Meetings of Shareholders affecting the interests of minority shareholders was monitored, and proposals were made to challenge them, where appropriate.
1.2.5. Implementation of 2023 Investment Program
EVERGENT Investments has analysed and implemented investments consistent with the directions and principles presented in 2023 Activity Program, approved by the shareholders in OGMS on 27 th April 2023.
million lei
2023 Activity Program
Achieved on 31.12.2023
Total investment program, of which assigned for the following portfolios:
305.2
197.24
• Financial - banking
0
0.06
• Energy- industrial
260
174.27
• Private equity
45.2
22.91
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
30
Image should be here
Board Report 2023 Separate Financial Statements
1.2.6. Perspective elements regarding EVERGENT Investmetns’ activity. 2024 Risks and
uncertainties. 2024 Objectives
a) Presentation and analysis of trends, elements, events or uncertainties affecting or likely to affect the issuer’s liquidity compared to the same period of the previous year.
On the local level, the main elements that could support the increase of the BVB share prices in 2024 are the decrease of interest rates by the ECB and the NBR starting from the second semester, the distribution of dividends with high yields by some BVB companies, the transition of the Romanian capital market to the emerging category according to MSCI classifications and the increase of contributions to private pension funds Pillar II .
On the other hand, elections in our country and internationally could generate volatility in the marke.
Election year 2024 will bring a reduced likelihood of deficit-correcting measures, and the government's financing needs will be significant, including due to Eurobond maturities.
The BVB will probably be dependent on the evolution of global markets which will determine the financing costs for the State's debt, but also the attractiveness for investment in the Romanian capital market.
Mandatory private pension contributions increase from 3.75% to 4.75%, so pension funds will have more cash available for capital market investments.
A potentially important event would be the inclusion of the BVB in the emerging markets by MSCI, as well as the launch of the central counterparty. These events could significantly increase liquidity, attractiveness and valuation of the local market. The inclusion of the BVB in the MSCI index will attract the attention of international investors to the Romanian capital market, providing a guarantee of its maturity and stability. At the same time, the launch of the central counterparty will offer new tools to investors, will improve the efficiency of transactions and will give the possibility to reduce risk through hedging, important aspects to attract more institutional investors and to increase confidence in the local market.
The resilience of the financial system continues to be tested by the uncertain macroeconomic and geopolitical context, driven by risks of higher than expected inflation or a more pronounced economic slowdown. Optimistic investor sentiment is already reflected in equity prices, and geopolitical risks are increasing due to the continuing war between Russia and Ukraine or the regional escalation of the Middle East conflict, with adverse implications for global commodity markets and supply chains, with international trade already fragmented following previous shocks.
At its first monetary policy meeting of 2024, the Federal Reserve (Fed) kept the benchmark interest rate at 5.25% to 5.50% and signalled that the likelihood of initiating downward adjustment at its next meeting in March is low.
The likelihood that the US administration will take action to correct the budget deficit is low, given that 2024 is an election year; on the contrary, it is likely to react promptly to any signs that the US economy could fall into recession.
For the global economy, the IMF forecasts a growth rate of 2.9% for 2024. At the level of developed countries, the favourable evolution of the US economy stands out, with the IMF forecast revised
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
31
Image should be here
Board Report 2023 Separate Financial Statements
upwards by 0.5% for the year 2024, in contrast to expectations for the euro area, for which the outlook has been revised downwards by 0.3% in 2024.
Significant geopolitical risks also remain, such as a potential re-intensification of tensions between Russia and Ukraine or regional escalation of the conflict between Israel and Hamas, with adverse implications for commodity markets and global supply chains, as international trade is already relatively fragmented following previous shocks.
Fears about the scale, duration and impact of the Middle East conflict are also reflected in commodity markets, increasing uncertainty, particularly in the oil market. This comes at a time when oil prices are already high amid concerns about falling production in OPEC+'s biggest exporters, Russia and Saudi Arabia.
In a hypothetical scenario involving a regional expansion of the Middle East conflict, the World Bank estimates oil prices to rise to between $140 and $157 per barrel (compared to an average of $81 per barrel in 2024 in a no-deal scenario). So far, the effects of the conflict on global commodity markets have been limited, with the most significant price increases in the European gas market (+32.2% from 7-31 October 2023) reflecting a geopolitical risk premium rather than supply chain disruptions.
b) Presentation and analysis of the effects of current and forecast capital expenses on the financial position of the issuer, compared to the same period of the previous year.
The detailed presentation of the current or expected capital expenditures on EVERGENT Investments' financial situation, respectively related to the Share Buyback Programmes for the purpose of reducing the share capital are contained in the materials submitted for approval to the AGM of 29 April 2024: " Approval of the implementation of a share buyback programme for the purpose of reducing the share capital”.
c) Presentation and analysis of events, transactions and economic changes that significantly affect core business revenue.
Dividend income for 2023 included in the 2024 Income and Expenditure Budget, which is the main income reflected in the income statement, has been estimated on the basis of the preliminary 2023 results of the portfolio companies, new legislative provisions, management announcements, investment and cash-flow estimates of the companies.
2024 Objectives
The key elements of EVERGENT Investments' investment strategy and policy are based on an allocation of resources that ensures the sustainable development of EVERGENT Investments' business and the satisfaction of shareholders' interests on both short and long term:
Sound investment policy is the basis for long-term growth in the value of assets under management, which is fundamental to building investor confidence.
EVERGENT Investments Shareholder Remuneration Policy
EVERGENT Investments has a predictable dividend policy and conducts annual buyback programs that support the liquidity of EVER shares. In the context of volatile capital markets, the Board of Directors seeks to strike a balance between the need to secure resources to support the investment
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
32
Image should be here
Board Report 2023 Separate Financial Statements
programmes to be developed, short-term shareholder expectations, i.e. the distribution of dividends, and long-term shareholder expectations, i.e. the growth of total assets and hence the EVER share price.
The policy mix of dividend allocation and the possibility to subscribe to public offerings (IPOs) is considered to offer a higher yield than traditional dividend distribution.
Capital operations by carrying out share buyback programmes for the purpose of reducing share capital.
Strategies defined per assets portfolios:
➢ Private equity portfolio growth - private equity approach within existing majority holdings (real estate, agricultural, other sectors)
➢ Increase the performance of the Financial - Banking and Energy - Industrial portfolios, listed portfolios that provide liquidity to EVERGENT Investments assets, representing the main income generators and sources for new investments.
➢ Sell for Portfolio Sell - extracting value from the portfolio of shares from the privatisation process.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
33
Image should be here
Board Report 2023 Separate Financial Statements
2. Risk Management
One of the main components of the risk management system is the permanent risk management function. This function has a main role in defining the policy regarding risk management and monitoring in the company, in order to ensure the permanent compliance of the risk level with the company's risk profile .
The risk management responsibility is not limited to the level of risk specialists or control functions. Operational structures, under the supervision of management functions, are primarily responsible for daily risk management, taking into account the risk appetite and in accordance with the policies, procedures and controls of EVERGENT Investments.
2.1. Risk Management Policy
EVERGENT Investments sets, implements and maintains an adequate and formalized risk management policy that:
• Identifies all relevant risks that it is or could be exposed to;
• Includes the necessary procedures to allow the company to assess the exposure to relevant risks that it is or could be exposed to.
The objectives of the risk management policy are the prudent management of risks in order to prevent
the impact of internal and external factors on the activity of the company, preventing it from reaching
its set goals, causing unplanned and uncontrolled damage, or causing other negative effects.
The efficiency of the risk management system is assessed on a quarterly basis by Executive Management, the Audit Committee and Board of Directors and is carried out in compliance with the provisions of art. 45 FSA Reg. no.2 /2016 on the application of corporate government principles by entities authorized, regulated and supervised by FSA modified and completed by FSA Reg. no. 9/2019.
Following the examination of the characteristics and performances of the risk management system, the Board of Directors concluded that, on 31 st December 2023, it is proportional and adequate for the size, nature and complexity of current activity, insuring the coherence of controls with the risks generated by processes and efficient use of company assets.
Personnel of the Risk Management Department:
1. Sonia Fechet – risk manager, department coordinator (FSA Reg. no: PFR13 2 FARA/040050)
2. Elena Rebei – senior risk manager (FSA Reg. no: PFR13 2 FARA/040049)
The main activities run in 2023 targeted:
✓ Annual revision of the policy, profit and procedures for risk management, FSA notification on the revised Risk Policy and Profile.
✓ Assessment of the Company’s risk profile ;
✓ Calculation of risk indicators set in accordance with risk management procedures and analysis of the abidance by them and by the approved risk tolerance limits;
✓ Risk analysis regarding investments suggested by the portfolio management functions;
Image should be here
Image should be here
EVERGENT sets and permanently maintains operational the risk management position that is hierarchically and functionally independent from the activities generating risk exposure and has access all relevant information necessary to fulfil its attributions and responsibilities .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
34
Image should be here
Board Report 2023 Separate Financial Statements
✓ Analysis of the impact of the 2024 activity program on the structure of assets, the system of prudential limits and the risk profile of the company;
✓ Assessment of the way in which the structure of variable remuneration affects the company’s risk profile;
✓ Preparation of a half-yearly report on the evaluation of the effectiveness of the risk management system;
✓ Daily monitoring of portfolio assets within prudential limits;
✓ Follow up on the fulfilment of the actions set out in the Annual Risk Response Plan and the Operational Risk Event Reporting Forms;
✓ Analysis of the classification of asset classes into risk categories according to their degree of liquidity;
✓ Weekly and monthly monitoring of liquidity risk indicators;
✓ Calculation of exposure and leverage;
✓ Filling in the Risk Profile section of the semi-annual Institutional Reporting Annex (Annex IV to Regulation (EU) 231/2013);
✓ Monitoring the EVERGENT Investments synthetic risk indicator (SRI) and calculating past performance scenarios;
✓ Carrying out the annual stress test;
✓ Calculation of own funds and own funds requirements;
✓ Update the information in the Key Information Document on the Synthetic Risk Indicator (SRI) and Past Performance Scenarios to 31.05.2023 due to the change of the Custodian of the company's assets;
✓ Reporting on risk management activity, annual IT operational risk self-assessment, annual stress testing, status of implementation of risk manager recommendations, own funds and own funds requirements;
✓ Administrative activities.
2.2. Risk Profile
The risk profile represents all exposures of EVERGENT Investments to real and potential risks. The risk profile of EVERGENT Investments on 31.12.2023 is the following:
Risk type
Undertaken risk level
Risk level on 31.12.2023
Market risk
Average
Average
Issuer risk
Average
Low
Liquidity risk
Low
Low
Credit and counterparty risk
Average
Low
Operational risk
Average
average
Sustainability risk
Average
Average
On 31 st December 2023, the risk indicators calculated for the relevant risks that EVERGENT Investment is or could be exposed to abide by the tolerance limits, risk appetite and profile approved by the Board of Directors.
Between 01.01.2023-31.12.2023 there has been no exceeding of the risk limits undertaken through the risk profile.
2.3. Main risks that the company is exposed to
In its activity, EVERGENT Investments is exposed to various types of risks that are associated to its equities portfolio (shares, fund units, bonds) especially to the portfolio of financial instruments traded on the capital market, these being the most important types of risks that it faces.
Image should be here
Image should be here
The global risk profile undertaken by EVERGENT Investments is average, corresponding to an average risk appetite.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
35
Image should be here
Board Report 2023 Separate Financial Statements
The main risks that EVERGENT Investment Company is exposed to are :
1. Market Risk
a) Most of EVERGENT Investments’ assets are subject to market risk, defined as a potential of their market value to change. We distinguish between three types of very different market risks:
b) Price risk derives from market movements, assets exposed to it being financial assets such as shares and holding titles in open or closed investment funds. Price risk is a relevant risk for EVERGENT Investments.
c) Currency risk describes the risk that the value of financial and monetary instruments and debt instruments denominated in currencies other than the leu will change due to changes in exchange rates. Currency risk is a relevant risk for EVERGENT Investments.
d) Interest rate risk refers to the possibility that financial or monetary instruments and bank loans with variable interest suffer following unexpected changes of interest rate. The interest rate risk is a relevant risk for EVERGENT Investments.
The main objective of market risk management, as part of the independent risk management function is to make sure that the business function optimizes the risk/reward relationship and does not expose EVERGENT Investments to unacceptable losses that do not correspond to the risk appetite. In order to reach this objective, market risk management defines and applies a framework that systematically identifies, evaluates, monitors and reports market risk so that higher management may make efficient decisions, in due time, regarding the methods to manage and lower it. The Risk Management Department identifies market risks through the active analysis of the portfolio and investment suggestions of the business function .
2. Liquidity Risk
Liquidity risk is the risk stemming from a potential incapacity to fulfil all payment obligations when these become due, or to fulfil them without excessive costs.
Liquidity risk is a relevant risk for EVERGENT Investments, although the Fund's closed-ended structure results in relatively low prudential liquidity requirements (shareholders are not entitled to request share redemptions from the Fund). Management of the liquidity risk profile in 2023 was an important factor in maintaining adequate liquidity .
The liquidity risk management framework is designed to identify, measure and management the liquidity risk position. The Risk Management Department is responsible for the internal monitoring and reporting of liquidities. The liquidities management position provides a proper framework for the management of liquidities, taking into consideration the investment policy, liquidity risk profile and support obligations of EVERGENT Investments .
Liquidity reserves include cash and cash equivalents available, as well as very liquid equity. The liquidity reserve volume is constantly monitored and reported.
3. Issuer Risk
Issuer risk results from exposures on shares held in entities in the portfolio and represent the current or future risk of value loss for a title in the portfolio, due either to the deterioration of its economic- financial status, or the business conditions (failure to function or lack of correlation of its internal activities according to its business plan), or to events, external trends or changes that could not have been known or prevented by the control system. Issuer risk is a relevant risk for EVERGENT Investments .
The issuer risk management framework is designed to identify, measure and management the issuer risk position. The Risk Management Department is responsible for the monitoring and internal reporting of issuer risk. The portfolio management function provides a proper framework for the management and monitoring of issuers in the portfolio.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
36
Image should be here
Board Report 2023 Separate Financial Statements
4. Credit and Counterparty Risk
The counterparty risk is a risk associated to credit risk. Credit risk is the risk of causing a financial loss for the company, stemming from the uncertainty related to the capacity, ability or wish of the business partners to fulfil their contract obligations.
Counterparty risk represents the risk that a counterparty in a transaction infringe on its contract obligation before the final settlement of the cash flows corresponding to the transactions.
The credit and counterparty risk represents a relevant risk for EVERGENT Investments.
The management framework for the credit and counterparty risk is designed to identify, measure and manage the credit and counterparty risk position. The Risk Management Department is responsible for the monitoring and internal reporting of credit and counterparty risk. The portfolio management function provides a proper framework for the monitoring and management of assets in the portfolio that are exposed to credit and counterparty risk.
5. Operational Risk
Operational risk is the risk of loss resulting from internal processes, inadequate individuals or systems or external events. Since operational risks stem from all operations run on the level of the company, these are relevant risks for EVERGENT Investments .
The daily management of operational risk is the responsibility of all company departments. The risk management function manages a consistent application of operational risk management in the entire company. Through our annual operational risks self-evaluation model we aim to maintain a strict monitoring and high awareness of these risks.
In order to comply with the requirements of ASF Rule 4/2018, information technology (IT) risk is treated separately in the operational risk self-assessment process. According to the self-assessment carried out on 31.12.2023, the level of residual operational risk generated by IT systems is maintained in the medium risk category, falling within the requirements of ASF Rule 4/2018. The result of the
internal IT operational risk assessment is communicated annually to the ASF.
In addition, the risk related to the prevention and combating of money laundering and terrorist financing (ML/FT) activity is assessed in a separate process.
Other subcategories of operational risks include legal risk, vocational liability risk, compliance risk, model risk, risk related to outsourced activities.
6. Sustainability Risk
The risk related to sustainability means an environment, social or governance event or condition that if manifested, could cause a significant negative, actual or potential effect on the assets, profitability or balance status or on the fund’s reputation.
Sustainability risk can manifest itself as a risk in its own right or can have an impact and contribute significantly to other risk categories such as market risk, liquidity risk, credit and counterparty risk, issuer risk or operational risk. Sustainability risk is a relevant risk for EVERGENT Investments.
The management of sustainability risk is carried out by the department with risk management function, in accordance with specific sustainability risk procedure, through the setting of adequate limits and the follow-up of its abidance by the undertaken limits . The ESG risk level resulting from the internal self-assessment, according to the self-assessment result as at 30 th June 2023, is medium.
On the level of asset portfolios, the management and lowering of sustainability risks is the task of organisational structures with portfolio management function through the integration of sustainability risks in the investment decision-making, based on specific strategies.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
37
Image should be here
Board Report 2023 Separate Financial Statements
7. The risk of EVERGENT Investments’s assets failure to abide by legal holding limits
On 31 st December 2023, assets in EVERGENT Investments portfolio abide by the legal prudential limits. Between 01.01.2023 and 31.12.2023 there has been no exceeding of legal prudential limits.
7.1 Limits regarding the exposure level on assets categories reported to total assets, in accordance with the Net monthly Report on 31.12.2023 – Law no. 243/2019, art. 35, line (2):
a) Securities and monetary market instruments issued by the same issuer , with the exception of securities or monetary market instruments issued or guaranteed by a member state, local public authorities of the member state, a third state or international public bodies to which one or more member state belong – allowed limit: 10% of assets, limit that may be increased up to a maximum 40%, provided that the total value of equities held by EVERGENT Investments in each of the issuers it has holdings up to 40%, should not exceed 80% of total assets value..
Issuer name
Market value of asset category
Weight of total EVERGENT Investments assets
BANCA TRANSILVANIA shares
1,160,575,717
39.35
OMW PETROM shares
340,363,310
11.54
Total
1,500,939,027
50.89
Exposure per TLV issuer is within the maximum holding limit of 40% and is closely monitored through daily holding monitoring mechanisms. The two issuers exceeding 10% individually do not exceed cumulatively 80% of total assets .
b) 1. Securities and money market instruments issued by entities belonging to the same group - permitted limit: 50% of assets .
Group name
Market value of asset category
(FSA Reg. no.7/2020) (lei)
Weight of EVERGENT Investments’ total assets value (%)
EVER IMO, of which:
• Ever Imo shares
• Ever Imo bonds
61,056,709
43,450,309
17,606,400
2.07
1.47
0.60
BVB, din care:
• BVB stocks
• Depozitarul Central shares
23,757,419
22,845,594
911,825
0.81
0.77
0.03
b) 2. Securities and money market instruments issued by entities belonging to the Group that EVERGENT Investments is part of - allowed limit: 40% of assets.
Name
Market value of asset category (FSA Reg. no.7/2020) (lei)
Weight of total assets of EVERGENT Investments (%)
EVERLAND shares
50,952,229
1.73
AGROINTENS shares
44,223,366
1.50
EVER IMO shares
43,450,309
1.47
CASA shares
34,209,918
1.16
EVER IMO bonds
17,606,400
0.60
MECANICA CEAHLAU shares
15,141,344
0.51
REGAL shares
7,082,453
0.24
EVER AGRIBIO shares
2,582,026
0.09
VISIONALFA INVESTMENTS shares
0
0
Total EVERGENT Investments Group
215,248,045
7.30
c) Exposure to counterparty risk in a transaction with derivaties traded outside regulated markets – allowed limit : 20% of assets, irrespective of the transaction counterparty de – not the case.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
38
Image should be here
Board Report 2023 Separate Financial Statements
d) Overall exposure to derivatives – allowed limit: should not exceed total assets value – not the case.
e) Value of current accounts and cash - allowed limit: 20% of assets. The limit may be exceeded up to maximum 50% provided that the amounts come from the issue of equity securities, from investments that reached maturity, or from the sale of financial instruments in the portfolio, and that exceeding is not over 90 days .
In net asset on 31.12.2023, the value of current accounts and cash is 1,024,389 lei, representing 0.03% of total assets value.
f) Bank deposits set-up and held at the same bank – allowed limit: 30% of assets.
Bank name
Deposit value
(FSA Reg. no.7/2020)
(lei)
Weight of total assets of EVERGENT Investments
(%)
BANCA TRANSILVANIA
179,623,046
6.09
EXIM Banca Românească
111,449,882
3.78
BCR
19,076,284
0.65
g) UCITS not allowed for trading within a trading venue or a third state stock exchange, issued by a
single AIF destined for retail investors – allowed limit : 20% of assets.
RIAIF name
Market value of asset category
(FSA Reg. no.7/2020)
(lei)
Weight of total EVERGENT Investments’ assets (%)
FIA Fondul Privat Comercial
82,830,850
2.81
FIA DCP Investiții
43,604,700
148
FIA Hermes
14,678,341
0.50
h) UCITS not allowed for trading within a trading venue or on a third party stock exchange, issued by
a single AIF destined for professional investors – allowed limit : 10% of assets.
FIAIP name
Market value of asset category
(FSA Reg. no.7/2020)
(lei)
Weight of total EVERGENT Investments’ assets (%)
FIA Alchemist
71,939,768
2.44
FIA BT Invest 1
31,052,889
1.05
i) 1. UCITS not allowed for trading in a trading place or on a stock exchange from a third country, issued by an open-type AIF – allowed limit : 50% of assets.
Name of open-type AIF
Market value of asset category
(FSA Reg. no.7/2020)
(lei)
Weight of total EVERGENT Investments’ assets (%)
FIA Fondul Privat Comercial
82,830,850
2.81
FIA Alchemist
71,939,768
2.44
FIA DCP Investiții
43,604,700
1.48
FIA BT Invest 1
31,052,889
1.05
FIA Hermes
14,678,341
0.50
TOTAL open-type AIF
244,106,547
8.28
i) 2. UCITS not allowed for trading , within a trading value or on a third state stock market, issued by other open-types AIF – case of the Group that EVERGENT Investments is part of- allowed limit: 40%
of assets – not the case .
j) 1. UCITS issued by a single OPCVM authorized by FSA or a competent national authority from
another member state– allowed limit : 40% of assets.
UCITS name
Market value of asset category
(FSA reg. no.7/2020) (lei)
Weight of total EVERGENT Investments assets (%)
FDI BT Maxim
7,352,246
0.25
FDI BT Index Romania ROTX
7,019,240
0.24
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
39
Image should be here
Board Report 2023 Separate Financial Statements
FDI Transilvania
6,927,743
0.23
FDI Napoca
6,285,313
0.21
FDI Tehnoglobinvest
1,664,082
0.06
j) 2. UCITS issued by a single CIU allowed for trading in a trading venue in Romania, another member
state or the stock exchange of a third party – allowed limit: 40% of assets.
CIU name
Marke value of asset category
(FSA Reg. no.7/2020) (lei)
Weight of total EVERGENT Investments assets (%)
Transilvania Investments Alliance
33,664,165
1.14
Fondul Proprietatea
1,636,560
0.06
k) Financial instruments loans, the loan period cannot be longer than 12 calendar months, in compliance with FSA regulation regarding margin transactions and loan operations – allowed limit: 20% of assets , limit that may be increased up to 30%, with FSA approval, under the conditions set by FSA regulations- not the case.
l) 1. Granting cash loans, participation/subscription to syndicated loans in favour of a third party, - only for entities from the group EVERGENT Investments is part of, setup as investment company - allowed limit : 10% of assets - not the case ;
l) 2. Credit portfolios issued by other financial or non-financial entities, purchased directly, in full or in part – only in the case of investments in financial instruments issued by internationally recognized financial institutions, credit institution or financial non-banking institutions authorized by B.N.R. or other central banks from a member state or third party states- not the case.
m) Securities, instruments of monetary market not allowed for trading in a trading location or stock exchange from a third state, with the exception of state titles and bonds issued by the Ministry of Public Finance, as well as holdings acquired by that particular FIAIR through the law, in whose case no holding limit is allowed – allowed limit : 40% of assets
Asset type
Market value of asset category
(FSA Reg. no.7/2020) (lei)
Weight of total
EVERGENT Investments’ assets (%)
Shares held in close-type issuers (incl. amounts to collect following the withdrawal from closed-companies)
262,884,456
8.91
Closed bonds
17,606,400
0.60
TOTAL
280,490,856
9.51
Note: new investments in corporate bonds not allowed for trading will be made abiding by the conditions foreseen by art. 44 FSA Regulation no.7/2020; art.44 of FSA Regulation no.7/2020 does not apply in case the corporate bonds not allowed for trading are issued by a company in which EVERGENT Investments holds at least 51% of the share capital.
n) Shares issued by limited liability companies, regulated by Companies’ Law no. 31/1990 republished with its later amendments and additions – allowed limit : 20% of assets –not the case .
o) Greenhouse gas emission certificate as defined by art. 3 letter b) Government’s Resolution no. 780/2006 on the setting of the marketing scheme of greenhouse gas emission certificates, – allowed limit: 10% of assets – not the case .
Other restrictions applicable to EVERGENT Investments:
➢ It cannot make short sales, defined in accordance with the provisions of (EU) Regulation no. 236/2012 of the European Parliament and Council on 14th March 2021 on short selling and certain aspects of credit default swaps, other than for the purpose of risk coverage, namely hedging, in accordance with art.33 line (1) Law no.243/2019 .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
40
Image should be here
Board Report 2023 Separate Financial Statements
➢ Cannot swap financial instruments for cash or other financial instruments in the portfolio and does not use free transfers of illiquid assets in its investment portfolio to investors („redemption in kind”), in accordance with art.43, line (2) FSA Regulation no . 7/2020.
➢ Cannot invest in money market instruments such as commercial papers, in accordance with art. 35 line (1), letter g) Law no . 243/2019.
7.2. Limits regarding the level of EVERGENT Investments’ exposure to the issuers’ share capital
a) Memorandum of Association of the Central Depository, 3 rd Title, 1 st Chapter, Art. 10 (1)
Company shareholders may not hold more than 5% of vote rights, with the exception of market operator, that may hold up to 75% of vote rights with FSA approval.
Issuer name
No. of shares held
Total number of issuer’s shares
Holding percentage in the issuer’s share capital (%)
Depozitarul Central (Regisco)
7,396,029
252,919,526
2.92
b) Law no. 126/11.06.2018, art. 136 line (5)
No shareholder of a market operator may hold, neither directly or jointly with the persons he/she acts in concerted manner, more than 20% of total vote rights.
Issuer name
No. of shares held
Total number of issuer’s shares
Holding percentage in the issuer’s share capital (%)
Bursa de Valori București
348,256
8,049,246
4.33
c) Banca Transilvania Memorandum of Association, art. 11, item b (b)
No shareholder may hold 10% or more of the Bank’s share capital, unless:
(i) they have GMS approval
(ii) they abide by the formalities requested by the law.
Issuer name
No. of shares held
Total number of issuer’s shares
Holding percentage in the issuer’s share capital (%)
Banca Transilvania
47,839,065
798,658,233
5.99
7.3. Value of managed assets (Law no. 74/2015, art. 2 line (2) – on 30.09.2022, the value of assets managed by EVERGENT Investments and reported in compliance with “EVERGENT Investments’ statement of assets and liabilities”, was 2,949,306,015 lei. Their value in euro is 592,872,998.
EVERGENT Investments policy regarding the use of leverage (according to the Exposure and Leverage Calculation Procedure): " The maximum level of leverage that EVERGENT Investments can employ is 2 times the total value of the Net Asset (NAV) ”.
The value of exposure and level of leverage effect is reported on a monthly basis within the Explanatory Notes of Annex 10 „Statement of Assets and Liabilities of EVERGENT Investments” and Annex 11 „Detailed statement of Investments” of FSA Regulation no. 7/2020, in accordance with art. 38 line (4) Law no. 243/2019 and quarterly in the Risk Profile section of Annex IV to EU Regulation no. 231/2013.
On 31.12.2023, EVERGENT Investments’ portfolio includes assets acquired through the use of the leverage effect namely listed shares that were acquired through bank loan , resulting in a leverage ascertained through the gross method of 1.0029 and through the commitment method of 1.0239.
Method type
Exposure value (lei)
Leverage level
Leverage limit internal level
Gross method
2,673,586,747
1.0029 (or 100.29%)
Engagement method
2,729,620,159
1.0239 (or 102.39%)
2
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
41
Image should be here
Board Report 2023 Separate Financial Statements
The exposure and leverage effect were calculated based on the Statement of Assets and Liabilities of EVERGENT Investments on 31.12.2023 certified by depository BCR SA, with the application of calculation and treatment rules (exclusion, conversion, inclusion) foreseen by art. 7 (gross method) and art. 8 (commitment method) of EU Reg. no. 231/2013.
Between 01.01.2023 - 31.12.2023 there have been no financing operations through financial instruments (SFT) and no total return swap (TRS) transactions as defined by (EU) Regulation no. 2365/2015.
8. Other risks: regulatory risk, systemic risk, strategic risk, reputational risk, conflict of interest risk, risk related to activities carried out by subsidiaries.
2.4. Crisis simulations
Stress testing and scenario analysis play an important role in risk management.
EVERGENT Investments prepared the annual crisis simulation for reference date 31 st March 2023 in accordance with art. 15 line (3) letter (b) Directive 2011/61/EU and art. 16, line (1), second paragraph of Directive 2011/61/EU corroborated with art.2 FSA Rule no.39/2020 .
The simulation of the simultaneous application of extreme shocks to different categories of financial instruments held in the portfolio on 31.03.2023 indicates that they could lead to a decrease by:
✓ 17.56 % of total assets and 19.51 % of net asset value (in the historic scenario)
✓ 45.54 % of total assets and 50.59 % of net asset value (in the hypothetic scenario)
The results of crisis simulations under normal and exceptional conditions, in accordance with article 16 line (1) second paragraph of Directive 2011/61/UE and art. 2 FSA Rule no. 39/2020: we have run scenarios applying extreme shocks on assets and separately on liabilities of the Fund, as well as combined scenarios, on both assets and liabilities in order to determine the general effect on the Fund’s liquidities. Liquidity crisis simulation reconfirm that the Fund’s key elements allow it to remain sufficiently liquid to fulfil its short-term payment obligations under normal and crisis circumstances.
Crisis simulations will contribute to making the adequate decisions on management level, including decisions related to business strategies. The results of the annual crisis simulations were presented and approved by the Board of Directors in the meeting of 15.05.2023 and were submitted to FSA along with the used methodology.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
42
Image should be here
Board Report 2023 Separate Financial Statements
3. Financial Position and Performance
The separate financial statements have been prepared by EVERGENT Investments in accordance with the provisions of Rule 39/2015 for the approval of Accounting Regulations in accordance with International Financial Reporting Standards applicable to entities authorised, regulated and supervised by the ASF in the Financial Instruments and Investments Sector ("Rule 39/2015"). Within the meaning of Rule 39/2015, International Financial Reporting Standards ("IFRS") are standards adopted in accordance with the procedure laid down in Regulation (EC) No 1606 /2002 of the European Parliament and of the Council of 19 th July 2002 on the application of international accounting standards, as amended and supplemented.
In 2023, the Company's financial position recorded a significant increase of 25% and a record value of total assets of RON 2.95 million as at 31 st December 2023, on the back of the appreciation of the value of the shares in the portfolio, but also due to the use, in the first quarter of the year, of the credit facility contracted from the Romanian Commercial Bank to take advantage of market opportunities.
The net result achieved in 2023, including net profit and net gain on sale of financial assets classified at fair value through other comprehensive income (FVTOCI), was 203.8 million lei, exceeding the budgeted level by 158%.
3.1. Comprehensive Income. Management Expenses. Financial Position
➢ Separate statement of comprehensive income:
(lei)
2021 (audited)
2022 (audited)
2023 (audited)
Income
Gross dividend income
54,656,711
120,777,371
143,419,181
Interest revenue
4,718,481
7,087,713
9,909,187
Other operating income
1,030,926
1,607,660
1,163,202
Net gain/ (net loss) on financial assets at fair value through profit or loss (FVTPL)
25,460,617
(474,436)
39,332,779
Net gain on sale of non-financial assets
-
-
5,490
Net gain on revaluation of investment property
143,329
798,078
37,290
Expenses
Loss reversal from financial assets impairment
3,895,437
2,332,072
100,129
(Loss)/loss reversal from impairment of non-financial assets
(28,989)
671
-
(Set-up)/reversal of provisions for risks and expenses
(1,620,399)
117,190
-
Expenses with wages, remunerations and other similar expenses
(29,426,547)
(28,773,429)
(37,100,983)
Other operating expenses
(10,477,957)
(11,660,747)
(13,553,289)
Operating profit
48,351,609
91,812,143
143,312,986
Financing expenses
(42,218)
(95,436)
(4,084,887)
Profit before tax
48,309,391
91,716,707
139,228,099
Income tax
(1,920,757)
(8,863,072)
(14,494,674)
Net profit
46,388,634
82,853,635
124,733,425
Other comprehensive income elements
Increase of reserve from the revaluation of property, plant and equipment, net of deferred tax
439,940
806,957
1,530,984
Net gain/(net loss) on the revaluation of FVTOCI financial assets
414,290,697
(168,168,297)
414,997,141
Other elements of comprehensive income – elements that will not be reclassified in profit or loss
414,730,637
(167,361,340)
416,528,125
Net gain/ (net loss) from the revaluation of FVTOCI bonds
45,845
(105,304)
(185,969)
Other elements of comprehensive income – elements that will be reclassified in profit or loss
45,845
(105,304)
(185,969)
Other elements of comprehensive income - Total
414,776,482
(167,466,644)
416,342,156
Total comprehensive income
461,165,116
(84,613,009)
541,075,581
Basic and diluted earnings per share (net profit per share)
0.0477
0.0874
0.1365
Basic and diluted earnings per share (including gain from the sale of FVTOCI financial assets)
0.1536
0.1244
0.2230
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
43
Image should be here
Board Report 2023 Separate Financial Statements
In 2023, the Company registered a net profit of 124.7 million lei, 50% higher than that registered in the previous year, growth driven both by dividend income received from portfolio companies (including special dividends from OMV Petrom and Fondul Proprietatea) and significant net gain from financial assets at fair value through profit or loss (FVTPL).
Comprehensive income was also significantly influenced by the net gain on revaluation of financial assets measured at fair value through other comprehensive income (FVTOCI), in the amount of MDL 415.0 million, due to the increase in prices of listed shares in the portfolio.
According to IFRS 9 "Financial Instruments", in the case of portfolio shares, depending on their classification, gains or losses on sale are reflected either in profit or loss (in the case of FVTPL financial assets) or directly in Retained Earnings (in the case of FVTOCI financial assets).
Accordingly, management considers the Company's performance indicator to be Net Profit, including Net Profit and Net Gain on Sale of Financial Assets FVTOCI:
(lei)
2021
(audited)
2022
(audited)
2023
(audited)
Net profit
46,388,634
82,853,635
124,733,425
Gain on the sale of FVTOCI* financial assets, net of tax, reflected in retained earnings
102,908,216
35,081,104
79,023,327
Net result (including Gain on the sale of FVTOCI financial assets)
149,296,850
117,934,739
203,756,752
* represents a reclassification from other comprehensive income elements to retained earnings
Gain on the sale of FVTOCI financial assets worth 79 million lei, reflected in retained earnings was significantly higher than that registered in the previous year due to the increase in stock market prices during the year, and therefore to the opportunities to capitalize on portfolio holdings.
➢ Management Expenses
The monthly average percentage of management expenses represents 0.08% of total assets value, being lower than the average commissions paid to management companies by local investment funds
(0.15% - 0.32%) .
Structure of Management Expenses
Management Expenses (lei)
27,026,217
Expenses with wages, indemnities and similar, of which:
20,233,812
- wages and indemnities, wihtout participation to the benefit plan of directors and employees
19,560,715
- expenses for insurance and social protection
472,078
- expenses with vocational training
201,019
Expenses with outsourced services and other operating expenses
6,033,715
Expenses for energy and water
588,471
Expeense for fuel and materials
170,219
Management expenses include expenses directly related to the carrying out of everyday activity.
In management expenses, the main weight, of 75%, is held by expenses with wages, indemnities and similar, that include wages, indemnities, social insurance and vocational training expenses, without the participation to the benefit plan of directors and employees). For more details regarding expenses with wages, indemnities and similar expenses, divided into fixed and variable expenses, see explanatory note 11 to the individual financial statements on 31 st December 2023 and information in section “3.5 Remunerations for financial year 2023” below.
Expenses for outsourced services and other operating expenses represent 22% of total management expenses and mainly include services for the monitoring of companies in the portfolio, consultancy, management of spaces and archive, insurance, post expenses and subscriptions, rents, royalties, concession taxes, travel, expenses for maintenance and repairs, other operating expenses.
Image should be here
The monthly average percentage of management expenses represents 0.08 % of total assets value.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
44
Image should be here
Board Report 2023 Separate Financial Statements
➢ Separate statement of financial position:
(lei)
31 st December 2021 (audited)
31 st December 2022 (audited)
31 st December 2023 (audited)
Assets
Cash and current accounts
267,380
788,781
1,024,388
Bank deposits with initial maturity within 3 months
157,466,639
104,971,764
299,408,624
Bank deposits with initial maturity over 3 months
-
-
10,724,880
Financial assets at fair value through profit or loss
381,215,357
333,619,756
347,807,747
Financial assets at fair value through other comprehensive income
1,952,286,731
1,875,688,529
2,240,394,284
Bonds at fair value through other comprehensive income
3,982,215
3,982,047
3,884,483
Bonds at depreciated cost
34,171,645
17,550,535
17,555,243
Other financial assets at depreciated cost
5,361,399
9,869,910
6,418,790
Other assets
1,579,222
497,055
515,601
Intangible assets held for sale
-
-
212,738
Investment property
4,247,186
4,284,448
4,109,000
Property, plant and equipment
8,308,912
9,282,127
10,435,507
Right-of-use assets
3,570,975
3,474,536
3,320,774
Intangible assets
360,960
412,375
402,983
Total assets
2,552,818,621
2,364,421,863
2,946,215,042
Liabilities
Loans
-
-
63,674,421
Lease liabilities
3,511,637
3,456,939
3,303,893
Dividends payable
34,036,742
42,633,808
49,950,267
Current profit tax liabilities
-
5,370,896
7,410,272
Financial liabilities at depreciated cost
1,833,601
2,871,103
1,267,195
Other liabilities
3,409,990
4,154,999
6,144,422
Provisions for risks and charges
1,749,743
1,632,553
1,632,553
Liabilities related to deferred profit tax
125,338,378
89,669,402
149,977,380
Total liabilities
169,880,091
149,789,700
283,360,403
Equity
Share capital
510,105,062
499,988,637
499,988,637
Retained earnings
981,801,980
1,018,427,444
1,153,588,929
Reserve from the revaluation of property, plant and equipment
8,967,836
9,774,793
11,305,777
Reserves from the revaluation of financial assets at fair value through other comprehensive income
903,246,143
699,891,438
1,035,679,283
Own shares
(41,119,507)
(38,991,230)
(66,642,400)
Equity-based payments to employees
16,252,012
20,765,780
24,881,378
Other equity elements
3,685,004
4,775,301
4,053,035
Total equity
2,382,938,530
2,214,632,163
2,662,854,639
Total liabilities and equity
2,552,818,621
2,364,421,863
2,946,215,042
On 31 st December 2023, the value of the Company’s total assets was de 2.95 billion lei, an increase by 25% compared to the level at the end of the previous year.
This significant increase in assets is mainly reflected in the increase in the value of FVTOCI financial assets, largely driven by the favourable evolution of the value of listed portfolio shares classified in this category. Dividend receipts from portfolio companies and the use, in the first quarter of the year, of the credit facility contracted with Banca Comercială Română to take advantage of market opportunities also contributed to the increase in the value of total assets.
The increase in total liabilities was driven both by the increase in the deferred tax liability related to the FVTOCI financial assets revaluation reserve, correlated with the increase in this reserve in 2023, and by the drawdown of the EUR 19.2 million credit facility taken from BCR in January 2023.
At the Ordinary General Meeting of Shareholders held on 27 th April 2023, the Company's shareholders approved the distribution of a gross dividend of RON 0.09/share (total RON 82.7 million), related to the statutory result for the financial year 2022, consisting of the net profit and the net gain reflected in the retained earnings from the sale of FVTOCI equity instruments.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
45
Image should be here
Board Report 2023 Separate Financial Statements
3.2. Performance indicators
2021
2022
2023
Current liquidity indicator
6.6
3.5
4.5
Rotation speed of debits-clients
29
21
15
Rotation speed of intangible assets
0.04
0.07
0.09
Net profit per share (lei/share)
0.0477
0.0874
0.1365
Earnings per basic share (lei/share)
0.1536
0.1244
0.2230
Specification:
✓ Current liquidity indicator = current assets/ current liabilities
✓ Rotation speed of debits-clients =average balance of claims/turnover x number of days corresponding to the reporting period
✓ Rotation speed of non-current assets = revenue from current activity/non-current assets
✓ Earnings per basic share (lei/share) = (net profit/(net loss)+gain from the transfer of FVTOCI assets/ no. of shares
Note: (1) Turnover includes revenue from dividends, interest, other operating revenue and net gain from financial assets at fair value through profit or loss
(2) Earning per share, namely net profit per share have been calculated using the average number of shares in circulation (eg. less own shares bought-back by the Company).
3.3. 2023 Budget Achievement Degree
million lei
Budgeted 2023
Achieved 2023
Achievement degree %
Total income
102.75
194.16
189
Financial income
101.96
192.79
189
• dividend income
97.43
143.42
147
• income from bank deposits and bonds
4.53
9.91
219
• net gain on FVTPL financial assets
-
39.33
n/a
• other financial income
-
0.13
n/a
Other operating income
• income from rent and connected activities
0.79
1.10
140
• other income from current activity
-
0.27
n/a
Total expenses
(71.03)
(54.93)
77
Financial expenses
(24.58)
(6.17)
25
• loss from FVTPL financial assets
(17.15)
-
-
• expenses related to bank transactions and commissions
(0.91)
(0.74)
81
• net expenses from currency rate differences
(1.81)
(1.35)
75
• other financial expenses
(4.71)
(4.08)
87
Expenses from current activities
(46.45)
(48.76)
105
Gross profit
31.72
139.23
439
Income tax
(6.97)
(14.49)
208
Net profit
24.75
124.74
504
Net gain on the sale of FVTOCI financial assets
54.18
79.02
146
Net result
78.93
203.76
258
The net result obtained in 2023, of 203.76 million lei, is 158% higher than the budgeted one.
Realised net profit significantly exceeded the budgeted level, mainly due to the recording of 47% higher than expected dividend income for 2023 and a significant net gain on FVTPL financial assets compared to a cautiously projected loss for 2023, given the international environment at the beginning of the year .
The net gain from the sale of FVTOCI assets is 46% higher than the budgeted level, on the back of the
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
46
Image should be here
Board Report 2023 Separate Financial Statements
increase in stock prices on the BVB during the year, and therefore also of the opportunities to exploit the portfolio holdings.
At the same time, the recorded current activity expenses (the main category of expenses), are 5% higher than the budgeted level, the variable remuneration being correlated with the Company's profitability which was significantly above the forecast level.
3.4. Tangible assets of the Company
Location and characteristics of the main tangible assets
On 31 st December 2023, EVERGENT Investments owned tangible assets, including tangible fixed assets, real estate investments and assets representing rights of use in leasing contracts, with a gross value of 21.5 million lei and a net value of 17.7 million lei, with the following composition:
Value (lei)
Tangible assets category
Gross
Net
Lands
946,201
946,201
Buildings
9,289,837
9,289,837
Equipment and means of transportation, of which:
2,313,140
65,696
• equipment
2,082,058
65,696
• transportation means
231,082
-
Other fixed means
467,520
133,773
Assets under construction
-
-
Real estate investments
4,109,000
4,109,000
Right-of-use assets
4,331,264
3,320,774
TOTAL
21,456,962
17,865,281
The company reassessed the land and buildings owned as on 31 st December 2023.
The main tangible assets held are buildings. The company owns 5 buildings on the following sites:
ASSET
Address
Description
Headquarters
94 C Pictor Aman Street, Bacau
building S + GF + 3 floors
București
str. Unirii, Splai nr.6, 4 th district, Bucharest
block GF + M
București
No. 12 Nerva Traian Street, block 1437, 3 rd district, Bucharest
block GF
Iași
No. 3 Grigore Ureche Street, Gh. Sontu block, Iași
block GF
Vaslui
8 Miron Costin Street, Vaslui
Building
3.5. Remuneration of staff for financial year 2023
Remuneration of EVERGENT Investments staff was awarded in compliance with the remuneration principles of the Company in accordance with the relevant legal provisions, internal regulations and contractual provisions, namely:
1. “ Remuneration policies and practices for categories of staff whose professional activities have a significant impact on its risk profile ”, specific regulation of the status of AIFM, developed in accordance with the provisions of Law 74/2015 on AIFM and ESMA Guideline 232/2013 on sound remuneration policies under AIFMD . According to legal regulations, "staff" means all categories of staff, i.e. directors, officers, key functions and other staff whose actions have a significant impact on the Company's risk profile .
Remuneration policies and practices include all types of remuneration granted to staff.
2. EVERGENT Investments’ Memorandum of Association (FSA Authorization no. 108/13.07.2022).
3. Administration and management contracts, approved at the Ordinary General Meeting of Shareholders No. 4 of 28 th January 2021.
4. The collective labour agreement and individual employment contracts applicable to the Company's employees.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
47
Image should be here
Board Report 2023 Separate Financial Statements
Remuneration paid to all staff is detailed in the table below, in total and separately for: members of the Board of Directors; Directors; control functions (i.e. employees in departments: Compliance, Internal Audit, Risk Management) and other functions included in the category of identified staff other than those indicated above (i.e. replacements of Directors - Director and PPE Manager, CFO, compartment coordinators, excluding key area coordinators), with presentation of the calculation method for Fixed Remuneration and Variable Remuneration.
The method of calculation for each type of Remuneration is presented in this section, with clear identification of the functions and with the internal legal and procedural provisions, namely:
Evergent Investments does not pay performance commissions and has no outsourced functions.
Remuneration of directors and executive managers
Details regarding the remuneration of directors and executive managers are presented in Annex 7 – “Remuneration report for 2023 financial year”.
Remuneration of employees
Employees’ remuneration is comprised of:
(a) the fixed component, representing the monthly remuneration for the duties and responsibilities carried out in accordance with the provisions of the individual employment contracts;
The fixed component also includes meal vouchers, holiday vouchers, retirement allowances, sickness or death grants, holiday gifts, etc.
(b) Variable component, consisting of participation in the annual benefit plan and quarterly awards. The total amount of Variable Remuneration (in cash and/or in shares at market value) is at the level of 5% of net profit, in the range of 0-9 gross monthly basic salaries, as set out in the Collective Employment Agreement.
The benefit plan granted annually, after approval of the annual financial statements by the General Meeting of Shareholders, based on the achievement of performance targets, the Company's implementation of projects and prudent risk management.
At individual level, job performance is evaluated annually, qualitatively and quantitatively, on the basis of the criteria laid down in the Collective Labour Agreement, the Internal Rules and the individual employment contracts, in accordance with specific internal procedures.
Quarterly bonuses are granted in accordance with the criteria foreseen in the Remuneration Policy and Collective Employment Contract.
The benefit plan for the directors, executive managers and employees of the Company are granted in cash and/or Company shares (EVER shares), at least 50% being granted in shares through Stock Option Plan (SOP) type programs.
Stock benefit awards are made through SOP programs, approved by shareholders, for the purpose of distributing EVER shares to the Company's directors, officers and employees, with the source of shares repurchased by the Company .
The right to receive shares is granted on the basis of a Plan approved by the Board of Directors in accordance with the resolutions adopted by the General Meeting of Shareholders.
The shares shall be allotted following the exercise of the right by the beneficiaries, after the expiry of a period of 12 months from the grant of the right.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
48
Image should be here
Board Report 2023 Separate Financial Statements
In 2023:
• the cash component of the 2022 benefit plan was paid, and
• EVER shares were assigned to as granted as part of 2021 benefit plan. The assignment was made after the expiry of the 12 months vesting period (the right was granted in 2021, after the approval of 2021 financial statements for 2021 by OGMS). The event was subject of current report on 5 th May 2023 on the granting of EVER shares, in accordance with “2021 Share assignment plan ”.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Total and detailed gross remuneration by staff category and type of remuneration
Gross remunerations
(lei)
Gross remunerations
(expenses for 2023)
Gross remunerations
Actually paid in 2023
Gross remunerations to be paid in 2024 and value of shares to be assigned or deferred (in 2025)
No. of beneficiari es
Amount of benefits actually granted and shares actually awarded during 2023 (prior years' expenses *)
A = B+C
B
C
1. Remunerations offered to the entire AIFM staff
36,436,563
19,274,948
17,161,615
12,455,968
Fixed remunerations
19,005,962
19,005,962
-
52
-
Variable remunerations
- in cash
• bonuses
362,411
268,986
93,425
47
77,405
• participation to benefit plan
2,102,204
-
2,102,204
34
1,528,175
- as shares (share-based participation to the benefits plan)
14,965,986
-
14,965,986
49
10,850,388
2. Remunerations offered to AIFM’s identified staff
28,418,943
14,486,482
13,932,461
10,402,154
A. Members of the Board of Directors (BD)
13,217,325
6,356,172
6,861,153
5,154,492
Fixed remunerations
6,356,172
6,356,172
-
5
-
Variable remunerations
- as shares (participation to the share-based benefits plan)
6,861,153
-
6,861,153
5
5,154,492
•
• B. Executive managers, of which:
7,794,833
3,748,512
4,046,321
2,781,908
Fixed remuneration
3,748,512
3,748,512
-
2
-
Variable remunerations
- as shares (participation to the share-based benefits plan)
4,046,321
-
4,046,321
2
2,781,908
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
50
Image should be here
Board Report 2023 Separate Financial Statements
Gross remunerations
(lei)
Gross remunerations
(expenses for 2023)
Gross remunerations
Actually paid in 2023
Gross remunerations to be paid in 2024 and value of shares to be assigned or deferred (in 2025)
No. of beneficiari es
Amount of benefits actually granted and shares actually awarded during 2023 (prior years' expenses *)
A = B+C
B
C
C. Functions with control attributions (with the express indication of all functions included in this category)
2,498,580
1,468,537
1,030,043
905,393
Fixed remunerations
1,417,906
1,417,906
-
8
-
Variable remunerations
- in cash
• bonuses
65,627
50,631
14,996
7
15,196
• participation to benefit plan
473,114
-
473,114
7
392,382
- in shares (participation to the share-based benefits plan)
541,933
-
541,933
7
497,815
D. Functions other than those indicated in lit. A-C above, included in the identified personal category (with the actual indication of all functions included in this category)
4,908,205
2,913,261
1,994,944
1,560,361
Fixed remunerations
2,829,964
2,829,964
-
11
-
Variable remunerations
- in cash
• bonuses
112,902
83,297
29,605
11
26,269
• participation to the benefit plan
678,118
-
678,118
8
479,714
- as shares (share-based participation to the benefits plan)
1,287,221
-
1,287,221
10
1,054,378
* Includes:
- cash: 2022 cash benefit plan participation and awards related to the fourth quarter of 2022 paid in 2023;
- shares: share-based participation in the 2021 benefit plan (shares actually distributed in the year 2023).
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
4.
EVER Share
The market on which EVER share is traded: Bucharest Stock Exchange, Premium category, since 01.11.1999. It is traded under the EVER, symbol since 28 th March 2021.
The register of shares and shareholders is kept, in accordance with the law, by Depozitarul Central SA.
Evolution of EVER share between 01.01.2023 – 31.12.2023
Yields: EVER share, BET-FI, VUAN EVER
Yields
December 2023 (%)
EVER Share
BET-FI
VUAN EVER
1 month
-0.39
2.40
3.31
3 months
4.53
9.63
7.23
6 months
5.39
21.25
19.95
12 months
-7.30
17.95
23.00
Note: series of historic prices and NAVPS are taken into consideration for the calculation of yield/risk indicators are adjusted with issuers’ corporate events.
Risk Analysis (1Y, daily series): EVER share/BET-FI
Indicator
EVER share
BET-FI
Annualized volatility (%)*
14.51
10.67
Beta**
0.47
1.00
* Volatility (12M) = annualized volatility
** Beta = price sensitivity to market movements
Image should be here
Image should be here
Image should be here
Number of shares: 961,753,592 Nominal value: 0.1 lei Share capital: 96,175,359.2 lei Capitalization (31.12.2023): 1,221,427,061 lei (246 million euro) Price: 1.27 lei,
EPS*: 0.2118 lei, PER*: 5.99; DY: 7.08% *Note: EPS and PER indicators were calculated taking into consideration net result, of 203.75 million lei, comprised of 124.73 million lei net profit and 79.02 million lei net gain on asset sale reflected in retained earnings – accounting treatment as per IFRS 9.
Image should be here
Image should be here
Connected information in the Corporate Governance Code of EVERGENT Investments Ch. 16. Assessment of the performance of the company and EVER share
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
52
Image should be here
Board Report 2023 Separate Financial Statements
EVERGENT Investments is not subject to the transparency requirements of the "EU Regulation 2019/2088 on sustainability reporting in the financial services sector" regarding the promotion of environmental or social features and sustainable investments. The EVER share does not fall under the category of products mentioned in Art. 8, para. (1) and art. 9, par. (1), (2) and (3) respectively, at this moment it does not promote environmental or social features or a combination of these features, it does not aim at sustainable investments and no index has been designated as a benchmark.
Statement in accordance with art. 7 of EU Regulation no. 852/2020: “ The investments underpinning this financial product do not take into account the EU criteria for environmentally sustainable economic activities .”
4.1. Dividend Policy
EVERGENT Investments aims to provide its shareholders with a competitive dividend yield in the capital market. Through the optimal mix of predictable dividend policy and redemption programs, the Company returns value to shareholders in both the long and short term. This is supported by dividend payout ratios in recent years that demonstrate the stability of the Company's cash flows and therefore a strong financial position in the market.
has informed shareholders that it is starting the payment of dividends for the year 2022, through the press release dated 29 th May 2023, in accordance with the Resolution of the General Meeting of Shareholders No. 4 of 27 th April 2023, as follows :
✓ The gross dividend per share is 0.09 lei, from which dividend tax will be deducted at source and commissions on payment will be charged to the net dividend amount;
✓ Payment date is 28 th June 2023;
✓ Shareholders entitled to receive 2022 dividends are those registered in the consolidated register of shareholders on 9 th June 2023 – Registration date. In case of deceased shareholders, dividends shall be paid at the request of one of the heirs, only after the transfer of shares by Bucharest Central Depository to the name of the heirs.
Dividend payment
2020 dividend
2021 dividend
2022 dividend
Dividend payment on 31.12.2023
0.043 lei
0.065 lei
0.09 lei
Total payable (lei/share)
42,012,148
62,052,983
82,695,517
Total paid (lei)
31,564,005
46,029,394
60,272,201
The dividends for the year 2019, unpaid until 11 th June 2023, in the total amount of 14,100,250.05 lei, were prescribed by law and according to the resolution no. 7 of the EVERGENT Investments AGOA on 27.04.2023.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
53
Image should be here
Board Report 2023 Separate Financial Statements
Shareholding structure on 31 st December 2023
Total shareholders: 5,740,303
4.2. Acquisition of own shares
1. In accordance with the resolution of the Extraordinary General Meeting of EVERGENT Investments’ shareholders no. 2/28.04.2022, between 22.12.2022 and 06.01.2023 we have run the public offering for the purchase of own shares, for a number of 19,625,000 shares, at a purchase price of 1.41 lei/share, in order to lower the share capital, through share annulment.
The offer was a success from the point of view of the interest shown by investors, the assignment index being 0.0908835825.
2. The extraordinary general meeting of shareholders of EVERGENT Investments adopted Resolution no. 2 on 27.04.2023, through which:
- it approved Programs 8 and 9 for the buy-back of own shares, abiding by the legal provisions applicable and with the following main characteristics:
a) Program purpose: the Company will buy-back shares in order to run “stock option plan” type programs (Program 8), as well as in order to lower the share capital through share annulment (Program 9).
b) The number of shares that can be bought-back: (i) maximum 9,200,000 shares through market operations (0.956% of registered share capital) for distribution to employees, managers and directors of the Company, through “stock option plan” type programs (Program 8) and (ii) maximum 10,000,000 shares (1.039% of the registered capital) through public purchase offering, for the purpose of lowering the share capital through share annulment (Program 9).
c) Minimum price per share: the minimum acquisition price will be the BVB price at the time the purchase is made.
d) Maximum price per share: 2 lei.
e) Duration of each program: maximum 18 months from the date the resolution is entered in the Trade Registry.
f) Payment of bought-back shares will be from the distributable profit or available reserves of the Company registered on the latest approved annual financial statement, with the exception of legal reserves registered on the 2022 financial statements, according to the provisions of art. 103 index 1 Companies’ Law no. 31/1990.
- authorizes the Board of Directors and individually its members to adopt all decisions necessary to implement the resolution, including going through all stages and formalities for the implementation of the programs, application of assignment criteria, ascertaining the beneficiaries and number of rights/options to purchase shares, right exercise period, preparation and publication of informative documents according to the law.
Image should be here Image should be here Image should be here Image should be here
0.33%
12.30%
37.49%
49.88%
foreign individuals
foreign companies
resident individuals
resident companies
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
54
Image should be here
Board Report 2023 Separate Financial Statements
I. First stage of Buy-back Program no. 8 (current report on 11.07.2023) – cumulated results of operations run:
✓ Period: 17.05.2023 – 11.07.2023;
✓ total no. of bought-back shares: 1,000,000, representing 0.104% of share capital;
✓ average buy-back price: 1.2587 lei/share;
✓ Total value of bought-back shares: 1,258,686.64 lei
✓ Purpose: buy-back of own shares in order to abide by the legal obligations stemming from “stock option plan” type programs
✓ Broker: BT Capital Partners.
II. The second stage of Buy-back program no. 8 (current report on 13.10.2023) – cumulated results of operations run:
✓ Period: 13.07.2023 – 12.10.2023;
✓ total number of bought-back shares: 3,500,000, representing 0.3639% of share capital;
✓ average buy-back price: 1.1943 lei/share;
✓ total value of bought-back shares: 4,179,938.88 lei
✓ Purpose: buy-back of own shares in order to abide by the legal obligations stemming from “stock option plan” type programs
✓ Broker: BT Capital Partners.
III. Third stage of Buy-back Program no. 8 (current report on 28.11.2023) – cumulated results of operations run:
✓ Period: 16.10.2023 – 28.11.2023;
✓ Total number of shares bought-back: 4,700,000, representing 0.4886% of share capital;
✓ Average buy-back price: 1.2198 lei/share;
✓ Total value of bought-back shares: 5,732,949.64 lei
✓ Purpose: buy-back of own shares in order to abide by the legal obligations stemming from “stock option plan” type programs;
✓ Broker: BT Capital Partners.
IV. Initiation of the Public Offering of EVER shares – Buy-back program 9 (current report on 29.11.2023 and FSA Resolution no.
1328/22.12.2023)
Through FSA resolution no. 1328/22.12.2023 we approved the public offering for shares issued by EVERGENT Investments SA, with the following main characteristics:
✓ number of shares that are object of the offer: 10,000,000, representing 1.0398% of share capital;
✓ Buy-back price: 1.45 lei per share;
✓ Period: 08.01.2024 – 19.01 2024;
✓ Offer broker: BT Capital Partners;
✓ Subscription location: according to the offer document displayed on the website www.evergent.ro.
✓ The purpose of the program is the lowering of share capital through the annulment of bought-back shares, in accordance with EGMS resolution no. 2 on 27.04.2023.
The operations are part of the EVERGENT Investments policy mix which includes redemption and dividend allocation programs that provide a higher return on invested capital than other types of investments.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
55
Image should be here
Board Report 2023 Separate Financial Statements
5. Company Management
5.1. List of Directors
5.1.1. CV (name, forename, age, qualification, vocational experience, position and seniority)
No .
Name forename
Age
Qualification
Vocational experience
Current position in
EVERGENT Investments
Seniority
1
Doroș Liviu Claudiu
54
Higher education
• MBA - Management and Business Administration
• Economist – specialization Economy of Services
• Specializations: capital market:
• Investment consultant
• Specialist in technical analysis and trading strategies
• Agent for financial investment services
• Project management
• Internal control
• Economist
• Brokerage
• Company management
• Consultancy
• Assets management
BD president
CEO
Member of the Management Committee
BD member 2006 - present
2
Iancu Cătălin – Jianu - Dan
48
• Graduation certificate Stanford University. Graduate School of Business
• MBA in management. Rotterdam School of Management
Bachelor studies - Bachelor of Economy – the Academy of Economic Studies Bucharest; Faculty of Economic studies in foreign language
• Training courses at Morgan Stanley. Standard Bank. Barclays Capital
• Management “OTP Management Academy
• Investment management. Capital market consultant
• Member of the Association of Financial Markets in Romania
BD Vice-president
Deputy -CEO
Member of the Management Committee
BD Member 2013 - present
3
Radu Octavian Claudiu
62
• FernUniversitaet Hagen – Betriebswirtschaftlehre
• Bachelor studies – Bachelor of Economics - the Academy of Economic studies Bucharest – Faculty of Commerce
• Business consultation
• Marketing
• Management
Independent non- executive manager
President of the audit committee
BD Member 2013 - present
4
Ciorcilă Horia
60
• Cluj Napoca Polytechnic Institute. Faculty of electronics. Specialization Automation and Computers
• BD President – Banca Transilvania
• BD member at BT Asset Management SAI
Non-executive, independent director
President of the Investment Committee
BD member 2013 - present
5
Ceocea Costel
67
Higher education
• Doctor in industrial engineering with thesis “Risk in Management Activity”
• MBA - Management and Business Administration.
• Economist - major Economy of the Constructions and Transport Industry
Specialization: Capital Market:
• Investment consultant
• Business manager
• Company assessor
• Company liquidator
• Acquisitions manager
• Chartered accountant
• Project management
• Internal control
• President of EVERGENT Investments (2009 - 2021)
• CEO EVERGENT Investments (2009 – 2017)
• Banca Transilvania Manager
• University lecturer –Vasile Alecsandri University of Bacau
Non-executive director
President of the Appointing- Remuneration Committee
BD member 2001 - present
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
56
Image should be here
Board Report 2023 Separate Financial Statements
Authorization of EVERGENT Investments’ Board of Directors
The members of the Board of Directors, presented above have been approved by OGMS resolution no. 2/28.01.2021, for the 5 th April 2021 – 5 th April 2025 mandate and authorized by FSA (authorization no. 49/30.03.2021).
(Current report on 31.03.2021)
Authorization of EVERGENT Investments’ management
The company’s executive management, presented in the table above, has been approved by BD resolution on 5 th April 2021 and authorized by FSA (authorization no. 59/05.04.2021) for a 4 years’ mandate, namely for 5 th April 2021 - 5 th April 2025.
(Current report on 06.04.2021)
Consultative committees of the Board of Directors (BD Resolution on 5 th April 2021)
➢ Appointing -Remuneration Committee is comprised of 3 members, namely :
1. Costel Ceocea – President – non-executive director;
2. Octavian Claudiu Radu – member – non-executive and independent director;
3. Horia Ciorcilă – member – non-executive and independent director.
➢ Audit Committe este is comprised by 3 members, namely:
1. Octavian Claudiu Radu – President - non-executive and independent director;
2. Horia Ciorcilă – member - non-executive and independent director;
3. Costel Ceocea – membru – non-executive director.
➢ Investment Committee – is comprised of 3 members, namely:
1. Horia Ciorcilă – President – non-executive and independent director;
2. Octavian Claudiu Radu – member – non-executive and independent director;
3. Costel Ceocea – member – non-executive director.
The non-executive quality for the members of the Consultative Committees and independent directors for their presidents insures the fulfilment of the conditions foreseen by the Corporate Governance Code of EVERGENT Investments, aligned to the requirements of the Bucharest Stock Exchange Code.
5.1.2. Any agreement, convention or family connection between that director and another individual due to whom he was appointed director – n/a.
5.1.3. Directors’ holding in the company’s share capital (direct and indirect holding on 31.12.2023)
No.
Name
Forename
Holdings as of 31.12.2023
% of share capital
1
Ceocea
Costel
5,343,128
0.55
2
Doroș
Liviu Claudiu
521,531
0.05
3
Iancu
Cătălin Jianu Dan
5,884,655
0.61
4
Radu
Octavian Claudiu
0
0.00
5
Ciorcilă
Horia
5,268,993
0.54
5.1.4. List of individuals affiliated to the company. EVERGENT Investments Group – detailed presentation in Ch. 1.2.3.
Transactions with related parties in 2023 are presented in explanatory note 29 to the individual financial statements of the Company on 31 st December 2023.
5.2. List of executive management members:
Members of EVERGENT Investments’ management: Doroș Liviu Claudiu – CEO, Iancu Cătălin Jianu Dan – deputy-CEO – FSA authorization no. 59/05.04.2021.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
57
Image should be here
Board Report 2023 Separate Financial Statements
5.2.1. Term for which the individual is part of executive management
The directors of the company have entered Management Contracts for a 4 years’ mandate, namely 5 th April 2021 - 5 th April 2025.
5.2.2. Any agreement, convention or family relationship between that individual and another individual due to whom that individual was appointed member of executive management- not the case.
5.2.3. Participation of the individual to the capital of the company – see the list presented under item 5.1.3.
5.3. For all individuals foreseen under item 5.1. and 5.2. mention possible litigations or administrative procedures in which they were involved over the last 5 years, regarding their activity within the issuer, as well as those regarding the ability of that individual to fulfil his attributions within the issuer – not the case.
5.4. Assessment of individuals in the management structure
According to “Policies for the evaluation of individuals in the management structure and individuals holding key positions within EVERGENT Investments” (
www.evergent.ro/despre
noi ) and statutory provisions, the Board of Directors has carried out the annual assessment of the efficiently of the Board and its Committees as well as assessment of the performance of directors based on the criteria set for the monitoring of the results of executive management’s activity and of the company as a whole. The President of the Board and the Board in its entirety have ascertained that the way in which the Board carries out its activity has insured the fulfilment of its responsibilities .
The consultative committees tasked with the carrying out of investigations and the drafting of recommendations for the board in fields such as audit ( Audit Committee ), remuneration of staff (managers, directors, employees) or appointing of candidates for various management positions ( Appointing-Remuneration Committee), investments (Investment Committee) have submitted the Board recommendations for each meeting concerning issues under their area of competence (see: Corporate Governance Code of EVERGENT Investments ) and presented half-yearly reports on their activity.
The Board of Directors has appointed the management of the company to the CEO and deputy CEO, who together form the Management Committee.
Each executive manager of the company coordinates the daily activity of certain departments according to the organizational chart and adopts individual decisions on its specific area of activity, and together they adopt decisions within the collective work body, the Management Committee, in applying the legal requirements that executive managers ensure the actual management of the company.
For this purpose, the Committee adopts decisions on:
✓ Implementation of the investment strategy set by the Board of Directors ;
✓ Implementation of the resolutions of the Board of Directors that target assigned competencies;
✓ Issues that fall under the competence of the Board of Directors that are to be subject to its debate and approval, which concern assigned attributions ;
✓ Issues that, through their nature may impact all lines of activity (business, support, compliance);
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
58
Image should be here
Board Report 2023 Separate Financial Statements
✓ Issues that, in order to adopt a decision, require the full understanding and harmonization of all business and compliance aspects;
✓ Approval of the specific procedures of company departments.
The Management Committee presents the decisions adopted and situation of running operations in the meetings of the Board of Directors and prepares regular reports on its activity.
6. Human Resource Management
On the level of the executive special attention is paid to human resources to insure the continuity of professional training programs for the purpose of maintaining the expertize acquired over several years of specialization. Staff working in the following fields was included in the continuous training programs: investment analysis, assets evaluation, accounting, audit, risk management, legal, corporate governance. The amount assigned in the reporting period for the professional training and participation to seminaries and conferences in the field was 201.019 lei.
Staff were assessed for their work in 2022 in terms of both performance and specific knowledge.
The company had 45 employees at the end of 2023. In line with the Succession and Development Plan approved by the Board of Directors, the recruitment and selection process continues, with a timeframe of 2025-2026.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
59
Image should be here
Board Report 2023 Separate Financial Statements
7. Internal Audit Department
Internal audit activity is an independent activity of objective assurance and counselling with the purpose of adding value and improving the company’s operations. It helps the company in fulfil its objectives through a systematic and methodical approach that evaluates and improves the efficiency of the risk management, control and governance processes .
The internal audit activity is carried out by the internal audit department that is subordinated to the Board of Directors and from an administrative point of view it is subordinated to the CEO. Through its positioning in the organization chart, direct access is insured and activity reporting on the level of the Audit Committee and Board of Directors, as well as the independence required in order to carry out the internal audit activity, for the purpose of the objective evaluation of the efficiency of processes / operations and submission of recommendations for their improvement .
Internal audit is exercised as follows:
✓ compliance (regularity) audit – that has the objective of verifying the compliance with applicable laws, regulations, policies and procedures;
✓ performance (operational) audit – that has the objective of verifying the quality and adequate nature of systems and procedures, critical analysis of organizational structure, the evaluation of method adequacy, resources and achievement of results in relation to the objectives set;
✓ audit of the corporate governance system, that has the objective of evaluating the way in which the management position is exercised in order to reach company objectives.
Internal Audit Function:
✓ sets, implements and maintains an audit plan for the examination and evaluation of the adequacy and efficiency of internal control systems and mechanisms and procedures of EVERGENT Investments;
✓ issued recommendations based on the result of activities carried out;
✓ verifies the abidance by issued recommendations;
✓ reports on aspects related to internal audit.
Internal audit activity is carried out in compliance with the International Standards for professional practice of internal audit (IAI), its compliance being supported by the results of the quality assurance and improvement program which includes internal and external assessments.
Once every 5 years the internal audit activity is evaluated by an independent qualified auditor. The last external evaluation was at the end of 2019, and the opinion of the financial auditor was that the internal audit function is in general compliant with IAI standards for the professional practice of internal audit, that is the highest rating offered by IAI and IAI Ethics Code, as well as the approved Charter of the Internal audit, applicable policies, procedures and regulations.
The internal audit activity maintains a multiannual plan that includes, on a time horizon of about 3 years, all activities and processes that can be audited in EVERGENT Investments SA. The internal audit missions included in the Multiannual Plan are defined and selected based on the analysis of risks associated to auditable activities, for the purpose of prioritizing the internal audit missions on the forecast horizon. The internal audit plan is evaluated on an annual basis and is in agreement with the objectives of the company.
Image should be here
Image should be here
The internal audit function is separate and independent from other functions and activities of EVERGENT Investments SA. The Internal Audit Department is subordinate to the Board of Directors. FSA notified internal auditor: Virginia Sofian, Gabriela Stelea, Rodica Grinţescu
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
60
Image should be here
Board Report 2023 Separate Financial Statements
The internal audit plan and resources necessary are endorsed by the Audit Committee and approved by the Board of Directors. At the same time, significant modifications occurred at a later time are submitted for endorsement and approval. The plan is revised and adapted, if necessary, as an answer to chances in business, risks, operations, programs systems and controls of the company and to the priorities decided by the Board of Directors or management .
For each audit mission a plan is prepared and documented to take the following into consideration:
• objectives of the activity that is revised and means through which it is controlled;
• significant risks related to the activity and means through which the potential impact of the risk is maintained at an acceptable level;
• adequacy and efficiency of management and control systems for activity risks, with reference to the control framework;
• opportunities for the significant improvement of management and control systems of activity risks.
The plan of the mission includes objectives of the mission, coverage area, calendar and resource assignment. The objectives of the mission reflect the result of the evaluation of the risk associated to the revised activity. At the same time, on drafting the objectives of the mission the possibility of errors, irregularities, non-compliances and other significant exposures are taken into consideration.
The overall internal audit objectives for 2023 focused on assessing the effectiveness of the risk management system and the system of controls implemented by process and activity.
Thus, the internal control framework of EVERGENT Investments is structured on three levels:
✓ functions that own and manage risks (operational management) – 1 st line. Operational management is responsible for maintaining effective internal control and executing daily control procedures;
✓ risk supervision functions (risk management function and compliance function) – 2 nd line. The risk management function ensures the management and control of risks identified through specific valuation processes, and the compliance function provides the management of compliance risks;
✓ function that provides an independent examination of the efficiency of the risk management system, control and governance (internal audit function) – 3 rd line. The internal audit function provides the objective and independent valuation of the efficiency of the risk management system, internal control system and governance and execution processes, to support the reaching of objectives and issues recommendations for the improvement of these activities.
Activities run in year 2023 based on the internal audit plan targeted:
✓ audit of asset valuation activity and calculation of unit net asset value per share (NAVPS);
✓ corporate governance audit;
✓ audit of the remuneration policy of company managers (members of the board of directors and executive managers) and of the staff;
✓ audit of the investment activity and private equity portfolio management;
✓ audit of the activity for the prevention and fight against money laundering and the financing of terrorism;
✓ audit of legal activity - partial implementation;
✓ human resources audit - partial implementation;
✓ audit of regular and current reports – partial implementation;
✓ audit of the activity of Agrointens SA subsidiary;
✓ audit of the activity of Everland SA subsidiary;
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
61
Image should be here
Board Report 2023 Separate Financial Statements
✓ follow-up of progresses registered in the implementation of internal audit recommendations, under supervision;
✓ verification of certain compliance aspects, at the request of the Board of Directors or executive managers;
✓ participation to committees/work groups nominated by Board of Directors or Directors for the implementation of certain projects/activities.
Besides the activities presented, other non-audit activities were run, that included:
✓ strategic and annual planning of internal audit activities;
✓ reports on the internal audit activity;
✓ monitoring and report on the assurance and improvement program of the quality of internal audit activity;
✓ report on the implementation status of recommendations submitted by internal auditors and the audit committee;
✓ extension of the mandate of the financial auditor;
✓ administrative activities
Internal auditors report directly to the Audit Committee and Board of Directors their ascertainments and suggestions for the significant improvement of internal controls.
Following the assurance missions run in the reporting period, internal audit has presented recommendation for process improvement. Based on the conclusions and recommendations presented by internal audit, EVERGENT Investments’ executive management and the management of subsidiaries have adopted adequate measures for the management of identified risks.
The objectives and purpose of each internal audit mission, opinion of the internal auditors/ conclusions, recommendations and measure plan for the implementation of recommendations suggested or applied during the audit activity have been included in internal audit reports that have been presented to the Audit Committee and Board of Directors.
At the same time, internal auditors reported to the directors, the Audit Committee and the Board of Directors on the purpose, authority, responsibility and performance of the internal audit activity in relation to its plan and on its compliance with the Code of Ethics and the Standards. The report includes significant risk and control issues, governance issues and other issues that require the attention of executive management and/or the Board of Directors.
Internal auditors followed-up the progresses registered in the implementation of recommendations and reported to executive management on the abidance by the deadlines set for implementation. AT the same time, internal auditors followed-up the setting of measures by the audited structures to complete the implementation of recommendations.
No situations were identified in which the management decided not to take any measures to reduce risks considered unacceptable for the Company .
Image should be here
Image should be here
Proper measures were implemented to keep risks at an acceptable level .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
62
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
EVERGENT Investments sets up and maintains a permanent and efficient compliance verification function that is independent and has the following responsibilities. a) periodically monitors and evaluates the adequacy and efficiency of measures, policies set according to applicable regulations and actions taken to remedy deficiencies regarding the company’s abidance by its obligations. b) regularly monitors and verifies the application of legal provisions applicable to EVERGENT Investments’ activities, internal regulations and procedures and acts in accordance with its competencies to prevent and suggest measures to remedy any infringement of the laws, regulations in force applicable to the capital market or internal regulations and procedures of EVERGENT Investments by EVERGENT Investments or its staff; follows up the implementation of suggestions and recommendations; c) counsels and assists relevant individual responsible for the carrying out of the activities in order for EVERGENT Investments to abide by its obligation based on incidental capital market legislations.
8. Compliance Department
The internal control activity has been carried out mainly through permanent control , with a pro- active nature , exercised through the constant supervision and monitoring of activities subjected to internal control in order to prevent the occurrence of legal or internal non- compliance, for an efficient increase of the internal control function. The main activities of the Compliance Department for H 1 2023 specific to EVERGENT Investments as AIFM (permit no.20/23.01.2018), defined by art. 51 Law 74/2015 on alternative investment fund managers and are approved by the Board of Directors within the 2023 Investigations Plan.
With the mention that all objectives set in the investigations plan have been reached, the activity of the compliance officers consisted mainly in the running of the following control actions regarding regulations related to EVERGENT Investments’ activity, in the tripartite capacity of AIFM, AIF and issuer:
1. Status of compliance with legal norms on:
✓ Alternative Investment Fund Managers , through the „Verification of the abidance by the Assessment Policy and Procedure for individuals in the management structure and individuals covering key-positions in EVERGENT Investments SA”, including the annual verification of the adequacy of the above-mentioned personnel.
✓ Alternative Investment Funds , through the insertion of the new depositary name and elements of depository services contracts and contracts for the delivery of custody services and update of certain categories of data and information presented below:
a) „ Key Information Document”
- alignment to the provisions of EU Delegated Regulation no. 2268/2021 amending EU Regulation no. 653/2017 on key information documents relating to insurance-based and structured individual investment products (SIIPs) by laying down regulatory technical standards on the format, content, revision and amendment of key information documents as well as the conditions for the compliance with the requirement to provide such documents, with effect from 1 st January 2023.
- data update on 31.05.2023 on the synthetic risk indicator and performance scenarios, transposed in the following annexes as well: i) information on the prior performance of the Fund, over the last 10 years; ii) results of the previous performance scenarios.
b) „ Rules of EVERGENT Investments SA – Closed-end alternative investment fund for retail investors set-up as investment company (AIFRI)”
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
63
Image should be here
Board Report 2023 Separate Financial Statements
- Modifications also refer to Section 3.7. Leverage level calculation method, to redraft the information on the calculation methods for the exposure and to remove the statement that the Company has no assets acquired through the use of leverage, in line with the current situation regarding the taking out of an investment loan.
c) „Prospectus of the AIFM attracting capital from retail investors – abstract” – updates regarding:
- financial data since the latest reporting, namely 31st March 2023, unaudited.
- presentation of data on 31 st March 2023 regarding the shareholding structure and structure of assets portfolio, taken from the Activity Report of the Board of Directors in Q1.
- rewording of information on leverage effect regarding the calculation methods for exposure and removal of the statement that the Company does not have assets acquired through the use of leverage effect.
d) Issuers of financial instruments , by verifying, in particular, the convening notice, materials and information presented to shareholders at the OGMS and EGMS on 27.04.2023.
e) Information on sustainability in the financial services sector.
2. Conditions that lay at the base of the authorization/endorsement of the functioning conditions foreseen by art. 2, 4 and 6-10 Law no. 74/2015 (authorisation of EVERGENT Investments as AIFM – FSA authorization no.20/23.01.2018 ) and later amendments – we continued the process of revising the internal procedural framework, and notified FSA about:
a) Annual assessment of the adequacy of “Procedures and Policies for asset valuation and calculation of net asset unit value per share” and communication to investors through Current Report within the legal deadline (28.02.2023) and display on the website of the revised documents:
(i) “Policies and procedures for the valuation of assets and calculation of net asset unit value per share”.
(ii) “Rules and procedures to evaluate the assets of EVERGENT Investments S.A.“.
The release included the information that the methods for the ascertainment of assets value has not been modified.
b) „Procedures on organizational structure and administrative and accounting requirements and control and safeguard devices in the field of electronic data processing, as well as appropriate internal control mechanisms”;
c) Liquidities management policies;
d) Risk management policy in EVERGENT Investment;
e) Risk profile of EVERGENT Investments.
Conclusion: no non-compliances identified .
3. Prudential rules foreseen by art. 12 Law no. 74/2015 – no non-compliances identified .
4. Remuneration policies foreseen under art. 13 Law no. 74/2015
The abidance by the following was verified :
• Remuneration policies of EVERGENT Investments, assignment operations for EVER shares in accordance with the “Share Assignment Plan” for 2022 (CR 05.05.2023) and granting of EVER share in accordance with the “Share Granting Plan” for 2021 (CR 30.05.2023);
• Remuneration policies on the Group level, including in the balance GMS of subsidiaries.
Conclusion: no non-compliances identified.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
64
Image should be here
Board Report 2023 Separate Financial Statements
5. Provisions of art. 14 Law 74/2015 on the identification, prevention, management and monitoring of situations mentioned in art. 30-37 EU Reg. no. 231/2013 generating conflicts of interest – the potential conflict of interest situations, corresponding to the types of conflict of interests identified in the activity of EVERGENT Investments/ EVERGENT Investments Group, were managed according to the rules set.
• The “Policy for the prevention and management of conflicts of interest and personal transactions” and “Procedure for the prevention and management of conflicts of interest” were revised with the inclusion of certain provisions regarding the individual investment portfolio management contracts managed on a discretionary basis;
• Monitoring of compliance with legal requirements on personal transactions was carried out;
• Verification of compliance with legal requirements on avoidance of conflict of interest and misuse of confidential information has been carried out.
Conclusion: no conflict was registered.
6. Provisions of art. 18 Law 74/2015, lines (1), (3) - (9), (11), (12) on the assessment of AIF assets- the net monthly asset was endorsed, it also includes the verification of the held assets assessment method.
Conclusion: no infringement of legal provisions were identified.
7. Provisions of art. 19 Law 74/2015, on the delegation of the collective portfolio management activity or risk management – not the case .
8. Provisions of art. 20 Law 74/2015, line (1)-(11) regarding the agreement between depositary and AIFM
• EVERGENT Investments notified FSA and informed the investors, through the current report of 28.03.2023, regarding the decision to change the Asset Depository of EVERGENT Investments SA - respectively Banca Comercială Română SA (BCR SA) instead of BRD- Groupe Société Générale SA.
• Through current report on 19.05.2023 EVERGENT Investments informed investors about the authorization by the Financial Supervisory Authority of Banca Comerciala Romana as depository of the Company’s assets (FSA Authorization no. 74 on 18 th M2023).
9. The transparency and reporting obligations foreseen by art. 21 and 23 namely the transparency obligations foreseen under art. 22 Law no. 74/2015.
All mandatory reports and public releases, according to the good practices instituted through the own Corporate Governance Code, have been endorsed by the Compliance Department from the point of view of the abidance by the legal deadline and content of the report; the webpage is constantly updated in the Romanian and English language, once public information is released.
Conclusion: Full prior verification- no non-compliances identified.
10. Obligations pertaining to AIFM following the gaining of control over certain unlisted companies and certain issuers foreseen by art. 25-29 Law no. 74/2015.
a) The legal reporting and transparency requirements regarding the changes of holding thresholds have been met;
b) Information on the activity of the subsidiary were included in the contents of this report, as well as more detailed information in the consolidated activity reports of EVERGENT Investments SA for 2022 and first half of 2023.
Conclusion: Full prior verification- no non-compliances identified.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
65
Image should be here
Board Report 2023 Separate Financial Statements
11. Abidance by EU Regulations (MAD, MAR) on market abuse (privileged information, personal transactions).
a) All persons with access to privileged information were notified of the closed period prior to the announcement of financial results regarding the ban on EVER Share trading, according to the published financial reporting calendar and the ex-post status was checked as per internal procedures. Conclusion: no non-compliances were identified.
b) BD was submitted and approved the Reports on “The abidance of EVERGENT Investments by legal and internal regulation on the preparation of EGMS and OGMS on 27.04.2023” and the “Abidance of EVERGENT Investments SA by legal and internal regulations regarding the privileged information regimen ”.
Conclusion: privileged information related to the convening of GMS and presentation of financial statements were properly managed.
12. The management of complaints regarding EVERGENT Investments activity on the capital market
• An internal control was run regarding the Verification of the abidance of EVERGENT Investments SA by the management method for shareholders’ complaints.
• Reports were made in accordance with FSA Reg. no. 9/2015.
13. Abidance by legal and internal provisions for the organization and conducting of:
• Extraordinary and ordinary general meeting of shareholders on 27.04.2023, with the certification of the abidance by these obligations. BD was submitted Reports on “Abidance of EVERGENT Investments by legal and internal regulation for GMS preparation.”
Conclusion: no non-compliances identified.
14. Verification of the abidance by Norm no. 33/2017 on the organization of the archive activity at entities authorized/ certified, regulated and supervised by FSA - on a regular basis, in the endorsement process for certain internal documents/ operations, we also verify the keeping of records and evidence of documents in paper and electronic format.
a) A regular control was run for the “Verification of the abidance by FSA Norm no. 33/2017 on the organization of archive activities at entities authorized/ endorsed, regulated and supervised by FSA”.
Conclusion: no non-compliances identified .
15. Obtaining FSA authorizations/decisions; FSA notifications:
✓ Authorization by the Financial Supervisory Authority of Banca Comercială Română as depositary of the company's assets - ASF Authorization no. 74 of 18 th May 2023. The Compliance Department has endorsed the documentation submitted to the ASF regarding the termination, by agreement of the parties, of the deposit and custody contract concluded with BRD - Groupe Société Générale together with the contracts on deposit and custody services concluded with the Romanian Commercial Bank, approved by the Board of Directors of EVERGENT Investments.
16. Method of abiding by internal procedures – verification of the abidance by internal procedures regarding mainly:
a) Internal compliance endorsement for investment notes, including cash loan operations contracted in January 2023 (CR on 17.01.2023), work procedure, hob descriptions, from
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
66
Image should be here
Board Report 2023 Separate Financial Statements
the point of view of the abidance and reflecting of legal provisions and internal regulations;
b) Compliance endorsement for the running of own shares buy-back program in accordance with EGMS Resolution no. 2/27.04.2023 (period: 1 st stage: 17.05-14.07.2023, RC 15.05.2023 ; 2 nd stage 13.07-12.10.2023 CR 11.07.2023); 3 rd 16.10-28.11.2023;
c) Compliance endorsement for the running of own shares buy-back program in accordance with EGMS Resolution no 2/27.04.2023 through the Public Offering run between 08.01.2024-19.01.2024 – according to FSA resolution no. 1328/22.12.2023.
d) Reports presented to the Board of Directors on the status of BD and MC resolutions implementation on 31.12.2022 and 31.03.2023;
Starting with internal reports on 30.06.2023, this activity is passed to another structure.
Conclusion: no non-compliances were identified following the verifications carried out.
17. Compliance of the investment of managed assets with capital market regulations, internal rules and procedures and Memorandum of Association – internal compliance visas were issued for investment notes.
Conclusion: no infringement of legal provisions or internal regulations ascertained.
18. Verification whether the training of the members of management structure/staff was carried out in accordance with legal provisions and internal policies/procedures of AIFM
• The updated information for the categories of persons specified in the Regulation for 2023, with reference to 31.01.2024, was uploaded to the ASF Authorisation Portal Platform within the deadlines set out in ASF Regulation no. 3/2023..
The half-yearly statement on suspended employment contracts has been communicated, in accordance with the provisions of Article 37 (2) of ASF Regulation No 32/2020 on training, education and professional development on the capital market, as amended.
19. Notification of EVERGENT Investments, its management structure and employees regarding the legal regime applicable to the capital market, including on draft rules under public consultation.
***
Staff of the Compliance Department:
1. Michaela Pușcaș – compliance officer, department manager (FSA Reg.no.: PFR13RCCO/04003)
2. Gabriel Lupașcu – compliance officer (FSA Reg.no.: PFR14RCCO/040020)
The detailed responsibilities of each individual employed in the department are set. In case one of the individuals is missing, his/her attributions and responsibilities are immediately taken over by the other authorized individual.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
67
Image should be here
Board Report 2023 Separate Financial Statements
9. Legal assistance, consultancy and legal representation activity
The mission of the Legal Department is to make sure that the rights and interests of the company are protected and reached in accordance with applicable laws and regulations. For this purpose, under the coordination of the Director who is responsible for leading all activities related to legal advice and representation, the department has been involved in pursuing litigation strategy, providing professional advice and legal representation before the courts and other private and public law institutions.
9.1. Legal Representation
The legal assistance and representation activity run in the reporting period focused on the formulation of the necessary defences in the 273 litigations registered in specific records, a number of 41 files being concluded. In order to insure a correct solving of a case in court, the service pays the outmost importance on the abidance by legal terms and measures, correlated with the presence of the conventional representatives in court.
A summary of litigations is the following (details in annex 3):
9.1.1. During 2023, the Legal Service paid particular attention to claims files, as they aim to recover amounts owed to our company.
A favourable solution was obtained in the case brought against SNGN - Romgaz regarding claims for the countervalue of the additional net dividends due and not paid for 2018, the court ordering the defendant company to pay to EVERGENT both the principal debt and the interest and costs advanced. The amount was partially recovered in December 2023.
In view of the high proportion of debts in total receivables, legal steps to recover the amounts owed by AAAS have been continued and intensified, and the company has developed a complex strategy in relation to this debtor. Enforcement proceedings against AAAS are continuing, with the Legal Service in constant contact with the bailiffs and helping to identify assets that can be pursued.
At the same time, two cases are pending before the courts against the Romanian State in order to hold it liable as the final beneficiary of the amounts unlawfully executed from the undersigned by AAAS. In one of the cases, the court ordered the Romanian State to pay EVERGENT the sum of 50,000 lei as material damages. The judgment is subject to appeal, and we will take all steps in our defence to allow the action as formulated .
We also note the promotion of a number of 56 files on the subject of Complaint against the Land Registry Orders issued by OCPI Iasi, which unlawfully rejected our requests for the registration of
Image should be here
Image should be here
Litigations in which EVERGENT Investments SA acts as plaintiff: ✓ 225 cases, of which: 203 cases are pending in various trial stages (of which 170 cases are against AAAS) and 22 cases are concluded. ✓ The value of pending litigations: 70,227,426.64 lei (claims and insolvency).
Image should be here
Image should be here
Litigations in which EVERGENT Investments SA is defendant: ✓ 48 cases, of which: 29 cases are litigations pending in various trial stages, and 19 are concluded. ✓ Litigations against EVER has various claims as object (e.g. resolution to replace authentic document) non-quantifiable in money.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
68
Image should be here
Board Report 2023 Separate Financial Statements
the Summonses on the real estate execution of the assets taken over by AAAS from the company Fortus S.A., the undersigned also taking other extrajudicial steps in order to protect the interests of EVERGENT, in an operation in which they are trying to evade real estate from execution, to the detriment of AAAS creditors.
9.1.2. In the statement of litigations there are 16 cases (of which 11 pending and 5 solved) with object insolvency and connected files. Litigations in this category target the recovery of claims in files dating back a long time, on the dockets of courts since insolvency proceedings involve lengthy operations. In this cases we have unsecured claims and we don’t expect a high change of recovering all amounts declared on creditors’ tables.
In the category of debtors from this category, a different situation is that of debtor Vastex S.A., EVERGENT being the majority creditor with a claim registered in the debtors’ creditors table of 8,834,829.73 lei. Special attention is paid to this procedure since the debt can be recovered, the debtor having assets in its estate, both movable and immovable that could cover the amount due. We would like to point out that, following legal action taken by EVERGENT in the insolvency proceedings of debtor Vastex for the protection of our interest as majority creditor, syndic judge ordered:
- the supplementing the Report on the causes and circumstances leading to the insolvency of the debtor Vastex S.A..;
- removal from the list of definitive creditors of the claim of Castrum Corporation S.R.L. in the amount of 26,685,999.27 lei;
- the entry into bankruptcy through the general procedure of the debtor Vastex S.A. as of 13.09.2023.
Expenses in the amount of 6,105.41 lei incurred after the date of entry into insolvency proceedings have been fully recovered.
9.1.3. As a defendant, the company has 48 registered cases, of which 29 are pending and 19 have been finally settled. Litigations in this category mainly comprise challenges to enforcement against AAAS. In all cases of appeals against enforcement brought by this institution, the necessary defences are formulated in a timely and thorough manner. We show that during 2023 EVERGENT has obtained final success in more than 50% of these cases.
New litigations have been filed against our company with object the pronouncement of a resolutions to replace authentic documents, actions filed by various plaintiffs who in the past have carried out various operations with companies that are now cancelled from the Trade Registry and in which our company was a shareholder.
9.2. Legal Consultancy
The Legal Department is responsible for offering legal advice and for protecting the interests of the Company. For this purpose, the department is consulted and it provides consultancy in all fields of activity of the company and/or its subsidiaries within the Group in an important number of consultancy cases, highly complex from a legal point of view, such as: investment projects, revisions of legislative proposals, transactions, corporate operations, contracts.
At the end of 2023 the legal consultancy activity covers a number of 51 consultancy files and a total number of 269 legality endorsements on various legal documents such as contracts, addenda, decisions, mandates, agreements. In this way, the department has achieved its objective of maintaining a high level of responses on legality opinions within the deadlines set.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
69
Image should be here
Board Report 2023 Separate Financial Statements
The main documents and operations carried out during the legal consultancy and endorsement activity refer to:
✓ Review and endorsement of documents related to EVERGENT Investments' General Meetings of Shareholders held in 2023;
✓ Legal advice and opinion on all mandates issued by the company at General Meetings of Shareholders held by EVERGENT Group companies;
✓ endorsement of documents within the Public Offering run by the company in 2023;
✓ participation to negotiation meetings, submission of comments, amendments, provision of legal advice and legality endorsement in corporate operations and/or transactions run by the company in 2023, with stress on the private equity area.
✓ From among the projects in which the legal department was involved, we mention:
➢ change of provider for storage and custody services. Thus, contracts were concluded with the new depositary - Banca Comercială Română SA (BCR SA), a credit institution approved by the Financial Supervisory Authority (ASF) as depositary (ASF Register - Section of Approved Depositories in Romania - Decision no. 27/04.05.2006).
➢ the Company’s contracting from Banca Comerciala Română a “revolving” type credit as overdraft, for a 12 months’ period, with a maximum value of 19,200,000 euro and set-up of guarantees for this contract.
➢ Development of the Group’s ESG policy through which EVER aims to generate long- term value for the entire spectrum of the interested parties, both through the achievement of financial performance and shareholder return objectives, and through the positive impact on the environment and the community.
➢ advice on the competitive tendering procedure for the sale of the majority of shares issued by REGAL SA.
➢ assistance and consultancy for the drafting of internal documents such as internal regulations, collective employment contract, procedures, etc.
We would also like to mention the approval, on the level of the director’s activity, of a number of 2141 orders for the set-up and/or suspension of garnishments regarding the payment of dividends to shareholders and corresponding reply notices.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
70
Image should be here
Board Report 2023 Separate Financial Statements
10. Corporate Governance
The annual directors report is accompanied by:
✓ Statement on the application of corporate governance principles in accordance with the provisions of ASF Regulation No 9/2019 amending and supplementing ASF Regulation No 2/2016 on the application of corporate governance principles by entities authorised, regulated and supervised by the FSA (Annex 5);
✓ Statement on the compliance of corporate governance code presented in the Corporate Governance Code of Bucharest Stock Exchange ( Annex 6).
The above-mentioned documents are posted on website www.evergent.ro
10.1. Relationship with investors
In the reporting period we have observed and ensured all transparency obligation, notification and reporting obligation through press releases, publication of mandatory reports and the running of a close correspondence with shareholders. We have provided shareholders with additional information, some of which regular in nature (monthly newsletter), designed in such a way so as to ensure the daily briefing on the company’s activity .
According to the provisions of “Corporate Governance Code”, regular and continuous information was simultaneously released both in the Romanian and English language. An important component of the relationship with shareholders is the direct communication activity: written correspondence: e-mails, social media platforms or letters as well as telephone communication.
Processing of personal information - EVERGENT Investments processes personal data it has access to in accordance with European Regulation no. 679/2016 (“Regulation”) on the protection of natural individuals regarding the processing of personal data and the free circulation of this data based on the legal obligations and legitimate interests of the Company and its shareholders. The company makes sure that all principles foreseen by the Regulation regarding the processing of personal data it has access to are abided by. The processing of personal data is made through automated and manual means, abiding by legal requirements and under conditions that insure the safety, confidentiality and observance of the targeted individual’s rights.
10.2. Ensuring Business Continuity
Business continuity is insured through the preparation and implementation of
a) Continuity plan - with its half-yearly assessment and regular testing, in accordance with the requirements of FSA Reg. no. 2/2016 and FSA Norm no. 4/2018;
b) Succession and Development Plan – the personnel selection and recruitment process is run in accordance with EVERGENT Investments’ characteristics.
Image should be here
Image should be here
Connected information in the Corporate governance code of EVERGENT Investments Ch. 1.1. General Meeting of Shareholders Ch. 8. Shareholders’ rights
Image should be here
Image should be here
Note – details regarding each category of reports in the reporting period are presented in annex 4.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
71
Image should be here
Board Report 2023 Separate Financial Statements
10.3. Application of corporate governance principles in accordance with FSA regulation no. 2/2016
Relevant events registered in 2023 in connection with the application of the provisions of Regulation no. 2/2016 on the application of corporate governance principles by entities authorized, regulated and supervised by the FSA:
1. Board responsibilities: references in chapter 5 – Company management
2. Responsibilities of executive management and individuals holding key positions: references in chapter 2: Risk management, chapter 5 – Management of the Company, chapter 7- Internal Audit, chapter, Chapter 8 - Compliance
3. Conflicts of interest and their management: references in chapter 8- Compliance
4. Risk management and risk management function: references in chapter 2 – Risk management
5. Provisions regarding transparency – information foreseen by art. 48 1 of the Regulation are found on the website in the section: Investor information / Corporate Governance / Corporate Governance Code/ Information foreseen by art. 48 index 1 FSA Regulation no. 2/2016
10.4. Engagement policy of EVERGENT Investments
Information on the application of involvement policy within issuers in the portfolio, according to the provisions of art. 101 line (1) Law no. 24/2017 on the issuers of financial instruments and market operations.
EVERGENT Investments SA abides by the requirements mentioned in art. 101 Law no. 24/2017 R on the involvement policy within issuers in the portfolio, the policy that is subordinate to the objectives and principles set by the Company’s investment strategy and policy through:
a) The Company’s Corporate Governance Code, documents that meets the legal requirements mentioned for the involvement policy in issuers in the portfolio.
The Company’s corporate governance code presents, in an integrated and concise manner, all relevant aspects related to the management and functioning of the Companies, by assimilating significant aspects from the company’s authorization as AIF and AIFM.
The Code is aligned with the relevant legal provisions and best practices in the field, with reference to principles and rules of national and international representative entities.
The Code is regularly revised, the latest edition is posted on website
www.evergent.ro
.
b) A series of other company documents, consistent with AIFM and AIF legislation include descriptions of the way in which EVERGENT Investments meets the provisions stipulated by line (3) Law no. 27/2017, namely:
1 Procedures regarding the organisational structure and administrative, accounting requirement and control and protection tools in the field of electronic data processing, as well as mechanisms adequate to internal control;
2 Investment strategy and policy: Statements regarding diligence policies, taking into consideration the main negative effects of investment decisions of sustainability factors;
3 Policy on the prevention and management of conflicts of interests and personal transactions .
In 2023, EVERGENT Investments acted in the best interest of its investors and followed an active involvement strategy in relationship with the company it invests in for the purpose of improving their potential to create average and long-term value and implicitly risk-adjusted performance for its shareholders.
EVERGENT Investments has diligently and constantly monitored the relevant aspects related to the issuers it invested in, including the strategy, performances, financial and non-financial risks, capital
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
72
Image should be here
Board Report 2023 Separate Financial Statements
structure, social impact, on the environment and corporate governance, in accordance with the legal provisions and applicable internal procedures.
The monitoring focused on the way in which issuers proceeded to identify potential risks, especially those related to environment, social factors and corporate governance code which may have a significant impact on the performance of companies on the average and long term. At the same time, the monitoring focused on the way the issuers insured the transparency of this component and the extent to which they managed the impact of these factors on the company’s activity.
In addition to the information obtained through direct analysis and research, EVERGENT Investments started the dialogue with the representatives of companies in order to get a clearer image on the financial position of the company and the main aspects connected to its activity, including, depending on the case, the sustainability component as well.
As Alternative Investment Fund of the investment companies type– F.I.A.S., category Alternative Investment Fund for Retail Investors (FIAIR), with diversified investments, closed-end, self- managed, EVERGENT Investments has exercised the vote rights corresponding to its holdings in the managed companies, in accordance with the investment objectives and strategy for each individual portfolio.
The exercise of voting rights and the evaluation of the corporate governance code adopted by the issuers in which EVERGENT Investments invested represented important elements of the investment process in 2023.
Thus, EVERGENT Investments has acted honestly, correctly, professionally and diligently, in accordance with the best interest of its shareholders and abiding by professional ethics sets by legal regulations in force, its own Corporate Governance Code and established practices in the field.
General presentation of the vote conduct in companies where it is shareholder
The internal analysis for vote substantiation is made based on operational procedure “ Exercise of EVERGENT Investments’ attributions as shareholder of the companies in the portfolio ”. The regulation foresees that analysis within the portfolio management department analyse the materials and information made available to the shareholders in order to identify the best representation solution and protect the interests of the Company. Proposals shall be transposed into mandates of representation, special proxies or ballot through correspondence that shall be subject to the approval of the deputy CEO /CEO and/or Management Committee.
In exercising the vote policy, as well as in all of its activity, the Company acts honesty, equitably, professionally and independently in the interest of the Company and its investors.
Thus, in accordance with the best practices and provisions of the Corporate Governance Code, the Company supports the proposals of the directors of companies in the portfolio referring to: change of name, change of headquarters, setting the date and venue for the annual general meeting; acceptance / approval of the financial statements; approval of dividend payment; authorization of the transfer of reserves and income assignment; amendments to authorized signers; approval of the modification of the methods for accounting records holding; acceptance of work agreements, appointment of internal auditors.
Regarding aspects related to the Board of Directors, the Company usually considers supporting the management. However, a vote against the management will be considered in case the corporate performance has been poor.
The Company considers voting “for” for: cumulative vote – for the protection of minority
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
73
Image should be here
Board Report 2023 Separate Financial Statements
shareholders; increase of share capital with contributions from reserves; share buy-back programs in case all shareholders can participate, under equal conditions; the lowering of share capital following the annulment of bought-back shares.
In the case of the vote for the following categories, the Company makes case-to-case assessment: capital operation for which there are the premises that the Company’s interests shall be affected; the contracting of credits and pledging/ mortgaging of company property; issue of corporate bonds; merger or division of the company; conversion of shares from one category to another; conversion of a category of bonds to another or shares; modification of the Memorandum of Association; setup or cancellation of secondary headquarters: subsidiaries, agencies, or other such units without legal personality; assets sale; anticipatory dissolution of the Company.
The company considers voting “against” for share capital increase with contribution in kind; share capital increase without granting preference right to the shareholders.
In case it is considered that, based on professional reasoning and taking into account the specific situation of that particular company, it is not necessary to involve the Company’s shareholder in the GMS due to conjuncture situations or general policy interests of EVERGENT, in relation to companies classified in different categories, the proposal concerns the company ’s non-participation in the GMS, with the information regarding the adopted decisions and the course of the GMS session to be obtained subsequently.
All these principles are transposed according to the above-mentioned legal and internal provisions in the vote options sent to the companies in the portfolio, following the close and responsible analysis of the management proposals of that particular company.
10.5. IT Safety
In the reporting period, the main objective of the IT activity was ensuring the safety and integrity of the data stored on the company’s servers and lowering of cyber security risks, through :
1. monitoring the Internet and mail traffic and early identification of cyber-attacks;
2. warning employees about these attacks and offering measures to counter them;
3. adaptation of security policies on the background of remote work;
4. preparation of instructions, use guides for certain remote application and later testing of their use;
5. identification of additional risks and management methods in case the staff is allowed to use personal work devices (computer, laptop, phone);
6. optimization of the process for the identification and reporting of cyber safety incidents .
The business continuity plan (BCP) was revised, with its quarterly and regular testing, in accordance with the requirements of FSA Reg. no. 2/2016 and FSA norm no. 4/2018.
The IT Security Incident Response Plan (PRIS) has been tested in accordance with the requirements of ASF Standard 4/2018.
Annual vulnerability and social engineering tests have been performed as required by ASF Rule 4/2018 .
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
74
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
75
Image should be here
Board Report 2023 Separate Financial Statements
11. EVERGENT Investments’ approach regarding environmental, social and governance aspects - “ESG”
For EVERGENT Investments Group generating value means, in addition to financial performance and profitability for its shareholders, a positive impact on the environment and the community in which it operates.
By applying its investment experience and expertise, the company is positioning itself to help build a sustainable future.
As ESG integration efforts in the investment sector evolve, EVERGENT Investments' approach will continue to develop. The company works closely with all stakeholders to provide transparency to the approach and to adapt it to their needs.
The 2023 ESG policy of EVERGENT Investments Group is posted on
www.evergent.ro
Regulatory Framework
EVERGENT Investments, as participant to the financial market falls under the transparency requirements foreseen by regulation (EU) no. 2019/2088 on information regarding sustainability in the financial services sector. EVERGENT has prepared a policy regarding the integration of sustainability risks in the decision-making process and aims to gradually integrate the sustainability decision in investment analysis.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
76
Image should be here
Board Report 2023 Separate Financial Statements
Given this objective, and taking into consideration sustainability risks as relevant risks in accordance with the modifications of (EU) Regulation no. 1255/2021 to amend Regulation (EU) no. 231/2013 concerning risks related to sustainability and sustainability factors that alternative investment funds should take into consideration, EVERGENT Investments aims to gradually integrate sustainability risks in the investment decision. The integration of ESG factors into the company's investment strategy and policy can reduce risks and increase profitability.
Environment component – „Enviromental”
The global transition to zero emissions under the Paris Agreement requires the commitment and collaboration of all sectors. In scenarios analysed by the International Energy Agency, energy demand will grow by 2.1% per year until 2040, especially in developed countries. The share of zero- carbon energy is projected to increase from 36% today to 52% by 2040. Romania supports the European Union's environmental targets to achieve zero carbon emissions by 2050. The decarbonisation target to be achieved by 2030, the intermediate stage, has been accelerated from 40% to 55%. This ambitious target cannot be achieved without the use of all low-carbon energies, in particular nuclear and gas. Thus, Romania's target is to reduce CO2 emissions by 43.9% by 2030 compared to 2005 levels.”
In line with Romania's energy strategy and the EU Taxonomy, EVERGENT Investments Group considers gas and nuclear fuel to be transitional fuels, indispensable in the European economy to achieve neutrality targets by 2050.
EVERGENT Investments' strategy is to invest in projects and economic activities that have a significant positive impact on the climate and the environment, respect social and governance principles according to their growth potential and offer sustainable and higher returns compared to other investment opportunities in the market.
What sectors can EVERGENT Investments target
To this extent, EVERGENT Investments tries to identify business segments that manufacture or supply goods, products and services that provide environmental solutions. The Company considers that this area may include:
- agriculture;
- industries that manufacture renewable energy (hydro, photovoltaic) or with low carbon emissions (nuclear energy or energy obtained by modern combined cycles gas turbines that generate less than half the volume of carbon-dioxide (CO2) compared to coal-fired power plants of the same size.
- Nuclear power can have a reversible effect on global warming, as energy demand is projected to increase. Over the nuclear fuel cycle, nuclear power plants have very low greenhouse gas emissions compared to other sources of energy production.
EVERGENT Investments focuses mainly on the growth rates of Company profits, but also on the sustainability of these profits.
EVERGENT Investments evaluates investments from the point of view of sustainability, according to an internally processed methodology that analyses environmental, social and governance criteria. Due to the experience and diversity of the team of analysts, EVERGENT Investments can have a large coverage of the market depending on the sector and the type of activity, so as to identify the
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
77
Image should be here
Board Report 2023 Separate Financial Statements
investment opportunities it pursues, aligned with sustainability standards .
The structure of EVERGENT Investments’ listed shares portfolio according to ESG principles
On 31 st December 2023, more than 50% of the asset portfolio is held in issuers that integrate ESG factors into their activities.
Chart of ESG scores* achieved by issuers in EVERGENT Investments' listed portfolio
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
78
Image should be here
Board Report 2023 Separate Financial Statements
* ESG ratings according to Sustainalytics.
The main issuer is Banca Transilvania, which obtained a very good ESG Risk Rating (15.1) and is classified in the Low Risk category in terms of ESG initiatives and performance. The result ranks Banca Transilvania in the top 15% of the companies analysed by Sustainalytics globally .
The Company also received Most GHG Mitigated in Central Europe recognition from the International Finance Corporation (IFC) for its contribution to reducing the impact of greenhouse gas emissions for providing green financing to companies in Romania.
In December 2023, Banca Transilvania received a ESG rating of 3.5, following the assessment of FTSE Russell. The ESG Index is the result of an assessment based on three pillars: environmental, social and governance. More than 300 indicators were used to analyse the bank's exposure and the way Banca Transilvania manages the ESG area.
Banca Transilvania sold bonds worth EUR 500 million in November 2023. It is the first bond issue with an ESG label, with a minimum 50% social component and a green component. The issue is listed on the Dublin Stock Exchange. The bonds are MREL, helping to ensure an optimal level of MREL-eligible funds, as distinct from customer deposits, which are guaranteed by the Bank Deposit Guarantee Fund, according to European standards.
Following Refinitiv's analysis, a London Stock Exchange Group company, the Bank is rated 81/100 in terms of ESG performance. This indicates a high degree of transparency in the public reporting of sustainability materials.
This rating ranks Banca Transilvania 49 th out of 1,124 banks rated by Refinitiv worldwide.
This confirms the bank's results in areas such as: the governance of its product and service offering; the policy of excluding polluting sectors from fossil fuel lending; the responsible marketing policy and the initiatives implemented to develop human capital.
OMV Petrom has set itself the goal of achieving carbon neutrality in its operations by 2050. The company will act in three key areas: decarbonising current operations, expanding its lower carbon natural gas business, pursuing low and zero carbon business opportunities. The carbon intensity of OMV Petrom's operations is expected to decrease by about 30% and Scope 1-3 emissions intensity is
0
5
10
15
20
25
30
35
Low ESG rating 15.1 TLV
Medium ESG rating 24.6 SNP
Low ESG rating 14.4 BRD
Medium ESG rating 29 SNG
TLV SNP BRD SNG
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
79
Image should be here
Board Report 2023 Separate Financial Statements
expected to decrease by about 20% by 2030. It targets a reduction in methane emissions intensity to less than 0.2% by 2025, in line with international targets.
To offer customers a range of low-carbon energy options in the long term, OMV Petrom will invest in renewable energy and biofuel production. The company will commission more than 1 GW of renewable energy capacity in Romania by 2030. The company also plans to exceed 15% biofuel of total fuel production in 2030, with 150 thousand tonnes per year of cellulosic ethanol from straw and 450 thousand tonnes per year of sustainable aviation fuel and diesel from renewable sources.
A low-carbon mobility infrastructure will be developed, with more than 500 alternative fuel points. This includes the largest electric vehicle network in OMV Petrom's operating region by 2030, as well as LNG mobility and CNG investments.
In the second half of the decade, the company will step up investment to take advantage of opportunities in carbon capture and storage, as well as hydrogen, which is anticipated to make a significant contribution to the country's decarbonisation.
As such, OMV Petrom's portfolio will be expanded to include five new low and zero carbon activities, which together will account for approximately 35% of cumulative investment value by 2030 and approximately 15% of EBIT CCA, excluding special items in 2030.
OMV Petrom will acquire from RNV Infrastructure a 50% stake in Electrocentrale Borzești, which owns renewable energy projects with a capacity of about 1 GW, of which 950 MW wind and 50 MW photovoltaic. The projects will be developed, built and operated in partnership with RNV Infrastructure. Furthermore, OMV Petrom will acquire in full Renovatio Asset Management, owner of the largest charging network for electric vehicles in Romania, with more than 400 charging points in Romania, with prospects to grow to about 650 by 2026. OMV Petrom together with Renovatio plan to invest around €1.3 billion by 2027, including bank financing, in renewables in Romania.
BRD approaches the future from three main perspectives: customer satisfaction and digitalisation, transition to sustainability and business line efficiency, through the HORIZONS 2025 action plan. This strategy translates into the execution of the Bank's vision to strengthen the long-term relationship with its individual and corporate customers by offering more personalisation and an omnichannel journey. Through Horizons 2025, BRD aims to strengthen its position on the Romanian market, to be a leader in the energy transition towards sustainability and to provide more support to the Romanian economy and society. From an ESG perspective, the bank aims to provide cumulative sustainable financing of more than €1 billion by 2025.
AEROSTAR S.A. announced a €3 million investment, from its own sources, in securing energy by implementing a photovoltaic park in 2022. The company has achieved its goal of contributing to increased sustainability, reducing the effects of global warming and achieving climate neutrality.
Private – equity Portfolio
EVERGENT Investments has the opportunity to generate a positive impact by being able to influence the behaviour of companies in the private equity portfolio.
The "Atria Urban Resort" project is under construction of 350 apartments, according to Phase III, in accordance with the nZEB energy efficiency standard (near-zero energy consumption), respecting the "eco-friendly" principles and reducing the carbon footprint.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
80
Image should be here
Board Report 2023 Separate Financial Statements
The buildings are equipped with 296 solar panels installed in Phase III and cover a total area of 730 square meters. They have a production capacity of 446,500 kWh/year and the energy produced will be used in the solar domestic hot water system. The panels are flat, with an absorbent surface made of selective aluminium fins, measuring 2.00m x 1.30m.
In addition to the proprietary solar panel system, each apartment is equipped with a central heating system and heat recovery ventilation equipment that further reduces additional energy consumption, as well as exterior wall insulation (15 cm for facades and 25 cm for terraces).
On the report date, Veranda Mall has completed a photovoltaic plant located on the building that will cover 20-30% of the electricity used for heating, cooling and lighting the mall. This is part of the strategy to develop clean energy sources and is an important action towards decarbonisation and combating climate change. Decreasing energy consumption and developing cleaner energy sources are key to achieving the company's climate targets and addressing its dependence on external sources and reducing its carbon footprint.
Social component – “Social”
Employees are the core of EVERGENT Investments' resource mix. The Company's philosophy reflects the belief in a performance and team culture, of people who share the same value system.
The Company believes that a thorough involvement of employees leads to performance, and thus it supports diversity and equity initiatives and constantly promotes a culture of collaboration. EVERGENT Investments continues to improve working conditions and career plans for employees. All employees participated in continuous training programs on the ESG field throughout the year 2023 .
EVERGENT Investments offers its employees opportunities to advance and evolve professionally, and in order to keep talented people within the company, it has implemented the "stock option plan" benefit system.
The Company acknowledges the positive impact it can have on the community it is part of, either through capital investments or through sponsorships. It aims to create opportunities for communities with insufficient resources. Therefore, in 2023 it allocated amounts for donations and sponsorships to support excellence and performance in education, to support children from disadvantaged backgrounds, for cultural projects or sports competitions, for health and humanitarian needs or crises.
Education
The Company is a strong supporter of education and its excellence.
In order to support performance, access to education or excellence in education, EVERGENT Investments has supported the organization of national Olympiads, contributed to the participation of students in international stages, MBA scholarships, national chess competitions, it supported high school, university and academic projects.
Health, wellbeing and inclusion
The Company is involved in projects that offer financial inclusion and improve the quality of life of disadvantaged people or people with special needs.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
81
Image should be here
Board Report 2023 Separate Financial Statements
Social and humanitarian projects are supported through Casa Sperantei Hospice Foundation, STOP Drug Foundation, through non-profit associations or offered directly to the people in question.
Social responsibility
Through all its actions, EVERGENT Investments aims to be an integral part of the community, with a team of highly committed professionals who aim to generate value for the full spectrum of stakeholders. The Company engages in social responsibility activities, in accordance with its own Corporate Governance Code, supporting them directly or through foundations or specialized associations, in order to build a strong community.
The many initiatives and projects it has been involved in during 2023 reflect the Company's mission to build resilient communities.
The main areas in which we are involved are: education, health, culture, sport, social.
Education is an essential factor in the sustainable development of society. EVERGENT Investments has strategic partnerships with universities, schools or organizations to support performance in education, creating connections between the local business environment and the national or global academic community. EVERGENT Investments' mission is to discover talented young people and support them on their journey to excellence.
EVERGENT Investments supports the health sector on several levels, so that healthcare can be carried out in line with European standards.
EVERGENT supports culture because it wants young people to acquire Romanian identity, to cultivate their curiosity and critical spirit. Through art and culture, it encourages dialogue between all generations.
Sport means perseverance, bravery, exceeding limits, team spirit, performance and its continuity. EVERGENT Investments supports both beginners and experienced athletes in achieving their goals.
Communities and companies share the same interests, the positive impact on society contributes to business consolidation. The involvement of EVERGENT Investments in the community it operates in is aimed at sustainable economic development. Creating new jobs and supporting disadvantaged people for their integration into the community are sustainable mechanisms of intervention in society, on the long term.
Corporate Governance component– “Governance”
EVERGENT Investments applies a corporate governance system aligned with the legal provisions applicable to entities authorized, regulated and supervised by the Financial Supervisory Authority, the provisions of the Corporate Governance Code of the Bucharest Stock Exchange, the OECD principles of corporate governance, as well as the best practices in the field. This system represents the set of management responsibilities and practices to provide a strategic direction and a guarantee regarding the achievement of objectives.
The implementation of corporate governance principles, structures and mechanisms, as well as the development of responsible and transparent business practices, are important cornerstones of EVERGENT Investments' business, while ensuring the prerequisites for achieving sustainable
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
82
Image should be here
Board Report 2023 Separate Financial Statements
performance growth and for aligning the interests of all parties involved in the EVERGENT relationship.
EVERGENT Investments is based on values such as accountability, innovation, performance, diligence in action and how employees go above and beyond to be better. The Company's values are firmly rooted in the organisational culture, guiding both personal and business strategy. The Company's team is made up of talented and persistent people who share the same values, which have become the competitive advantages and generated performance.
12. The activity of preventing and fighting against money laundering and the financing of terrorism
ML/FT designated individuals have fulfilled their responsibilities in 2023 as set by FSA rule no. 13/2019 on the establishment of measures to prevent and combat money laundering and terrorist financing through the financial sectors supervised by the Financial Supervisory Authority, as well as those specified in the internal regulations.
The main activities run and implemented in the reporting period are:
1. Approval of the Genearl ML/TF Strategy, in accordance with the provisions of FSA rule no. 13/2019.
2. Update of ML/FT Procedure applicable on the level of EVERGENT, including up-to-date legislative changes and their transposition at Group level, taking into account the specific activity carried out by each subsidiary.
3. carrying out the assessment of money laundry and financing of terrorism risk on individual level and on the level of the entire activity, as well as the assessment of internal controls. All internal controls were assessed as compliant.
4. Proper training and information of Company staff.
5. Drawing up regular activity reports and ensuring the necessary correspondence with the authorities.
During the reporting period no breaches of legislation for the fight against money laundering and the financing of terrorism were identified at EVERGENT and no sanctions were applied.
13. Supervision of the implementation of international capital market sanctions
The activity is internally regulated, the compliance department manages the specific working procedure in application of the express regulations of FSA.
The procedure applies to persons designated for the proper administration of international capital market sanctions, employees who come into direct contact with clients, and all EVERGENT Investments employees.
An internal committee is currently appointed by the Board of Directors/executive management, subject to legal requirements; the representative of the compliance department may also be a member of the committee, in which capacity he/she also liaises with the A.S.F.
The designated persons are responsible for the fulfilment of responsibilities set by the applicable special law.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
83
Image should be here
Board Report 2023 Separate Financial Statements
The main activities carried out and implemented in the reporting period are:
• Ensuring compliance with the internal procedure on “ Supervision of the application of international sanctions on capital market”
• Monitoring and communicating to the FSA, if applicable, whether the persons concerned by the restrictive measures imposed at international level are in the EVERGENT Investments SA shareholding structure or whether they have an impact on the activity or on the investment strategy and policy of the Company. No such situation has been identified.
• Verification of the implementation of staff training - continuous professional training programmes for the year 2023 were conducted, attended by all employees, organised by trainers authorised by the ASF; in addition there were trainings of all staff conducted by the compliance officer , and
• Preparation of the annual activity report to the Management Board
During the reporting period there was no situation of freezing of funds and economic resources as a result of the verification of restrictive measures issued by the European Union against the Russian Federation.
14. Subsequent events
14.1. Completion of the Public Offering of shares issed by EVERGENT Investments, approved by FSA resolution no. 1328/22.12.2023– current reports on 19.01.2023 and on 25.01.2023 supplied to the market by BT Capital Partners, as offer broker.
✓ Offer period: 08.01.2024 – 19.01.2024
✓ allocation index set within the offer: 0.0409086221.
✓ Number and percentage of securities tendered in the offer: 244,447,246 shares, representing 25.42% of the share capital;
✓ Number of shares bought within the offer: 10,000,000, that represent 1.0398% of the share capital;
✓ Total value of bought-back shares: 14,500,000 de lei.
14.2. Accessing credit facilities to capitalize on market operations
The revolving credit facility in the form of an overdraft facility of up to EUR 19,200,000 was extended for a period of 12 months and a new revolving credit facility in the form of a ceiling on object credits of up to EUR 10 million was contracted for a period of 24 months, of which 12 months were the drawdown period.
14.3 On February 28, 2024, the Board of Directors of EVERGENT Investments approved a series of operations aimed at optimizing the Company's activities, as well as continuing ongoing projects, as follows:
• Purchasing from the subsidiary CASA S.A. a property worth 5,441,600 lei and selling to it a property worth 7,572,000 lei, both located in Bacău;
• Contributing to the share capital of the subsidiary CASA S.A. with properties worth 1,108,900 lei, located in Iași and Vaslui;
• Contributing to the share capital of the subsidiary EVER IMO S.A. with properties worth 4,975,000 lei, located in Bucharest;
• Increasing the cash share capital of the subsidiary EVER IMO SA by the amount of 2,100,000 lei ;
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
84
Image should be here
Board Report 2023 Separate Financial Statements
• Increasing the cash share capital of the subsidiary AGROINTENS SA by the amount of 7,650,000 lei ;
• Subscribing and paying the amount of 4,950,000 lei as part of the subsequent increase in the share capital of mWare Solutions.
The 2023 Board of Directors’ Report relating to the separate financial statements was approved in the session on 25 th March 2024.
Claudiu DOROȘ
President and CEO
Finance Director
Mihaela MOLEAVIN
Compliance officer
Gabriel LUPAȘCU
Director
Georgiana DOLGOȘ
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
85
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Annex 1.1.
In accordance FSA Regulation no 7/2020
STATEMENT OF ASSETS AND LIABILITIES OF EVERGENT Investments
Date of calculation 31/12/2023 - Monthly, balanta IFRS
LEI
% total assets
1
Intangible assets
402.982,68
0,014
2
Tangible assets
10.435.506,91
0,354
3
Investment property
4.109.000,00
0,139
4
Biological assets
0,00
0,000
5
Right-of-use asset from leasing contracts
3.320.773,83
0,113
6
Financial assets, of which:
2.612.719.740,44
88,588
6.1
Financial assets at amortized cost, of which:
17.642.111,19
0,598
6.1.1
Bonds, of which:
17.642.111,19
0,598
6.1.1.1
Listed bonds, of which:
0,00
0,000
6.1.1.1.1
Corporate bonds
0,00
0,000
6.1.1.1.2
Municipal bonds
0,00
0,000
6.1.1.2
Listed and not traded over the last 30 days bonds, of which:
35.711,19
0,001
6.1.1.2.1
Corporate bonds
0,00
0,000
6.1.1.2.2
Municipal bonds
35.711,19
0,001
6.1.1.3
Unlisted bonds, of which:
17.606.400,00
0,597
6.1.1.3.1
Corporate bonds
17.606.400,00
0,597
6.1.1.3.2
Municipal bonds
0,00
0,000
6.2
Financial assets at fair value through profit or loss, of which:
347.807.747,24
11,793
6.2.1
Shares, of which:
74.452.577,19
2,524
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
86
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
6.2.1.1
Listed shares
22.845.593,60
0,775
6.2.1.2
Listed shares not traded over the last 30 trading days
0,00
0,000
6.2.1.3
Unlisted shares, of which:
51.606.983,59
1,750
6.2.1.3.1
Unlisted shares
50.532.762,00
1,713
6.2.1.3.2
Unlisted shares from a member state
1.074.221,59
0,036
6.2.2
UCITS and/or AIF equity securities, of which:
273.355.170,05
9,268
6.2.2.1
Fund units, of which:
273.355.170,05
9,268
6.2.2.1.1
Listed fund units
0,00
0,000
6.2.2.1.2
Unlisted fund units
273.355.170,05
9,268
6.2.2.2
Shares, of which:
0,00
0,000
6.2.2.2.1
Listed shares
0,00
0,000
6.3
Financial assets measured at fair value through other comprehensive income, of which:
2.247.269.882,01
76,197
6.3.1
Shares, of which:
2.208.084.673,84
74,868
6.3.1.1
Listed shares
1.996.880.168,84
67,707
6.3.1.2
Listed shares not traded over the last 30 trading days
0,00
0,000
6.3.1.3
Untraded shares
211.204.505,00
7,161
6.3.1.4
New issued securities
0,00
0,000
6.3.2
UCITS and/or AIF equity securities, of which:
35.300.725,15
1,197
6.3.2.1
Fund units, of which:
0,00
0,000
6.3.2.1.1
Listed fund units
0,00
0,000
6.3.2.1.2
Unlisted fund units
0,00
0,000
6.3.2.2
Shares, of which:
35.300.725,15
1,197
6.3.2.2.1
Listed shares
35.300.725,15
1,197
6.3.3
Bonds
3.884.483,02
0,132
6.3.3.1
Listed bonds, of which:
3.884.483,02
0,132
6.3.3.1.1
Corporate bonds
3.884.483,02
0,132
6.3.3.1.2
Municipal bonds
0,00
0,000
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
87
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
6.3.3.2
Listed and untraded over the last 30 days bonds, of which:
0,00
0,000
6.3.3.2.1
Corporate bonds
0,00
0,000
6.3.3.2.2
Municipal bonds
0,00
0,000
6.3.3.3
Unlisted bonds, of which:
0,00
0,000
6.3.3.3.1
Corporate bonds
0,00
0,000
6.3.3.3.2
Municipal bonds
0,00
0,000
7
Availability (cash and current accounts), of which:
1.094.946,89
0,037
7.1
Amounts in current accounts and financial investment services company accounts
1.024.389,32
0,035
7.2
Amounts under settlement
70.557,57
0,002
7.3
Amounts in transit
0,00
0,000
8
Bank deposits
310.149.212,71
10,516
9
Other assets
6.673.079,77
0,226
9.1
Dividends or other receivables, of which:
0,00
0,000
9.1.1
Dividends due from listed issuers
0,00
0,000
9.1.2
Shares distributed without cash contribution
0,00
0,000
9.1.3
Shares distributed with cash contribution
0,00
0,000
9.1.4
Amounts due from capital decreases
0,00
0,000
9.2
Other assets, of which:
6.673.079,77
0,226
9.2.1
Other financial assets measured at amortized cost
6.275.137,96
0,213
9.2.2
Other assets
397.941,81
0,013
10
Accrued charges
400.771,81
0,014
11
Total assets
2.949.306.015,04
100,000
12
Total liabilities
281.705.891,14
#Error
12.1
Financial liabilities measured at amortized cost
1.267.032,74
#Error
12.2
Deferred tax liabilities
149.977.380,22
#Error
12.3
Loans
63.674.420,52
#Error
12.4
Other liabilities, of which:
66.787.057,66
#Error
12.4.1
Dividends payable to shareholders
49.950.267,22
#Error
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
88
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
12.4.2
Amounts subscribed and not paid to the share capital increases of the issuers
0,00
#Error
12.4.3
Other liabilities
16.836.790,44
#Error
13
Provisions for risks and expenses
1.632.553,14
#Error
14
Deferred income
21.831,97
#Error
15
Equity capital, of which:
2.666.034.409,19
#Error
15.1
Share capital
96.175.359,20
#Error
15.2
Capital assimilated elements
403.813.278,04
#Error
15.3
Other equity elements
28.934.412,57
#Error
15.4
Capital bonuses
0,00
#Error
15.5
Revaluation reserves
1.050.164.830,92
#Error
15.6
Reserves
904.200.810,39
#Error
15.7
Treasury shares
66.642.399,51
#Error
15.8
Retained earnings
124.654.692,66
#Error
15.9
Earnings of the period
124.733.424,92
#Error
16
Net assets
2.665.945.738,79
#Error
17
Number of issued shares in circulation
910.011.057
#Error
18
Net asset value per share
2,9296
#Error
19
Number of companies in the portfolio, of which:
30
#Error
19.1
Companies admitted to trading on an EU trading venue
15
#Error
19.2
Companies admitted to trading on a third country stock exchange
0
#Error
19.3
Companies not admitted to trading
15
#Error
* According to article 123 paragraph (3) of FSA Regulation 9/2014, regarding the NAV/share calculation, this position represents: 'The number of issued outstanding shares at that date, excluding the own shares bought back by the company'
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
89
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
ANNEX – according to Article 38 paragraph (4) of Law no. 243/2019
EVERGENT Investments portfolio assets which were assessed by valuation methods in accordance with International Valuation Standards, on 31.12.2023
No.
Issuer
Fiscal Code
Symbol
Number of shares held
No/Evaluation Report date
Value
share
total
EUR
Unlisted shares (closed)
1
CATALYST ROMANIA SCA SICAR Munsbach
LU25590227
299,5440
1494 / 15.11.2023
720,9001
1.074.221,59
RON
Shares listed on an inactive market
1
BRIKSTON CONSTRUCTION SOLUTIONS IASI
1989343
BKS
225,0000
1497 / 15.11.2023
3,5289
794,00
2
NORD S.A. Bucuresti BUCURESTI
1558154
NORD
1.665.004,0000
1749 / 29.12.2023
10,3849
17.290.900,00
3
PROFESSIONAL IMO PARTNERS S.A. BUCURESTI
24599480
PPLI
24.307.608,0000
1750 / 29.12.2023
2,7508
66.865.419,00
4
MECANICA CEAHLAU PIATRA NEAMT
2045262
MECF
175.857.653,0000
1747 / 29.12.2023
0,0861
15.141.344,00
Unlisted shares (closed)
1
AGROINTENS SA BUCURESTI
33857839
4.776.911,0000
1743 / 29.12.2023
9,2577
44.223.366,00
2
CASA S.A. BACAU
8376788
14.098.462,0000
1742 / 29.12.2023
2,4265
34.209.918,00
3
DEPOZITARUL CENTRAL S.A. BUCURESTI
9638020
7.396.029,0000
1495 / 15.11.2023
0,1233
911.825,00
4
DYONISOS COTESTI
7467373
772.824,0000
1744 / 29.12.2023
0,5106
394.582,00
5
EVER AGRIBIO S.A. Saucesti
46793311
378.429,0000
1493 / 15.11.2023
6,8230
2.582.026,00
6
EVER IMO S.A. BUCURESTI
425818
4.963.027,0000
1745 / 29.12.2023
8,7548
43.450.309,00
7
EVERLAND SA BACAU
33857820
4.440.750,0000
1746 / 29.12.2023
11,4738
50.952.229,00
8
MWARE SOLUTIONS S.A. BUCURESTI
31021453
75.000,0000
1748 / 29.12.2023
69,1260
5.184.452,00
9
REGAL GALATI
1647588
1.116.258,0000
1751 / 29.12.2023
6,3448
7.082.453,00
10
RULMENTI BIRLAD
2808089
2.408.645,0000
1752 / 29.12.2023
1,7088
4.115.893,00
11
STRAULESTI LAC ALFA S.A. BUCURESTI
36160878
3.880.307,0000
1753 / 29.12.2023
17,6868
68.630.214,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
90
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Explanatory note: The valuation methods used for securities for which valuation methods have been chosen in accordance with the valuation standards in force, according to the law, based on a valuation report, presented in the Annex are detailed in “Asset Valuation and UNAV Calculation Policies and Procedures”.
EVERGENT Investments’ leverage effect and exposure value, calculated in accordance with the provisions of (EU) Regulation no.231/2013
Method type
Leverage
Exposure value (RON)
Gross method
1,0029 (or 100,29%)
2.673.586.747,00
Commitment method
1,0239 (or 102,39%)
2.729.620.159,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
91
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Annex 1.2
DETAILED STATEMENT OF INVESTMENTS ON 31.12.2023 IN COMPARISON TO 30.11.2023
No.
Item
Currency
Start of the reporting period (30.11.2023)
End of the reporting period (31.12.2023)
Differences
% of net asset
% of total asset
Currency
LEI
% of net asset
% of total asset
Currency
LEI
LEI
1
I. Total assets
RON
111,595
100,000
0,00
2.879.874.608,09
110,629
100,000
0,00
2.949.306.015,04
69.431.406,95
2
I.1. Securities and money market instruments, of which:
RON
76,590
68,632
0,00
1.976.510.326,20
75,762
68,483
0,00
2.019.761.473,63
43.251.147,43
3
I.1. Securities and money market instruments, of which:
EUR
0,167
0,150
865.848,09
4.305.516,21
0,146
0,132
780.863,39
3.884.483,02
-421.033,19
4
I.1.1. Securities and money market instruments admitted to or traded on a regulated market in Romania, of which:
RON
76,590
68,632
0,00
1.976.510.326,20
75,762
68,483
0,00
2.019.761.473,63
43.251.147,43
5
I.1.1. Securities and money market instruments admitted to or traded on a regulated market in Romania, of which:
EUR
0,167
0,150
865.848,09
4.305.516,21
0,146
0,132
780.863,39
3.884.483,02
-421.033,19
6
I.1.1.1. - BVB listed shares
RON
73,492
65,856
0,00
1.896.564.521,52
72,310
65,363
0,00
1.927.752.004,52
31.187.483,00
7
I.1.1.2. – ATS listed shares
RON
3,097
2,775
0,00
79.910.312,62
3,450
3,118
0,00
91.973.757,92
12.063.445,30
8
I.1.1.3. – Listed shares, not traded over the last 30 days
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
9
I.1.1.4. – municipal bonds
RON
0,001
0,001
0,00
35.492,06
0,001
0,001
0,00
35.711,19
219,13
10
I.1.1.5. – city bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
11
I.1.1.6. – corporate bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
12
I.1.1.6. – corporate bonds
EUR
0,167
0,150
865.848,09
4.305.516,21
0,146
0,132
780.863,39
3.884.483,02
-421.033,19
13
I.1.1.7. – state bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
14
I.1.1.8. - preemptive rights / assignment
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
92
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
15
I.1.2. securities and instruments of monetary market admitted to or traded on a regulated market of a member state
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
16
I.1.3. securities and money market instruments admitted at the official rate of a stock exchange from a third country, or negotiated by another regulated market in at third country that operated regularly and is renowned and open to the public, approved by F.S.A., of which:
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
17
I.2. newly issued securities
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
18
I.3. other securities and money market instruments mentioned in art. art. 83 line (1) letter (a) of G.E.O. no. 32/2012 of which:
RON
11,158
9,999
0,00
287.945.894,00
10,478
9,472
0,00
279.343.667,00
-8.602.227,00
19
I.3. other securities and money market instruments mentioned in art. art. 83 line (1) letter (a) of G.E.O. no. 32/2012 of which:
EUR
0,042
0,037
215.941,30
1.073.789,71
0,040
0,036
215.941,30
1.074.221,59
431,88
20
I.3.1. - unlisted shares (closed)
RON
10,481
9,392
0,00
270.469.694,00
9,818
8,875
0,00
261.737.267,00
-8.732.427,00
21
I.3.1. - unlisted shares (closed)
EUR
0,042
0,037
215.941,30
1.073.789,71
0,040
0,036
215.941,30
1.074.221,59
431,88
22
I.3.2. – municipal bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
23
I.3.3. – city bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
24
I.3.4. – corporate bonds
RON
0,677
0,607
0,00
17.476.200,00
0,660
0,597
0,00
17.606.400,00
130.200,00
25
I.3.5. – state bonds
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
26
I.4. Bank deposits, of which:
RON
10,777
9,657
0,00
278.116.136,67
11,615
10,499
0,00
309.659.064,89
31.542.928,22
27
I.4. Bank deposits, of which:
EUR
0,140
0,126
728.957,61
3.624.814,59
0,018
0,017
98.530,10
490.147,82
-3.134.666,77
28
I.4.1. bank deposits setup at a credit institute in Romania;
RON
10,777
9,657
0,00
278.116.136,67
11,615
10,499
0,00
309.659.064,89
31.542.928,22
29
I.4.1. bank deposits setup at a credit institute in Romania;
EUR
0,140
0,126
728.957,61
3.624.814,59
0,018
0,017
98.530,10
490.147,82
-3.134.666,77
30
I.4.2. bank deposits setup at credit institutions in a member state;
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
93
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
31
I.4.3. bank deposits setup at credit institutions, in a third state;
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
32
I.5. Derivatives traded on a regulated market
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
33
I.6. Current accounts and cash
RON
0,064
0,057
0,00
1.644.098,52
0,037
0,033
0,00
983.230,14
-660.868,38
34
I.6. Current accounts and cash
EUR
0,011
0,010
58.026,74
288.543,77
0,001
0,001
6.743,60
33.546,71
-254.997,06
35
I.6. Current accounts and cash
USD
0,000
0,000
1.208,64
5.476,71
0,000
0,000
1.693,24
7.612,47
2.135,76
36
I.7. money market instruments, other than those traded on a regulated market, in accordance with art. 82 letter g) GEO no. 32/2012 – repo type contracts on securities
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
37
I.8. AIF/UCITS holding titles, of which:
RON
11,642
10,433
0,00
300.444.366,13
11,578
10,465
0,00
308.655.895,20
8.211.529,07
38
I.8.1. Fund units
RON
10,324
9,251
0,00
266.423.183,74
10,254
9,268
0,00
273.355.170,05
6.931.986,31
39
I.8.2. Shares
RON
1,318
1,181
0,00
34.021.182,39
1,324
1,197
0,00
35.300.725,15
1.279.542,76
40
I.9. Dividends or other rights to collect
RON
0,097
0,087
0,00
2.500.000,00
0,000
0,000
0,00
0,00
-2.500.000,00
41
I.10. other assets (amounts in transit, receivables from distributors, amounts at SSIF, etc.)
RON
0,907
0,813
0,00
23.415.645,58
0,953
0,862
0,00
25.412.672,57
1.997.026,99
42
II. Total liabilities
RON
11,595
10,390
0,00
299.231.529,54
10,629
9,608
0,00
283.360.276,25
-15.871.253,29
43
II.1. Expenses for the payment of commissions to A.I.F.M.
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
44
II.2. Expenses for the payment of commissions due to the depositary
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
45
II.3. Expenses with commissions due to brokers
RON
0,000
0,000
0,00
207,36
0,000
0,000
0,00
127,23
-80,13
46
II.4. expenses with turnover commissions and other bank services
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
47
II.5. Interest expenses
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
48
II.6. Issue expenses
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
49
II.7. Expenses with the commissions/
RON
0,008
0,007
0,00
201.626,00
0,008
0,007
0,00
206.563,00
4.937,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
94
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
fees owed to F.S.A.
50
II.8. Financial audit expenses
RON
0,004
0,004
0,00
106.798,25
0,013
0,012
0,00
355.044,37
248.246,12
51
II.9. Other approved expenses
RON
11,583
10,380
0,00
298.922.897,93
10,608
9,589
0,00
282.798.541,65
-16.124.356,28
52
II.10. Redemptions to pay
RON
0,000
0,000
0,00
0,00
0,000
0,000
0,00
0,00
0,00
53
III. Net asset value (I-II)
RON
100,000
89,610
0,00
2.580.643.078,55
100,000
90,392
0,00
2.665.945.738,79
85.302.660,24
NAV Statement
Element no.
Current Period (31.12.2023)
Corresponding period of the previous year (31.12.2022)
Differences
Net assets
2.665.945.738,79
2.214.741.795,06
451.203.943,73
Number of issued shares in circulation
910.011.057
929.905.696
-19.894.639
Net asset value per share
2,9296
2,3817
0,5479
I. Securities admitted to or traded on a Romanian regulated market
1.Shares traded over the last 30 trading days (work days)
2. Shares not traded over the last 30 trading days (work days)
Not the case
3. Shares not traded over the last 30 trading days (work days) for which financial statements are not obtained within 90 days from the legal submission dates.
Not the case
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
95
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
4. Preemptive rights / assignment rights
No.
Issuer
Right types
Symbol
Date of latest trading session
No. of owned rights
Right value
Total value
Percentage in F.I.A.I.R. total assets
lei
lei
%
1
IASITEX
de preferinta
IASXR03
611.269
0,0000
0,00
0.000
TOTAL
0,00
0,000
5.Bonds admitted to trading issued or pledged by local public administration authorities/ corporate bonds
Issuer
Bond symbol
Date of latest trading session
No. of bonds held
Acquisition date
Coupon date
Coupon maturity date
Initial value
Daily increase
Cumulated interest
Cumulated Discount / bonus cumulate
Market price
Total value
Percentage in total issued bonds
Percentage in F.I.A.I.R. total assets
lei
%
%
Bonds admitted to trading in EUR
AUTONOM SERVICES S.A.
AUT24E
27.12.2023
800
12.11.2019
12.11.2023
11.11.2024
800.000,00
97,27
4.863,39
#Error
97,0000
3.884.483,02
4,000
0,132
Total bonds admitted to trading in EUR
3.884.483,02
0,132
Bonds admitted to trading in RON
MUNICIPIUL BACAU
BAC26B
27.05.2016
2.000
03.09.2009
01.11.2023
31.01.2024
35.280,00
7,07
431,19
#Error
93,0000
35.711,19
0,500
0,001
Total bonds admitted to trading in RON
35.711,19
0,001
TOTAL
3.920.194,21
0,133
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
96
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
6. Bonds admitted to trading issued or guaranteed by public central administration authorities
Not the case
7.Other securities admitted to trading on a regulated market
Not the case
8. Amounts pending settlement for securities allowed to trading or traded on a Romanian regulated market
Issuer
Security type
Symbol
Unit value
No. of traded securities
Total value
Percentage in the issuer’s share capital / total bonds of an issuer
Percentage in F.I.A.I.R. total assets
lei
lei
%
%
BANCA TRANSILVANIA SA
Shares
TLV
23,8800
2.960
70.684,80
0,000
0,002
TOTAL
70.684,80
0,002
II. Securities admitted to trading or traded on a regulated market of another member state
1.Shares traded over the last 30 trading days (work days)
Not the case
2.Bonds admitted to trading or pledged by local public administration authorities, corporate bonds
Not the case
3. Bonds admitted to trading or pledged by central public administration authorities
Not the case
4.Other securities allowed for trading on a regulated market in another member state
Not the case
5. Amounts pending settlement for securities allowed for trading on a regulated market from a member state
Not the case
III. Securities admitted to trading or traded on a regulated market in a third state
1.Shares traded over the last 30 trading days (work days)
Not the case
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
97
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
2.Bonds admitted to trading issued or pledged by public local administration authorities, corporate bonds, traded over the last 30 days
Not the case
3.Other securities admitted to trading on a regulated market of a third state
Not the case
4. Amounts pending settlement for securities admitted to trading or traded on a regulated market of a third state
Not the case
IV.Money market instruments admitted to trading or traded on a Romanian regulated market
Not the case
Amounts pending settlement for money market instruments admitted to trading or traded on a Romanian regulated market
Not the case
V. Money market instruments admitted to or traded on a regulated market of another member state
Not the case
Amounts pending settlement for money market instruments admitted to trading or traded on a regulated market of another member state
Not the case
VI. Money market instruments admitted to trading or traded on a regulated market of a third state
Not the case
Amounts pending settlement for money market instruments allowed for trading or traded on a regulated market of a third state
Not the case
VII. Newly issued securities
1. Newly issued shares
Not the case
2. Newly issued bonds
Not the case
3. Preemptive rights (following central depositary registration, before being admitted to trading).
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
98
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Not the case
VIII. Other securities and money market instruments
VIII.1 Other securities
1. Shares not admitted to trading
No.
Issuer
No. of owned shares
Nominal value
Share value
Total value
Percentage in the issuer’s share capital / total bonds of an issuer
Percentage in F.I.A.I.R. total assets
lei
%
%
Shares not admitted to trading in EUR
1
CATALYST ROMANIA SCA SICAR
299,5440
1.000,0000
720,9001
1.074.221,59
1,989
0,036
Total shares not admitted to trading in EUR
1.074.221,59
0,036
Shares not admitted to trading in RON
2
AGROINTENS SA
4.776.911,0000
10,0000
9,2577
44.223.366,00
100,000
1,499
3
CASA ROMANA DE COMPENSATIE
852.039,0000
0,1000
0,0000
0,00
7,879
0,000
4
CASA S.A.
14.098.462,0000
2,5000
2,4265
34.209.918,00
99,774
1,160
5
DEPOZITARUL CENTRAL S.A.
7.396.029,0000
0,1000
0,1233
911.825,00
2,924
0,031
6
DYONISOS
772.824,0000
0,1000
0,5106
394.582,00
12,410
0,013
7
EVER AGRIBIO S.A.
378.429,0000
10,0000
6,8230
2.582.026,00
100,000
0,088
8
EVER IMO S.A.
4.963.027,0000
2,5000
8,7548
43.450.309,00
100,000
1,473
9
EVERLAND SA
4.440.750,0000
10,0000
11,4738
50.952.229,00
100,000
1,728
10
MWARE SOLUTIONS S.A.
75.000,0000
0,1000
69,1260
5.184.452,00
5,556
0,176
11
REGAL
1.116.258,0000
0,1000
6,3448
7.082.453,00
93,889
0,240
12
RULMENTI
2.408.645,0000
2,7500
1,7088
4.115.893,00
6,005
0,140
13
STRAULESTI LAC ALFA S.A.
3.880.307,0000
10,0000
17,6868
68.630.214,00
50,000
2,327
14
VASTEX
147.105,0000
2,5000
0,0000
0,00
13,935
0,000
15
VISIONALFA INVESTMENTS S.A.
2.499.750,0000
0,1000
0,0000
0,00
99,990
0,000
Total shares not admitted to trading in RON
261.737.267,00
8,875
TOTAL
262.811.488,59
8,911
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
99
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
2. Shares traded within other systems than regulated markets
Not the case
3. Shares not admitted to trading measured at zero value (lack of updated financial statement submitted to the Trade Registry)
Not the case
4. Bonds not admitted to trading
No.
Issuer
No. of owned bonds
Purchase date
Coupon date
Coupn maturity date
Initial value
Daily increase
Cumulated interest
Cumulated discount / bonus
Total value
Percentage in total bonds issued
Percentage in F.I.A.I.R. total assets
lei
%
%
Bonds not admitted to trading in RON
1
EVER IMO S.A.
6.720.000
24.06.2021
23.06.2023
22.06.2024
16.800.000,00
4.200,00
806.400,00
#Error
17.606.400,00
100,000
0,597
Total bonds not admitted to trading in RON
17.606.400,00
0,597
TOTAL
17.606.400,00
0,597
5. Amounts pending settlement for shares traded within other systems than regulated markets
Not the case
VIII.2. Other money market instruments than those mentioned under art. 83 line (1) letter a) of G.E.O. 32/2012
1. Commercial papers
Not the case
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
100
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
IX. Availabilities in current accounts and cash
1. Availabilities in current accounts and cash, in lei
No.
Bank name
Currenct value
Percentage in F.I.A.I.R. total assets
lei
%
1
BANCA TRANSILVANIA SA - RO09BTRLXXXXXXXXXXXXXXXX
0,00
0,000
2
BANCA TRANSILVANIA SA Sucursala BACAU - RO87BTRLXXXXXXXXXXXXXXXX
0,00
0,000
3
BANCA TRANSILVANIA SA Sucursala BACAU - RO95BTRLXXXXXXXXXXXXXXXX
9.996,50
0,000
4
BANCA TRANSILVANIA SA Sucursala Bacau - RO55BTRLXXXXXXXXXXXXXXXX
894.914,08
0,030
5
BCR - RO14RNCBXXXXXXXXXXXXXXXX
5.058,63
0,000
6
BCR - RO41RNCBXXXXXXXXXXXXXXXX
9.970,00
0,000
7
BCR - RO68RNCBXXXXXXXXXXXXXXXX
9.970,00
0,000
8
BCR - RO84RNCBXXXXXXXXXXXXXXXX
4.222,35
0,000
9
BCR - RO95RNCBXXXXXXXXXXXXXXXX
172,25
0,000
10
BCR Sucursala Bacau - RO51RNCBXXXXXXXXXXXXXXXX
0,00
0,000
11
DIRECTIA GENERALA A FINANTELOR PUBLICE BUCURESTI - RO91TREZXXXXXXXXXXXXXXXX
44.659,95
0,002
12
EVERGENT Investments S.A. - Casa
2.394,17
0,000
13
Exim Banca Romaneasca - RO66BRMAXXXXXXXXXXXXXXXX
1.872,21
0,000
TOTAL
983.230,14
0,033
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
101
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
2. Availabilities in current accounts and cash, in currency
No.
Bank name
Current value
RNB currency rate
Updated value in lei
Percentage in F.I.A.I.R. total assets
currency
%
Availabilities in current accounts and cash in EUR
1
BANCA TRANSILVANIA SA Sucursala Bacau - RO04BTRLXXXXXXXXXXXXXXXX
2.212,31
4,9746
11.005,36
0,000
2
BANCA TRANSILVANIA SA Sucursala Bacau - RO20BTRLXXXXXXXXXXXXXXXX
1.463,12
4,9746
7.278,44
0,000
3
BCR - RO30RNCBXXXXXXXXXXXXXXXX
917,97
4,9746
4.566,53
0,000
4
BCR - RO52RNCBXXXXXXXXXXXXXXXX
1.154,23
4,9746
5.741,83
0,000
5
BCR - RO57RNCBXXXXXXXXXXXXXXXX
995,97
4,9746
4.954,55
0,000
6
BCR Sucursala BUCURESTI - RO90RNCBXXXXXXXXXXXXXXXX
0,00
4,9746
0,00
0,000
Total availabilities in current accounts and cash in EUR
6.743,60
33.546,71
0,001
Availabilities in current accounts and cash in USD
1
BANCA TRANSILVANIA SA Sucursala BACAU - RO83BTRLXXXXXXXXXXXXXXXX
0,00
4,4958
0,00
0,000
2
BANCA TRANSILVANIA SA Sucursala BACAU - RO86BTRLXXXXXXXXXXXXXXXX
55,26
4,4958
248,44
0,000
3
BCR - RO03RNCBXXXXXXXXXXXXXXXX
995,66
4,4958
4.476,29
0,000
4
BCR - RO25RNCBXXXXXXXXXXXXXXXX
642,32
4,4958
2.887,74
0,000
Total availabilities in current accounts and cash in USD
1.693,24
7.612,47
0,000
TOTAL
41.159,18
0,001
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
102
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
X. Bank deposits on distinct categories: setup with Romanian credit institutions/ from another member state/ a third state
1. Bank deposits in lei
No.
Bank name
Setup date
Maturity date
Initial value
Daily increase
Cumulated interest
Total value
Percentage in F.I.A.I.R. total assets
lei
lei
lei
lei
%
1
Exim Banca Romaneasca
17.10.2023
16.01.2024
6.000.000,00
1.016,67
77.266,67
6.077.266,67
0,206
2
BANCA TRANSILVANIA SA
05.10.2023
04.01.2024
7.000.000,00
1.195,83
105.233,33
7.105.233,33
0,241
3
Exim Banca Romaneasca
19.10.2023
18.01.2024
7.000.000,00
1.195,83
88.491,67
7.088.491,67
0,240
4
Exim Banca Romaneasca
19.10.2023
18.01.2024
6.500.000,00
1.110,42
82.170,83
6.582.170,83
0,223
5
Exim Banca Romaneasca
16.11.2023
15.02.2024
5.000.000,00
833,33
38.333,33
5.038.333,33
0,171
6
Exim Banca Romaneasca
16.11.2023
15.02.2024
4.000.000,00
666,67
30.666,67
4.030.666,67
0,137
7
Exim Banca Romaneasca
12.12.2023
12.03.2024
8.500.000,00
1.463,89
29.277,78
8.529.277,78
0,289
8
Exim Banca Romaneasca
12.12.2023
12.03.2024
7.000.000,00
1.205,56
24.111,11
7.024.111,11
0,238
9
Exim Banca Romaneasca
12.12.2023
12.03.2024
8.000.000,00
1.377,78
27.555,56
8.027.555,56
0,272
10
Exim Banca Romaneasca
12.12.2023
12.03.2024
5.000.000,00
861,11
17.222,22
5.017.222,22
0,170
11
Exim Banca Romaneasca
14.12.2023
14.03.2024
1.500.000,00
256,25
4.612,50
1.504.612,50
0,051
12
Exim Banca Romaneasca
19.12.2023
23.01.2024
8.000.000,00
1.255,56
16.322,22
8.016.322,22
0,272
13
Exim Banca Romaneasca
19.12.2023
23.01.2024
5.200.000,00
816,11
10.609,44
5.210.609,44
0,177
14
Exim Banca Romaneasca
19.12.2023
23.01.2024
6.000.000,00
941,67
12.241,67
6.012.241,67
0,204
15
Exim Banca Romaneasca
28.12.2023
30.01.2024
8.500.000,00
1.334,03
5.336,11
8.505.336,11
0,288
16
Exim Banca Romaneasca
28.12.2023
30.01.2024
9.000.000,00
1.412,50
5.650,00
9.005.650,00
0,305
17
Exim Banca Romaneasca
28.12.2023
27.02.2024
4.000.000,00
661,11
2.644,44
4.002.644,44
0,136
18
Exim Banca Romaneasca
28.12.2023
27.02.2024
6.000.000,00
991,67
3.966,67
6.003.966,67
0,204
19
BCR
18.01.2023
17.01.2024
10.000.000,00
2.083,33
725.000,00
10.725.000,00
0,364
20
BCR
31.12.2023
01.01.2024
8.350.182,57
1.101,76
1.101,76
8.351.284,33
0,283
21
BANCA TRANSILVANIA SA
05.10.2023
04.01.2024
5.000.000,00
854,17
75.166,67
5.075.166,67
0,172
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
103
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
22
BANCA TRANSILVANIA SA
10.10.2023
11.01.2024
8.000.000,00
1.333,33
110.666,67
8.110.666,67
0,275
23
BANCA TRANSILVANIA SA
10.10.2023
11.01.2024
8.000.000,00
1.333,33
110.666,67
8.110.666,67
0,275
24
BANCA TRANSILVANIA SA
10.10.2023
11.01.2024
7.000.000,00
1.166,67
96.833,33
7.096.833,33
0,241
25
BANCA TRANSILVANIA SA
10.10.2023
11.01.2024
7.000.000,00
1.166,67
96.833,33
7.096.833,33
0,241
26
BANCA TRANSILVANIA SA
02.11.2023
04.01.2024
6.000.000,00
941,67
56.500,00
6.056.500,00
0,205
27
BANCA TRANSILVANIA SA
02.11.2023
04.01.2024
4.000.000,00
627,78
37.666,67
4.037.666,67
0,137
28
BANCA TRANSILVANIA SA
02.11.2023
02.02.2024
4.000.000,00
666,67
40.000,00
4.040.000,00
0,137
29
BANCA TRANSILVANIA SA
02.11.2023
02.02.2024
6.000.000,00
1.000,00
60.000,00
6.060.000,00
0,205
30
BANCA TRANSILVANIA SA
06.11.2023
06.02.2024
7.000.000,00
1.186,11
66.422,22
7.066.422,22
0,240
31
BANCA TRANSILVANIA SA
06.11.2023
06.02.2024
6.000.000,00
1.016,67
56.933,33
6.056.933,33
0,205
32
BANCA TRANSILVANIA SA
06.11.2023
06.02.2024
8.000.000,00
1.355,56
75.911,11
8.075.911,11
0,274
33
BANCA TRANSILVANIA SA
06.11.2023
06.02.2024
9.000.000,00
1.525,00
85.400,00
9.085.400,00
0,308
34
BANCA TRANSILVANIA SA
21.11.2023
22.02.2024
5.000.000,00
833,33
34.166,67
5.034.166,67
0,171
35
BANCA TRANSILVANIA SA
05.10.2023
04.01.2024
6.700.000,00
1.144,58
100.723,33
6.800.723,33
0,231
36
BANCA TRANSILVANIA SA
21.11.2023
22.02.2024
5.000.000,00
833,33
34.166,67
5.034.166,67
0,171
37
BANCA TRANSILVANIA SA
28.11.2023
27.02.2024
8.000.000,00
1.355,56
46.088,89
8.046.088,89
0,273
38
BANCA TRANSILVANIA SA
05.12.2023
05.03.2024
8.000.000,00
1.355,56
36.600,00
8.036.600,00
0,272
39
BANCA TRANSILVANIA SA
05.12.2023
05.03.2024
6.000.000,00
1.016,67
27.450,00
6.027.450,00
0,204
40
BANCA TRANSILVANIA SA
05.12.2023
05.03.2024
7.000.000,00
1.186,11
32.025,00
7.032.025,00
0,238
41
BANCA TRANSILVANIA SA
28.12.2023
28.03.2024
5.000.000,00
847,22
3.388,89
5.003.388,89
0,170
42
BANCA TRANSILVANIA SA
28.12.2023
28.03.2024
8.000.000,00
1.355,56
5.422,22
8.005.422,22
0,271
43
BANCA TRANSILVANIA SA
28.12.2023
28.03.2024
7.000.000,00
1.186,11
4.744,44
7.004.744,44
0,238
44
BANCA TRANSILVANIA SA
22.12.2023
21.03.2024
8.000.000,00
1.355,56
13.555,56
8.013.555,56
0,272
45
BANCA TRANSILVANIA SA
22.12.2023
21.03.2024
7.000.000,00
1.186,11
11.861,11
7.011.861,11
0,238
46
BANCA TRANSILVANIA SA
22.12.2023
21.03.2024
5.000.000,00
847,22
8.472,22
5.008.472,22
0,170
47
Exim Banca Romaneasca
17.10.2023
16.01.2024
5.700.000,00
965,83
73.403,33
5.773.403,33
0,196
TOTAL
309.659.064,88
10,499
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
104
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
2. Bank deposits in currency
No.
Bank name
Setup date
Maturity date
Initial value
Daily increase
Cumulated interest
RNB currency rate
Total value
Percentage in F.I.A.I.R. total assets
currency
currency
currency
lei
lei
%
Bank deposits in EUR
1
BANCA TRANSILVANIA SA
10.12.2023
10.01.2024
98.500,00
1,37
30,10
4,9746
490.147,82
0,017
Total bank deposits in EUR
98.500,00
30,10
490.147,82
0,017
TOTAL
490.147,82
0,017
XI. Derivatives traded on a regulated market
- on distinct categories: on a Romanian regulated market/ market from a member state / a third state
1. Futures contracts
Not the case
2. Options
Not the case
3. Amounts pending settlement for derivatives traded on a regulated market
Not the case
XII. Derivatives negotiated outside regulated markets
1. Forward Contracts
Not the case
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
105
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
2. Swap Contracts
- evaluation depending on listing
Not the case
- evaluation depending on the ascertainment of present value of payments within the contracts
Not the case
3. Contracts for differences
Not the case
4. Other derived contracts related to securities, currency, interest rate or yield, or other derivatives, financial indexes or indicators/ derivative contracts related to commodities that must be settled in money funds or can be settleled in company fonds at the request of one of the parties
Not the case
XIII. Money market instruments, other than those traded on a regulated market, in accordance with art. 82 letter g) G.E.O no. 32/2012
Not the case
XIV. UCITS. / OCPU holding titles
1. Holding titles denominated in lei
No.
Fund name
Date of latest trading session
No. of owned fund units
Fund unit value (NAV)
Market price
Total value
Percentage in total holding titles of UCITS/OCPU
Percentage in F.I.A.I.R. total assets
lei
lei
lei
%
%
Shares
1
FONDUL PROPRIETATEA
29.12.2023
3.129.178,000000
#Error
0,5230
1.636.560,09
0,055
0,055
2
Transilvania Investments Alliance S.A
29.12.2023
103.264.310,000000
#Error
0,3260
33.664.165,06
4,775
1,141
Total Shares
35.300.725,15
1,197
Unit funds
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
106
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
3
FDI BT Index Romania ROTX
238.117,915992
29,4780
#Error
7.019.239,93
2,205
0,238
4
FDI BT MAXIM
319.468,404575
23,0140
#Error
7.352.245,86
2,733
0,249
5
FDI NAPOCA
7.265.417,540000
0,8651
#Error
6.285.312,71
33,162
0,213
6
FDI TehnoGlobinvest
1.071,770000
1.552,6480
#Error
1.664.081,55
25,993
0,056
7
FDI Transilvania
116.884,880000
59,2698
#Error
6.927.743,46
20,008
0,235
8
FIA ALCHEMIST
614,676400
117.036,8144
#Error
71.939.767,74
49,995
2,439
9
FIA BT INVEST 1
1.308,797738
23.726,2700
#Error
31.052.888,52
8,267
1,053
10
FIA DCP INVESTITII
4.161,462300
10.478,2157
#Error
43.604.699,61
42,051
1,478
11
FIA FONDUL PRIVAT COMERCIAL
166.024,330000
498,9079
#Error
82.830.849,83
48,209
2,808
12
FIA HERMES
70,958400
206.858,3964
#Error
14.678.340,84
49,448
0,498
Total Unit funds
273.355.170,05
9,268
TOTAL
308.655.895,20
10,465
2. Holding titles denominated in currency
Not the case
3. Amounts pending settlement for holding titles denominated in lei
Not the case
4. Amounts pending settlement for holding titles denominated in currency
Not the case
Not the case
XV. Dividends or other receivable rights
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
107
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
1. Dividends to collect
Not the case
2. Shares distributed without money consideration
Not the case
3. Shares distributed with money consideration
Not the case
4. Amount payable for shares distributed with money consideration
Not the case
5. Preemptive rights (before admission to trading and following the trading period)
Not the case
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
108
Image should be here
Image should be here
Board Report 2023 Separate Financial Statements
Evolution of net asset and NAT over the latest 3 reporting periods
31.12.2023
31.12.2022
31.12.2021
Net assets
2.665.945.738,79
2.214.741.795,06
2.383.174.895,38
Net asset value per share
2,9296
2,3817
2,4888
Explanatory notes: The valuation methods used for financial instruments for which valuation methods in accordance with the valuation standards in force, according to the law, were used, based on valuation report, presented in the Annex in accordance with art. 38 line (4) din law no. 243/2019, are detailed in “Policies and Procedures for the asset valuation and NAV calculation”.
Leverage effect and the value of EVERGENT Investments’ exposure calculated in accordance with the provisions of (EU) Regulation no. 231/2013
Method type
Leverage lever
Exposure value (RON)
Gross method
1,0029 (sau 100,29%)
2.673.586.747,00
Commitment method
1,0239 (sau 102,39%)
2.729.620.159,00
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
SEPARATE FINANCIAL STATEMENTS
Annex 2
EVERGENT INVESTMENTS SA
SEPARATE FINANCIAL STATEMENTS
AT 31 DECEMBER 2023
Prepared in accordance with Accounting Regulations compliant with the International Financial Reporting Standards applicable to entities authorized, regulated and supervised by the Financial Supervisory Authority - Financial Instruments and Investments sector, approved by Financial Supervisory Authority’s Rule no. 39/ 2015
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
SEPARATE FINANCIAL STATEMENTS
TABLE OF CONTENTS
PAGE NO.
SEPARATE STATEMENT OF COMPREHENSIVE INCOME
111
SEPARATE STATEMENT OF FINANCIAL POSITION
112
SEPARATE STATEMENT OF CHANGES IN EQUITY
113 – 114
SEPARATE STATEMENT OF CASH FLOWS
115 – 116
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
117 – 208
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
SEPARATE STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
111
In LEI
Note
2023
2022
Revenue and gains(losses)
Gross dividend revenue
6
143,419,181
120,777,371
Interest revenue
7
9,909,187
7,087,713
Other operating revenue
8
1,163,202
1,607,660
Net gain/(net loss) on financial assets at fair value through profit or loss
9
39,332,779
(474,436)
Net gain from the sale of non-financial assets
5,490
-
Net gain from the revaluation of investment property
37,290
798,078
Expenses
Loss reversal on financial assets
100,129
2,332,072
Loss reversal on non-financial assets impairment
-
671
Reversal of provisions for risks and expenses
24
-
117,190
Expenses with wages, remunerations and other similar expenses
10
(37,100,983)
(28,773,429)
Other operating expenses
11
(13,553,289)
(11,660,747)
Operating profit
143,312,986
91,812,143
Financing expense
12
(4,084,887)
(95,436)
Profit before tax
139,228,099
91,716,707
Income tax
13
(14,494,674)
(8,863,072)
Net profit of the financial year
124,733,425
82,853,635
Other comprehensive income
Increase from revaluation of property, plant and equipment, net of deferred tax
16 d)
1,530,984
806,957
Net gain/(loss) from the revaluation of equity instruments at fair value through other comprehensive income (FVTOCI)
414,997,141
(168,168,297)
Other elements of comprehensive income – elements that will not be reclassified in profit or loss
16 d)
416,528,125
(167,361,340)
Net loss from the revaluation of FVTOCI bonds
(185,969)
(105,304)
Other comprehensive income- elements that will be reclassified in profit or loss
(185,969)
(105,304)
Other comprehensive income elements - Total
416,342,156
(167,466,644)
Total comprehensive income of the financial year
541,075,581
(84,613,009)
Basic and diluted earnings per share (net profit per share)
27
0,1365
0,0874
Basic and diluted earnings per share (including gain from the sale of FVTOCI financial assets)
27
0,2230
0,1244
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
SEPARATE STATEMENT OF FINANCIAL POSITION
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
112
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
In LEI
Note
31 December 2023
31 December 2022
Assets
Cash and current accounts
14
1,024,388
788,781
Bank deposits with initial maturity within 3 months
15 a)
299,408,624
104,971,764
Bank deposits with initial maturity of more than 3 months
15 b)
10,724,880
-
Financial assets measured at fair value through profit or loss
16 a)
347,807,747
333,619,756
Financial assets measured at fair value through other comprehensive income
16 b)
2,240,394,284
1,875,688,529
Bonds at fair value through other comprehensive income
16 e)
3,884,483
3,982,047
Bonds at amortized cost
16 e)
17,555,243
17,550,535
Other financial assets at amortized cost
17 a)
6,418,790
9,869,910
Other assets
17 b)
515,601
497,055
Non-current assets held for sale
212,738
-
Investment property
18
4,109,000
4,284,448
Plant, property and equipment
19
10,435,507
9,282,127
Right-of-use assets for qualifying assets in leases
19
3,320,774
3,474,536
Intangible assets
19
402,983
412,375
Total assets
2,946,215,042
2,364,421,863
Liabilities
Borrowings
20
63,674,421
-
Lease liabilities
21
3,303,893
3,456,939
Dividends payable
22
49,950,267
42,633,808
Current tax liabilities
7,410,272
5,370,896
Financial liabilities at amortized cost
23 a)
1,267,195
2,871,103
Other liabilities
23 b)
6,144,422
4,154,999
Provisions for risks and expenses
24
1,632,553
1,632,553
Deferred tax liabilities
25
149,977,380
89,669,402
Total liabilities
283,360,403
149,789,700
Equity
Share capital
26
499,988,637
499,988,637
Retained earnings
1,153,588,929
1,018,427,444
Reserves from the revaluation of property, plant and equipment
11,305,777
9,774,793
Reserves from the revaluation of financial assets at fair value through other comprehensive income
16 d)
1,035,679,283
699,891,438
Treasury shares
26 e)
(66,642,400)
(38,991,230)
Equity-based payments to employees, directors and administrators
26 f)
24,881,378
20,765,780
Other items of equity
26 g)
4,053,035
4,775,301
Total equity
2,662,854,639
2,214,632,163
Total liabilities and equity
2,946,215,042
2,364,421,863
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(all amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
113
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
In LEI
Note
Share capital
Reserves from the revaluation of property, plant and equipment
Reserves from the revaluation of FVTOCI financial assets
Retained earnings
Treasury shares
Equity-based payments to employees, directors and administrators
Other equity elements
Total
Balance at 31 December 2022
26
499,988,637
9,774,793
699,891,438
1,018,427,444
(38,991,230)
20,765,780
4,775,301
2,214,632,163
Comprehensive income
Net profit of the financial year
-
-
-
124,733,425
-
-
-
124,733,425
Other comprehensive income
-
-
-
Increases of revaluation reserve on property, plant and equipment, net of deferred tax
-
1,530,984
-
-
-
-
-
1,530,984
Revaluation at fair value of FVTOCI equity instruments, net of deferred tax
-
-
414,997,141
-
-
-
-
414,997,141
Revaluation at fair value of FVTOCI bonds
-
-
(185,969)
-
-
-
-
(185,969)
Total other comprehensive income
-
1,530,984
414,811,172
-
-
-
-
416,342,156
Total comprehensive income of the financial year
-
1,530,984
414,811,172
124,733,425
-
-
-
541,075,581
Net gain, transferred to retained earnings, for the sale of FVTOCI equity instruments
16 d)
-
-
( 79,023,327 )
79,023,327
-
-
-
-
Transactions with shareholders directly recognized in equity
Redemption of own shares
-
-
-
-
(38,842,825)
-
(380,999)
(39,223,824)
Own shares attributed to employees, administrators and directors
26 e)
-
-
-
-
11,191,655
(10,850,388)
(341,267)
-
Equity-based payments to employees, directors and administrators
-
-
-
-
-
14,965,986
-
14,965,986
Dividends expired according to the law (explanatory note 3 m)
-
-
-
14,100,250
-
-
-
14,100,250
Dividends distributed from the result of 2022 financial year
-
-
-
(82,695,517)
-
-
-
(82,695,517)
Total transactions with shareholders directly recognized in equity
-
-
-
(68,595,267)
(27,651,170)
4,115,598
(722,266)
(92,853,105)
Balance at 31 December 2023
26
499,988,637
11,305,777
1,035,679,283
1,153,588,929
(66,642,400)
24,881,378
4,053,035
2,662,854,639
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(all amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
114
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
In LEI
Note
Share capital
Reserves from the revaluation of property, plant and equipment
Reserves from the revaluation of FVTOCI financial assets
Retained earnings
Treasury shares
Equity-based payments to employees, directors and administrators
Other equity elements
Total
Balance at 31 December 2021
26
510,105,062
8,967,836
903,246,143
981,801,980
(41,119,507)
16,252,012
3,685,004
2,382,938,530
Comprehensive income
Net profit of the financial year
-
-
-
82,853,635
-
-
-
82,853,635
Other comprehensive income
Increases of revaluation reserve on property, plant and equipment, net of deferred tax
-
806,957
-
-
-
-
-
806,957
Revaluation at fair value of FVTOCI equity instruments, net of deferred tax
-
-
(168,168,297)
-
-
-
-
(168,168,297)
Revaluation at fair value of FVTOCI bonds
-
-
(105,304)
-
-
-
-
(105,304)
Total other comprehensive income
-
806,957
(168,273,601)
-
-
-
-
(167,466,644)
Total comprehensive income of the financial year
-
806,957
(168,273,601)
82,853,635
-
-
-
(84,613,009)
Net gain, transferred to retained earnings, for the sale of FVTOCI equity instruments
16 d)
-
-
(35,081,104)
35,081,104
-
-
-
-
Transactions with shareholders directly recognized in equity
Decrease of share capital
26 a)
(10,116,425)
-
-
(26,389,968)
35,999,999
-
506,394
-
Redemption of own shares
-
-
-
-
(38,566,162)
-
(119,881)
(38,686,043)
Own shares attributed to employees, administrators and directors
26 e)
-
-
-
-
4,694,440
(5,398,224)
703,784
-
Equity-based payments to employees, directors and administrators
-
-
-
-
-
9,911,992
-
9,911,992
Dividends expired according to the law (explanatory note 3 m)
-
-
-
7,133,676
-
-
-
7,133,676
Dividends distributed from the result of 2021 financial year
-
-
-
(62,052,983)
-
-
-
(62,052,983)
Total transactions with shareholders directly recognized in equity
(10,116,425)
-
-
(81,309,275)
2,128,277
4,513,768
1,090,297
(83,693,358)
Balance at 31 December 2022
26
499,988,637
9,774,793
699,891,438
1,018,427,444
(38,991,230)
20,765,780
4,775,301
2,214,632,163
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
SEPARATE STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
115
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
In LEI
Not e
2023
2022
Operating activities
Net profit for the year
124,733,425
82,853,635
Adjustments:
Loss reversal from assets impairment
(100,129)
(2,332,072)
Loss reversal from non-financial assets impairment
-
(671)
Net gain from the revaluation of investment property
17
(37,290)
(798,078)
(Net gain) / Net loss of financial assets at fair value through profit or loss
9
(39,332,779)
474,436
Reversal of provisions for risks and charges
24
-
(117,190)
Gross dividend income
6
(143,419,181)
(120,777,371)
Interest income
7
(9,909,187)
(7,087,713)
Financing expenses
12
4,084,887
95,436
Corporate tax
13
14,494,674
8,863,072
Other adjustments
18,417,493
11,021,983
Modifications of assets and liabilities corresponding to operating activities
Payments for acquisition of financial assets at fair value through profit or loss
(57,426)
(5,000,000)
Proceeds from sales of financial assets at fair value through profit or loss
25,202,214
52,121,165
Payments for acquisition of financial assets at fair value through other comprehensive income
(197,181,371)
(207,420,556)
Proceeds from sales of financial assets at fair value through other comprehensive income
322,049,047
89,198,421
Proceeds from bonds
11,760
16,711,760
Set-ups of deposits with initial maturity of more than 3 months
(10,000,000)
-
Changes in other assets
3,680,264
(2,502,603)
Changes in other liabilities
1,042,630
1,399,845
Proceeds from dividends
132,016,774
115,165,356
Proceeds from interest
7,425,009
7,016,519
Paid profit tax
(17,155,411)
(3,504,141)
Net cash resulted from operating activities
235,965,40 3
35,381,233
Investment activities
Payments for acquisitions of property, plant and equipment
(152,696)
(740,070)
Payments for acquisition of intangible assets
(83,235)
(124,869)
Payments for acquisition of investment property
-
(948,484)
Proceeds from sale of intangible assets and property investments
5,490
2,321
Net cash used in investment activities
(230,441)
(1,811,102)
Image should be here
SEPARATE STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
The attached explanatory notes are integral part of the financial statements.
116
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
In LEI
Note
2023
2022
Financing activities
Paid dividends
(61,278,808)
(46,322,241)
Lease payments
(542,462)
(558,211)
Proceeds from borrowings
94,121,516
-
Loan repayments
(32,135,621)
-
Loan interest paid
(3,641,718)
-
Payments of lease liability interest
(111,396)
(95,436)
Acquisition of treasury shares
(39,223,824)
(38,686,043)
Net cash used in financing activities
(42,812,313)
(85,661,931)
Net increase/(decrease) of cash and cash equivalents
192,922,649
(52,091,800)
Cash and cash equivalents at 1 January
105,541,921
157,633,721
Cash and cash equivalents at 31 December
298,464,570
105,541,921
In LEI
31 December 2023
31 December 2022
Cash at hand
2,394
4, 626
Current bank accounts
1,021,995
784,158
Bank deposits with initial maturity within 3 months
297,440,181
104,753,137
Cash and cash equivalents
298,464,570
105,541,921
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
117
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
1. REPORTING ENTITY
EVERGENT Investments SA (“ the Company ” or “ EVERGENT Investments ”), is setup as a Romanian private-law legal entity, organized as a joint-stock company, classified according to applicable regulations as AIS-type Alternative Investment Fund, alternative investment fund category intended for retail investors - AIFRI, with a diversified investment policy, closed, self-managed.
The Company is authorized by the Financial Supervision Authority (FSA) as alternative investment fund manager by Permit no. 20/23.01.2018 and as an Alternative Investment Fund intended for retail investors (AIFRI), by Permit no. 101/25.06.2021.
The duration of the Company is 100 years starting 23 August 2021 and may be extended by the shareholders prior to the expiry thereof, by decision of the Extraordinary General Meeting of Shareholders.
The headquarters of the Company is located in Street Pictor Aman, no. 94C, Bacau municipality, Bacau county, Romania.
According to the Articles of Incorporation, the Company’s main business activity consists in:
• administration of the portfolio;
• risk management;
• other auxiliary activities related to collective administration activities permitted by the legislation in force.
The company is self-managed as a one-tier company.
The shares issued by Evergent Investments SA are listed at the Bucharest Stock Exchange, the primary market, Premium category, with indicative EVER, since 29 March 2021 (the Company’s share were previously traded using indicative SIF2), as per the BSE Decision of 1 November 2011.
The shares and shareholders’ record is kept according to the law by Depozitarul Central S.A. Bucharest.
As of 22 May 2023, the assets deposit and custody services are provided by Banca Comercială Română SA, as per FSA License no. 74 of 18 May 2023. Previously, such services were provided by BRD – Société Générale SA.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
118
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
2. BASIS OF PREPARATION
(a) Statement of compliance
The separate financial statements have been prepared by the Company in accordance with Accounting Regulations compliant with the International Financial Reporting Standards applicable to entities authorized, regulated and supervised by FSA in the field of Financial Instruments and Investments approved by “Rule 39/2015”.
According to Norm 39/2015, the International Financial Reporting Standards, hereinafter referred to as IFRS, represent the standards adopted in accordance with the procedure foreseen by Regulation (CE) no. 1606/2002 of the European Parliament and Council of 19 July 2002 regarding the application of international accounting standards, with the subsequent amendments and additions.
The separate financial statements for the financial year ended 31 December 2023, including the financial information used for comparison purposes include the separate statement of financial position, separate statement of comprehensive income, separate statement of cash flows, separate statement of changes in equity and explanatory notes.
The consolidated financial statements of the Group (the Company and its subsidiaries) at 31 December 2023 were approved on 25 March 2024. They will be available on the Company’s website:
www.evergent.ro
The Company’s accounting records are held in Lei (national currency symbol: “RON”).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
119
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
2. BASIS OF PREPARATION (continued)
(b) Financial Statements Presentation
The separate financial statements have been prepared in accordance with the requirements of IAS 1 “Presentation of Financial Statements”. The presentation adopted by the company is based on liquidity for the statement of financial position and a presentation of income and expenses depending on their nature for the statement of comprehensive income, considering that these presentation methods offer more relevant information for the users, than if presented based on other methods allowed by IAS 1.
These separate financial statements were prepared based on the going concern assumption that assumes that EVERGENT Investments will continue its activity in the predictable future. The management of the Company considers that EVERGENT Investments will normally continue its activity in the future, and consequently, the separate financial statements were prepared on this basis (see explanatory note 2 (g) “Impact of the Russian- Ukrainian military conflict and other global trends on the Company’s financial position and performance”).
(c) Functional and presentation currency
The Company’s management consider that the functional currency, as defined by IAS 21 “The Effects of Changes in Foreign Exchange Rates”, is the Romanian (“Leu” or “RON”). The individual financial statements are presented in RON, rounded to the closest RON, a currency that the management of the Company has selected as presentation currency.
(d) Basis of measurement
The separate financial statements have been prepared based on the fair value convention for financial assets at fair value through profit or loss and financial assets measured at fair value through other comprehensive income.
Other financial assets and liabilities are stated at amortized cost, and non-financial assets and liabilities have been presented at historic cost, fair value or revaluated amount.
(e) Use of Estimates and Judgments
The preparation of separate financial statements in accordance with IFRS requires the use of management estimates, judgments and assumptions that affect the ascertainment and application of the Company’s accounting policies and the reported value of the assets, liabilities, income and expenses in the financial statements. Estimates and assumptions associated with these are based on historical experience and other factors deemed reasonable in light of the given circumstances, and the result of this considerations represents the basis for the judgements used when establishing the accounting value of the assets and liabilities for which no other valuation sources are available. The results obtained may differ from the value of the estimates.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
120
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
2. BASIS OF PREPARATION (continued)
(e) Use of Estimates and Judgments
Estimates and underlying assumptions are periodically reviewed. The revisions of accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period in which the estimate is revised and future periods if the revision affects both current period and following periods.
The information and judgments concerning the ascertainment and application of accounting policies and the laying of accounting estimates with the highest degree of uncertainty regarding the estimates, which have a significant impact on the amounts recognized in these annual financial statements, are the following:
• Determining the fair value of financial instruments (see explanatory notes 16 (c) and 3 (e) (vi))
• Fair value hierarchy and unobservable inputs used in the evaluation (Level 3) (see explanatory notes 16(c) and note 18)
• Classification of financial instruments (see explanatory notes 3 (e) i) and 5)
• Adjustments for expected credit losses of assets carried at amortized cost (see explanatory note 3 (e) (vii)
(f) Information on material accounting policies
The Company also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements.
The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies. The amendments also provide guidance on the application of materiality to disclosure of accounting policies.
Management reviewed the accounting policies and made updates to the information disclosed in Note 3 Material accounting policies (2022: Significant accounting policies) in certain instances in line with the amendments.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
121
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
2. BASIS OF PREPARATION (continued)
(g) Impact of the Russian-Ukrainian military conflict and other global events and trends on the financial position and performance of the Company
In the context of the continuation of the Russian-Ukrainian military conflict and the outbreak of other military conflicts, with all their consequences, in 2023 the Bucharest Stock Exchange recorded high volatility and relatively low liquidity, but the upward trend continued.
Inflationary pressures are still high. The National Bank of Romania maintained the monetary policy interest rate at 7% per year, the last increase being operated at the beginning of January 2023, and the European Central Bank continued to increase the reference interest rate (on September 14, 2023 it announced the tenth consecutive increase), which reached a new all-time high .
Domestically, additional risks come from macroeconomic imbalances which continued to rise, the delay in reforms and the absorption of European funds, especially through the National Recovery and Resilience Plan (PNRR) and the risk of default on loans contracted by the non-governmental sector.
The prolongation of the war in Ukraine and the outbreak of other military conflicts and the estimates regarding the medium-term evolution of inflation continued to generate uncertainties and risks regarding the prospects of the economic activity, with potential impact on the evolution of financial instrument quotations, including on the Bucharest Stock Exchange, where a high volatility is expected in the future, at least in the short term, on a 3–6-month horizon.
Under these circumstances, the Company’s management considers that the profitability of EVERGENT Investments may be affected, but on the short and medium term, and does not estimate difficulties in honouring the Company’s commitments, and going concern is not affected.
The management closely monitors the evolution of this conflict and other events and trends at the global level and their impact and the measures taken at international level on the economic environment at national level, the market where the Company's assets are exposed.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
122
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES
The accounting policies have been consistently applied on all periods presented in the individual financial statements prepared by the Company.
The comparatives in certain notes to the financial statements (i.e Notes: 11. Other operating expenses and 13. Profit tax) were reclassified/updated for consistency with the information presented in the current year.
The Company also adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023. The amendments require the disclosure of ‘material’, rather than ‘significant’, accounting policies.
Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in the financial statements (see Note 2 (f) for further information).
(a) Foreign currency transactions
Operations expressed in foreign currency are registered in lei at the official exchange rate on the transaction date. Monetary assets and liabilities registered in a foreign currency are converted into the functional currency at the date of preparation of the financial statements at the closing rate of the date in question.
Foreign exchange rate differences arising on the settlement of monetary items or conversion of monetary elements at rates different from those at which they were translated on initial recognition (during the period), or in the previous annual financial statements are recognized as profit or loss in the period in which they arise.
The main exchange rates for foreign currency in accordance with NBR reporting were:
Currency
31 December 2023
31 December 2022
Variation
Euro (EUR)
1: 4.9746 Lei
1: 4.9474 Lei
+0.55%
American dollar (USD)
1: 4.4958 Lei
1: 4.6346 Lei
-2.99%
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
123
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(b) Subsidiaries and associates
Subsidiaries are entities under the Company’s control. Control exists when the Company is exposed or has the right to variable earnings from its involvement in the entities it has invested in and has the ability to affect these earnings through its power over the entity it invested in. At the time control is evaluated, the potential or convertible voting rights which can be exercised at that time must also be taken into consideration.
Associates are those companies in which the Company can exercise significant influence, but not control over financial and operational policies.
The list of subsidiaries and associates is presented under explanatory note 29.
In these separate financial statements, the Company has classified its interests in subsidiaries and associates as financial assets measured at fair value through comprehensive income or financial assets at fair value through profit or loss, in accordance with IFRS 9.
(c) Accounting for hyperinflation effect
In accordance with IAS 29, the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy must be presented in the current measurement unit on the date when they are prepared (non-monetary elements are restated using a general price index on the purchase or contribution date). In accordance with IAS 29, an economy is considered to be hyperinflationary when, among other factors, the cumulated inflation rate over a three years’ period exceeds 100%.
In Romania’s case (economy whose functional currency has been adopted by the Company), the provisions of IAS 29 have been adopted for the preparing of separate financial statements up to 31 December 2003, starting 1 January 2004 its economy ceased to be hyperinflationary.
Thus, the values expressed in the current measurement unit at 31 December 2003 are stated as base for the book values reported in the separate financial statements and do not represent measured values, replacement cost, or any other measure of the present value of assets or prices at which the transactions would be made at this moment.
(d) Statement of cash flows
On preparing the statement of cash flow, the Company treats the following as cash and cash equivalents: cash at hand, current bank accounts, bank deposits with an initial maturity within or equal to 3 months (without, if the case be, restricted deposits and restricted current accounts), less the corresponding interest and adjustments for expected credit loss.
Given its main object of activity, the Company considers that the entire activity of investments in financial instruments (both the management of FVTPL classified financial assets and FVTOCI assets) is part of its operational activity.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
124
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities
(i) Classification of financial assets
IFRS 9 provides an approach regarding the classification and evaluation of financial assets that reflects the business model within which financial assets and cash flow characteristics are managed.
The business models used by the Company to manage its financial assets are:
• To collect contractual cash flows:
Financial assets held within this business model are managed to obtain cash flows through the collection of contract payments over the life of the instrument. This means that EVERGENT Investments manages the assets held in its portfolio to collect those contractual cash flows (instead of managing the general return of the portfolio through holding or selling assets).
Assets held under this business model are not necessarily held to maturity, “rare frequency” sales are also possible, when the credit risk of those particular instrument increases. An increase of the sale frequency over a certain period of time is not necessarily contrary to this type of business if the Company can explain the reasons that led to these sales and can prove that the sales do not reflect a modification of the current business model.
• To collect contractual cash-flows and to sell:
Financial assets that are held within this business model are managed both for the collection of contractual cash flows and for the sale of financial assets.
• Other business models:
Other business models include the maximization of cash flows through sale, trading, management of assets based on fair value, financial instruments purchased for sale or trade purposes that are measured at fair value through profit or loss.
The management of this portfolio is made based on the market value evolution of those assets and includes frequent purchases and sales for the purpose of profit maximization.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
125
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(i) Classification of financial assets (continued)
Analysis of cash flow characteristics (SPPI test)
The SPPI test represents the analysis of the contract terms of financial assets for the purpose of identifying if the cash flows represent solely payments of principal and interest corresponding to the principal.
IFRS 9 includes three categories for the classification of financial assets: measured at amortized cost, measured at fair value through comprehensive income and measured at fair value through profit or loss.
• Financial assets measured at amortized cost
Following initial recognition, a financial asset is classified as measured at amortized cost only if two of the following conditions are met simultaneously:
o the asset is held in a business model whose objective is to keep financial assets to collect contractual cash flows;
o the contractual terms of the financial asset generate, on certain dates, cash flows representing exclusive payments of principal and interest.
• Financial assets measured at fair value through other comprehensive income („FVTOCI”)
Following initial recognition, a financial asset is classified as measured at fair value through other comprehensive income, only if two conditions are met simultaneously:
o the asset is held within a business model whose objective is to keep the financial assets to collect contractual cash flows and to sell them;
o the contractual terms of the financial asset generate, on certain dates, certain cash flows represented exclusive payments of principal and interest.
Moreover, on the initial recognition of an investment in equity instruments that is not held for trading, the Company may irrevocable chose to present later modification of fair value in other comprehensive income.
The Company has used its irrevocable option to designate these equity instruments at fair value through other comprehensive income as these financial assets are held both for the collection of dividends and for gains from sale, not for trading.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
126
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(i) Classification of financial assets (continued)
Gains or losses corresponding to an equity instrument measured at fair value through other comprehensive income are recognized in other comprehensive income, except for dividend revenue.
• Financial assets measured at fair value through profit or loss (“FVTPL”):
All financial assets that are not classified as measured at amortized cost or fair value through other comprehensive income, as described above, are measured at fair value through profit or loss.
Moreover, on initial recognition, the Company may irrevocably designate that a financial asset that otherwise meets the requirements to be measured at amortized cost or fair value through other comprehensive income, is measured at fair value through profit or loss, if this eliminates or significantly reduces an accounting inconsistency that would occur if another method would be used.
Financial assets that do not meet the criteria regarding the collection of cash flows (SPPI test) must be measured at fair value through profit or loss.
Following the adoption of IFRS 9, financial assets such as equity instruments that the Group did not opt to classify as financial assets measured at fair value through other comprehensive income, and which were not held for trading, have been classified at fair value through profit or loss.
Assets held for trading are measured at fair value through profit or loss. An asset is held for trading if it cumulatively meets the following requirements:
o it is held for sale and repurchase in the near future;
o on initial recognition, it is part of an identified financial instruments portfolio, that are managed together, and for which there is proof of a recent pattern of following short-term profit; or
o it is a derivative (with the exception of a derivative that is a financial guarantee contract or designated and efficient hedging instrument ).
The Company does not owe financial assets held for trading at 31 December 2023 or 31 December 2022.
In case of financial assets at fair value through profit or loss, fair value modifications are registered in the statement of comprehensive income, in profit or loss.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
127
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(ii) Classification of financial liabilities
Financial liabilities, including loans, are classified following initial recognition at amortized cost, except financial liabilities measured at fair value through profit or loss (financial liabilities held for trading purposes that are designated on initial recognition or later at fair value through profit or loss, according to IFRS9 specific provisions, including financial liabilities corresponding to derivatives). Incorporated derivatives are separated from the host contract in case of financial liabilities.
The Company does not hold financial liabilities carried at fair value through profit or loss at 31 December 2023 or 31 December 2022.
(iii) Initial recognition
Assets and liabilities are recognized at the date when the Company becomes a party of the contractual provisions (transaction date). Financial assets and liabilities are measured at fair value at the time of their initial recognition, plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.
(iv) Offsetting of assets and liabilities
Financial assets and financial liabilities are set off, and the net result presented in the statement of financial position when there is a legal set off right and if it is intended to be settled on a net basis, or if the Company intends to realize its asset and settle the debt simultaneously.
Income and expenses are presented on a net basis only when allowed by accounting standards, or for the profit and loss resulted from a group of similar transactions, such as those from the Company’s trading activity.
(v) Measurement at amortized cost
The amortized cost of a financial asset or liability represents the value to which the financial asset or liability is measured after initial recognition, less principal payments, plus or minus the accumulated amortization up to that moment using the effective interest method for every difference between the initial value and the value at maturity, except for the case of financial assets, write-downs corresponding to expected credit risk losses.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
128
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(vi) Measurement at fair value
Fair value is the price that would be received following the sale of an asset or the price that would be paid to transfer a liability through an orderly transaction between market participants on the evaluation date (e.g. an exit price ).
The determination of the fair value of financial assets and liabilities is based on the quotations of an active market. A financial instrument has an active market if quoted prices are rapidly and regularly available, and these prices reflect the market transactions regularly made under objective market conditions .
Fair value measurement for instruments traded on an active market is made by multiplying the number of shares held by the closing price on the last trading day of the given reporting period.
In case a financial asset is listed on several active markets, the Company uses either the principal market for the asset, or, in the absence of a principal market, the most advantageous market, taking into consideration all barriers/costs associated to the access to each market.
For all other financial instruments, fair value is determined using evaluation techniques.
Evaluation techniques include techniques based on the net present value, discounted cash flow method, comparison with similar instruments for which there is an observable market and other measurement methods .
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
129
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(vii) Identification and measurement of expected credit losses
Financial assets measured at amortized cost
The Company recognises expected credit losses for financial assets at amortized cost measured according to the provisions of IFRS 9.
For this purpose, these instruments are classified as stage 1, stage 2 or stage 3 depending on absolute or relative credit risk, by reference to the moment of their initial recognition. Thus:
Stage 1 : includes (i) newly recognized exposures, other then purchased or originated credit-impaired (POCI) ; (ii) exposures for which credit risk has not significantly deteriorated since initial recognition (iii) exposures with low credit risk (low credit risk exemption).
Stage 2 : includes exposures that, although performing, have registered a significant deterioration of credit risk since initial recognition.
Stage 3 : includes impaired credit exposures.
Expected credit loss represents the difference between all contractual hedged cash flows that are owed to the Group and all cash flows that the Group expects to receive, updated to the initial effective interest rate.
For stage 1 exposures, expected credit loss is equal to expected loss calculated on a timescale of up to one year. For stage 2 or 3 exposures, expected credit loss is equal to expected loss calculated on a timescale corresponding to the entire exposure duration.
The Company evaluates if the credit risk for a financial instrument has significantly increased from its initial recognition based on the information available, without unjustified cost or effort, that are indicators of significant credit risk increase since initial recognition, such as the significant deterioration of the financial results or the credit rating of the issuer of the financial instrument or more than 30-day delays in principal or interest payment for that financial instrument.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
130
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(vii) Identification and measurement of expected credit losses (continued)
The Company uses the simplified approach applicable to trade receivables, contract assets and leasing contract receivables recorded under Other financial assets at amortised cost, as they do not have a significant financing component. On this approach, the Company measures for these receivables the loss allowance at an amount equal to lifetime expected credit loss (i.e. eliminates the need to calculate expected losses of credit risk for Stage 1 at an amount equal to 12-month expected credit losses and the need to evaluate the occurrence of a significant credit risk increase).
The Company has defined as credit-impaired exposures, the receivables that meet one or both criteria below:
• exposures for which the Company evaluates that it is unlikely that the debtor pay its obligations, irrespective of the value of exposures and number of days for which exposure is delayed (due to significant financial difficulties of the client or if client is expected to enter bankruptcy),
• overdue amounts, with significant delays, over 365 days.
The Company recognizes in profit or loss the value of expected credit loss modification on the entire life span of the financial assets as loss or reversal of expected credit losses.
Losses or reversals of expected credit losses is calculated as the difference between the book value of a financial asset and present value of future cash-flows using the actual interest rate of the financial asset at the initial time.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
131
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(e) Financial assets and liabilities (continued)
(viii) Derecognition
The Company derecognizes a financial asset when the contractual rights to receive cash flows from that asset expire, or when the Company has transferred the contractual rights to receive contractual cash flows for that particular asset in a transaction that significantly transfers all risks and rewards of ownership.
Any interest in the transferred financial assets retained by the Company or created for the Company is recognized separately as an asset or liability .
The Company derecognizes a financial liability when contractual obligations have ended, or when contractual obligations are cancelled or expired.
If an entity transfers a financial asset through a transfer that meets the requirements for derecognition and retains its right to administrate the financial asset in return for a fee, then it must recognize either an asset in administration, or a liability in administration for that contract.
When derecognizing a financial asset in its entirety (other than FVTOCI capital instruments) in full, the difference between:
• its book value, and
• the sum of (i) value of the amount received (including any new asset obtained minus any new liability) and (ii) any accumulated gain or loss that was recognized in other comprehensive income
must be recognized in profit or loss.
In the case of debt instruments, when the financial asset at fair value through other comprehensive income is derecognized, the accumulated gain or loss previously recognized in other comprehensive income is reclassified from revaluation reserve to profit or loss as a reclassification adjustment (recycled in profit or loss).
In case of equity instruments carried at fair value through other comprehensive income, accumulated gain or loss previously recognized in other comprehensive income is not reclassified from revaluation reserve to profit or loss (i.e. not recycled in profit or loss), but is reclassified to retained earnings.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
132
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(f) Investment property
(i) Initial recognition
Investment property is real estate (land, buildings or parts of a building) held by the Company for the purpose of rental or for appreciation or both, and not for use in the production or supply of goods or services or for administrative purposes or to be sold in the normal course of business.
A real estate investment is recognized as an asset if, and only if:
- it is likely that the future economic benefits associated with the asset will accrue to the Company;
- the cost of the asset can be reliably determined.
A real estate investment is initially valued at cost, including transaction costs. The cost of a purchased investment property consists of its purchase price plus any directly attributable expenses (for example, professional legal fees, property transfer taxes and other transaction costs).
(ii) Subsequent measurement
The Company registers investment properties at fair value, and changes in fair value are recognised in profit or loss.
Fair value measurement
At 31 December 2023, the Company's investment properties were valued by independent external valuers, authorized by the National Association of Authorized Valuers of Romania (“ANEVAR”). The valuers mainly applied the market approach, using the method of market comparisons, and the income-based approach, using the direct capitalization method, in compliance with the valuation principles and techniques contained in the ANEVAR Asset Valuation Standards.
Gains or losses resulting from changes in the fair value of investment properties are recognized in profit or loss, in the period to which the valuation refers.
(iii) Transfers
Transfers to or from investment property are made when and only when there is a change in the use of the respective asset.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
133
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(f) Investment property (continued)
(iii) Transfers (continued)
For the transfer of an investment property valued at fair value to property, plant and equipment, the implicit cost of the asset for the purpose of its subsequent registration will be its fair value from the date of the change of use.
If a property used by the Company becomes an investment property that will be registered at fair value, the Company applies IAS 16 until the date of change of use. The Company must treat any difference as of that date in the carrying amount of the property in accordance with IAS 16 and its fair value as a revaluation in accordance with IAS 16 .
(iv) Derecognition
The book value of an investment property is derecognized on disposal or when the investment is definitively withdrawn from use and no future economic benefits are expected of its disposal.
The gains or losses resulted from the disposal of an investment property are recognized in profit or loss when it is scrapped or sold.
(g) Tangible and intangible assets
(i) Recognition and measurement
Tangible assets are initially measured at cost by the Company. The cost of a property, plant and equipment is comprised of the purchase price, including non-recoverable taxes, after the deduction of any price discounts of commercial nature to which any cost that can be directly attributed to bringing the asset to the location and condition necessary for it to be used for the intended purpose is added, for example: expenses with employees that directly result from the construction or purchase of the asset, costs for the development of the location, initial delivery and handling costs, costs for installation and assembly, fees for the professionals involved.
Property, plant and equipment are classified by the Company in the following classes of assets of the same nature and with similar use:
o Lands;
o Buildings;
o Equipment, technical installations and machines;
o Transportation vehicles;
o Other property, plant and equipment;
o Right-of-use assets.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
134
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(g) Tangible and intangible assets (continued)
(i) Recognition and measurement (continued)
Subsequent measurement
Lands and buildings are presented at revaluated amount, which represents the fair value on the revaluation date. The determination of fair values and revaluation is performed at the end of each reporting period.
All the other classes of assets in this category are accounted for at cost less accumulated depreciation and impairment adjustments (if the case).
In the case of revalued property, plant and equipment (lands and buildings), if the book value of an asset is increased further to revaluation, the increase will be recognized in other comprehensive income, as revaluation reserve. In case the book value is lowered, this lowering will be recognized in profit or loss, exception when it is recognized in other comprehensive income to the extent that the revaluation reserve has creditor balance for the analyzed asset.
Expenses for the maintenance and repairs of tangible assets are registered by the Group in the statement of consolidated comprehensive income (in profit or loss) when they occur, and significant improvements to tangible assets, which meet the definition of property, plant and equipment are capitalized.
(ii) Depreciation
Depreciation is calculated using the straight-line method throughout the estimated useful life of assets, as follows:
Buildings
40 years
Equipment, technical installations and machines
2-12 years
Vehicles
4-8 years
Furniture and other tangible assets
4-12 years
Right-of-use assets in lease contracts
Duration of lease contract
Lands are not subject to depreciation.
Intangible assets that meet the recognition criteria as per IFRS are accounted for at cost less accumulated depreciation. The amortisation of intangible assets is recorded in profit or loss, on a straight-line basis for a maximum estimated period of 3 years, for which the maximum depreciation period is 10 years.
The depreciation methods, estimated useful lives as well as residual values are revised for each reporting period.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
135
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(g) Tangible and intangible assets (continued)
(iii) Sale/scrapping of tangible and intangible assets
Property, plant and equipment that are sold or scrapped are written-off together with their corresponding accumulated depreciation. Any profit or loss resulted from such an operation is included in profit or loss in the current period.
The revaluation reserve for revalued property, plant and equipment (lands and buildings) included in equity is transferred directly to retained earnings when the asset is disposed of or scrapped.
(h) Impairment of assets, other than financial assets
The book value of Company’s assets that are not financial in nature, other than assets such as deferred taxes, are revised at every reporting date to identify the existence of impairment indicators. If such indication exists, the recoverable value of those assets will be estimated.
An impairment loss is recognized when the book value of the cash generating asset or unit exceeds the recoverable value of the cash generating asset or unit.
A cash-generating unit is the smallest identifiable group generating cash that has the ability to generate cash inflows independent from other assets or other asset groups.
Impairment losses are allocated to reduce the carrying amount of assets in the cash- generating unit in the following order:
(a) first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit (if any); and
(b) then any other assets of the unit, on a pro rata basis, based on the carrying amount of each asset in that unit.
Impairment losses are recognized in comprehensive income, in profit or loss.
The recoverable value of cash generating asset or unit is the maximum between the value in use and fair value less sale costs for that asset or unit. In order to ascertain the value in use, future cash flows are revised using a discount rate before taxation that reflects current market conditions and risks specific for that particular asset. Impairment losses recognized in the previous periods are measured on each reporting date in order to determine if they diminished or no longer exist. Impairment loss is reversed if a change has occurred in the estimates used to determine the recoverable value. Impairment loss is reversed only in case the book value of the asset does not exceed the book value that would be calculated net of amortization and impairment if the impairment loss had not been recognized.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
136
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(i) Share capital
Ordinary shares are recognized in share capital.
(j) Own shares
The Company recognises own shares (acquisition of treasury shares) on the transaction date as a decrease of equity, in Other items of equity. Own shares are recorded at acquisition value, and brokerage fees and other costs directly connected to the acquisition are recorded directly in equity, in a distinct account. For details on the scope of buy-back programs, please see Note 26 (e).
Cancellation of own shares is made in accordance with the approval of shareholders, after meeting all legal requirements. On cancellation, the balance of treasury shares is compensated with share capital and retained earnings.
The annulment of own shares may generate gains or losses depending on the acquisition value of own shares reported with their nominal amount. Net gain or loss from the cancellation of own shares are directly recognized in equity, in a distinct account.
(k) Distributable dividends
Dividends are treated as a distribution of result in the period when they were declared and approved by the General Meeting of Shareholders.
The dividends declared before the reporting date and not yet paid are registered as liabilities on the reporting date.
(l) Dividends prescribed
The rights to request dividends not collected by the shareholders within 3 years from the declaration date, are time-barred according to the law.
On the time-bar date, the Company registers their value in equity, in a separate reserve account in retained earnings.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
137
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(m) Provisions for risks and charges
Provisions are recognized in the statement of financial position when a legal or implicit obligation arises for the Company connected to a past event and it is probable that in the future it will be necessary to use economic resources to settle this obligation, and a reasonable estimation of the value of the liability can be made. In order to determine the provision, future cash flows are updated using an discounting rate before taxation that reflects the current market conditions and specific risks of that individual liability.
(n) Interest income and expenses
Interest income and expenses (representing borrowing costs) are recognized in the statement of comprehensive income (in profit or loss) through the effective interest method. Effective interest rate represents the date that accurately updates cash payments and collections in the future for the expected lifespan of the financial asset or liability to the gross book value of the financial asset or at the amortised cost of the financial liability.
(o) Dividend income
Dividend income is recognized in profit or loss on the date the right to receive such income is set.
The Company registers dividend income at gross value that includes dividend tax which is recognized as current profit tax expense. The actual calculation is made according to the tax provisions in force on the calculation date.
(p) Benefits of managers, directors and employees
Short-term benefits
Short-term benefits of managers, directors and employees mainly include the remunerations/wages and bonuses, but also participation in the cash benefits plan (see note (s) below). The short-term benefits are recognized as expense when the services are delivered. A liability is recognized for the amounts expected to be paid as cash bonuses on the short-term or schemes for the employees’ profit sharing (in cash or in shares) as the Company has, on the reporting date, a legal or implicit obligation to pay these amounts as a result of services delivered beforehand by the managers, directors and employees, and if that obligation can be reliably estimated.
The fixed (remunerations) and variable (bonuses and participation in the benefits plan) component of the remuneration of the directors and managers of the Company are established by the provisions of Article 7 para. (11) of the Articles of Incorporation and of the Remuneration Policy of the Company's directors, approved by the Ordinary
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
138
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(p) Benefits of managers, directors and employees (continued)
General Meeting of Shareholders, being provided in the administration and management contracts.
The fixed component (salaries) and the variable component (bonuses and participation in the benefit plan) of the remuneration of the Company's employees are established by the individual employment contracts and the collective labor contract.
Defined contribution plans
The Company makes payments on behalf of its own managers, directors and employees to the Romanian pension system, health insurance and unemployment fund, during the normal course of business.
All managers, directors and employees of the Company are members, and at the same time have the legal obligation to contribute (through social contributions) to the pension scheme of the Romanian state (a defined contribution plan of the state). All corresponding contributions are recognized in profit or loss in the period when they are made. The Group has no other additional obligations.
The Company is not engaged in any independent pension scheme and, consequently, it has no such obligations. The Company is not engaged in any other post-retirement benefits system. The Company is not bound to pay subsequent services to its former or current managers, directors and employees.
(q) Participation in the profit-sharing plan of managers, directors and employees, in cash or as equity
The managers and directors participate in the benefits plan (part of the variable component of the remuneration), paid including as shares or options to purchase Company’s shares, at a rate of 5% of the net profit obtained and of the net gain from transactions reflected in the Company’s retained earnings, before the setup of the benefit participation plan.
The actual level of the participation to the benefit plan is set by the Board of Directors, following the approval of the annual financial statements in the General Meeting of Shareholders , based on the result of the assessment of the achievement of the following performance objectives:
• achieving a positive net result, an indicator composed of the net profit realized and the net gain from transactions reflected in retained earnings;
• the result of the annual assessment of the adequacy of the management structure, according to the criteria and procedure established by FSA Regulation no. 1/2019 on the evaluation and approval of the members of the management structure and of the persons holding key positions within the entities regulated by the Financial Supervisory Authority, namely “appropriate”.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
139
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(q) Participation in the profit-sharing plan of managers, directors and employees, in cash or as equity (continued)
The managers and directors participate in the benefits plan (part of the variable component of the remuneration), paid including as shares or options to purchase Company’s shares, at a rate of 5% of the net profit obtained and of the net gain from transactions reflected in the Company’s retained earnings, before the setup of the benefit participation plan.
The actual level of the participation to the benefit plan is set by the Board of Directors, following the approval of the annual financial statements in the General Meeting of Shareholders , based on the result of the assessment of the achievement of the following performance objectives:
• achieving a positive net result, an indicator composed of the net profit realized and the net gain from transactions reflected in retained earnings;
• the result of the annual assessment of the adequacy of the management structure, according to the criteria and procedure established by FSA Regulation no. 1/2019 on the evaluation and approval of the members of the management structure and of the persons holding key positions within the entities regulated by the Financial Supervisory Authority, namely “appropriate”.
The fund for the participation of the Company’s employees in the benefits plan is maximum 5% of the net profit achieved and the net gain from transactions reflected in the Company’s retained earnings, before the setup of the benefit-sharing plan, paid including as shares or options to purchase Company shares, with the approval of the Board of Directors, provided that the annual financial statements are approved by the General Meeting of Shareholders. The total value of individual remunerations for employees is between 0-9 gross monthly wages.
When the employees are appointed and the individual levels are set in the benefits plan the following are taken into account:
• the achievement by the Company of a positive net result (indicator composed of the net profit realized and the net gain from transactions reflected in the carried forward result);
• the results of the annual evaluation of the professional performance criteria applicable to the employees, according to the internal regulations and the specific internal procedure;
• the benefit plan is granted only to employees who actually worked in the Company in the year for which the benefit plan is granted, proportionally to the period worked during that year;
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
140
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(q) Participation in the profit-sharing plan of managers, directors and employees, in cash or as equity (continued)
• employees whose employment contracts have been terminated for reasons attributable to them and employees who have directly or indirectly caused losses to the Company (materials, image) will not participate in the benefit plan.
The benefits plan may be granted annually, in cash and/or shares. The structure of this variable remuneration offered to the managers, directors and employees of the Company (Beneficiaries) is: at least 51% in Company shares, through the running of a Stock Option Plan (SOP) type program, the source being shares redeemed by the Company, and maximum 49% in cash. Beneficiaries may choose that the percentage of variable remuneration offered in shares be up to 100%.
Regarding the cash benefits sharing plan, the payments are made in the year following the year when services were rendered, further to the approval of the Board of Directors, after the Company’s annual financial statements are approved in the General Meeting of Shareholders.
Regarding participation in the benefits plan with shares by the Company, Beneficiaries may exercise their right/option only 12 months after the signing by each beneficiary of their agreements with the Company, but no more than 15 months as of such date. The signing of the beneficiaries’ agreement with the Company, which takes place following the Board of Directors’ approval of the SOP plan (after the Company’s annual financial statements are approved in the General Meeting of Shareholders), agreement that also sets the number of shares offered to each Beneficiary).
Therefore, the actual granting of benefits under the plan in the form of shares takes place more than 12 months after the end of the year when the services were rendered.
For the participation of managers, directors and employees to the benefits plan, the Company recognizes an expense in the period when the services were delivered (the period to which the benefits plan refers), in correspondence with a liability, for that portion offered in cash, and in correspondence with an increase of equity (benefits offered to employees as equity instruments) for the portion offered as shares through SOP .
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
141
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES ( continued)
(r) Profit tax
The profit tax corresponding to the financial year includes current and deferred income tax. Current profit tax includes tax on dividend income recognized at gross value.
Profit tax is recognized in the statement of comprehensive income, or in other comprehensive income if the tax corresponds to other comprehensive income.
Current profit tax represents tax to be paid for the tax profit obtained in the current period (including gain from the sale of FVTOCI financial assets, directly recognized in retained earnings), determined based on the percentages applied on the reporting date and all adjustments corresponding to previous periods.
For the period ended 31 December 2023, the profit tax rate was 16% (31 December 2022: 16%).
The tax rate corresponding to dividend income was 8% or 0% (2022: 5% or 0%). Dividend tax exemption is applied in case the Group’s holding percentage was higher than 10% of the share capital of the company distributing the dividends, for an uninterrupted period of at least one year before distribution.
Deferred tax is determined for those temporary differences that occur between the tax base for asset and liability tax calculation and their book value, used for reporting in the consolidated financial statements.
Deferred tax is not recognized for the following temporary differences: initial recognition of the goodwill, initial recognition of assets and liabilities from transactions that are not business combinations and that do not affect the accounting profit or the tax profit and differences coming from subsidiary investments, provided they are not reversed in the near future.
Deferred tax is calculated based on tax percentages that are expected to the applied to the time differences on their reversal, based on the law applicable on the reporting date. Receivables and liabilities from deferred tax are settled only if there is a legal right to offset the current receivables and liabilities with tax and if they correspond to the tax collected by the same tax authority for the same entity subject to taxation or for different tax authorities, but which want to settle current receivables and liabilities with tax using a net base or the assets and liabilities will be realised simultaneously.
The deferred tax asset is recognized only to the extent that it is likely that future profits will be achieved to be used to cover the tax loss. The receivable is revised at the end of each financial year and it is lowered to the extent that it is improbable for the corresponding tax benefit to be achieved.
Additional taxes that occur in dividend distribution (if applicable) are recognized on the same date as the dividend payment obligation.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
142
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES ( continued)
(s) Earnings per share
The Company presents the basic and diluted earnings per share for ordinary shares. Earnings per share are calculated through the dividing the profit or loss attributable to the Company’s ordinary shareholders to the average weighted number of ordinary shares in the reporting period.
Diluted earnings per share are calculated through the adjustment of profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares with the dilution effects generated by potential ordinary shares.
Basic and diluted earnings per share (including gain from the sale of FVTOCI financial assets)
The Company presents in its financial statements, along the Basic and diluted earnings per share, an alternative method of measuring performance (not provided under IFRS). The basic and diluted earnings per share including not only the net profit for the period, but also gains from the sale of FVTOCI financial assets (presented in the Statement of changes in equity in the line Net gains, transferred to retained earnings, related to sale of FVTOCI), since along with the net profit, the gain from the sale of FVTOCI financial assets is considered an indicator of the Company’s performance and represents a potential source for dividend distribution to the shareholders, but is not however reflected in the statement of comprehensive income for the period.
Reconciliation
In LEI
31 December
2023
31 December
2022
Net profit attributable to Company’s shareholders
124,733,425
82,853,635
Gains carried to retained earnings attributable to shareholders (from sale of financial assets at fair value through other comprehensive income)
79,023,327
35,081,104
Net result (including the gains from the sale of FVTOCI assets)
203,756,752
117,934,739
Average weighted number of outstanding ordinary shares corresponding to the reporting period
913,537,589
947,657,151
Basic earnings per share ( including the gains from the sale of FVTOCI assets )
0. 2230
0. 1244
Dividends are treated as an allocation of net result in the period in which they were declared and approved by the General Meeting of Shareholders. The net result available for allocation is the net result of the year registered in the separate financial statements prepared in accordance with IFRS.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
143
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(t) Leases where the Company is a lessee
Initial recognition and measurement
On the commencement date of a contract, the Company evaluates if that contract is, or includes a lease contract. A contract is or contains a lease contract if that contract offers the right to control the use of an identified asset for a certain period of time, in exchange for a price .
At the commencement date, the Company, as lessee, recognizes a right-of-use asset and a lease liability.
Determining the duration of the lease
The Company determines the duration of the lease as the irrevocable period of a lease, together with:
• the periods covered by an option to extend the lease if the Company has reasonable assurance that it will exercise that option; and
• the periods covered by an option to terminate the lease if the Company has reasonable assurance that it will not exercise that option.
In assessing the extent to which it has reasonable assurance that it will exercise an option to extend a lease or that it will not exercise an option to terminate a lease, the Company shall consider its intentions and all relevant factors and circumstances that is an economic incentive for EVERGENT Investments to exercise the option to extend the lease or not to exercise the option to terminate the lease. The main relevant factors analyzed are: contractual terms and conditions for optional periods compared to market rates, significant modernization of the lease asset, costs related to the termination of the lease.
Initial measurement of the lease liability
At the commencement date, the Company measures the right-of-use asset at cost.
The cost shall include the initial amount of the lease liability (as described in the paragraph below), any lease payments made on or before the commencement date of the contract, less any incentives received and any initial direct costs incurred by the lessee (if the case).
Initial measurement of the lease liability
At the commencement date, the Company measures the lease liability at discounted value of the lease payments that are not paid on that date. The lease payments are discounted using the implicit interest rate in the lease if such rate can be readily determined. If such rate cannot be readily determined, the Company uses its incremental borrowing rate.
The Company’s incremental borrowing rate is the interest rate that the Company should pay to borrow for a similar period, with a similar guarantee, the funds necessary to obtain an asset with a value similar to that of the right-to-use asset, in a similar economic environment.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
144
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(t) Leases where the Company is a lessee (continued)
Subsequent measurement of the right-to-use asset
After the commencement date, the Company measures the right-of-use asset applying the cost model, which means that it measures the right-of-use asset at cost, less any accumulated depreciation and any accumulated impairment.
Subsequent measurement of the lease liability
After the commencement date, the Company measures the lease liability by increasing the book value to reflect the interest related to the lease liability and reducing the book value to reflect the lease payments made, reflecting, if the case be, any changes in the lease.
The interest on the lease liability for each period during the entire contract period must be the value that produces a constant interest rate for the balance of the lease liability.
After the commencement date, the interest related to the lease liability is reflected in profit or loss.
Recognition exemption
The Company, as lessee, choses to apply the exemption allowed by IFRS 16:
o short-term leases; and
o leases whose underlying assets are of low value.
Consequently, in case of short-term leases, and in case of contracts with low value underlying asset, the Company recognizes the lease payments associated to such leases as an expense, on a straight-line basis over the entire duration of the lease.
(u) Contingent assets and liabilities
Contingent liabilities and assets are potential obligations or assets arising from previous events and whose existence will be confirmed or not by the occurrence of one or more uncertain future events, which are not fully controlled by the Company. The assessment of contingent liabilities and assets inherently involves the use of judgments and estimates regarding the outcome of future events.
Contingent liabilities are not recognized in the financial statements. They are presented in the notes, except in cases where the likelihood of an outflow of economic benefits is low. Contingent assets are not recognized in the financial statements, but are presented when an inflow of benefits is likely.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
145
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(v) New IFRS accounting standards and amendments to existing standards, which are into force in the current year
The amendments to the existing standards issued by the International Accounting Standard Board (“IASB”) and adopted by the European Union (“EU”) presented in the table below are in force for the current reporting period, and are mandatorily effective for reporting period that begins on or after 1 January 2023.
Their adoption, where they were applicable to the Company, has not had any material impact on the disclosures or on the amounts reported in these financial statements.
Standard
Title
IFRS 17 Insurance Contracts
New standard IFRS 17 “Insurance Contracts” including the June 2020 and December 2021 Amendments to IFRS 17
Amendments to IAS 1
Disclosure of Accounting Policies
Amendments to IAS 8
Definition of Accounting Estimates
Amendments to IAS 12
Deferred Tax related to Assets and Liabilities a rising from a Single Transaction
Amendments to IAS 12
International Tax Reform — Pillar Two Model Rules*
(w) Standards and amendments to existing standards issued by the IASB and adopted by the EU, but not yet effective
At the date of authorisation of these financial statements, the amendments to the existing standards issued by the IASB and adopted by the EU presented in the table below were not in force, therefore the Company has not applied them.
Standard
Title
Effective date
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
1 January 2024
Amendments to IAS 1
Classification of Liabilities as Current or Non- Current and Non-current Liabilities with Covenants
1 January 2024
The Company considers that the adoption of these new amendments to the existing standards, where they are applicable to the Company, will not have a significant impact on its financial statements in the upcoming periods.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
146
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
3. MATERIAL ACCOUNTING POLICIES (continued)
(x) Standards and interpretations issued by the IASB, but not yet adopted by the EU
At present, IFRS as adopted by the EU do not significantly differ from IFRS adopted by the International Accounting Standards Board (IASB) except for the following new standards and amendments to the existing standards, which were not adopted by the EU as at the date of authorisation of these financial statements:
Standard
Title
EU adoption status
Amendments to IAS 7 and IFRS 7
Supplier Finance Arrangements
(IASB effective date: 1 January 2024)
Not yet adopted by EU
Amendments to IAS 21
Lack of Exchangeability
(IASB effective date: 1 January 2025)
Not yet adopted by EU
IFRS 14
Regulatory Deferral Accounts (IASB effective date: 1 January 2016)
The European Commission has decided not to launch the endorsement process of this interim standard and to wait for the final standard
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further amendments (effective date deferred by IASB indefinitely but earlier application permitted )
Endorsement process postponed indefinitely until the research project on the equity method has been concluded
The Company estimates that the adoption of these new standards and amendments to the existing standards, if applicable to the Company, will not have a significant impact on its financial statements in the future periods.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
147
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS
Risk management is carried out in a consistent methodological environment, which represents an important component of the strategy for yield maximization while maintaining an acceptable level of risk exposure and abiding by legal provisions. The formalization of risk management policies and procedures decided by the management of the Company is an integral part of the Company’s strategic objectives.
Investments expose the Company to a variety of risks associated to the financial instruments held and the financial markets on which it operates. The main risks that the Company is exposed to are:
• market risk (interest rate risk, currency risk and price risk);
• credit risk;
• liquidity risk;
• taxation risk (non-financial risk);
• operational risk (non-financial risk)
The general risk management strategy aims to maximize the Company’s profit by reference to the risk level that it is exposed to and minimize potential adverse variations on the Company’s financial performance. The Company has implemented procedures and policies for the management and measurement of the risks it is exposed to. These policies and procedures are presented under the sections dedicated to each individual risk group.
(a) Market Risk
Market risk is defined as the risk of recording a loss or the failure to achieve the expected profit, as a result of fluctuation of prices, fluctuation of interest rates and currency exchange rates. In order to manage market risk efficiently, procedures for investment diligence and diligence in monitoring the portfolio holdings, technical and fundamental analysis methods are used, as well as forecasts regarding the evolution of economic branches and financial markets, as well as specific procedures such as:
• permanent monitoring of market issuers and risk / return characteristics of portfolio holdings
• diversification of the range of financial instruments and business sectors
• active management of the stock portfolio
• optimizing the performance / market risk ratio
• adequate assessment of unlisted holdings
• monitoring the macroeconomic, political and sectoral context and adapting market risk management to this context
• following the classification of the asset categories in the portfolio within the legal limits
• setting limits on appetite and tolerance to market risk and monitoring compliance with the established risk profile .
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
148
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
The selection of investment opportunities is made through:
• technical analysis;
• Fundamental analysis – determining the issuer’s ability to generate profit;
• comparative analysis – determining the relative value of an issuer in relation with the market or other similar companies;
• statistical analysis – determining tendencies and correlations using price and traded volume history.
The Company is exposed to the following market risk categories: price risk, interest rate risk and currency risk.
(i) Price risk
The Company is exposed to the risk related to price variation of financial assets measured at fair value through profit or loss, and financial assets measured at fair value through comprehensive income. At 31 December 2023, 87.5% of all shares traded on an active market by the Company (31 December 2022: 86.5%) represented investments in companies that were included in the BET index of the Bucharest Stock Exchange, index weighted with free-float capitalization of the most liquid Romanian companies on the regulated market of Bucharest Stock Exchange.
A positive variation of 10% variation of the price of financial assets at fair value through profit or loss would lead to an increase of post-tax profit of 30,024,375 lei (31 December 2022: 28,901,780 lei), a negative variation of 10% having an equal contrary net impact.
A positive 10% variation of the price of financial assets measured at fair value through other comprehensive income would lead to an increase of equity, net of profit tax, of 196,949,607 lei (31 December 2022: 165,398,856 lei), a negative 10% variation having an equal contrary net impact.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
149
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(i) Price risk (continued)
The Company held shares in companies operating in various fields of activity, such as:
In LEI
31 December 2023
%
31 December 2022
%
Financial, bank and insurance
1,336,250,825
57.73%
998,900,780
51.38%
Natural gas industry
340,363,310
14.70%
122,045,217
6.28%
Manufacture and maintenance of transportation vehicles
202,178,681
8.74%
177,917,240
9.15%
Real-estate development (promotion)
177,501,692
7.67%
166,644,821
8.57%
Real-estate transactions, rentals and other services
83,426,626
3.60%
68,801,031
3.54%
Natural gas industry
63,613,273
2.75%
248,620,519
12.79%
Agriculture, animal breeding, fishing
46,805,392
2.02%
57,565,624
2.96%
Wholesale, retail, tourism and restaurants
24,373,353
1.05%
23,224,474
1.19%
Manufacture of machines, tools and equipment
19,257,237
0.83%
26,904,764
1.38%
Food industry
7,930,382
0.34%
7,321,768
0.38%
Power industry
7,680,000
0.33%
37,945,196
1.95%
IT industry
5,184,452
0.23%
6,118,695
0.31%
Metal construction and metal products industry
280,845
0.01%
195,644
0.01%
Transport, storage, communication
-
0.00%
1,996,157
0.10%
Other
793
0.00%
595
0.01%
TOTAL
2,314,846,861
100.00%
1,944,202,525
100.00%
As shown in the above table, at 31 December 2023, the Company mainly held shares in companies operating in the financial-banking and insurance field, which account for 57.73 % of the Company’s total share portfolio (31 December 2022: 51.38%). The Company’s exposure regarding the holding of Banca Transilvania shares is 50% of the Company’s share portfolio on 31 December 2022 (31 December 2022: 44%).
Fund units held by the Company are exposed to price risk as they have investments with different degrees of risk (bank deposits, bonds, other fixed-income instruments, shares and other financial instruments).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
150
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(ii) Interest rate risk
The Company is exposed to interest rate risk. The changes in the interest rate on the market directly influences the revenues and expenses corresponding to financial assets and liabilities bearing variable interest, as well as the fair value of fixed interest-bearing assets.
At 31 December 2023 and 31 December 2022, most of the Company’s assets and liabilities do not bear interest. Therefore, the Company is not significantly influenced by the risk of interest rate fluctuations. Cash surplus or other similar cash equivalent are mainly invested in short-term bank deposits with maturity of 1- 3 months. Moreover, the Company has non-significantly invested in corporate and municipal bonds with fixed or variable interest.
The Company does not use derivatives to protect itself from interest rate fluctuations, the interest rate risk being insignificant.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
151
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(ii) Interest rate risk (continued)
The following tables present the Company’s exposure to interest rate risk, at book value, broken down depending on the latest date of interest change and contractual maturity at 31 December 2023 and 31 December 2022:
In LEI
Net value at
31 December
2023
Under 1 month
Between
1 and 3 months
Between
3 and 12 months
Over 1 year
No interest rate risk
31 December 2023
Financial assets
Cash and current accounts
1,024,388
1,024,388
-
-
-
-
Bank deposits with initial maturity within 3 months
299,408,624
130,600,608
168,808,016
-
-
-
Bank deposits with initial maturity of more than 3 months
10,724,880
10,724,880
-
-
-
-
Financial assets at fair value through profit or loss
347,807,747
-
-
-
-
347,807,747
Financial assets at fair value through other comprehensive income
2,240,394,284
-
-
-
-
2,240,394,284
Bonds at fair value through other comprehensive income
3,884,483
-
-
3,884,483
-
-
Bonds at amortized cost
17,555,243
3,371
-
17,528,371
23,501
-
Other financial assets at amortized cost
6,418,790
-
-
-
-
6,418,790
Total financial assets
2,927,218,439
142,353,247
168,808,016
21,412,854
23,501
2,594,620,821
Financial liabilities
Borrowings
63,674,421
63,674,421
-
-
-
-
Lease liabilities
3,303,893
44,463
89,907
410,219
2,759,304
-
Dividends payable
49,950,267
-
-
-
-
49,950,267
Financial liabilities at amortized cost
1,267,195
-
-
-
-
1,267,195
Total financial liabilities
118,195,776
63,718,884
89,907
410,219
2,759,304
51,217,462
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
152
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(ii) Interest rate risk (continued)
In LEI
Net value at
31 December
2022
Under 1 month
Between
1 and 3 months
Between
3 and 12 months
Over 1 year
No interest rate risk
31 December 2022
Financial assets
Cash and current accounts
788,781
788,781
-
-
-
-
Bank deposits with initial maturity within 3 months
104,971,764
104,971,764
-
-
-
-
Financial assets at fair value through profit or loss
333,619,756
-
-
-
-
333,619,756
Financial assets at fair value through other comprehensive income
1,875,688,529
-
-
-
-
1,875,688,529
Bonds at fair value through other comprehensive income
3,982,047
-
24,127
3,957,920
-
Bonds at amortized cost
17,550,535
3,594
-
815,220
16,731,721
-
Other financial assets at amortized cost
9,869,910
-
-
-
-
9,869,910
Total financial assets
2,346,471,322
105,764,139
-
839,347
20,689,641
2,219,178,195
Financial liabilities
Lease liabilities
3,456,939
43,069
79,648
326,947
3,007,275
-
Dividends payable
42,633,808
-
-
-
-
42,633,808
Financial liabilities at amortized cost
2,871,103
-
-
-
-
2,871,103
Total financial liabilities
48,961,850
43,069
79,648
326,947
3,007,275
45,504,911
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
153
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(ii) Interest rate risk (continued)
The impact on the Company’s net profit of a +/- 100 bp modification of the interest rate for assets and liabilities bearing variable interest and expressed in other currencies, corroborated with a +/- 500 bp modification of the interest rate corresponding to assets and liabilities bearing variable interest and expressed in lei is +/- 533,365 lei (31 December 2022: +/- 2,002 lei).
(iii) Currency risk
The currency risk is the risk of recording losses or of not obtaining the estimated profit following the adverse fluctuations of the exchange rate.
Most of the Company’s financial assets and financial liabilities are expressed in national currency and therefore exchange rate fluctuations do not significantly affect the Company’s activity and results. Exposure to changes in the exchange rate is mainly due to current accounts and bank deposits, corporate bonds, shares and bank loans and lease debts in foreign currency.
The assets and liabilities expressed in lei and in other currencies at 31 December 2023 and 31 December 2022 are presented in the tables below:
In LEI
Net value at
31 December
2023
Lei
EUR
USD
31 December 2023
Cash and current accounts
1,024,388
983,229
33, 547
7,612
Bank deposits with initial maturity within 3 months
299,408,624
298,918,476
490,148
-
Bank deposits with initial maturity of more than 3 months
10,724,880
10,724,880
-
-
Financial assets at fair value through profit or loss
347,807,747
346,733,526
1,074,221
-
Financial assets at fair value through comprehensive income
2,240,394,284
2,240,394,284
-
-
Bonds at fair value through other comprehensive income
3,884,483
-
3,884,483
-
Bonds at amortized cost
17,555,243
17,555,243
-
-
Other financial assets at amortized cost
6,418,790
6,418,790
-
-
Total financial assets
2,927,218,439
2,921,728,428
5,482,399
7,612
Financial liabilities
Borrowings
63,674,421
-
63,674,421
-
Lease liabilities
3,303,893
180,398
3,123,495
-
Dividends payable
49,950,267
49,950,267
-
-
Financial liabilities at amortized cost
1,267,195
813,787
453,408
-
Total financial liabilities
118,195,776
50,944,452
67,251,324
-
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
154
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(a) Market risk (continued)
(iii) Currency risk (continued)
In LEI
Net value at
31 December
2022
Lei
EUR
USD
31 December 2022
Cash and current accounts
788,781
741,714
33,855
13,212
Bank deposits with initial maturity within 3 months
104,971,764
101,372,972
3,598,792
-
Financial assets at fair value through profit or loss
333,619,756
332,256,736
1,363,020
-
Financial assets at fair value through comprehensive income
1,875,688,529
1,875,688,529
-
-
Bonds at fair value through other comprehensive income
3,982,047
-
3,982,047
-
Bonds at amortized cost
17,550,535
17,550,535
-
-
Other financial assets at amortized cost
9,869,910
9,869,910
-
-
Total financial assets
2,346,471,322
2,337,480,396
8,977,714
13,212
Financial liabilities
Lease liabilities
3,456,939
362,389
3,094,550
-
Dividends payable
42,633,808
42,633,808
-
-
Financial liabilities at amortized cost
2,871,103
2,197,712
673,391
-
Total financial liabilities
48,961,850
45,193,909
3,767,941
-
The net impact on the Company ’s profit of a +/- 15% modification of the RON/EUR exchange rate, corroborated with a modification of +/- 15% of RON/USD exchange rate, at 31 December 2023, all other variables remaining the same is ± 7,781,925 lei (31 December 2022: de +/- 658,096 lei).
(b) Credit risk
The Company is exposed to credit risk related to financial instruments arising from the possible failure of a third party to pay its obligations towards the Company. The Company is exposed to credit risk following the investments made in bank deposits and bonds issued by municipalities or companies, current accounts and other receivables.
On 31 December 2023 and 31 December 2022, the Company did not hold any collateral as insurance or other credit risk improvement. At 31 December 2023 and 31 December 2022, the Company did not register overdue financial assets, with the exception of outstanding sundry debtors.
The Company’s maximum credit risk exposure is 339,014,014 Lei at 31 December 2023 and 137,158,411 lei at 31 December 2022, and can be analyzed as follows:
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
155
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(b) Credit risk (continued)
Exposures from current accounts and bank deposits
In LEI
Rating
31 December 2023
31 December 2022
Banca Transilvania
Moody’s: Baa2 (2022: Fitch BB+)
180,546,490
103,026,039
EximBank
Fitch: BBB- (assimilated to sovereign rating)
111,451,754
529
Banca Comercială Română
Fitch: BBB+
19,128,304
2,461
Treasury
Fitch: BBB- (assimilated to sovereign rating)
44,660
199
BRD - Group Societe Generale
Fitch: BBB+
-
2,725,654
CEC Bank
Fitch: BB
-
7,110
Total availabilities with banks
311,171,208
105,761,992
Cash
2,394
4,626
Total cash, bank accounts and deposits - gross amounts, of which:
311,173,602
105,766,618
Cash and current accounts
1,024,389
788,787
Bank deposits with initial maturity within 3 months
299,424,213
104,977,831
Bank deposits with initial maturity of more than 3 months
10,725,000
-
Expected credit losses, out of which for:
(15,710)
(6,073)
Current accounts
(1)
(3)
Bank deposits with initial maturity within 3 months
(15,589)
(6,070)
Bank deposits with initial maturity of more than 3 months
(120)
-
Total cash, bank account and deposits
311,157,892
105,760,545
The annual average interest rate for 2023, for bank deposits was 6.06% (2022: 5.32%).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
156
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(b) Credit risk (continued)
Exposures from bonds at amortized cost
In LEI
Rating
31 December
2023
31 December
2022
EVER IMO bonds
No rating
17,606,400
17,606,400
Bacău municipal bonds
Fitch: BBB- (assimilated to sovereign rating)
35,711
47,694
Total bonds at amortised cost – gross value
17,642,111
17,654,094
Expected credit losses
( 86,868 )
( 103,559 )
Total bonds at amortised cost
17,555,243
17,550,535
EVER IMO SA bonds are denominated in Lei, convertible in issuer shares, are due on 23 June 2024 and a fixed interest rate (coupon) of 9% per year.
Bacău municipal bonds are denominated in Lei, mature on 31 October 2026 and bear an annual interest rate consisting of the average of the 6M ROBID reference interest rate and 6M ROBOR, plus a margin of 0.85%.
Exposures from bonds at fair value through other comprehensive income
In LEI
31 December
2023
31 December
2022
Autonom Service bonds
3,884,483
3,982,047
Total
3,884,483
3,982,047
Autonom Service bonds are denominated in EUR, have their maturity on 12 November 2024 and have a fixed interest rate (coupon) of 4.45% per year.
Autonom Service Company has a B+ credit rating issued by Fitch.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
157
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(b) Credit risk (continued)
Financial assets at amortized cost
In LEI
31 December
2023
31 December
2022
AAAS receivable
48,762,677
48,756,218
Amount representing the guarantee for the public buy-back offer of treasury shares
5,000,000
8,500,000
BRD – settlement transactions
-
-
Advances from the Central Depositary for dividends payments to shareholders
859,628
1,051,798
Dividends to be received
745,297
477,023
Other financial assets at amortized cost
-
Adjustments for expected credit loss
(48,948,812)
(48,915,129)
Total
6,418,790
9,869,910
Other assets at amortized cost mainly include the claim against AAAS, trade receivables, sundry debtors and supplier advances.
Adjustments for expected credit loss correspond mainly to receivable from the Authority for State Assets Management (“AAAS”), from litigations won definitively, which are covered in full, and related to a portion of trade receivables.
At 31 December 2023 and 31 December 2022, the amount representing the guarantee for the public buy-back of treasury shares was set at the intermediary according to the provisions of FSA Regulation no. 5/2018 regarding issuers of financial instruments and market operations, article 57 point 1, letter d).
(c) Liquidity risk
Liquidity risk represents the risk of recording a loss or of not obtaining the estimated profits, resulting from the impossibility at any time to fulfill short-term payment obligations, without this payment involving excessive costs or losses that cannot be borne by the Company.
The Company’s financial instruments may include investments in shares not traded on an organized market that might consequently have low liquidity .
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
158
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(c) Liquidity risk (continued)
The structure of the Company’s assets and liabilities has been analyzed based on the remaining period of time from the balance date until the contract maturity date, both at 31 December 2023 and at 31 December 2022, as follows:
In LEI
Book value
Value not updated
Within 1 month
Under 3 months
Between 3 and 12 months
Over 1 year
No pre-set maturity
31 December 2023
Financial assets
Cash and current accounts
1,024,388
1,024,388
1,024,388
-
-
-
-
Bank deposits with initial maturity within 3 months
299,408,624
301,460,062
130,900,769
170,559,293
-
-
-
Bank deposits with initial maturity of more than 3 months
10,724,880
10,758,213
10,758,213
-
-
-
-
Financial assets at fair value through profit or loss
347,807,747
347,807,747
-
-
-
-
347,807,747
Financial assets at fair value through other comprehensive income
2,240,394,284
2,240,394,284
-
-
-
-
2,240,394,284
Bonds at fair value through other comprehensive income
3,884,483
4,033,205
-
-
4,033,205
-
-
Bonds at amortized cost
17,555,243
18,377,284
3,608
-
18,347,794
25,882
-
Other financial assets at amortized cost
6,418,790
6,418,790
6,286,620
-
9,769
78,877
43,524
Total financial assets
2,927,218,439
2,930,273,973
148,973,598
170,559,293
22,390,768
104,759
2,588,245,555
Financial liabilities
Borrowings
63,674,421
66,994,156
331,773
544,219
2,494,337
63,623,827
-
Lease liabilities
3,303,893
4,651,465
54,615
109,231
491,538
3,996,081
-
Dividends payable
49,950,267
49,950,267
49,950,267
-
-
-
-
Financial liabilities at amortized cost
1,267,195
1,267,195
1,267,195
-
-
-
-
Total financial liabilities
118,195,776
122,863,083
51,603,850
653,450
2,985,875
67,619,908
-
Net financial assets
2,809,022,663
2,807,410,890
97,369,748
169,905,843
19,404,893
(67,515,149)
2,588,245,555
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
159
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(c) Liquidity risk (continued)
In LEI
Book value
Value not updated
Within 1 month
Under 3 months
Between 3 and 12 months
Over 1 year
No pre-set maturity
31 December 2022
Financial assets
Cash and current accounts
788,781
788,781
788,781
-
-
-
-
Bank deposits with initial maturity within 3 months
104,971,764
105,232,894
105,232,894
-
-
-
-
Financial assets at fair value through profit or loss
333,619,756
333,619,756
-
-
-
-
333,619,756
Financial assets at fair value through other comprehensive income
1,875,688,529
1,875,688,529
-
-
-
-
1,875,688,529
Bonds at fair value through other comprehensive income
3,982,047
4,286,530
-
-
152,000
4,134,530
-
Bonds at amortized cost
17,550,535
19,928,693
3,946
-
1,544,560
18,380,187
-
Other financial assets at amortized cost
9,869,910
9,869,910
9,687,531
-
60,119
78,877
43,383
Total financial assets
2,346,471,322
2,349,415,093
115,713,152
-
1,756,679
22,593,594
2,209,351,668
Financial liabilities
Lease liabilities
3,456,939
4,598,395
51,591
95,684
396,844
4,054,276
-
Dividends payable
42,633,808
42,633,808
42,633,808
-
-
-
-
Financial liabilities at amortized cost
2,871,103
2,871,103
2,871,103
-
-
-
-
Total financial liabilities
48,961,850
50,103,306
45,556,502
95,684
396,844
4,054,276
Net financial assets
2,297,509,472
2,299,311,787
70,156,650
(95,684)
1,359,835
18,539,318
2,209,351,668
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
(All amounts are presented in Lei, unless otherwise stated)
160
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
For all non-financial assets, except other assets and non-current assets held for sale, the expected recovery period is longer than 12 months from the reporting date.
For all non-financial liabilities, except current tax and other liabilities, the expected settlement period is longer than 12 months from the reporting date.
(d) Taxation risk
The taxation system in Romania is subject to various interpretations and permanent changes that can be retroactive. In certain circumstances, tax authorities might adopt different positions than those of the Company and might calculate tax interest and penalties. Although the tax corresponding to a transaction can be minimal, the penalties can be large, depending on the interpretation of the tax authorities.
Moreover, Romania’s Government has under its supervision a series of agencies that are authorized to control both the Romanian and foreign entities carrying out activities in Romania. These verifications are largely similar to those carried out in many countries but might also extend over some legal or regulating areas in which the Romanian authorities might be interested.
The tax returns might be subject to control and revisions over a period of five years and in general after the date of their submission. According to the legal provisions applicable in Romania, the already checked periods can be subject to other additional verifications in the future.
The management of the Company considers it has correctly calculated and registered taxes, levies and other liabilities towards the state. Nevertheless, there is a risk that authorities might have a different position than that of the Company.
The latest control of the National Agency of Fiscal Administration, the Company was subjected to, covered the period up to January 1, 2010. Therefore, the Company’s tax liabilities after this date may be the subject of subsequent verifications, provided that they are not already time-barred.
(e) Operational risk
Operational risk represents the risk of loss caused either by the use of processes, systems and human resources that are inadequate or have not fulfilled their function property, or by external events and actions.
The management of operational risk is ensured by the Company through the implementation of and compliance with operational risk standards and procedures and a rigorous internal control system.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022
(All amounts are presented in Lei, unless otherwise stated)
161
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4. MANAGEMENT OF SIGNIFICANT RISKS (continued)
(f) Capital adequacy
The management’s policy regarding capital adequacy is focused on maintaining a solid capital base, for the purpose of supporting the continuous development of the Company and reaching its investment objectives.
The Company’s equity includes various types of reserves and retained earnings. At 31 December 2023, equities were 2,662,854,639 lei (31 December 2022: 2,214,632,163 lei).
As AIFM, the Company applies the legal requirements provided by Law no. 74/2015 regarding the minimum level of initial capital and those provided by Law no. 74/2015 and EU Regulation no. 2019/2033, as regards the minimum level of own funds.
According to applicable regulations, the level of initial capital is at least the Lei equivalent of 300,000 euro, calculated at the reference rate communicated by the NBR, and the minimum level of own funds is at least a quarter of the fixed general expenses of the previous year.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
162
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
5. FINANCIAL ASSETS AND LIABILITIES
The table below summarizes the book values and fair values of the Company’s financial assets and liabilities at 31 December 2023:
In LEI
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Amortized cost
Total book value
Fair value
Cash and current accounts
-
-
1,024,388
1,024,388
1,024,388
Bank deposits with initial maturity within 3 years
-
-
299,408,624
299,408,624
299,408,624
Bank deposits with initial maturity of more than 3 years
-
-
10,724,880
10,724,880
10,724,880
Financial assets at fair value through profit or loss
347,807,747
-
-
347,807,747
347,807,747
Financial assets at fair value through other comprehensive income
-
2,240,394,284
-
2,240,394,284
2,240,394,284
Bonds at fair value through other comprehensive income
-
3,884,483
-
3,884,483
3,884,483
Bonds at amortized cost
-
-
17,555,243
17,555,243
17,555,243
Other financial assets at amortized cost
-
6,418,790
6,418,790
6,418,790
Total financial assets
347,807,747
2,244,278,767
335,131,925
2,927,218,439
2,927,218,439
Borrowings
-
-
63,674,421
63,674,421
63,674,421
Lease liabilities
-
-
3,303,893
3,303,893
3,303,893
Dividends payable
-
-
49,950,267
49,950,267
49,950,267
Financial liabilities at amortized cost
-
-
1,267,195
1,267,195
1,267,195
Total financial liabilities
-
-
118,195,776
118,195,776
118,195,776
For financial assets and financial liabilities at amortized cost, the Company analysed the fair value at 31 December 2023 and concluded that there are no significant differences between fair value and amortized cost.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
163
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
5. FINANCIAL ASSETS AND LIABILITIES (continued)
The table below summarizes the book values and fair values of the Company’s financial assets and liabilities at 31 December 2022:
In LEI
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Amortized cost
Total book value
Fair value
Cash and current accounts
-
-
788,781
788,781
788,781
Bank deposits with initial maturity within 3 years
-
-
104,971,764
104,971,764
104,971,764
Financial assets at fair value through profit or loss
333,619,756
-
-
333,619,756
333,619,756
Financial assets at fair value through other comprehensive income
-
1,875,688,529
-
1,875,688,529
1,875,688,529
Bonds at fair value through other comprehensive income
-
3,982,047
-
3,982,047
3,982,047
Bonds at amortized cost
17,550,535
17,550,535
17,550,535
Other financial assets at amortized cost
-
-
9,869,910
9,869,910
9,869,910
Total financial assets
333,619,756
1,879,670,576
133,180,990
2,346,471,322
2,346,471,322
Lease liabilities
-
-
3,456,939
3,456,939
3,456,939
Dividends payable
-
-
42,633,808
42,633,808
42,633,808
Financial liabilities at amortized cost
-
-
2,871,103
2,871,103
2,871,103
Total financial liabilities
-
-
48,961,850
48,961,850
48,961,850
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
164
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
6. GROSS DIVIDEND INCOME
În LEI
2023
2022
Banca Transilvania
54,765,272
48,355,982
OMV Petrom
51,652,238
10,927,544
SNGN Romgaz SA
16,385,524
28,759,388
Fondul Proprietatea
10,572,057
922,695
Aerostar
4,159,104
3,465,920
SN Nuclearelectrica SA
3,771,535
1,751,501
Transilvania Investments Alliance
1,468,285
-
Bursa de Valori Bucuresti
449,877
334,047
BRD Group Societe Generale
-
21,124,249
Străuleşti Lac Alfa
-
3,553,026
Regal
-
1,518,111
Other dividends
195,289
64,908
Total
143,419,181
120,777,371
Dividend revenue is registered at gross value. Dividend tax rates for the period concluded on 31 December 2023 were 8% or 0% (2022: 5% or 0%). Dividend tax exemption is applied in case the Company’s holding percentage was more than 10% of the share capital of the company that distributed the dividends, for an uninterrupted period of at least one year before distribution.
In 2023, the value of gross dividends distributed by the companies for which holdings were classified as financial assets at fair value through other comprehensive income was 142,833,231 lei (2022: 118,925,213 lei).
7. INTEREST INCOME
In LEI
2023
2022
Interest income corresponding to bank deposits and current accounts
8,196,745
4,071,469
Interest income corresponding to bonds at amortized cost
1,534,092
2,837,987
Interest income corresponding to bonds at fair value through other comprehensive income
178,350
178,257
Total
9,909,187
7,087,713
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
165
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
8. OTHER OPERATING INCOME
In LEI
2023
2022
Rent income
940,113
793,834
Income from recovered receivables
166,364
115,351
Other income from operations
56,725
698,475
Total
1,163,202
1,607,660
9. NET GAIN / (NET LOSS) FROM ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
In LEI
2023
2022
Net gain from the revaluation of financial assets measured at fair value through profit or loss
38,752,808
1,830,713
Net gain / (net loss) from the sale of financial assets at fair value through profit or loss
579,971
(2,305,149)
Total
39,332,779
(474,436)
Unrealized net gains in 2023, in amount of 38,752,808 lei (2022: 1,830,713 lei) represents the difference from the revaluation at fair value of shares and fund units held at fair value through profit or loss.
In 2023, the unrealized net gain was mainly generated by the increase of fair value of fund units, while in 2022 it was generated mainly by the increase of fair value of shares classified in such category.
The net gain realised in 2023, and the net gain in 2022 come from the sale of fund units.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
166
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
10. EXPENSES WITH SALARIES, REMUNERATIONS AND OTHER SIMILAR EXPENSES
Expenses with wages, remunerations, contributions and other similar expenses include expenses with the salaries, allowances, contributions and other benefits, as well as corresponding contributions of the employees, members of the Board of Directors and Management Committee.
In LEI
2023
2022
No. beneficiaries
Value
No. beneficiaries
Value
Fixed remunerations
Board of Directors
5
6,356,172
5
5,710,068
Management Committee
2
3,748,512
2
3,367,500
Employees
47
8,901,278
43
7,124,543
Total fixed remunerations
19,005,962
16,202,111
Variable remunerations
Board of Directors and Management Committee
5
5
Bonuses for the current year
-
263,547
Participation in the benefit plan in stocks for the current year
10,907,474
6,379,200
Total
10,907,474
6,642,747
Employees
47
43
Participation in the benefit plan in cash for the current year
2,102,204
1,533,984
Bonuses for the current year
362,411
297,808
Participation in the benefit plan in stocks for the current year
4,058,512
3,532,792
Total
6,523,127
5,364,584
Total variable remunerations
17,430,601
12,007,331
Expenses with social contributions and similar
472,078
405,787
Expenses with provisions for untaken leaves, net
192,342
158,200
Total wages, allowances, contributions and similar expenses
37,100,983
28,773,429
The remunerations due to the directors are approved by the General Meeting of Shareholders by the Articles of Association, management contracts and the Remuneration Policy of the Company’s officers, and those due to officers are approved by the General Meeting of Shareholders and Board of Directors, through the management contracts.
The average number of employees for the period concluded on 31 December 2023 was 46 (31 December 2022: 41).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
167
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
11. OTHER OPERATING EXPENSES
In LEI
2023
2022
Commission and fee expenses
4,115,438
3,895,593
Expenses with outsourced services
3,301,445
3,079,156
Expenses with promotion and protocol
935,278
664,132
Expenses with the amortization of tangible and intangible assets
870,330
765,152
Expenses with the depreciation of right-of-use assets from lease contracts
547,432
603,329
Audit and audit-related services
486,314
561,964
Expenses with sponsorship and patronage
458,737
349,963
Net expenses with foreign exchange differences
1,353,417
9,611
Other operating expenses
1,484,898
1,731,847
Total
13,553,289
11,660,747
Expenses with commissions and fees include mainly the commission calculated based on the net asset owed to FSA, commissions for equity transactions on the regulated market, commissions owed to the depository and custodian bank, for register services of the Central Depositary owed by the Company, as well as legal assistance fee and other fees for consultancy.
Expenses with outsourced services are represented mainly by the cost of portfolio monitoring services, insurance, assets evaluation services, maintenance, insurance, professional training courses and services for the management of property owned by the Company.
Other operating expenses include expenses with travel, post and telecommunication, expenses with maintenance and repairs, utilities, fuel, inventory objects and materials, other taxes and other expenses.
In 2023, the fees for the Company’s statutory financial statements audit included in the category of audit and audit-related services supplied by the statutory auditor were 372,833 Lei excluding VAT in 2023 (443,671 Lei including VAT), and in 2022 415,630 Lei excluding VAT (494,600 Lei including VAT). Such fees relate to the audit of separate and consolidated financial statements, the reporting audit in the ESEF electronic format (European Single Electronic Format) and review of the remuneration report .
In 2023, expenses related to short-term leases were 60,275 lei (2022: 23,379 lei).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
168
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
12. FINANCING EXPENSES
In LEI
2023
2022
Expenses with loan interest
3,973,491
-
Expenses with lease interest
111,396
95,436
Total
4,084,887
95,436
13. PROFIT TAX
In LEI
2023
2022
Current profit tax
Current income tax (16%)
4,142,694
4,014,059
Dividend tax (2023: 8%; 2022: 5%)
11,121,034
5,612,015
15,263,728
9,626,074
Deferred profit tax
Financial assets
20,282
-
Investment property and property, plant and equipment
(17,579)
(16,625)
Liabilities related to cash benefit plan and other benefits
(771,757)
(790,803)
Provisions for risks and charges
-
44,426
(769,054)
(763,002)
Profit tax ( part recorded through profit or loss)
14,494,674
8,863,072
The reconciliation of profit before tax with income tax expense in the profit or loss account:
In LEI
2023
2022
Profit before tax
139,228,099
91,716,707
Tax in accordance with the statutory taxation rate of 16% (2022: 16%)
22,276,496
14,674,673
Effect on income tax of:
Non-deductible expenses
7,318,157
10,859,469
Non-taxable income
(23,294,041)
(20,312,170)
Other elements
12,894,175
5,464,392
Registration/ (reversal) of temporary differences
(769,054)
(763,002)
Dividend tax (2023: 8%; 2022: 5%)
11,121,034
5,612,015
Profit tax, of which:
29,546,767
15,535,377
• Profit tax expense (through profit or loss)
14,494,674
8,863,072
• Profit tax through retained earnings, on sell of FVTOCI financial assets
15,052,093
6,672,305
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
169
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
13. PROFIT TAX (continued)
The effective profit tax rate through profit or loss at 31 December 2023 is 10.4% (31 December 2022: 9.7%).
The main non-taxable income from the standpoint of profit tax calculation is represented by dividend income (withholding tax) and income from differences following the measurement of financial assets at fair value through profit or loss (holdings over 10%), and non-deductible expenses include expenses from the revaluation of financial assets at fair value through profit or loss (holdings over 10%), as well as expenses proportionally assigned to non-taxable income.
When determining the fiscal result, management and administration expenses, as well as other common expenses, are taken into account as non-deductible expenses, pro rata with the share of non-taxable income in the total income recorded by the Company.
The main components of Other income are the items similar to income which include, mainly, the realized net gain, reflected in retained earnings, related to the sales of equity instruments classified at fair value through other comprehensive income (FVTOCI) in case of ownerships below 10%, and items similar to expenses which include mainly benefits granted to directors, officers and employees of the Company in equity instruments sold in shares, at the time of their actual award.
14. CASH AND CURRENT ACCOUNTS
In LEI
31 December
2023
31 December
2022
Cash
2,394
4,626
Current accounts
1,021,995
784,158
Cash and current accounts – gross value
1,024,389
788,784
Expected credit loss for current accounts
(1)
(3)
Total cash and bank accounts
1,024,388
788,781
The current bank deposits are constantly at the Company’s disposal. As regards the accounts opened with Banca Comercială Română, the Company entered into a movable mortgage agreement to guarantee the loan facility contracted at such bank (see note 20 Borrowings).
All current accounts of the Company are classified as Stage 1.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
170
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
15.a) BANK DEPOSITS WITH INITIAL MATURITY UNDER 3 MONTHS
In LEI
31 December 2023
31 December 2022
Term deposits with initial maturity within 3 months
297,440,181
104,753,137
Interest-related receivables
1,984,032
224,697
Total bank deposits – gross value
299,424,213
104,977,834
Expected credit loss
(15,589)
(6,070)
Total bank deposits
299,408,624
104,971,764
15. b) BANK DEPOSITS WITH INITIAL MATURITY OF MORE THAN 3 MONTHS
In LEI
31 December
2023
31 December
2022
Term deposits with initial maturity of more than 3 months
10,000,000
-
Interest-related receivables
725,000
-
Total bank deposits – gross value
10,725,000
-
Expected credit loss
(120)
-
Total bank deposits
10,724,880
-
At 31 December 2023, such category includes the collateral held at Banca Comercială Română, established as guarantee for the loan facility contracted at such bank (see Note 20 Borrowings). The collateral is classified in Stage 1.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
171
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS
a) Financial assets at fair value through profit or loss
In LEI
31 December 2023
31 December 2022
Fund units
273,355,170
265,105,760
Shares
74,452,577
68,513,996
Total
347,807,747
333,619,756
In LEI
2023
2022
1 January
333,619,756
381,215,357
Purchases
57,426
5,000,000
Sales
(25,202,214)
(52,121,165)
Changes in fair value
38,752,808
1,830,713
Gain/(Loss) from FVTPL sale
579,971
(2,305,149)
31 December
347,807,747
333,619,756
b) Financial assets at fair value through other comprehensive income
In LEI
31 December 2023
31 December 2022
Shares measured at fair value
2,240,394,284
1,875,688,529
Total
2,240,394,284
1,875,688,529
At 31 December 2023 and 31 December 2022 the category of shares measured at fair value through other comprehensive income mainly includes shares held in Banca Transilvania, OMV Petrom, SNGN Romgaz, Aerostar, BRD Groupe Société Générale, Professional Imo Partners and Străulesti Lac Alfa.
The Company has used its irrevocable option to designate such equity instruments at fair value through other comprehensive income, as these financial assets are held both for dividend collection and for gains from sale and are not held for trading.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
172
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
b) Financial assets at fair value through other comprehensive income (continued)
The movement of financial assets in the period ended 31 December 2023 and 31 December 2022 is presented in the following table:
In LEI
2023
2022
1 January
1,875,688,529
1,952,286,731
Purchases
195,816,371
209,129,856
Sales
(322,049,047)
(89,198,421)
Gain/(Loss) in change of fair value
490,938,431
(196,529,637)
31 December
2,240,394,284
1,875,688,529
In 2023, shares measured at fair value through other comprehensive income increased due to the appreciation of stock quotations during the year.
In 2022, they decreased because of the unfavorable effect of the Russian-Ukrainian military conflict on financial markets (including the Bucharest Stock Exchange), but also due to the increase of interest rates determined by the increase of the monetary policy interest rate by the National Bank of Romania against the background of increased inflationary pressure.
The sales of shares classified at fair value through other comprehensive income were decided following the fundamental analysis developed by the specialized departments, in the context of the Company's medium and long-term objectives or for capitalizing on some opportunities (e.g. public purchase offers carried out by certain issuers). The sales were not made shortly after acquisition and the transactions with such shares were not aimed at obtaining short-term profits.
For information regarding the net gains from the sale of shares carried at fair value through other comprehensive income, see Note 16 d).
At 31 December 2023, 8,044,831 shares at Banca Transilvania held by the Company are mortgaged in favour of BCR, as collateral for the loan facility contracted at such bank (see Note 20 Borrowings).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
173
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair Value Hierarchy
The below table analyzes the financial instruments at fair value depending on the valuation method. Fair value levels depending on the inputs in the valuation model have been defined as follows:
• Level 1: quoted prices (not adjusted) on active markets for shares and bonds and the (unadjusted) unit value of the net asset in case of fund units (that meet the definition of Level 1 inputs);
• Level 2: inputs other than the quoted prices included in level 1 that are observable for assets or liabilities either directly (e.g. prices) or indirectly (e.g. price derivatives);
• Level 3: inputs for assets or liabilities that are not based on observable inputs from the market (unobservable inputs).
31 December 2023
In LEI
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit or loss
296,200,764
-
51,606,983
347,807,747
Financial assets measured at fair value through other comprehensive income
1,932,882,437
-
307,511,847
2,240,394,284
Bonds at fair value through other comprehensive income
3,884,483
-
-
3,884,483
Total
2,232,967,684
-
359,118,830
2,592,086,514
31 December 2022
In LEI
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit or loss
277,399,197
-
56,220,559
333,619,756
Financial assets measured at fair value through other comprehensive income
1,578,423,906
-
297,264,623
1,875,688,529
Bonds at fair value through other comprehensive income
3,982,047
-
-
3,982,047
Total
1,859,805,150
-
353,485,182
2,213,290,332
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
174
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
Financial assets
Fair value at
31 December 2023
Valuation technique
Unobservable inputs, value intervals
Relationship between unobservable inputs and fair value
Listed minority interest without active market
794
Market approach, comparable companies method
Invested capital/EBITDA multiple: 8.48
Discount for lack of marketability: 15.9%
The lower the EV/EBITDA multiple, the lower the fair value .
In The lower the lack of marketability discount, the higher the fair value .
Unlisted minority interest
5,027,718
Market approach, comparable companies method
Invested capital/turnover multiple: 0.4
Equity value/ book value multiple: 1
Discount for lack of marketability: 13.6%
The lower the EV/Turnover multiple, the lower the fair value.
In the balance, the book value is identified through equity. The lower the price/book value ratio, the lower the fair value.
The lower the lack of marketability discount, the higher the fair value.
Unlisted minority interest with control right
44,223,366
Income-based approach – discounted cash- flow method
Weighted average cost of capital: 13.6%
Constant long-term income growth rate: 3%
Discount for lack of marketability: 15,7%.
The lower the weighted average cost of capital, the higher the fair value .
The higher the long-term revenue increase rate, the higher the fair value .
The lower the lack of marketability discount, the higher the fair value.
Unlisted minority interest
5,579,034
Income-based approach – discounted cash- flow method
Weighted average cost of capital: 16.1%
Constant long-term income growth rate: 3%
Discount for lack of control: 14.7%
Discount for lack of marketability: 19%
The lower the weighted average cost of capital, the higher the fair value.
The higher the long-term revenue increase rate, the higher the fair value .
The lower the lack of control discount, the higher the fair value .
The lower the lack of marketability discount, the higher the fair value.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
175
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
Financial assets
Fair value at
31 December 2023
Valuation technique
Unobservable inputs, value intervals
Relationship between unobservable inputs and fair value
Unlisted interest with control right
136,730,070
Asset-based approach-asset accumulation method or adjusted net asset method
Market value of equity (Price) by reference to their book value: 0.9
Discount for lack of marketability: 12.2%
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
The lower the lack of marketability discount, the higher the fair value.
Listed interest with right of control
15,141,344
Income-based approach – discounted cash- flow method
Weighted average cost of capital: 15.3%
Constant long-term income growth rate: 3.0%
Discount for lack of marketability: 15.8%
The lower the weighted average cost of capital, the higher the fair value.
The higher the long-term income growth rate , the higher the fair value .
The lower the lack of marketability discount, the higher the fair value.
Listed minority interest without active market (investment/ holding / start-up)
84,156,319
Asset-based approach-asset accumulation method or adjusted net asset method
Market value of equity (Price) by reference to their book value: 1.5
Discount for lack of control: 11.5%
Discount for lack of marketability: 11.4%
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
The lower the lack of control discount, the higher the fair value.
The lower the lack of marketability discount, the higher the fair value.
Unlisted minority interest
68,260,185
Asset-based approach-asset accumulation method or adjusted net asset method
Market value of equity by reference to their book value: 0,7
Discount for lack of marketability: 5.7%
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
The lower the lack of marketability discount, the higher the fair value.
Total
359,118,830
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
176
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
Financial assets
Fair value at
31 December 2022
Valuation technique
Unobservable inputs, value intervals
Relationship between unobservable inputs and fair value
Listed minority interest without active market
2,020,876
Market approach, comparable companies method
Invested capital/revenues multiple: 0.6
Equity market value (Price)/book value thereof multiple: 0.9
Equity market value (Price)/EBITDA multiple: 5.4
Discount for lack of marketability: 16%
The lower the EV/Rev multiple, the lower the fair value .
In the balance sheet, the book value is identified through equity. The lower the price/book value ratio, the lower the fair value.
The lower the Price/EBITDA multiple, the lower the fair value
The lower the lack of liquidity discount, the higher the fair value .
Unlisted minority interest
4,778,247
Market approach, comparable companies method
Invested capital/turnover multiple: 0.5
Equity value/ book value multiple: 0.99
Discount for lack of marketability: 13.7%
The lower the EV/Turnover multiple, the lower the fair value.
In the balance, the book value is identified through equity. The lower the price/book value ratio, the lower the fair value.
The lower the lack of liquidity discount, the higher the fair value.
Unlisted minority interest with control right
54,177,041
Income-based approach – discounted cash- flow method
Weighted average cost of capital: 11.8%
Discount for lack of marketability: 17.9%.
Constant long-term income growth rate: 3%
The lower the weighted average cost of capital, the higher the fair value .
The lower the lack of marketability discount, the higher the fair value.
The higher the long-term revenue increase rate, the higher the fair value .
Weighted average cost of capital: 14.6%
Constant long-term income growth rate: 3%
Discount for lack of control: 19.5%
The lower the weighted average cost of capital, the higher the fair value.
The higher the long-term revenue increase rate, the higher the fair value .
The lower the lack of control discount, the higher the fair value .
Unlisted minority interest
6,522,389
Income-based approach – discounted cash- flow method
Discount for lack of marketability: 19.4%
The lower the lack of marketability discount, the higher the fair value.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
177
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
Financial assets
Fair value at
31 December 2022
Valuation technique
Unobservable inputs, value intervals
Relationship between unobservable inputs and fair value
Unlisted interest with control right
127,266,998
Asset-based approach-asset accumulation method or adjusted net asset method
Market value of equity (Price) by reference to their book value: 0.9
Discount for lack of marketability: 12.2%
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
The lower the lack of marketability discount, the higher the fair value.
Listed interest with right of control
22,901,596
Income-based approach – discounted cash- flow method
Weighted average cost of capital: 12.4%
Constant long-term income growth rate: 3.5%
Discount for lack of marketability: 16%
The lower the weighted average cost of capital, the higher the fair value.
The higher the long-term revenue increase rate, the higher the fair value .
The lower the lack of marketability discount, the higher the fair value.
Listed minority interest without active market (investment/ holding / start-up)
72,035,757
Asset-based approach-asset accumulation method or adjusted net asset method
Market value of equity (Price) by reference to their book value: 1.3
Discount for lack of control: 13.2%
Discount for lack of marketability: 11.4%
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
The lower the lack of control discount, the higher the fair value.
The lower the lack of marketability discount, the higher the fair value.
Market value of equity by reference to their book value: 0,7
In the balance, the book value is identified through equity. The lower the resulted ratio, the lower the fair value.
Unlisted minority interest
63,782,278
Asset-based approach-asset accumulation method or adjusted net asset method
Discount for lack of marketability: 5.7%
The lower the lack of marketability discount, the higher the fair value.
Total
353,485,182
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
178
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
Sensitivity analysis
Although the Company considers that fair value estimates are adequate, the use of other methods and assumptions could lead to different values of the fair value. For the fair values recognized following the use of a significant number of unobservable inputs (Level 3), the modification of one or more assumptions would influence the Company’s profit or loss and other comprehensive income at 31 December 2023 as follows:
Modified assumption
(Lei)
Impact on profit or loss
(before tax)
Impact on other comprehensive income (before tax)
WACC increase by 50 bps
-
(3,688,951)
WACC decrease by 50 bps
-
3,787,523
Increase of the perpetuity growth rate by 25 bps
-
97,906
Decrease of the perpetuity growth rate by 25 bps
-
(121,740)
Increase of (EBITDA, CA, P/E) multiples by 10%
107,422
432,827
Decrease of (EBITDA, CA, P/E) multiples by 10%
(107,422)
(432,827)
Increase of land sale price per sqm by 10%
6,029,621
3,782,478
Decrease of land sale price per sqm by 10%
(6,029,621)
(3,782,478)
Increase of apartment sale price per sqm by 10%
-
9,467,729
Decrease of apartment sale price per sqm by 10%
-
(9,467,729)
Increase of rent per sqm by 10%
65,501
362,520
Decrease of rent per sqm by 10%
(65,501)
(362,520)
Increase of rent capitalization rate by 50 bps
(174,049)
(1,219,072)
Decrease of rent capitalization rate by 50 bps
193,388
1,360,607
Increase of DLOM by 10%
(650,198)
(4,326,800)
Decrease of DLOM by 10%
650,198
4,326,800
The main unobservable inputs refer to the relevant multiples of the total invested capital and multiples of equity in ordinary shares.
Turnover multiple: is an instruments used to evaluate companies based on a market comparison with similar listed companies. Evaluating a company based on its turnover is particularly useful when the profit value is influenced by elements not related to the usual course of business. Turnover is the indicator from the income statement which is the hardest vulnerable to accounting policies, which recommends it as multiple .
EBITDA multiple: represents the most relevant multiple used when pricing the investments and it is calculated using information from comparable listed public companies (similar geographic location, industry size, target market and other factors that valuators consider as relevant). The trading multiples for the comparable companies are determined by dividing the enterprise value of the a company by its EBITDA and by further discounting, due to possible lack of marketability and other differences between
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
179
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
the comparable peer group and specific company .
Price/book value: this multiple measures a company's market price based on its book value (net assets). It reflects how many times the book value per share investors are ready to pay for a share.
A company that requires more assets (e.g. a manufacturing company with factory space and machinery) will generally post a significantly lower price-to-book than a company whose earnings result from rendering services (e.g. a consulting firm).
Weighted average cost of capital: represents the calculation of a company’s cost of capital in nominal terms (including inflation), based on the “Capital Asset Pricing Model”. All capital sources – shares, bonds and any other long-term debts - are included in the weighted average cost of capital calculation.
Discount for lack of control: represents the discount applied to reflect the absence of the power of control and it is used within the discounted cash flow method, in order to determine the value of a minority interest in the equity of the valued company.
Discount for lack of marketability (DLOM): represents the discount applied to the comparable market multiples, in order to reflect the liquidity differences between the revalued company from the portfolio and its comparable peer group. Valuators estimate the discount for lack of marketability based on their professional judgement after considering market liquidity conditions and company-specific factors.
In case of equity instruments in holdings, the evaluation model was determined by summing the market value of assets and liabilities, namely their book values adjusted further to the subsequent valuations where the income-based approach was used. This method was used to determine directly the value of the equity of holding-type majority shareholders .
Level 3 fair value modification
In LEI
2023
2022
At 1 January
353,485,182
318,728,736
Purchases/Capital investment
21,607,426
16,124,265
Sales
(2,719,363)
(4,030,734)
Loss recognized in profit or loss
(4,671,002)
(2,199,820)
Gain recognized in other comprehensive income
(8,583,413)
770,237
Transfers
-
24,092,498
Balance at 31 December
359,118,830
353,485,182
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
180
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
c) Fair value hierarchy (continued)
At 31 December 2023 and 31 December 2022, the Company classified as Level 1 securities measured on the basis of the BSE closing prices, on the last day of trading. Fund units evaluated based on the unit value of their net asset certified by the fund’s depositary are included in this level.
The investments classified in Level 3, representing 16% of the Company’s share portfolio at 31 December 2023 (31 December 2022: 18%), have been measured by independent external or internal valuers, based on the financial information provided by the monitoring departments, using measurement techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs, with the management’s supervision and review, which makes sure that all inputs underlying the valuation reports are accurate and adequate.
The valuation date for Level 3 investments was 30 September 2023 or 30 June 2023, and an analysis was subsequently made at the reporting date, 31 December 2023.
In 2022, the Company transferred the shares held in Mecanica Ceahlau from Level 1 to Level 3, as the market of such shares listed at the BSE became dormant this year.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
181
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
d) Reserve from the revaluation at fair value of financial assets measured at fair value through other comprehensive income, net of deferred tax
2023
2022
At 1 January
699,891,438
903,246,143
Gross gain/(loss) from the revaluation of financial assets measured at fair value through other comprehensive income
490,692,895
(196,626,807)
Deferred tax corresponding to the gain/loss from revaluation of financial assets measured at fair value through other comprehensive income
(75,881,723)
28,353,206
Net gain/(loss) from the revaluation of available financial assets measured at fair value through other comprehensive income
414,811,172
(168,273,601)
Net gain transferred to retained earnings as a result of the sale of financial assets measured at fair value through other comprehensive income
(79,023,327)
(35,081,104)
At 31 December
1,035,679,283
699,891,438
In 2023, the net gain obtained 79,023,327 lei (gross gain 94,075,420 Lei, related tax 15,052,093 lei) was mainly achieved from the sale of shares in SNGN Romgaz, SN Nuclearelectrica, Banca Transilvania, OMV Petrom and Șantierul Naval Constanța. In 2022, the net gain in amount of 35,081,104 lei (gross gain 41,753,409 lei, related tax 6,672,305 lei) was mainly achieved from the sale of shares held in Banca Transilvania SNTGN Transgaz, Eximbank and Aerostar.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
182
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
16. FINANCIAL ASSETS (continued)
e) Bonds at amortized cost
In LEI
31 December
2023
31 December 2022
Corporate bonds
17,606,400
17,606,400
Municipal bonds
35,711
47,694
Total bonds at amortised cost – gross value
17,642,111
17,654,094
Expected credit loss
(86,868)
(103,559)
Total bonds at amortised cost
17,555,243
17,550,535
Corporate bonds
3,884,483
3,982,047
Total bonds at fair value through other comprehensive income
3,884,483
3,982,047
At 31 December 2023 and 31 December 2022, the category of bonds at amortised cost included the bonds issued by EVER IMO and Bacău City Hall.
At December 31, 2023 and December 31, 2022, the category of bonds at fair value through other comprehensive income included bonds issued by Autonom Service SA, which are held by the Company in a business model whose objective is to keep assets both to collect contractual cash flows and to sell. Autonom Service bonds are listed on the Bucharest Stock Exchange.
All bonds of the Company are classified as Level 1.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
183
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
17. a) OTHER FINANCIAL ASSETS AT AMORTISED COST
In LEI
31 December
2023
31 December 2022
Sundry debtors
49,922,662
50,030,246
Trade receivables
128,618
106,088
Dividends receivable
281,373
-
Collateral (guarantees)
19,803
19,662
Advances to suppliers
15,146
129,043
Amount representing the guarantee for the public offering of buy-back of treasury shares
5,000,000
8,500,000
Total other financial assets – gross value
55,367,602
58,785,039
Less expected credit loss for other financial assets
(48,948,812)
(48,915,129)
Total other financial assets
6,418,790
9,869,910
Receivables from sundry debtors mainly include amounts arising from final court decisions in amount of 48,869,211 lei (31 December 2022: 48,862,753 lei).
The amount representing the guarantee for the public buy-back of treasury shares was set at the intermediary according to the provisions of FSA Regulation no. 5/2018 regarding issuers of financial instruments and market operations, article 57 point 1, letter d).
At 31 December 2023, Other financial assets at amortised cost are divided into performing assets in amount of 6,471,166 lei (31 December 2022: 9,869,910 lei) and impaired receivables in amount of 48,948,812 lei (31 December 2022: 48,915,129 lei), of which sundry debtors 48,948,812 lei (31 December 2022: 48,915,129 lei).
In LEI
31 December
2023
31 December 2022
Other performing financial assets
6,418,790
9,869,910
Other impaired financial assets
48,948,812
48,915,129
Total other financial assets – gross value
55,367,602
58,785,039
Adjustments for expected credit loss for other performing financial assets
-
-
Adjustments for expected credit loss for other impaired financial assets
(48,948,812)
(48,915,129)
Total other financial assets
6,418,790
9,869,910
Adjustment movements for expected credit loss for other assets at amortized cost can be analyzed as follows:
In LEI
2023
2022
At 1 January
(48,915,129)
(51,282,218)
Setup
(33,683)
(19,308)
Reversal
-
2,386,397
At 31 December
(48,948,812)
(48,915,129)
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
184
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
17. b) OTHER ASSETS
In LEI
31 December
2023
31 December 2022
Prepayments
400,772
384,854
Other assets
114,829
112,201
Total
515,601
497,055
18. INVESTMENT PROPERTY
In LEI
2023
2022
Balance at 1 January
4,284,448
4,247,186
Changes in fair value
37,290
798,078
Purchases
-
948,484
Contribution to share capital of subsidiaries
-
(1,709,300)
Transfer to assets held for sale
(212,738)
Balance at 31 December
4,109,000
4,284,448
In 2023, the Company transferred a building worth 212,738 lei to the category of assets held for sale.
In 2022, the Company contributed a land in amount of 1,709,300 lei to the share capital of its subsidiary EVER Agribio SA.
The fair value measurement of investment property was made by independent valuers, members of the National Association of Valuers of Romania (ANEVAR).
Fair value hierarchy
Based on the input data used in the valuation technique, the fair value of investment property was classified as level 3 in the fair value hierarchy.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
185
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
18. INVESTMENT PROPERTY (continued)
Valuation techniques
The table below presents the valuation techniques used to determine the fair value of investment property classified as level 3 in fair value hierarchy.
Valuation techniques
Input
Connection between input data and fair value measurement
The valuation method applied in the income approach for the evaluation of the entire real estate property (location-building) is direct capitalization. The method consists in the division of stabilized annual income by a corresponding capitalization rate, using the net operating income in conjunction with the net capitalization rate. In order to estimate the net operating income from the gross income corresponding to properties located in segmented markets of primary cities, with central locations we deducted the non-recoverable operating expenses for the property.
The contribution of the land resulted from the assigning process through which the net building replacement cost was deducted from the value of the entire property.
Market rent obtainable by an operator of a reasonable efficiency or average- competence management acting in an efficient manner.
The percentage of non- recoverable expenses (of the landlord) applied to the effective gross income.
Vacancy rate, given the location, area, technical qualities of the building (finishing, equipment) (15%).
Capitalization rate applied to the net income from operations (8.8%).
Estimated fair value would increase (decrease) in case:
the market rent is higher (lower).
the ratio of non-recoverable expenses is lower (higher).
the vacancy rate is lower (higher).
the capitalization rate is lower (higher).
These valuations are periodically revised by the management of the Company. The valuation frequency is dictated by the dynamics of the market the investment property held by the Company belongs to, so that the fair value of investment property reflects the market conditions on the date of the financial statements.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
186
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS
Gross book value
1 January 2023
Purchases
Transfer
Disposals
Annulment of accumulated depreciation and amortization
(on revaluation date)
Value increase from revaluation
Value decrease from evaluation
31 December 2023
Intangible assets
Intangible assets
2,667,653
83,236
-
(7,107)
-
-
-
2,743,782
Total
2,667,653
83,236
-
(7,107)
-
-
-
2,743,782
Tangible assets
Lands
878,857
-
-
-
-
67,344
-
946,201
Buildings
8,002,203
-
110,382
-
(533,792)
1,711,044
-
9,289,837
Equipment
2,094,963
46,431
-
(59,336)
-
-
-
2,082,058
Transportation vehicles
231,082
-
-
-
-
-
-
231,082
Other fixed assets
464,131
3,389
-
-
-
-
-
467,520
Tangible assets in progress
7,509
102,873
(110,382)
-
-
-
-
-
Total
11,678,745
152,693
-
(59,336)
(533,792)
1,778,388
-
13,016,698
Right-of-use assets from leases
Right-of-use transportation vehicles
1,252,611
571,161
-
(384,111)
-
-
-
1,439,661
Right-of-use office space
2,693,281
-
-
-
-
-
-
2,693,281
Right-of-use concessions
375,722
-
-
(177,400)
-
-
-
198,322
Total
4,321,614
571,161
-
(561,511)
-
-
-
4,331,264
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
187
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS ( continued)
Accumulated depreciation/amortization and impairment
1 January 2023
Depreciatio n/amortiza tion in the current period
Accumulated depreciation/a mortization of disposals
Annulment of accumulated depreciation/a mortization
(on revaluation date)
Setup of depreciation adjustments
Reversal of impairment allowances
31 December 2023
Intangible assets
Intangible assets
2,255,278
92,628
(7,107)
-
-
-
2,340,799
Total
2,255,278
92,628
(7,107)
-
-
-
2,340,799
Tangible assets
Buildings
26,975
506,817
-
(533,792)
-
-
-
Equipment
1,925,656
150,043
(59,337)
-
-
-
2,016,362
Transportation vehicles
231,082
-
-
-
-
-
231,082
Other non-current assets
212,905
120,842
-
-
-
-
333,747
Total
2,396,618
777,702
(59,337)
(533,792)
-
-
2,581,191
Depreciation of
right-of-use assets from leases
Right-of-use transportation vehicles
529,661
270,860
(384,020)
-
-
-
416,501
Right-of-use office areas
291,775
269,328
-
-
-
-
561,103
Right-of-use concessions
25,642
7,244
-
-
-
-
32,886
Total
847,078
547,432
(384,020)
-
-
-
1,010,490
Net book value
Intangible assets
412,375
402,983
Tangible assets
9,282,127
10,435,507
Right-of-use assets from leases
3,474,536
3,320,774
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
188
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS ( continued)
Gross book value
1 January 2022
Purchases
Transfer
Disposals
Annulment of accumulated depreciation and amortization
(on revaluation date)
Value increase from revaluation
Value decrease from evaluation
31 December 2022
Intangible assets
Intangible assets
2,573,655
124,869
-
(30,871)
-
-
-
2,667,653
Total
2,573,655
124,869
-
(30,871)
-
-
-
2,667,653
Tangible assets
Lands
898,529
-
-
-
-
7,970
(27,642)
878,857
Buildings
6,438,897
-
958,931
-
(341,791)
946,166
-
8,002,203
Equipment
2,162,153
81,480
-
(148,670)
-
-
-
2,094,963
Transportation vehicles
231,082
-
-
-
-
-
-
231,082
Other fixed assets
164,808
133,345
185,533
(19,555)
-
-
-
464,131
Tangible assets in progress
626,728
525,245
(1,144,464)
-
-
-
-
7,509
Total
10,522,197
740,070
-
(168,225)
(341,791)
954,136
(27,642)
11,678,745
Right-of-use assets from leases
Right-of-use transportation vehicles
1,301,507
579,491
-
(628,387)
-
-
-
1,252,611
Right-of-use office space
3,074,659
-
-
(381,378)
-
-
-
2,693,281
Right-of-use concessions
338,203
37,519
-
-
-
-
-
375,722
Total
4,714,369
617,010
-
(1,009,765)
-
-
-
4,321,614
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
189
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS ( continued)
Accumulated depreciation/amortization and impairment
1 January 2022
Depreciati on/amortiz ation in the current period
Accumulated depreciation/a mortization of disposals
Annulment of accumulated depreciation/a mortization
(on revaluation date)
Setup of depreciation adjustments
Reversal of impairment allowances
31 December 2022
Intangible assets
Intangible assets
2,212,695
73,454
(30,871)
-
-
-
2,255,278
Total
2,212,695
73,454
(30,871)
-
-
-
2,255,278
Tangible assets
Buildings
-
368,766
-
(341,791)
-
-
26,975
Equipment
1,843,039
229,292
(123,153)
-
-
(23,522)
1,925,656
Transportation vehicles
231,082
-
-
-
231,082
Other non-current assets
139,164
93,642
(14,434)
-
-
(5,467)
212,905
Total
2,213,285
691,700
(137,587)
(341,791)
-
(28,989)
2,396,618
Depreciation of
right-of-use assets from leases
Right-of-use transportation vehicles
814,075
323,919
(608,333)
-
-
-
529,661
Right-of-use office areas
313,757
269,330
(291,312)
-
-
-
291,775
Right-of-use concessions
15,562
10,080
-
-
-
-
25,642
Total
1,143,394
603,329
(899,645)
-
-
-
847,078
Net book value
Intangible assets
360,960
412,375
Tangible assets
8,308,912
9,282,127
Right-of-use assets from leases
3,570,975
3,474,536
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
190
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS ( continued)
Impairment losses recognized in profit or loss are classified, if applicable, as asset amortization and impairment expenses.
In 2023, purchases mainly include the capitalization of costs with the development of new facilities or modules of the embedded IT system, licenses and IT equipment.
Fair value measurement
At 31 December 2023 the Company’s lands and buildings were assessed by independent valuers, authorized by the National Agency of Authorized Valuers of Romania (“ANEVAR”). The revaluation of lands and buildings at 31 December 2023 was made based on the following methods, in compliance with the valuation principles and techniques included in the ANEVAR Goods Valuation Standards:
• income-based approach, capitalization and discounted cash-flow method with an average capitalization rate of 8.97% corroborated, for component assignment, with the net replacement cost or alternative methods through which the market value of the land was deducted from the value of the full real property.
The average vacancy rate, given the location, area and technical qualities of the building (finishing and equipment): 12%.
Fair value hierarchy
Based on the input used in the valuation technique, the fair value of buildings was classified as Level 3 in the fair value hierarchy.
Valuation techniques
Sales or offers of properties similar to those subject to valuation were collected, analyzed, compared and adjusted in direct comparisons in order to identify the similarities and differences between these properties, and the prices of comparable property were adjusted to justify the differences between the characteristics of the valued properties. The comparison elements used include ownership rights, financing and sale conditions, expenses incurred right after purchase, market conditions, location, physical characteristics, best use and town planning regulations in force.
The valuation model applied in case of revenue approach for the valuation of full properties (lands and buildings) is direct capitalization. The method consists in dividing the annual income stabilized by a corresponding capitalization rate, using the net operating income, in conjunction with the net capitalization rate.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
191
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
19. PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS ( continued)
The allocation process between land and building was made either through:
• deduction of the land’s market value from the value of the real property, in case of lands in exclusive property or leasehold, the result being the value of the building; or
• deduction of the net replacement cost from the value of the full real property, in case of lands held in joint property, the result being the value of the land.
In the cost-based approach we have used the net replacement cost method given the specialized nature of some buildings. Therefore, the net replacement cost has been determined based on the price in specialized catalogues, updated with discounted indexes or based on works estimates. The wear and tear degree was determined taking into consideration the improvements made for finishing and installations, capital repairs and development stages of the building.
Property, plant and equipment, as investment property have been evaluated taking into consideration the best use for these assets. Following the analysis of information regarding the location and characteristics of properties identified in the market analysis, it was ascertained that in general the best use is that existing at the valuation date.
The other categories of property, plant and equipment are presented at cost, less accumulated amortization and value impairment adjustment, where necessary.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
192
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
20. BORROWINGS
In LEI
31 December 2023
31 December 2022
Long-term payables
63,342,648
-
Long-term bank loans
63,342,648
-
Short-term payables
331,773
-
Short-term bank loans
331,773
-
Total loans
63,674,421
-
The reconciliation of opening loan balances and closing loan balances is presented in the table below:
In LEI
31 December 2023
31 December 2022
At 1 January
-
-
Proceeds from loans
94,121,516
-
Loan repayments
(32,135,621)
Related interest
331,773
-
Foreign exchange differences
1,356,753
-
At 31 December
63,674,421
-
In January 2023, EVERGENT Investments contracted from Banca Comercială Romană (BCR) a revolving loan facility as overdraft, of maximum 19,200,000 euro, with floating interest rate, for investments in listed shares.
The loan facility was contracted for a period of 12 months (initial due date: 17 January 2024), with automatic extension of the due date by successive periods of 12 months, if neither party notifies the termination of the contract at least 30 calendar days prior to the initial due date. The due date of the loan facility was extended by 12 months, until 17 January 2025.
At 31 December 2023, EVERGENT Investments established the following guarantees in favor of BCR:
• movable mortgage on accounts opened by the Company with BCR;
• movable mortgage on the 10,000,000 lei collateral established at BCR;
• movable mortgage on 8,044,831 Banca Transilvania shares held by the Company.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
193
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
21. LEASE LIABILITIES
31 December
31 December
In LEI
2023
2022
Gross lease liabilities
Lease liabilities (over 5 years)
1,990,865
2,253,133
Lease liabilities (between 1 and 5 years)
2,005,216
1,801,143
Lease liabilities (up to 1 year)
655,384
544,119
Total gross liabilities
4,651,465
4,598,395
Lease liabilities
Lease liabilities (over 5 years)
1,011,803
1,459,441
Lease liabilities (between 1 and 5 years)
1,747,501
1,547,834
Lease liabilities (up to 1 year)
544,589
449,664
Total
3,303,893
3,456,939
The Company registers leases the main object of which is transport, office areas and lands. Assets representing rights of use in leases are presented in note 19.
Expenses related to short-term leases are presented in note 12 Other operating expenses.
22. DIVIDENDS PAYABLE
In LEI
31 December 2023
31 December 2022
Dividends payable for 2012
641
641
Dividends payable for 2013
985
985
Dividends payable for 2014
162,380
162,380
Dividends payable for 2015
167,010
167,010
Dividends payable for 2016
162,414
162,414
Dividends payable for 2017
195,956
196,239
Dividends payable for 2018
117,587
117,720
Dividends payable for 2019
247,947
14,444,573
Dividends payable for 2020
10,448,442
10,673,557
Dividends payable for 2021
16,023,589
16,708,289
Dividends payable for 2022
22,423,316
-
Total dividends payable
49,950,267
42,633,808
Dividends payable, not collected within 3 years from the date of their release, are prescribed according to the law and registered to equity, with the exception of amounts garnished according to the law (e.g, if the amounts owed to shareholders as dividends are subject to enforcement procedures).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
194
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
23. a) FINANCIAL LIABILITIES AT AMORTIZED COST
In LEI
31 December 2023
31 December 2022
Suppliers and accrued expenses
1,242,655
1,478,303
Payments to be made to companies in the portfolio
-
1,365,000
Other financial liabilities
24,540
27,800
Total
1,267,195
2,871,103
23. b) OTHER LIABILITIES
In LEI
31 December 2023
31 December 2022
Taxes and levies
2,677,521
1,678,622
Liabilities related to employees’ cash benefits plan
2,254,311
1,877,247
Liabilities related to salaries and other salary rights
968,718
586,572
Other liabilities
243,872
12,558
Total
6,144,422
4,154,999
Liabilities regarding the cash benefits plan represent the amounts that are to be offered to employees as profit-sharing and bonuses, in cash, in accordance with the Collective Employment Contract.
Liabilities regarding salaries and other salary rights include mainly the amounts that are to be paid, representing salaries, allowances for vacations not taken, medical leaves and other rights.
Taxes represent current liabilities, including current income tax payables, which have been paid by the Company on time.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
195
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
24. PROVISIONS FOR RISKS AND CHARGES
In LEI
31 December 2023
31 December 2022
Provisions for litigations
1,632,553
1,632,553
Total
1,632,553
1,632,553
In general, for the amounts ascertained by enforceable titles and enforced by the bailiffs, litigations were initiated by Authority for the Administrations of State Assets (AAAS). Provisions for litigations represent mainly the amounts collected by the Company through bailiffs in the period 2011 – 2016 and later challenged by AAAS, which the Company estimates that it is likely they will be collected.
The provision for litigation can be analyzed as follows:
In LEI
31 December 2023
31 December 2022
At 1 January
1,632,553
1,749,743
Setup
-
24,754
Reversal
-
(141,944)
At 31 December
1,632,553
1,632,553
In 2022, reversals of provisions owed to the settlement of certain legal disputes.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
196
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
25. DEFERRED INCOME TAX LIABILITIES
Deferred income tax liabilities at 31 December 2023 are generated by the elements detailed in the following table:
In LEI
Assets
Liabilities
Net
Financial assets at fair value through other comprehensive income
957,340,697
-
957,340,697
Tangible assets
7,228,815
-
7,228,815
Investment property
2,345,917
-
2,345,917
Provisions for litigations and other liabilities
-
(1,632,553)
(1,632,553)
Liabilities related to profit sharing and other benefits
-
(27,924,253)
(27,924,253)
Total
966,915,429
(29,556,806)
937,358,623
Net temporary differences, 16% rate
937,358,623
Deferred income tax liabilities
149,977,380
Deferred income tax liabilities at 31 December 2022 are generated by the elements presented in the table below:
In LEI
Assets
Liabilities
Net
Financial assets at fair value through other comprehensive income
577,028,760
-
577,028,760
Tangible assets
4,925,739
-
4,925,739
Investment property
3,212,586
-
3,212,586
Provisions for litigations and other liabilities
-
(1,632,553)
(1,632,553)
Liabilities related to cash profit and other benefits
-
(23,100,768)
(23,100,768)
Total
585,167,085
(24,733,321)
560,433,764
Net temporary differences, 16% rate
560,433,764
Deferred income tax liabilities
89,669,402
Deferred income tax directly recorded through the decrease of equity is 155,487,732 lei at 31 December 2023 (31 December 2022: 93,257,490 lei), being generated by financial assets measured at fair value through other comprehensive income for which the Company’s interest is under 10% and/or interest is for a period of time under one year and property, plant and equipment.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
197
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26. CAPITAL AND RESERVES
a) Share Capital
The structure of the Company’s shareholding structure at 31 December 2023 and 31 December 2022 is presented in the tables below:
31 December 2023
No. of shareholders
No. of shares
Nominal value (lei)
(%)
Individuals
5,740,158
363,730,993
36,373,099
38%
Companies
145
598,022,599
59,802,260
62%
Total
5,740,303
961,753,592
96,175,359
100%
31 December 2022
No. of shareholders
No. of shares
Nominal value (lei)
(%)
Individuals
5,743,143
368,245,711
36,824,571
38%
Companies
155
593,507,881
59,350,788
62%
Total
5,743,298
961,753,592
96,175,359
100%
All shares are ordinary and have been subscribed and paid in full at 31 December 2023 and 31 December 2022. All shares have the same voting right and a nominal value of 0,1 lei/share. The number of shares authorized for issue is equal to that of issued shares.
Thus, the share capital at 31 December 2023 had a nominal value of 96,175,359 lei (31 December 2022: 96,175,359 lei).
At 31 December 2023, the difference of 403,813,278 lei between the book value of the share capital of 499,988,637 lei and its nominal value, is the inflation difference generated by the application of IAS 29 “Financial reporting in hyperinflationary economies” up to 1 January 2004.
In 2023, there were no changes in the Company’s share capital.
In July 2022, the Company’s share capital was decreased from 98,121,305.10 lei to 96,175,359.2 lei, divided in 961,753,592 shares with a nominal value of 0.10 lei, following the annulment of a number of 19,459,459 treasury shares bought back by the Company, in accordance with the Resolution of the Extraordinary General Meeting of Shareholders of EVERGENT Investments of 20 January 2022.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
198
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26. CAPITAL AND RESERVES
b) Reserves from the revaluation of assets measured at fair value through other comprehensive income
This reserve includes the accumulated net fair value modifications of financial assets measured at fair value through other comprehensive income from the date of their classification in this category until the date of derecognition or impairment.
Reserves from the revaluation of financial assets measured at fair value through other comprehensive elements are registered at value net of deferred tax. The value of the deferred income tax recognized directly through the decrease of equity is presented in note 16 d).
c) Legal reserves
According to legal requirements, the Company sets up legal reserves of 5% of the registered profit in accordance with statutory accounting regulations applicable, up to 20% of the share capital. The value of the legal reserve at 31 December 2023 is 20,763,584 lei (31 December 2022: 20,763,584 lei), and is included in retained earnings.
Legal reserves cannot be distributed to shareholders and are included in retained earnings.
d) Dividends
In the General Meeting of Shareholders on 27 April 2023, the Company’s shareholders approved the distribution of a gross dividend of 0.09 lei/share (total 82,695,517 lei), corresponding to the statutory profit of the 2021 financial year, consisting of the net profit and net gain reflected in retained earnings from the sale of FVTOCI equity instruments.
9 June 2023 was approved as registration date (former date 8 June 2023), and 28 June 2023 as date of payment of the dividend.
In the General Meeting of Shareholders on 29 April 2022, the Company’s shareholders approved the distribution of a gross dividend of 0.065 lei/share (total 62,052,983 lei), corresponding to the statutory profit of 2021 financial year, consisting of the net profit and net gain reflected in retained earnings from the sale of FVTOCI equity instruments.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
199
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26. CAPITAL AND RESERVES (continued)
e) Own shares
The total number of own shares held by the Company at 31 December 2022 is 51,742,535 representing 5.38% of the share capital (31.12.2022: 31,847,896 shares, representing 3.31% of the share capital) in total 66,642,400 lei (31.12.2022: worth 38,991,230 lei).
The evolution of the number of shares (and their value) in 2023 and 2022 is the following:
Own shares
Balance at 1 January 2023
Purchases during the period
Annulments during the period
Allocations during the periods (directors and employees)
Balance at
31 December 2023
Buy-back program approved by EGMS on 27 April 2023
-
9,200,000
-
(182,465)
9,017,535
Buy-back program approved by EGMS on 28 April 2022
8,400,000
19,625,000
-
(8,400,000)
19,625,000
Buy-back program approved by EGMS on 20 January 2022
23,100,000
-
-
-
23,100,000
Buy-back program approved by EGMS on 27 April 2020
347,896
-
-
(347,896)
-
Total no. of shares
31,847,896
28,825,000
-
(8,930,361)
51,742,535
Total share value (Lei)
38,991,230
38,842,825
-
(11,191,655)
66,642,400
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
200
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26. CAPITAL AND RESERVES (continued)
e) Own shares (continued)
Own shares
Balance at 1 January 2022
Purchases during the period
Annulments during the period
Allocations during the periods (directors and employees)
Balance at
31 December 2022
Buy-back program approved by EGMS on 28 April 2022
-
8,400,000
-
-
8,400,000
Buy-back program approved by EGMS on 20 January 2022
-
23,100,000
-
-
23,100,000
Buy-back program approved by EGMS on 29 April 2021
19,459,459
-
(19,459,459)
-
-
Buy-back program approved by EGMS on 27 April 2020
4,190,048
-
-
(3,842,152)
347,896
Total no. of shares
23,649,507
31,500,000
(19,459,459)
(3,842,152)
31,847,896
Total share value (Lei)
41,119,507
38,566,162
(35,999,999)
(4,694,440)
38,991,230
Within the buyback program approved by the EGMS on April 28, 2022, the Company initiated in December 2022 and completed in January 2023 the public tender to buy own shares with the following main characteristics:
• number of treasury shares bought back in the offer: 19,625,000 , representing 2.0405 % of the share capital
• purchase price : 1.41 lei per share
• offer period : 22 December 2022 – 6 January 2023
• intermediary of the offer : BT Capital Partners SA
The purpose of the program is the decrease of the share capital by annulling the shares bought back, as per EGMS Resolution no . 2 of 28 April 2022.
To implement buy-back program no. 8 approved by the EGMS of 27 April 2023, the Company made buy-backs of 9,200,000 own shares during 17.05 - 28.11.2023 (representing 0.956% of the share capital), in order to carry out stock option plans.
In 2023, a number of 8,930,361 shares (2022: 3,842,152 shares) were allocated to directors, officers and employees under the stock option plan (SOP) related to 2021 (2022: SOP 2020), in observance of the provisions of ESMA Guidelines no. 232/2013 on sound remuneration policies under the AIFM, the AIFM Remuneration policy of directors, officers and employees of the Company – Chapter 7 and the provisions of article 14 of the Company’s Articles of Association.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
201
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
26. CAPITAL AND RESERVES (continued)
f) Equity-based payments to employees, directors and officers
Equity-based payments to employees, directors and administrators represent the value of benefits regarding the benefit plan of managers, directors and employees through SOP programs, the part offered in shares. The following SOP programs are outstanding at 31 December 2023, and 31 December 2022:
In LEI
31 December
2023
31 December
2022
SOP 2021
-
10,850,388
SOP 2022
9,905,947
9,915,392
SOP 2023
14,975,431
-
Total
24,881,378
20,765,780
Options that may be exercised at the beginning of the reporting period, which were fully exercised in 2023 relate to SOP 2021 shares, in amount of 10,850,388 lei (8,930,361 shares) allocated in Q2 of 2023 for 1.2150 lei/share (closing price on 27 April 2022).
Options granted in 2023 and may be exercised at the end of the reporting period, relate to SOP 2022 shares, in amount of 9,905,947 lei (7,708,908 shares) and will be allocated in Q2 of 2024 for 1.2850 lei/share (closing price on 26 April 2023).
There were no options that expired or were lost in 2023 and 2022.
Shares corresponding to SOP 2023 are the equivalent of 14,975,431 lei and will be allocated in 2025 for a market price provided in SOP 2023, which will be submitted for approval to the Board of Administration, after the financial statements are approved. The number of shares based on the closing price of 31 December 2023 (1.27 lei/share) is estimated at 11,791,678.
g) Other items of equity
Other items of equity include acquisition costs for treasury shares (commissions and fees and other costs related their acquisition) and the gain/loss on allocation of treasury shares to administrators, officers and employees, as share-based benefits (the difference between value at granting price and the value at acquisition price of treasury shares).
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
202
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
27. EARNINGS PER SHARE
The calculation of the basic earnings per share was made based on the profit attributable to ordinary shareholders and weighted average number of outstanding ordinary shares (without bought-back shares):
In LEI
Note
31 December 2023
31 December 2022
Net profit assignable to the Company’s shareholders
124,733,425
82,853,635
Weighted average number of outstanding ordinary shares
913,537,589
947,657,151
Basic earnings per share (net profit per share)
0.1365
0.0874
Net profit assignable to the Company’s shareholders
124,733,425
82,853,635
Net gain registered in retained earnings attributable to shareholders (from the sale of financial assets at fair value through other comprehensive income)
79,023,327
35,081,104
Average weighted number of outstanding ordinary shares
913,537,589
947,657,151
Basic earnings per share (including earnings from the sale of FVTOCI financial assets)
3(v)
0.2230
0.1244
27. EARNINGS PER SHARE (continued)
Diluted earnings per share are equal to the basic earnings per share since the Company has not registered potential ordinary shares.
Basic and diluted earnings per share are calculated based on net income, which includes, in addition to net profit, the gain on the sale of FVTOCI financial assets.
The company also presents in the financial statements, together with the basic and diluted earnings per share, the basic and diluted result per share (including the gain from the sale of FVTOCI financial assets), because along with the net profit, the gain from the sale of FVTOCI financial assets is considered an indicator of the Company's performance and is a potential source for dividend distribution to the Company's shareholders.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
203
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
28. COMMITMENTS AND CONTINGENT LIABILITIES
a) Legal disputes
At 31 December 2023, the Company was involved in lawsuits as either plaintiff or defendant.
For lawsuits where Company acts as plaintiff/defendant whose object influences the Company’s patrimony, litigation provisions were setup.
Most lawsuits where the Company acts as plaintiff are those against the Authority for State Assets Management (“AAAS”). For amounts claimed by the Company and won through final court orders, receivables from AAAS were registered, for most of which the enforcement procedure was initiated. Impairment allowances were recorded for such receivables (see Explanatory note 17 a) ).
Contingent liabilities corresponding to the lawsuits where the Company acts as defendant are detailed below:
In LEI
2023
2022
1 January
-
233,607
Setups during the period
-
26,705
Lawsuits settled during the period
-
(260,312)
31 December
-
-
Of total contingent assets registered at 31 December 2023 and 31 December 2022 of 8,834,840 lei (31 December 2022: 9,207,386 lei), the amount of 5,111,090 lei (31 December 2022: 5,111,090 lei) represents the value of shares held by the Company in Vastex SA, as per Law 151/2014, and the court order, following the Company’s withdrawal from the shareholding of Vastex SA.
b) Contingencies related to the environment
The Company has not registered any type of liabilities at 31 December 2023 and 31 December 2022 for anticipated costs, including legal and consultancy fees, location surveys, design and implementation of remedy plans concerning the environment.
The management of the Company does not consider the expenses related to possible environment issues to be of significance.
c) Transfer pricing
The Romanian tax legislation has been providing rules on transfer pricing between affiliates ever since 2000. The current legislative framework defines the principle of “market value” for transactions between affiliates as well as the methods of determining transfer prices. Thus, it is probable that the tax authorities should conduct verifications of the transfer pricing to verify that the tax result and/or customs value of imported goods is not distorted by the effect of the prices practiced in the relations with affiliates. The Company cannot measure the result of such verifications.
The Company does not have significant transactions with related parties.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
204
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
29. TRANSACTIONS AND BALANCES WITH RELATED PARTIES
In the normal course of business, the Company has identified the following related parties:
List of subsidiaries and interest percentage:
31 December
2023
31 December
2022
Agrointens SA
99.99%
99.99%
Casa SA
99. 77 %
99. 60 %
Mecanica Ceahlău SA
73.30%
73.30%
Regal SA
93.89%
93.02%
EVER IMO SA
99.99%
99.99%
Everland SA
99.99%
99.99%
EVER AGRIBIO SA
99.99%
99.99%
VISIONALFA Investments SA*
99.99%
99.99%
A3 Snagov SRL**
99.99%
99.99%
* On 25 July 2023, the EGMS of subsidiary VISIONALFA Investments SA approved the temporary suspension of the company’s activity and declared its fiscal inactivity, for a period of 3 years.
**Subsidiary A3 Snagov SRL, established in June 2021, is indirectly owned by the Company, through Everland SA, which owns 100% of its shares.
In 2023, the Company took part in the increase of share capital of subsidiary Casa SA, by cash contribution in amount of 15,300,000 lei, and of subsidiary Agrointens SA, by cash contribution in amount of 6,250,000 lei, fully paid in at 31 December 2023, and paid in 1,365,000 lei from the share capital increase of EVER AGRIBIO SA of December 2022.
In 2022, the Company took part in capital increases of its subsidiaries:
• VISIONALFA Investments SA: by cash contribution , in amount of 249,975 lei, a company newly established in Q3 2022;
• EVER AGRIBIO SA: by cash contribution in amount of 124,990 Lei and in-kind contribution – land worth 1,709,300, a company newly established in Q3 2022 ,
• Agrointens SA: by cash contribution , in amount of 4,845,000 lei.
In 2023 and 2022, the Company did not sell any subsidiaries.
Associates of the Company
The Company holds an investment in an associated entity at 31 December 2023 and 31 December 2022, Străuleşti Lac Alfa S.A., with 50% ownership.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
205
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
29. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)
At the end of the reporting period, the following balances correspond to transactions with related parties:
In LEI
31 December
2023
31 December
2022
CASA SA
Other financial assets at amortized cost
25,065
2,546
Financial liabilities
111,159
98,148
EVER IMO SA
Corporate bonds at amortised cost
17,606,400
17,606,400
Other financial assets at amortised cost
109,166
108,976
Other assets
11,199
10,110
Lease liabilities
2,186,430
2,421,297
Financial liabilities
31,928
12,361
EVER AGRIBIO SA
Financial liabilities
-
1,365,000
In 2023 and 2022, the following transactions were carried out within the group, representing mainly dividends, bond interest, rents and delivery of management and archiving services.
In LEI
2023
2022
EVERLAND SA
Other operating income
1,604
1,599
CASA SA
Other operating income
560,567
364,328
Other operating income
1,016,739
866,848
REGAL SA
Dividend income
-
1,518,111
EVER IMO SA
Interest income
1,533,000
1,533,000
Other operating expenses
203,741
153,891
Interest expenses with lease liabilities
58,129
64,101
STRAULESTI LAC ALFA
Interest income
-
1,310,022
Gross dividend income
-
3,553,026
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
206
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
29. TRANSACTIONS AND BALANCES WITH RELATED PARTIES (continued)
Key Management Staff
At 31 December 2023 and 31 December 2022 the members of the Board of Directors were Mr. Liviu Claudiu Doroş (President of the Board of Directors and CEO), Mr. Cătălin Jianu Dan Iancu (Vice-president of the Board of Directors and Deputy CEO), Mr. Costel Ceocea (Non-Executive Director), Mr. Horia Ciorcilă (Non-Executive Director) and Mr. Octavian Claudiu Radu (Non-Executive Director).
The key management staff includes the members of the Board of Directors and Management Committee of the Company.
The remuneration for 2023 and 2022 are presented in the table below:
31 December 2023
31 December 2022
Board of Directors
13,217,325
9,860,045
Management Committee
7,794,833
5,860,270
Total, of which:
21,012,158
15,720,315
Share-based payment
10,907,474
6,379,200
Detailed information regarding the compensation and benefits offered to the members of the Board of Directors and Management Committee are presented in explanatory note 11.
The Company does not offer post-employment benefits or benefits for the termination of the employment contract to its key personnel.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
207
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
30. SUBSEQUENT EVENTS
The public offering for the buying of own shares
During 8 – 19 January 2024, the Company carried out the public offering for the purchase of treasury shares with the following characteristics:
• number of treasury shares bought back in the offer: 10,000,000 , representing 1.0398 % of the share capital
• purchase price : 1.45 lei per share
• intermediary of the offer : BT Capital Partners SA
The purpose of the program is the decrease of the share capital by annulling the shares bought back, as per EGMS Resolution no . 2 of 27 April 2023 .
Loan facilities
In January 2024, EVERGENT Investments concluded an addendum whereby it extended by 12 months the revolving loan facility in the form of overdraft, which it contracted from Banca Comercială Romană in January 2023, with a maximum value of 19,200,000 euro, with an initial due date of 12 months, with the aim of capitalising on market opportunities.
Also in January 2023, EVERGENT Investments contracted a multi-product revolving credit facility from Banca Comercială Romană, in the form of object loan, for a period of 24 months of which a 12-month withdrawal period, with a maximum value of 10,000,000 euro, with the aim of purchasing listed shares.
Image should be here
EXPLANATORY NOTES TO THE SEPARATE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
(All amounts are presented in Lei, unless otherwise stated)
208
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
30. SUBSEQUENT EVENTS (continued)
Sales, purchases of properties and contributions to the share capital of subsidiaries CASA SA and EVER IMO SA
On 28 February 2024, the Board of Directors of EVERGENT Investments approved:
• the purchase of a property worth 5,441,600 lei from subsidiary CASA SA and the sale to such subsidiary of a property worth 7,572,000 lei, both located in Bacău.
• The contribution of certain properties in amount of 1,108,900 lei located in Iași and Vaslui to the share capital of subsidiary CASA SA;
• The contribution of certain properties in amount of 4,975,000 lei, located in Bucharest to the share capital of EVER IMO SA.
Cash contributions to share capital increases
On 28 February 2024, the Board of Directors of EVERGENT Investments approved also:
• The increase of the share capital of the subsidiary EVER IMO S.A. with a cash contribution in amount of 2,100,000 lei ;
• The increase of the share capital of the subsidiary AGROINTENS SA with a cash contribution in amount of 7,650,000 lei ;
• Subscribing and payment of the amount of 4,950,000 lei as part of the subsequent increase of the share capital of mWare Solutions.
The separate financial statements were approved by the Board of Directors on 25 March 2024 and signed on its behalf by:
Claudiu Doroş Mihaela Moleavin
Chairman, CEO Finance Director
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
209
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Annex 3
STATEMENT OF LITIGATIONS 31.12.2023
Annex 1
Statement of pending litigations with object annulment of GMS resolutions for companies in Evergent Investments’ Portfolio – quality: plaintiff
No.
Company
Object
Litigation status
Observations
1
Dyonisos Cotesti
Annulment of OGMS decision on 14.04.2022
Evergent’s appeal
2*
Dyonisos Cotesti
Annulment of OGMS decision on 02.06.2023
Merits
3*
Rulmenti Barlad
Annulment of OGMS decision on 30.05.2023
Action dismissed
With appeal
4*
Brikston Construction
Annulment of OGMS decision on 12.05.2023
Appeal
5*
Vastex SA – in bankruptcy
Annulment of OGMS decision on 29.05.2023
Action allowed
Vastex SA’s appeal
SOLVED LITIGATIONS
1
Vastex SA – in bankruptcy
Annulment of EGMS decision on 14.04.2022
Action dismissed
2
Rulmenti Barlad
Annulment of OGMS decision on 31.05.2022
Evergent’s appeal dismissed
3
Vastex SA - în Bankruptcy
Annulment of OGMS decision on 14.04.2022
Action dismissed
4
Martens SA
Annulment of EGMS resolution on 28.04.2022
Action dismissed
5
Martens SA
Annulment of BD resolution on 03.12.2021
Action dismissed
6
Vastex SA – in bankruptcy
Annulment of EGMS resolution on 12.12.2022
Evergent’s appeal dismissed
7
Brikston Construction
Annulment of OGMS decision on 28.04.2022
Action dismissed
Statement of pending litigations with object claims- Evergent Investments SA acting as plaintiff
No.
Company/natural individual respondent
Claims value in lei
Object
Observations
1
AIPC
3,479.45
enforcement
2
AAAS
3,765.75
enforcement
3
AAAS
3,817.58
enforcement
4
A.A.A.S.
1,040.34
enforcement
5
A.A.A.S.
5,790.02
enforcement
6
A.A.A.S.
572,355.55
enforcement
7
A.A.A.S.
7,281,457.98
enforcement
8
A.A.A.S.
649,141.66
enforcement
9
A.A.A.S.
1,556,338.07
enforcement
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
210
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
10
A.A.A.S.
193,989.15
enforcement
11
A.A.A.S.
454,371.95
enforcement
12
A.A.A.S.
1,338,494.26
enforcement
13
A.A.A.S.
1,369,220.26
enforcement
14
A.A.A.S.
1,416,542.50
enforcement
15
A.A.A.S.
1,600,412.04
enforcement
16
A.A.A.S.
545,128.79
enforcement
17
A.A.A.S.
13,978.84
enforcement
18
A.A.A.S.
29,858.47
enforcement
19
A.A.A.S.
6,126.20
enforcement
20
A.A.A.S.
141,712.76
enforcement
21
AAAS
275.88
enforcement
22
A.A.A.S.
1,784,704.61
enforcement
23
A.A.A.S.
1,875,749.20
enforcement
24
A.A.A.S.
1,169,768.24
enforcement
25
A.A.A.S.
1,488,975.30
enforcement
26
A.A.A.S.
1,455,363.70
enforcement
27
A.A.A.S.
16,878.26
enforcement
28
A.A.A.S.
1,716.10
enforcement
29
A.A.A.S.
49,037.93
enforcement
30
A.A.A.S.
2,390.06
enforcement
31
A.A.A.S.
34,678.23
enforcement
32
A.A.A.S.
2,138.94
enforcement
33
A.A.A.S.
38,560.30
enforcement
34
A.A.A.S.
2,228.53
enforcement
35
A.A.A.S.
28,754.21
enforcement
36
A.A.A.S.
3,060.53
enforcement
37
A.A.A.S.
45,528.24
enforcement
38
A.A.A.S.
34,781.34
enforcement
39
A.A.A.S.
2,307.09
enforcement
40
A.A.A.S.
14,171.81
enforcement
41
A.A.A.S.
2,273.67
enforcement
42
A.A.A.S.
2,437.04
enforcement
43
A.A.A.S.
2,596.66
enforcement
44
A.A.A.S.
21,201.69
enforcement
45
A.A.A.S.
26,203.93
enforcement
46
A.A.A.S.
2,502,031.47
enforcement
47
A.A.A.S.
1,810,944.22
enforcement
48
A.A.A.S.
1,738,592.80
enforcement
49
A.A.A.S.
2,522,514.86
enforcement
50
A.A.A.S.
1,370,335.00
enforcement
51
A.A.A.S.
1,060,504.31
enforcement
52
A.A.A.S.
2,276,032.16
enforcement
53
A.A.A.S.
296,474.57
enforcement
54
A.A.A.S.
2,896,842.39
enforcement
55
A.A.A.S.
1,790,573.11
enforcement
56
A.A.A.S.
125,677.45
enforcement
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
211
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
57
A.A.A.S.
1,871,909.72
enforcement
58
A.A.A.S.
3,370,978.56
enforcement
59
A.A.A.S.
10,546.63
enforcement
60
A.A.A.S.
462,506.29
enforcement
61
A.A.A.S.
2,014,036.50
enforcement
62
A.A.A.S.
1,993,866.68
enforcement
63
A.A.A.S.
2,111,890.61
enforcement
64
A.A.A.S.
3,188,636.51
enforcement
65
A.A.A.S.
190,943.94
enforcement
66
A.A.A.S.
581.74
enforcement
67
A.A.A.S.
439,712.67
enforcement
68
A.A.A.S.
3,006.84
enforcement
69
AAAS
1,478.36
enforcement
70
AAAS
2,258.14
enforcement
71
AAAS
3,235.37
enforcement
72
AAAS
2,508.58
enforcement
73
AAAS
3,183.39
enforcement
74
AAAS
4,100.80
enforcement
75
AAAS
4,558.43
enforcement
76
AAAS
4,876.07
enforcement
77
AAAS
4,203.40
enforcement
78
AAAS
3,206.06
enforcement
79
AAAS
4,251.10
enforcement
80
AAAS
3,542.57
enforcement
81
AAAS
4,836.68
enforcement
82
AAAS
2,837.49
enforcement
83
AAAS
4,351.54
enforcement
84
AAAS
4,326.77
enforcement
85
AAAS
4,301.25
enforcement
86
AAAS
4,318.94
enforcement
87
AAAS
4,325.80
enforcement
88
AAAS
4,326.64
enforcement
89
AAAS
1,666.39
enforcement
90
AAAS
2,823.14
enforcement
91
AAAS
1,857.76
enforcement
92
AAAS
3,838.86
enforcement
93
AAAS
3,719.45
enforcement
94
AAAS
3,766.46
enforcement
95
AAAS
3,767.00
enforcement
96
AAAS
3,752.03
enforcement
97
AAAS
3,705.67
enforcement
98
AAAS
3,786.44
enforcement
99
AAAS
2,483.51
enforcement
100
AAAS
1,863.09
enforcement
101
AAAS
3,748.78
enforcement
102
AAAS
1,896.39
enforcement
103
AAAS
3,012.23
enforcement
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
212
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
104
DGFRP
2,660.18
enforcement
105
AAAS
1,708.19
enforcement
106
AAAS
1,962.64
enforcement
107
AAAS
3,169.44
enforcement
108
AAAS
1,278
enforcement
109
AAAS
3,149.10
enforcement
110
AAAS
1,983.74
enforcement
111
AAAS
1,748.81
enforcement
112
AAAS
3,146.18
enforcement
113*
AAAS
1,864.74
enforcement
114*
AAAS
1,649.92
enforcement
115*
AAAS
2,943.74
enforcement
116*
Cantoreanu Ioan Florin
10,228.85
enforcement
117
Romanian State
Civil liability
claims
EVERGENT’s appeal allowed. Partly allowed. with recourse
118
SNGN Romgaz
281,373
claims
Final since no appeal filed. Payment order.
119*
Cantoreanu Ioan Florin
7,481
claims
Action allowed. With appeal.
120*
Romanian State
Civil liability
claims
Litigations pending on the merits
121*
Accesorii Polka Dots SRL
29,513
claims
Litigations pending on the merits
TOTAL:
59,818,517.50
Statement of pending litigations where EVERGENT Investments acts as plaintiff – files related to claims
No.
Company
Object
Litigation status
Observations
1
Inco Industry SRL s.a.
intervention-usucapio
Action dismissed
Evergent and Inco’s appeal
2
Vastex; Delkimvas
Garnishment challenge
Stay proceedings
3
Vastex; Perpetuus Com
Garnishment challenge
Stay proceedings
4
Vastex, Rovitec Cons
Garnishment challenge
Stay proceedings
5
Vastex, Nechita Prestserv
Garnishment challenge
Stay proceedings
6
Vastex, Lexfan Fitness
Garnishment challenge
Stay proceedings
7
Vastex, Connected- Dval
Garnishment challenge
Stay proceedings
8*
Fortus Iasi
bankruptcy/obligation to do
Litigation pending on the merits
9*
AAAS
Approval of real estate enforcement
Evergent’s recourse
10*
Conimpuls Bacau
Declaratory action
Litigation pending on the merits
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
213
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
11*
AAAS/Romanian State
complaint CF registration 159029/DE 244/2012
Litigation pending on the merits
12*
AAAS/Romanian State
complaint CF registration 159029/DE 187/2011
Litigation pending on the merits
13*
AAAS/Romanian State
complaint CF registration 159029/DE 528/2010
Litigation pending on the merits
14*
AAAS/Romanian State
complaint CF registration 159029/DE 46/2011
Litigation pending on the merits
15*
AAAS/Romanian State
complaint CF registration 159039/DE 244/2012
Litigation pending on the merits
16*
AAAS/Romanian State
complaint CF registration 159039/DE 187/2011
Litigation pending on the merits
17*
AAAS/Romanian State
complaint CF registration 159039/DE 528/2010
Litigation pending on the merits
18*
AAAS/Romanian State
complaint CF registration 159039/DE 46/2011
Litigation pending on the merits
19*
AAAS/Romanian State
complaint CF registration 158897/DE 244/2012
Litigation pending on the merits
20*
AAAS/Romanian State
complaint CF registration 158897/DE 187/2011
Litigation pending on the merits
21*
AAAS/Romanian State
complaint CF registration 158897/DE 528/2010
Litigation pending on the merits
22*
AAAS/Romanian State
complaint CF registration 158897/DE 46/2011
Litigation pending on the merits
23*
AAAS/Romanian State
complaint CF registration 131219/DE 244/2012
Litigation pending on the merits
24*
AAAS/Romanian State
complaint CF registration 131219/DE 187/2011
Litigation pending on the merits
25*
AAAS/Romanian State
complaint CF registration 131219/DE 528/2010
Litigation pending on the merits
26*
AAAS/Romanian State
complaint CF registration 131219/DE 46/2011
Litigation pending on the merits
27*
AAAS/Romanian State
complaint CF registration 158923/DE 244/2012
Litigation pending on the merits
28*
AAAS/Romanian State
complaint CF registration 158923/DE 187/2011
Litigation pending on the merits
29*
AAAS/Romanian State
complaint CF registration 158923/DE 528/2010
Litigation pending on the merits
30*
AAAS/Romanian State
complaint CF registration 158923/DE 46/2011
Litigation pending on the merits
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
214
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
31*
AAAS/Romanian State
complaint CF registration 158930/DE 244/2012
Litigation pending on the merits
32*
AAAS/Romanian State
complaint CF registration 158930/DE 187/2011
Litigation pending on the merits
33*
AAAS/Romanian State
complaint CF registration 158930/DE 528/2010
Litigation pending on the merits
34*
AAAS/Romanian State
complaint CF registration 158930/DE 46/2011
Litigation pending on the merits
35*
AAAS/Romanian State
Complaint CF registration 158944/DE 244/2012
Litigation pending on the merits
36*
AAAS/Romanian State
Complaint CF registration 158944/DE 187/2011
Litigation pending on the merits
37*
AAAS/Romanian State
Complaint CF registration 158944/DE 528/2010
Litigation pending on the merits
38*
AAAS/Romanian State
Complaint CF registration 158944/DE 46/2011
Litigation pending on the merits
39*
AAAS/Romanian State
Complaint CF registration 158946/DE 244/2012
Litigation pending on the merits
40*
AAAS/Romanian State
Complaint CF registration 158946/DE 187/2011
Litigation pending on the merits
41*
AAAS/Romanian State
Complaint CF registration 158946/DE 528/2010
Litigation pending on the merits
42*
AAAS/Romanian State
complaint CF registration 158946/DE 46/2011
Litigation pending on the merits
43*
AAAS/Romanian State
complaint CF registration 158890/DE 244/2012
Litigation pending on the merits
44*
AAAS/Romanian State
complaint CF registration 158890/DE 187/2011
Litigation pending on the merits
45*
AAAS/Romanian State
complaint CF registration 158890/DE 528/2010
Litigation pending on the merits
46*
AAAS/Romanian State
complaint CF registration 158890/DE 46/2011
Litigation pending on the merits
47*
AAAS/Romanian State
complaint CF registration 158889/DE 244/2012
Litigation pending on the merits
48*
AAAS/Romanian State
complaint CF registration 158889/DE 187/2011
Litigation pending on the merits
49*
AAAS/Romanian State
complaint CF registration 158889/DE 528/2010
Litigation pending on the merits
50*
AAAS/Romanian State
complaint CF registration 158889/DE 46/2011
Litigation pending on the merits
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
215
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
51*
AAAS/Romanian State
complaint CF registration 158915/DE 244/2012
Litigation pending on the merits
52*
AAAS/Romanian State
complaint CF registration 158915/DE 187/2011
Litigation pending on the merits
53*
AAAS/Romanian State
complaint CF registration 158915/DE 528/2010
Litigation pending on the merits
54*
AAAS/Romanian State
complaint CF registration 158915/DE 46/2011
Litigation pending on the merits
55*
AAAS/Romanian State
complaint CF registration 159036/DE 244/2012
Litigation pending on the merits
56*
AAAS/Romanian State
complaint CF registration 159036/DE 187/2011
Litigation pending on the merits
57*
AAAS/Romanian State
complaint CF registration 159036/DE 528/2010
Litigation pending on the merits
58*
AAAS/Romanian State
complaint CF registration 159036/DE 46/2011
Litigation pending on the merits
59*
AAAS/Romanian State
complaint CF registration 158886/DE 244/2012
Litigation pending on the merits
60*
AAAS/Romanian State
complaint CF registration 158886/DE 187/2011
Litigation pending on the merits
61*
AAAS/Romanian State
complaint CF registration 158886/DE 528/2010
Litigation pending on the merits
62*
AAAS/Romanian State
complaint CF registration 158886/DE 46/2011
Litigation pending on the merits
63*
AAAS/Romanian State
complaint CF registration 131224
Litigation pending on the merits
64*
AAAS/Romanian State
complaint CF registration 159033
Litigation pending on the merits
65*
AAAS/Romanian State
complaint CF registration 156393
Litigation pending on the merits
66*
AAAS
Approval of real estate enforcement
Request dismissed as lacking interest. Evergent’s appeal
SOLVED LITIGATIONS
1
Vastex, Lotex General
Garnishment challenge
Orders the closing of the file.
2
Criminal complaint
Complaint dismissed
3
Groza Daniel
Enforcement challenge
Challenge dismissed.
4*
Romanian State
Displacement
Request dismissed
5*
Romanian State
Suspension
Request dismissed
6
Vastex, Castrum Corporation
Garnishment challenge
Dismissed as without object
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
216
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
7
Vastex, Lacautonacris
Garnishment challenge
Dismissed as without object
8
Vastex, Liceul Radu Miron
Garnishment challenge
Garnished third party’s appeal allowed
9
Vastex, Klique Graphics
Garnishment challenge
Dismissed as without object
10
Vastex S.A.
0.00
claims shares value Law 151/2014.
Vastex’s recourse dismissed
Statement of pending litigations with object insolvency (Evergent Investments SA acting as plaintiff -creditor)
No.
Company
Claim value in lei
Status
Observations
1
BIR
344.12
Bankruptcy
Procedure continues
2
Network Press
3,799.87
Bankruptcy
Procedure continues
3
Pantex S.A. Brasov
10.3
Bankruptcy
Procedure continues
4
Horticola SA
1,466,168.33
Insolvency
Procedure continues
5
Celule Electrice Bailesti
9,921.72
Insolvency
Procedure continues
6
Genko Med Group
93,835.07
Bankruptcy
Procedure continues
7
Vastex Vaslui
8,834,829.73
Orders the filing of bankruptcy. With appeal
Procedure continues
8*
First Bank SA
Challenge of rectified preliminary table
Action dismissed
First Bank S.A.’s appeal
9*
Vastex SA
Activity report challenge
Action dismissed
With appeal
10*
Vastex SA
Appeal against filing for bankruptcy
Action dismissed
Vastex S.A.’s appeal
11*
First Bank SA
Challenge of additional chart
pending
TOTAL LEI:
10,408,909.14
SOLVED LITIGATIONS
1
Vastex Vaslui
Presidential order
Evergent’s appeal allowed
2
Vastex Vaslui
Challenge of casual report
Challenge allowed
3
Vastex Vaslui
Challenge against the resolution of the Creditors’ Meeting on 11.11.2022
Challenge allowed.
4
Vastex Vaslui
Challenge of creditor table
Dismisses the appeals of First Bank and Castrum.
5*
Castrum Corporation
Challenge of judicial administrator appointment
Action dismissed
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
217
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Statement of pending litigations where Evergent Investments SA acts as respondent de parat
No.
Plaintiff
Claims value
Object
Observations
1
Spatariuc Maria
Resolution to replace authentic document
Litigation pending on the merits
2
Spatariuc Dumitru s.a.
Resolution to replace authentic document
Litigation pending on the merits
3
Dionisie Mirela s.a.
Resolution to replace authentic document
Dionisie Mirela’s appeal
4
Reuti Veronica
Document annulment
Litigation pending on the merits
5
Tibuleac Petrica Iulian
Resolution to replace authentic document
Litigation pending on the merits
6
Dron Cristina- Lotrisoara
Resolution to replace authentic document
Litigation pending on the merits
7
Cazacu Ioan
Resolution to replace authentic document
Split from file no. 9917/193/2021. Competence declined in favour of Botoşani Court
8
Placintaru Ion
Resolution to replace authentic document
Litigation pending on the merits
9*
Asavei Gheorghe
Obligation to do
Litigation pending on the merits
10*
Ever Imo/Octagon
Enforcement challenge
Litigation pending on the merits
11*
Nane Vasile
Resolution to replace authentic document
Litigation pending on the merits
SOLVED LITIGATIONS
1
Andrei Lina
Resolution to replace authentic document
Appeal dismissed. AAAS’ recourse .recourse ascertained as null
2*
Imobiliar Network
Providing of evidence
Request dismissed
LITIGATIONS AGAINST AAAS (plaintiff ) - EVER (respondent)
No.
Challenged amount in lei
Object
Status
Observations. Garnished third parties
1*
Challenge in annulment file 18677/299/ 2022
Extraordinary remedy
Treasury
2
Garnishment challenge
Challenge dismissed. AAAS’ appeal
Treasury
3
Garnishment challenge
Challenge dismissed. AAAS’ appeal
Treasury
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
218
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
4
Garnishment challenge
Challenge partly allowed. Evergent’s appeal
TP. Regal Galati
5
Enforcement challenge
Challenge dismissed. With appeal
Treasury
6
Enforcement challenge
Challenge dismissed. with appeal.
Treasury
7*
Enforcement challenge
Litigation pending on the merits
Treasury
8*
Enforcement challenge
Challenge dismissed. With recourse.
Treasury
9*
Enforcement challenge
Litigation pending on the merits
Treasury
10*
Enforcement challenge
Litigation pending on the merits
Treasury
11*
Enforcement challenge
Litigation pending on the merits
Treasury
12*
Enforcement challenge
Challenge dismissed. with appeal.
Treasury
13*
Enforcement challenge
Challenge dismissed. with appeal.
Treasury
14
Garnishment challenge
AAAS’ appeal allowed. Filing of chalenge in annulment EVERGENT
Treasury
15*
Challenge in annulment file no 17368/ 299/2022
Extraordinary means of attack
Treasury
16*
Enforcement challenge
Litigation pending on the merits
Treasury
17*
Challenge of real estate foreclosure
Litigation pending on the merits
18*
Challenge of real estate foreclosure
Litigation pending on the merits
SOLVED LITIGATIONS
1
Enforcement challenge
Appeals dismissed
Treasury
2
Enforcement challenge
AAAS’ appeal dismissed
Eximbank, Treasury S4 B
3
Garnishment challenge
AAAS’ appeal dismissed
Treasury
4
Garnishment challenge
AAAS’ appeal dismissed
Treasury
5
Garnishment challenge
AAAS’ appeal dismissed
Treasury
6
Garnishment challenge
Challenge dismissed
Treasury
7
Garnishment challenge
Evergent’s appeal dismissed
TP. Regal Galati
8
Garnishment challenge
Evergent’s appeal dismissed
TP. Regal Galati
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
219
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
9
Garnishment challenge
AAAS’ appeal dismissed
Treasury
10
Garnishment challenge
Evergent’s appeal dismissed
TP. Regal Galati
11
Garnishment challenge
AAAS’ appeal dismissed
Treasury
12
Garnishment challenge
AAAS’ appeal dismissed
Treasury
13
Garnishment challenge
AAAS’ appeal dismissed
Treasury
14
Garnishment challenge
Evergent’s appeal dismissed
TP. Regal Galati
15*
Challenge in annulment file 17696/299/2022
Evergent’s challenge in annulment dismissed
Treasury
16
Garnishment challenge
AAAS’ appeal dismissed
Treasury
17
Enforcement challenge
AAAS’ recourse allowed
* - new litigation, started in 2023
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
220
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Annex 4
Reports to BSE and FSA as of 31 December 2023
A. CURRENT REPORTS
➢ December 8, 2023: Threshold notification <5%
➢ November 29, 2023: Submission of Public Tender Offer for the purchase of EVER shares
➢ November 28, 2023: Completion of the 3 rd stage and closure of the share buyback program 8
➢ November 28, 2023: Notification - buyback 27 November 2023 - 28 November 2023
➢ November 27, 2023: Notification - buyback 20 November 2023 - 24 November 2023
➢ November 20, 2023: Holdings sales
➢ November 20, 2023: Notification - buyback 13 November 2023 - 17 November 2023
➢ November 15, 2023: Investors and analysts conference call on Q3 2023 results
➢ November 13, 2023: Notification - buyback 06 November 2023 - 10 November 2023
➢ November 6, 2023: Notification - buyback 27 October 2023 - 03 November 2023
➢ October 27, 2023: Notification - buyback 23 October 2023 - 26 October 2023
➢ October 27, 2023: Threshold notification >5%
➢ October 23, 2023: Notification - buyback 16 October 2023 - 20 October 2023
➢ October 16, 2023: Initiation of the 3 rd stage of the share buyback program No 8
➢ October 13, 2023: Completion of the 2 nd stage of the share buyback program No 8
➢ October 13, 2023: Notification - buyback 09 October 2023 - 12 October 2023
➢ October 12, 2023: Manager's transactions - Article 19 of Regulation (EU) No 596/2014
➢ October 9, 2023: Notification - buyback 02 October 2023 - 06 October 2023
➢ October 2, 2023: Notification - buyback 25 September 2023 - 29 September 2023
➢ September 25, 2023: Notification - buyback 18 September 2023-22 September 2023
➢ September 21, 2023: Manager's transactions - art.19 MAR
➢ September 18, 2023: Notification - buyback 11 September 2023 - 15 September 2023
➢ September 12, 2023: Auction Announcement Sale of Regal SA share package
➢ September 11, 2023: Notification – buyback 04 September 2023 – 08 September 2023
➢ September 4, 2023: Notification – buyback 28 August 2023 – 1 September 2023
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
221
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
➢ August 28, 2023: Notification – buyback 21 August 2023 – 25 August 2023
➢ August 21, 2023: Notification – buyback 11 August 2023 – 18 August 2023
➢ August 18, 2023: Manager's transactions - art.19 MAR
➢ August 11, 2023: Investors and analysts conference call on H1 2023 results
➢ August 11, 2023: Notification – buyback 07 August 2023 – 10 August 2023
➢ August 10, 2023: Threshold notification >5%
➢ August 7, 2023: Notification – buyback 31 July 2023 – 04 August 2023
➢ July 31, 2023: Notification – buyback 24 July 2023 – 28 July 2023
➢ July 24, 2023: Notification – buyback 17 July 2023 – 21 July 2023
➢ July 17, 2023: Notification – buyback 13 July 2023 – 14 July 2023
➢ July 11, 2023: Completion of 1 st stage and initiation of 2 nd stage of buyback program no. 8
➢ July 11, 2023: Notification – buyback 10 July 2023 – 11 July 2023
➢ July 10, 2023: Notification – buyback 3 July 2023 – 7 July 2023
➢ July 3, 2023: Notification – buyback 26 June 2023 – 30 June 2023
➢ June 27, 2023: Unauthorized use of the company’s name and image
➢ June 26, 2023: Notification – buyback 19 June 2023 – 23 June 2023
➢ June 19, 2023: Notification – buyback 12 June 2023 – 16 June 2023
➢ June 15, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
➢ June 12, 2023: Notification – buyback 6 June 2023 – 9 June 2023
➢ June 9, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
➢ June 6, 2023: Notification – buyback 29 May 2023 – 2 June 2023
➢ May 30, 2023: Information Document regarding the allocation of shares
➢ May 29, 2023: 2022 Dividend Payment
➢ May 29, 2023: Notification – buyback 23 May 2023 – 26 May 2023
➢ May 23, 2023: Notification – buyback 17 May 2023 – 22 May 2023
➢ May 19, 2023: Authorization of Banca Comercială Română as assets depository
➢ May 15, 2023: Initiation of the 8 th share buyback program
➢ May 15, 2023: Investors and analysts conference call on Q1 2023 results
➢ May 5, 2023: Approval of the Rights/Options Granting Plan - SOP
➢ April 27, 2023: EGMS & OGMS Resolutions – April 27, 2023
➢ April 27, 2023: Ordinary & Extraordinary General Meeting of Shareholders
➢ April 13, 2023: Information on the EGMS and OGMS of April 27/28, 2023
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
222
Image should be here
Board Report 2023 Separate Financial Statements
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
➢ April 3, 2023: Holding sales
➢ March 28, 2023: Asset Depository Change
➢ March 24, 2023: EGMS & OGMS Convening Notice – April 27, 2023
➢ March 1, 2023: EVERGENT Investments approves the Group’s ESG Policy
➢ March 1, 2023: Investors and analysts conference call – March 2, 2023
➢ February 28, 2023: Asset evaluation methods
➢ January 27, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
➢ January 17, 2023: EVERGENT Investments takes a credit facility
➢ January 13, 2023: Threshold notification < 5%
➢ January 11, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
➢ January 10, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
➢ January 9, 2023: Manager’s transactions – art. 19 Market Abuse Regulation
B. PERIODIC REPORTS
➢ December 15, 2023: NAV as of date 30 November 2023
➢ November 15, 2023: NAV as of date 31 October 2023
➢ November 15, 2023: Q3 2023 Report
➢ October 13, 2023: NAV as of date 30 September 2023
➢ September 15, 2023: NAV as of date 31 August 2023
➢ September 15, 2023: H1 2023 Consolidated Report
➢ August 14, 2023: NAV as of date July 31, 2023
➢ August 11, 2023: H1 2023 Report
➢ July 14, 2023: NAV as of date 30 June 2023
➢ June 15, 2023: NAV as of May 31, 2023
➢ May 15, 2023: Q1 2023 Report
➢ May 15, 2023: NAV as of April 30, 2023
➢ April 27, 2023: 2022 Annual Report
➢ April 13, 2023: NAV as of March 31, 2023
➢ March 15, 2023: NAV as of February 28, 2023
➢ February 28, 2023: 2022 Preliminary financial results
➢ February 15, 2023: NAV as of January 31, 2023
➢ January 20, 2023: 2023 Financial Calendar
➢ January 13, 2023: NAV as of December 31, 2022
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
223
Image should be here
2023 Board Report Separate Financial Statements
Statement regarding the application of corporate governance principles
In compliance with the provisions of the FSA Regulation no. 9/2019 for the amendment and completion of the FSA Regulation no. 2/2016 on the application of the corporate governance principles by entities authorized, regulated and supervised by the Financial Supervisory Authority
Compliance
No.
Rules for corporate governance principles application
YES
NO
If NO, explain
1.
The regulated entity has stated in its Memorandum of Association, the basic responsibilities of the council regarding the implementation and abidance by the corporate govern ance principles.
X
2.
The corporate governance structures, positions, competencies and responsibilities of the Board and executive management/ higher management are stated in internal policies and/or internal regulations .
X
3.
The annual report of the regulated entity is accompanied by an explanatory note which describes relevant events in connection to the application of corporate governance principles, recorded during the financial year.
X
4.
The regulated entity has drafted a communication strategy with the interested parties in order to insure p roper information.
X
5.
The structure of the council insures, depending on the case, a balance between the executive and non-executive members so that no individual or close group of individuals can influence the decision-making process.
X
6.
The council meets at least once every three months in order to monitor the way the activity of the regulated e ntity is carried out.
X
7.
The Board or executive/ higher management, depending on the case, regularly examines the policies regarding financial reporting, internal control and the risk administration/management system adopted by the regulated entity.
X
8
In its activity, the Board is supported by a remuneration committee that issues recommendations.
X
9
The remuneration committee submits to the Board the annua l reports on its activity.
X
10
In its activity, the Board has the support of consultative committees that issue recommendations regarding various issues that are the ob ject of the decision-making process.
X
11
Consultative committees submit the Board materials/reports regarding issues entrusted by these.
X
12
In the internal procedures/policies/regulations are provisions regarding the selection of nominations for the individuals in the executive/higher management, the appointment of new individuals or extending the mandate of those already existent.
X
13
The regulated entity makes sure that the members of the executive managem ent/ higher management receive professional training so that they can fulfill their attributions efficiently.
X
14
The key positions are set in such a way so that they are proper for the organizational structure of the regulated entity, and according to the regulations applicable to it.
X
15
The Board regularly analyze the efficiency of the internal control system of the regulated entity and the updating method, in order to ensure a rigorous management of the risks the regulated entity is exposed to.
X
16
The audit committee makes recommendations to the Board, regarding the selection, appointment, name and replacement of the financial auditor, as well as the terms and conditions of its remuneration.
X
17
The Board analysis, at least once a year and makes sure that the remuneration policies are consistent and h ave an efficient risk management.
X
18
The remuneration policy of the regulated entity is foreseen in internal regu lations that target the implementation and abidance by the corpo rate governance principles.
X
19
The Board has adopted a procedure for the purpose o f the proper identification and solving of conflict of interest cases.
X
20
The executive management / higher management, depending on the case, informs the Board about conflict of interest once these occur and does not participate to the decision-making process connected to the conflict state, if these structures or individuals are involved in that particular conflict state.
X
21
The council analyses, at least once a year, the efficiency of the risk administration /management system of the regulated e ntity.
X
22
The regulated entity has drafted procedures regarding the identification, evaluation and management of significant risks to which it can or will be exposed.
X
23
The regulated entity has clear action plans to ensure the continuity of the activity and for emergency situations.
X
24
The branch Board applies internal governance principles and policies similar to those of the parent company, unless there are other legal requirements that lead to the establishment of own policies.
X
Claudiu Doro ș Gabriel Lupașcu
President and CEO Compliance Officer
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
224
Image should be here
2023 Board Report Separate Financial Statements
Annex 6
Statement on compliance with the BSE Corporate Governance Code
Provisions of BSE Code
Compliance
A.1
All companies must have an internal regulation of the Board that includes the reference terms/responsibilities of the Board and key management positions of the company, which involve, among others, the General Principles in Section A.
YES
A.2
The provisions of conflict of interest management must be included in the Council’s regulation
YES
A.3
The Board of Directors or Board of Supervisors should comprise at least five members
YES
A.4
The majority of the members in the Board of Directors should not have an executive position. At least one member of the Board of Directors or Board of Supervisors should be independent in case of Standard Category Companies. In case of Premium Category companies, no less than two non-executive members of the Board of Directors or Board of Supervisors should be independent ( four members in the Board of Directors are independent ).
YES
A.5
Other professional engagement and obligations, relatively permanent of one member of the Board, including executive and non-executive positions in the Board of some non-profit companies and institutions must be disclosed to shareholders and potential investors before appointment and during his mandate.
YES
A.6
Any member of the Board must present the Board information regarding any relationship with any shareholder directly or indirectly holding shares that represent over 5% of all vote rights. This obligation refers to any kind of relationship that might affect the position of the member regarding matters decided by the Board.
YES
A.7
The company must assign a secretary of the Board, responsible for the support of the Board’s activity.
YES
A.8
The Corporate Governance Statement will inform if there has been a Board evaluation under the President or Appointment Committee, and if so, it will summarize the key measures and changes resulted from it. The Company should have a policy/guide regarding the Board’s evaluation, including the purpose, criteria and frequency of the evaluation process.
YES
A.9
The Statement regarding corporate governance should contain information regarding the number of meetings of the Board and Committees over the previous year, participation of managers (in person or in absence) and a report of the Board and committees regarding their activity.
15 Board meetings attended by all directors
A.10
The Corporate Governance Statement should include information regarding the exact number of independent members of the Management Board or in the Board of Supervisors.
2 - the independence of the directors is established according to the applicable legal requirements (Law no. 31/1990).
A.11
The Board of companies in the Premium Category should set up an Appointment Committee comprised of non-executive members that will manage the appointment procedure for new Board members and will make recommendations for the Board. The majority of the Appointment Committee members should be independent.
YES
B.1
In case of companies from Premium Category, the Audit Committee must comprise at least three members and the majority of the Audit Members should be independent.
YES
B.2
The president of the Audit Committee must be an independent non-executive member.
YES
B.3
The Audit Committee should carry out an annual evaluation of the internal control system.
YES
B.4
The evaluation must consider the efficiency and coverage of the internal audit function, de adequacy of the risk management and internal control reports presented by the Audit Committee before the Board, the promptness and efficiency of the executive management in solving identified deficiencies or weaknesses following internal control and the presentation of relevant reports before the Board.
YES
B.5
The Audit Committee must evaluate the conflicts of interest, in connection to the transaction of the company and its branches with affiliated parties.
YES
B.6
The Audit Committee must evaluate the efficiency of the internal control system and risk management system.
YES
B.7
The Audit Committee must monitor the application of legal standards and internal audit standards accepted. The Audit Committee should receive and evaluate the reports of the internal audit team.
YES
B.8
Every time the Code mentiones reports or analysis initiated by the Audit Committee, these must be followed by periodical reports (at least on an annual basis) or ad hoc reports to be later presented to the Boards.
YES
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
225
Image should be here
2023 Board Report Separate Financial Statements
B.9
No shareholder can be awarded preferential treatment in comparison to other shareholders in connection to transactions and agreements entered by the Company with shareholders and their affiliates.
YES
B.10
The Board should adopt a policy to make sure that any transaction of the company with any of the company it is closely connected to and whose value is equal or larger than 5% of the assets company’s net assets (according to the latest financial record) is approved by the Board following a mandatory opinion of the Audit Committee and correctly present to the shareholders and potential investors, as long as these transactions are entered in the category of events that are object of the reporting requirements.
YES
B.11
Internal Audits should be carried out by a structurally separate division (Internal Audit Department) from within the Company or through the employment of an independent entity.
YES
B.12
For the purpose of ensuring the fulfillment of the main functions of the internal audit department, this should report to the Board from a functional point of view. For administrative purposes and within the obligations of management to monitor and reduce risks, these should report directly before the general manager.
YES
C.1
The Company should publish on its website its remuneration polity and include in the annual report, a statement regarding the implementation of the remuneration policy during the annual period that is object of the analysis.
YES
D.1
The company should set up an Investor Relations Department - indicating to the public the person / individuals responsible or organizational unit. Besides the information requested by legal provisions, the company should include on its website a section dedicated to Investors’ Relations, in the Romanian and English language, with all relevant information that might interest the investors, including:
YES
D.1.1
Main corporate regulations: Memorandum of Association, procedures regarding the General Shareholders Meetings.
YES
D.1.2
Professional CVs of the members of the company’s management bodies of the Company; other professional engagements of the Board’s members, including executive and non-executive positions in the company’s management boards or in non-profit institutions;
YES
D.1.3
Current and periodical reports (quarterly, half-yearly and annually) – at least those foreseen under point D8 – including current reports with detained information concerning the non-compliance with the present Code;
YES
D.1.4
Information regarding shareholders’ general meetings: agenda and informative materials, selection of Board members; arguments supporting the candidate proposed to be elected in the Board, along with their professional CVs; shareholder’s questions regarding items on the agenda and answers of the company, included adopted resolutions;
YES
D.1.5
Information regarding corporate events, such as dividend payment and other distributions to shareholders, or other events that lead to the acquiring or limitations of a shareholder’s rights, including the deadlines and principles applicable to these operations. This information shall be published within a deadline that allows investors adopt investment decisions;
YES
D.1.6
Name and contact details of an individual who, on request can supply information
YES
D.1.7
Company’s presentation (e.g., presentations for investors, presentations regarding quarterly results, etc.) financial reports (quarterly, half-yearly, annual) audit reports and annual reports.
YES
D.2
The company shall have a policy regarding annual dividend distribution or distribution of other benefits to shareholders proposed by the General Manager or Directorate and approved by the Board, as a set of directorate guidelines that the company intends to follow regarding the distribution of net profit. The main annual policies for the distributions to shareholders will be published on the company’s website.
YES
D.3
The company will adopt a policy regarding forecasts. Forecasts refer to the quantified conclusions of some studies that aim to certain the global impact of a number of factors regarding a certain value (so called hypothesis): through its nature, this forecast has a high level of uncertainty, the real results can significantly differ from the initially presented forecasts. The forecast policy will set the frequency, period considered and forecast content. If published, the forecasts can be included only in annual, half-yearly and quarterly reports. The forecast policy will be published on the Company’s internet page.
YES
D.4
The rules of the general shareholders’ meeting should not limit the participation of shareholders to the general meetings and their exercising their votes. The modifications of the rules come into force, on the following meeting of shareholders.
YES
D.5
External auditors will be present at the general shareholders’ meeting when their reports are presented during the meeting.
YES
D.6
The Board will present the annual general shareholders’ meeting a short ascertainment of the internal control sand significant risk management systems, as well as opinions on issues presented before the general meeting.
YES
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
226
Image should be here
2023 Board Report Separate Financial Statements
D.7
Any specialist, consultant, expert of financial analyst can be present during the shareholders’ meeting based on a prior invitation from the Council. Accredited journalist can participate to the general shareholders’ meeting with the exception of the case when the President of the Board decides otherwise.
YES
D.8
Quarterly and semi-annual financial statements will include information in the Romanian and English language regarding key factors that influence changes on the level of the sales, the operational profile, net profit and other relevant financial indicators, from one quarter to the other and from year to the other.
YES
D.9
A Company shall organize at least 2 meetings/ teleconferences with analysts and investors per year. The information presented with such occasion will be published in the Investors’ Relation section on the Company’s internet page on the date of the meetings/ teleconferences.
YES
D.10
In case a company supports various forms of artistic and cultural events, sporting events, educational or scientific events and considers that their impact on the innovative nature and competitiveness of the company are part of its mission and development strategy, shall publish its policy regarding its activity in this field.
YES
Claudiu Doros Gabriel Lupașcu
President and CEO Compliance Officer
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
227
Image should be here
Board Report 2023 Separate Financial Statements
Annex 7
2023 Remuneration report, in accordance with the
Remuneration Policy
approved
by the Ordinary General Meeting of Shareholders of EVERGENT
Investments for the members of the management structure (directors and executive managers)
Key Information
The present Remuneration Report offers shareholders a full and accurate picture of the remuneration offered to its leaders by EVERGENT Investments SA, so that shareholders, potential investors and other stakeholders may assess remunerations in relation to the company’s long-term results and may measure the average and long term evolution of the leaders’ remuneration, especially in relation to the company’s performance.
In 2023 EVERGENT Investments once again demonstrated the performance of its business model and recorded a net result of 203.8 million lei, an increase of 72.8% compared to the previous year.
The company continued the predictable dividend policy of the last 15 years and started the distribution of 82.7 million lei to its shareholders on 28 June 2023. The amount allocated to the distribution of dividends to shareholders represents a pay-out ratio of 70% of the company's net income. The dividend yield for 2022 is 7.26%, calculated on ex date .
The remuneration policy
of the directors approved by shareholders in the
General
Meeting of 28 th January 2021
is one of the key instruments through which shareholders
confirm the importance of the company’s management structure. Thus, the contribution to the business strategy and continuity of leadership is validated in agreement with the long- term interests of shareholders, ensuring the sustainability and development of EVERGENT Investments, in the interest of all stakeholders.
The methods and level of remuneration of the members of the management
structure connect individual performance and the performance of the Board of Directors
with the performance of the company, reflected in the main performance indicator namely
net result, comprised of net profit and net gain on the sale of financial assets classified at fair value through other comprehensive income (treated as per IFRS S).
Comparison between management expenses of EVERGENT Investments (self-managed fund) and management committees of share funds
In 2023, EVERGENT Investments’ annual management expenses represent 1.5% of total assets under management on 31.12.2023, fixed and variable remunerations of directors, executive managers and employees of the company being included in this percentage. The level of this annual percentage of EVERGENT Investments’ management expenses is 37 % lower than the average of management fees of actively managed equity funds in Romania ( 2,4 %). The performance of the management structure is assessed based on financial and non-financial criteria correlated with the long-term strategy.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
228
Image should be here
2023 Board Report Separate Financial Statements
Criteria for the granting of remuneration
The company has assessed the leaders’ remuneration and performance not only for 2023, but annually, within a relevant timeframe that indicated the contribution to the constantly and long-term generated performance of EVERGENT Investments. The objective performances of the members of the management structure of EVERGENT Investments are related to the value of EVER share on BVB and the added value reflected in the results of the company.
Therefore:
1. in order to grant quarterly bonuses of a maximum value of 5% of fixed basic remunerations, the evolution of EVER share should be higher than the evolution of BET-FI index, on most trading days during the reporting period (quarter).
2. for the granting of the Annual benefits plan, a positive net result is necessary, this indicator is comprised of net profit achieved and net gain from transactions reflected in retained earnings (IFRS treatment), 5% of the net result before the registration of the benefits plan.
In 2023, net result was 203.8 million lei, and total assets on 31 st December 2023 were 2,946 million lei.
In 2023, the members of the Board of Directors of EVERGENT Investments were granted net fixed remunerations of 0.13%, and executive managers of 0.07% of total assets under management on 31 st December 2023. The variable remuneration for the members of the Board of Directors represents 0.23 % of total assets under management, and that of executive managers is 0.14 % din of total assets under management (statutory and procedural provisions).
From this perspective, the remuneration of the members of the management structure fully abides by the principles of remuneration established by community and national legislation 1 , as well as the best practices of corporate governance .
From the point of view of granting the variable remuneration component as shares, applicable regulations foresee that at least 50% of the annual benefits plan should be
granted in company shares. Nevertheless, the members of the Board of Directors, executive managers and a large part of employees have been choosing since 2018 to receive 100% of variable remuneration in shares , through stock option plan type programs, which indicates
the alignment of the interests of members of management structure and employees with
those of shareholders .
1 ESMA Guide No. 232/2013 on sound remuneration policies in accordance with AIFMD, Law No. 74/2015 on alternative investment fund managers, Alternative Investment Fund Managers Directive - AIFMD.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
229
Image should be here
2023 Board Report Separate Financial Statements
We specify that no member of the management structure of EVERGENT Investments SA has received any remuneration from the companies that belong to the EVERGENT Group.
1. Applicable legal and internal framework
The annual remuneration report of EVERGENT Investments’ leaders (members of the board of directors and executive managers) is prepared in accordance with the
Remuneration Policy of Company’s Leaders
, approved through the
Resolution of the
Ordinary General Meeting of Shareholders no. 3 of 28 th January 2021
and abiding by the
provisions of art. 107 Law no. 24/2017 on the issuers of financial instruments and market operations, republished.
The remuneration report for 2022 will be displayed on the website
www.evergent.ro
and will remain available to the public free of charge, for a period of 10 years.
In accordance with the provisions of art. 107, line 4 Law no. 24/2017, EVERGENT Investments processes the personal data of the members of management structure included in the present Remuneration Report, based on the previously stated legal article.
The remuneration report for 2022 financial year was verified by financial auditor Deloitte Audit SRL, the conclusion being that it has been prepared abiding by the provisions of Law no. 24/2017 on the issuers of financial instruments and market operations:
” Regarding the Directors’ Individual Report, we have read and state that it has been prepared, in all significant aspects, in accordance with the requirements of FSA Norm no. 39/2015, art 8-13. Regarding the Remuneration Report, we have read it and state that it has been prepared, in all significant aspects, in accordance with the provisions of Law 24/2017, art. 107.
Based exclusively on the activities that must be run during the audit of separate financial statements, in our opinion:
a) The information presented in the Individual Directors’ Report and Remuneration Report for the financial year for which the separate financial statements were prepared, are consistent, in all significant aspects, with the separate financial statements;
b) The Directors’ Individual Report was prepared, in all significant aspects, in accordance with the requirements of FSA norm no. 39/2015, articles 8-13.
c) The Remuneration report has been prepared, in all significant aspects, in accordance with the provisions of Law 24/2017, art no. 107.
Moreover, based on our knowledge and understanding of the Company and its environment, gained during the audit of the separate financial statements for the financial year ended on 31 st December 2023, we are required to report if we have identified significant distortions in the Individual Directors’ Report and Remuneration Report. We have nothing to report regarding this aspect.”
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
230
Image should be here
2023 Board Report Separate Financial Statements
In agreement with the provisions of art. 107, line 6 Law no. 24/2017 on the issuers of financial instruments and market operations, we mention that the Remuneration Policy related to financial 2022 has been presented for shareholders’ vote, in accordance with the
Ordinary General Meeting Resolution no. 3 of 27 th April 2023
, the opinion of shareholders,
resulted following the vote, being of consultative nature. The remuneration report for financial year 2021 was approved by shareholders with a percentage of 97.81%.
1.1.
Remuneration policy for the directors
approved by the General Meeting of
Shareholders (published on
www.evergent.ro
).
The remuneration report of the leaders is prepared in accordance with the
Remuneration Policy
approved by
Ordinary General Meeting of 28 th January 2021
,
without any deviation or derogation from the procedure regarding the application of the remuneration policy, as approved in the general meeting of shareholders.
Remuneration of leaders corresponds to the prerogatives, competence, attributions
and responsibilities and the time assigned for their fulfilment.
The remuneration policy has not been revised and there have been no modifications of its content in 2023.
1.2.
Remuneration policies and practices for the personnel categories
whose professional activities have a significant impact on its risk
profile
– document that is specific for companies of the Alternative Investment
Fund Manager type authorized by FSA (published on
www.evergent.ro
).
1.3. Memorandum of Association of EVERGENT Investments SA (published on
www.evergent.ro
).
In accordance with the provisions of art. 153^18 Companies’ Law no. 31/1990, the remunerations of the members of the Board of Directors and general limits of the additional remunerations of the members of the board of directors tasked with specific functions within this body and remunerations of executive managers, are set through the
Memorandum of Association
, approved by the extraordinary general meeting of
shareholders.
The Remuneration Report for the leaders abides by the relevant provisions of the
Memorandum of Association
, namely art. 7, line 11 and art. 14:
➢ ”Art. 7. Board of Directors – (11) The annual general limits of remunerations and bonuses for all the directors, including the supplementary remunerations of the directors in charge of specific duties, as well as of the directors, amount to 0.6% of the average total asset value of the previous year, calculated and reported in compliance with the legal provisions. Included in the general limits, the monthly remuneration for all the members of the Board of Directors is at the level of 0.015% of the average total asset value of the previous year, equally divided. The directors and managers participate in the benefit plan, inclusively paid by share allocation
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
231
Image should be here
2023 Board Report Separate Financial Statements
or option allocation to acquire company shares, amounting to 5% of the realized net profit and net revenue from transactions reflected in reported result. The actual level of this participation is established by the board of directors, after the approval of the annual financial statements in the General Meeting of Shareholders.”
➢ ”Art. 14. Remuneration Policies and Practices
(1) Remuneration policies and practices are compliant with legal regulations and directives applicable to A.I.F.M. and abide by the following basic principles:
(a) The remuneration policy is aligned with the Company’s strategy and is compatible with the investment policy, risk policy, long-term values and objectives of the Company.
(b) The remuneration of the Company’s directors, managers and employees is comprised of a fixed and a variable component.
(c) There is an appropriate balance between the fixed and the variable component of total remuneration, with the fixed component having a sufficiently large percentage of total remuneration to allow for a flexible policy on variable components of remuneration. The benefits plan for directors, managers and employees is also granted in shares or options to acquire shares of the company. At least 50% of the variable remuneration will consist of shares or options to acquire shares within the Stock Option Plan type programs, in compliance with the legal regulations in force.
(d) Variable remuneration is granted according to the achievement of the collective and individual performance targets, Company’s implementation of projects and prudential management of operational risks.
(2) The fixed and variable component of the directors and managers’ remuneration is set in Art. 7 line (11) of the Memorandum of Association. The directors and managers of the Company have the right to participate to the benefits plan as participation to the Company’s profit in cash and/or in shares. The performance indicators and criteria for the granting of variable remuneration are presented in the Administration and Management Contracts”.
1.4.
Administration and Management Contracts
.
The contracts for the mandate for 2021-2025 were approved by the
Resolution of the
Ordinary General Meeting of Shareholders no. 4 of 28.01.2021
, as follows:
” Approves the Administration and Management Contracts that will be entered with the members of the Board of Directors, namely executive managers, for the period of 05.04.2021 - 05.04.2025 mandate”.
The main modification approved by the General Meeting were:
(i) the reduction of the fixed monthly remuneration from 6 to 5 average tariff salaries calculated on the basis of the job status valid for the last day of the previous year, with inclusion within the general remuneration limits
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
232
Image should be here
2023 Board Report Separate Financial Statements
established according to the provisions of art. 7, par. 11 of the company's Memorandum of Association;
(ii) alignment with the provisions regarding performance objective, according to the provisions of the
Memorandum of Association
and Remuneration Policy
for the company’s leaders
2. Management of EVERGENT Investments
The members of the Board of Directors for the 5th April 2021 -5 th April 2025 mandate was approved by the
Ordinary General Meeting of Shareholders Resolution no.
2/28.01.2021
and authorized by FSA (Authorization no. 49/30.03.2021 ) , as follows: Doros
Liviu Claudiu – President of the Board of Directors, Iancu Catalin-Jianu-Dan – Vice- president; Ceocea Costel, Ciorcila Horia, Radu Octavian-Claudiu.
The consultative committees of the Board of Directors were set-up based on the
Resolution of 5 th April 2021
, with the following members:
➢ Appointing-Remuneration Committee : Costel Ceocea – President; Octavian Claudiu Radu; Horia Ciorcila.
➢ Audit Committee : Octavian Claudiu Radu – President; Horia Ciorcila; Costel Ceocea.
➢ Investment committee : Horia Ciorcila – President; Octavian Claudiu Radu; Costel Ceocea.
The Company’s executive management for the 5 th April 2021- 5 th April 2025 mandate is ensured by Doros Liviu Claudiu – CEO and Iancu Catalin-Jianu-Dan – Deputy CEO and was approved through the resolution of the Board of Directors on 5 th April 2021 and authorized by FSA (FSA Authorization no. 59/05.04.2021) for a 4 years’ mandate, namely from 5 th April 2021 – 5 th April 2025.
Management Committee
The Board of Directors has assigned the management of the Company to the CEO and Deputy CEO, who together form the Management Committee, in accordance with legal provisions and the provisions of the
Memorandum of Association
.
Each executive manager of the company coordinates the daily activity of certain departments according to the organizational chart and adopts individual decisions on its specific area of activity, and together they adopt decisions within the collective work body, the Management Committee, in applying the legal requirements that executive managers ensure the actual management of the company.
For this purpose, the Committee adopts decisions on:
✓ Implementation of the investment strategy set by the Board of Directors ;
✓ Implementation of the resolutions of the Board of Directors that target assigned competencies;
✓ Issues that fall under the competence of the Board of Directors that are to be subject to its debate and approval, which concern assigned attributions ;
✓ Issues that, through their nature may impact all lines of activity (business, support, compliance);
✓ Issues that, in order to adopt a decision, require the full understanding and harmonization of all business and compliance aspects;
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
233
Image should be here
2023 Board Report Separate Financial Statements
✓ Approval of the specific procedures of company departments.
The Management Committee presents the decisions adopted and situation of running operations in the meetings of the Board of Directors and prepares regular reports on its activity.
3. Remuneration of the members of the management structure for 2023 in accordance with the
Remuneration policy
approved by the
General Meeting of Shareholders of
EVERGENT Investments
In agreement with legal and internal provisions applicable to the activity of EVERGENT Investments, the Remuneration Report provides an overall image of remunerations, including all benefits, irrespective of form, granted or owed for 2023 financial year, to the leaders individually, in a clear and easy to understand manner and in accordance with the
Remuneration Policy
approved by the
General Meeting of
Shareholders
, including regarding the way in which remuneration contributes to the
issuer’s long-term performance.
Thus, the implementation of remuneration policies ensures:
✓ Performance of management act, on the long-term;
✓ Alignment with shareholders’ interests, while prudently managing risks;
✓ Drawing-in of the best professionals;
✓ Remuneration levels correlated to responsibilities;
✓ Transparency for investors.
The principles applicable at the company level in terms of remuneration, as approved by the shareholders, are the specific ones for the alternative investment funds managers, namely :
a) The remuneration policy is comparable with the solid and efficient management of risks and promotes this type of management and does not encourage taking on excessive risks, reported to the risk appetite;
b) the remuneration policy is aligned with the business strategy, values and long-term objectives, as well as with the interests of the company's investors and does not generate conflicts of interest;
c) the remuneration of managers corresponds to their prerogatives, tasks, competence and responsibilities.
d) the remuneration of the managers and employees of the company consists of a fixed and a variable component;
e) there is a proper balance between the fixed and variable components of total remuneration, the fixed component having a sufficiently high percentage of total remuneration as to allow the application of a flexible policy regarding the variable component of remuneration. The benefit plan for leaders and employees is also granted in shares, as options to purchase shares of the company. At least 50% of variable remuneration will consist of shares or options to purchase shares within Stock Option Plan type program, abiding by legal regulations in force.
f) Variable remuneration is granted depending on the achievement of collective and individual performance objectives, the implementation by the company of projects
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
234
Image should be here
2023 Board Report Separate Financial Statements
and prudential risk management. The value of variable remuneration is calculated depending on an assessment that combines individual performances and company results and performance assessment is made within a proper framework, uses both financial and non-financial criteria.
The remuneration policy approved by the ordinary general meeting of shareholders does not include clauses on the recovery periods for variable remunerations.
The remuneration structure includes:
(a) A fixed component, set on the level of responsibilities undertakes and assigned through the resolution of the management body; fixed remuneration is sufficiently large for the professional services delivered, depending on the prerogatives, tasks, competence and responsibilities of leaders.
(b) Variable remuneration, comprised of the annual benefits plan and quarterly bonuses, granted depending on the reaching of performance objectives and prudential management of operational risks.
(c) Other benefits granted to the members of the management structure: health insurance.
The remuneration structure does not encourage the taking on of risks incompatible with the risk profile, with the provisions of the
Memorandum of Association
and rules of
the company.
In accordance with the provisions of art. 107 Law no. 24/2017 and
Remuneration
policy
approved by the shareholders of EVERGENT , the remuneration of the members of
the management structure for financial year 2023 is the following:
1. Fixed remuneration
Included in the general limits set in accordance with art. 7, line 11 of the
Memorandum of Association
, monthly remuneration of all members of the Board of
Directors is at a level of 0.015% of total assets value average of the previous year, equally divided.
The monthly remuneration of each member of the Board of Directors is 5 average monthly tariff wages in the company.
The additional monthly remuneration of directors charged with specific functions within the Board of Directors (President and Vice-President of the Board of Directors, President and members of the advisory committees) is established by the Board of Directors, within the limit provided in art. 7, par. 11 of the
Memorandum of Association
.
The fixed monthly remuneration of company’s executive managers entered in the
Management Contracts approved by the Ordinary general meeting of shareholders is:
- at the level of 12 average monthly tariff salaries per company, for the CEO.
- at the level of 11 average monthly tariff salaries per company, for the Deputy CEO.
The average monthly tariff salary per company is set based on the functions chart valid on the last day of the previous year.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
235
Image should be here
2023 Board Report Separate Financial Statements
2. Variable remuneration
Variable remuneration is comprised of:
- Quarterly bonuses, within the 5% limit applied on received remuneration;
- Annual benefit plan comprised of cash and shares, 5% of net result, an indicator comprised of net profit obtained and net gain from the sale of financial assets reflected in retained earnings, calculated before the registration of the benefits plan.
Total annual remunerations consisting of the additional remunerations of directors tasked with specific functions within the Board of Directors, remunerations of executive managers and bonuses offered to directors and executive managers is granted within the 0.42% limit of the average total asset value for the previous year, in accordance with the
Memorandum of Association
.
Quarterly bonuses are granted with the approval of the Board of Directors, who ascertains if the granting criteria are met, that is that the evolution of EVER share price is higher than the evolution of BET-FI index, in most trading days in the reporting period (quarter).
The Benefit Plan is granted annually, following the approval of annual financial statements in the General Meeting of Shareholders.
Directors and executive managers participate to the benefit plan, plaid inclusively through the assignment of shares or options to purchase company shares, of 5% of net result, an indicator comprised of net profit obtained and net gain from the sale of financial assets reflected in retained earnings, calculated before the registration of the benefits plan, in accordance with the
Memorandum of Association
. The actual level of this participation is
set by the Board of Directors.
The benefit plan is granted based on the assessment result of the fulfilment of the following performance objectives set in the Administration and Management contracts:
- the achievement of a positive net result, an indicator composed of the net profit realized and the net gain realized from the sale of financial assets reflected in the carried over result;
- result of the annual assessment of the adequacy of the management structure according to the criteria and procedures set by FSA Regulation no. 1/2019 on the evaluation and approval of the members of the management structure and individuals holding key position within entities regulated by the Financial Supervisory Authority, namely “adequate”.
The assessment of performance aligned to the risks is made annually within an adequate framework, in order to guarantee that the assessment process if based on performance and that the actual payment of variable remuneration components that depend on performance is made for a period that takes into consideration the company’s policies and their inherent risks.
The Appointing-Remuneration Committee has made the annual assessment of the management structure for 2023, according to the criteria and procedures set by FSA Regulation no. 1/2019 and ascertained the adequacy of all individuals assessed.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
236
Image should be here
2023 Board Report Separate Financial Statements
The benefit plan is not granted in the event of a negative net result, an indicator composed of the net profit realized and the net gain realized from the sale of financial assets reflected in the retained earnings .
Other information on the remuneration of the members of the management structure, the calculation method for each component and relative proportion of fixed and variable components are presented in Annex 7.1 as well.
Details on the Annual Modification in comparison to the previous year, on the last 5 of the net remuneration of each member of the management structure, the Company’s performance (reflected in Net result) and net average remuneration of employees of the Company are presented in Annex 7.2.
Share-based remuneration
In agreement with the provisions of the
Memorandum of Association
, the directors
and executive managers of the company have the right to participate to the company’s benefit plan through the allocation of shares for the mandate exercise period as well. The granting of benefits as shares can also be made through Stock Option Plan (SOP) programs approved by the shareholders for the purpose of distributing “EVER” shares to the directors, executive managers and employees of EVERGENT Investments, the source being shares bought-back by the company.
Share-based remuneration has the purpose the alignment of the beneficiaries; interest in the implementation of objectives proposed and reaching long-term performance indicators, as well as the increase of the management act performance for the benefit of shareholders. At the same time, by offering shares through Stock Option Plan type programs, as part of variable remuneration tax facilities foreseen by the law for the company and for the beneficiaries are used .
Share-based remuneration is done abiding by the legal obligations for the preparation and publication of informative documents for investors, in accordance with the law.
In 2023 financial year, as part of variable remuneration for 2023, expenses with the benefits plan, including share-based, owed to the directors and executive managers of the company were also included. The actual attribution of shares will be in 2025. The market price and the number of shares calculated based on this price will be foreseen in the SOP program for 2023, following the approval of the financial statements for 2023 by the ordinary general meeting of shareholders.
The Board of Directors of EVERGENT Investments has made sure that the Remuneration Report for the members of the management structure of the company has been prepared, published and verified in accordance with applicable legal provisions.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
237
Image should be here
2023 Board Report Separate Financial Statements
Annex 7.1
Net, fixed and variable remunerations for each member of the management structure for year 2023
Net remunerations*** (expenses for 2023 according to the mandate exercise period) for:
Net sums granted for 2023
Value of owed shares (to be assigned and deferred for 2025*)
A. members of the Board of Directors (BD), of which
3,836,955
6,861,152
Total fixed remunerations, of which:
3,718,344
-
- base remunerations
BD Member
476,712
(x5 members)
-
- additional remunerations**
President of the Investment Committee (prior mandate President of the Appointing- Remuneration Committee – remuneration and member of the Audit committee)
572,052
-
President of the Audit Committee (prior mandate President of the Audit Committee and member in the Appointing-Remuneration Committee)
572,052
-
President of the Appointing-Remuneration Committee (previous mandate BD President and member in the Audit and Appointing- Remuneration Committees)
190,680
-
Variable remunerations, of which:
6,861,152
- share-based (share-based participation to the Benefits plan )
President of the Board of Directors
-
879,637
Vice- president of the Board of Directors
-
879,637
President of the Investment Committee
-
1,935,194
President of the audit Committee
-
1,935,194
President of the Appointing- Remuneration Committee
-
1,231,490
Other benefits (health insurance )
118,611
-
President of the Board of Directors
22,537
-
Vice-president of the Board of Directors
19,142
-
President of the Audit Committee
33,566
-
President of the Appointing- Remuneration Committee
43,366
-
B. Executive managers, of which
2,192,880
4,046,321
Total fixed remunerations, of which:
2,192,880
-
CEO
1,144,116
-
Deputy-CEO
1,048,764
-
Variable remunerations, of which:
- cash (bonuses)
4,046,321
CEO
-
Deputy CEO
-
- as shares (share-based participation to the benefits plan)
CEO
-
2,
111
,127
Deputy CEO
-
1,935,194
*-
the number of shares corresponding to the value of the variable remuneration will be determined according to the price of the EVER share on the date of the option is offered, after the approval of the financial statements of 2023 by the Ordinary General Meeting of Shareholders. On the date the option is offered, EVERGENT Investments shall publish ”Informative document on the granting of rights/options to purchase shares” prepared in accordance with Chapter 1 article 1 line (4) letter (i) EU Regulation no . 2017/1129.
** The position of president and vice-president of the Board of Directors are not remunerated in the current mandate.
*** For total gross remunerations, see section 3.5 of 2023 Annual Report
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
238
Image should be here
2023 Board Report Separate Financial Statements
Net remunerations
(expenses for 2023)
lei
%
President CEO
4,634,129
100
Fixed remuneration
1,620,828
35.0
Variable remuneration
2,990,764
64.5
Other benefits (health insurance)
22,537
0.5
Vice-president deputy-CEO
4,359,449
100
Fixed remuneration
1,525,476
35.0
Variable remuneration
2,814,831
64.6
Other benefits (health insurance)
19,142
0.4
President of the Appointing-Remuneration Committee
1,942,248
100
Fixed remuneration
667,392
34.4
Variable remuneration
1,231,490
63.4
Other benefits (health insurance)
43,366
2.2
President of the Investment Committee
2,983,958
100
Fixed remuneration
1,048,764
35.1
Variable remuneration
1,935,194
64.9
Other benefits (health insurance)
-
-
President of the Audit Committee
3,017,524
100
Fixed remuneration
1,048,764
34.8
Variable remuneration
1,935,194
64.1
Other benefits (health insurance)
33,566
1.1
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
239
Image should be here
2023 Board Report Separate Financial Statements
Calculation method for each type of remuneration and benefits for directors and executive managers
categories
Frequency
Calculation method (according to frequency)
Period 01.01.2023 -31.12.2023
Members of the Board of Directors (BD)
Fixed remunerations
Monthly remunerations *
Monthly
5 average monthly salaries (based on the employment Chart of the Company's employees at the end of the previous year), within the limit of 0.015% of the average total asset value of the previous year
Additional remunerations *
monthly
2 average monthly salaries for the president of the Appointing-Remuneration committee 6 average monthly salaries for the president of the Audit Committee 6 average monthly salaries for the president of the Investment Committee The President and vice-president of BD functions are not remunerated
Variable remunerations:
Cash bonuses *
quarterly
5% applied on remuneration (less additional remunerations) for the quarters when the evolution of EVERGENT Investments share price is higher than the evolution of the sector index (BET-FI), on most trading days in the reporting period (quarterly)
Share-based participation to the benefits plan
Annually
the total annual amount of participation in the benefits of BD/MC members is 5% of the achieved net profit and of the net profit from transactions reflected in the retained earnings, before the registration of the benefit plan
At least 50% of the benefit plan will be granted as shares the benefit plan is granted to directors and executive managers depending on the reaching of certain criteria identified in the Administration and Management contracts
Members of the Management Committee (MC)
Fixed remunerations CEO*
Monthly
12 average monthly salaries (based on the employment chart of the Company's employees at the end of the previous year)
Fixed remunerations deputy -CEO*
Monthly
11 average monthly salaries (based on the employment chart of the Company's employees at the end of the previous year)
Variable remunerations, of which:
Cash bonuses*
quarterly
% applied on remuneration (less additional remunerations) for the quarters when the evolution of EVERGENT Investments share price is higher than the evolution of the sector index (BET-FI), on most trading days in the reporting period (quarter)
Share-based participation to the benefits fund
Annually
the total annual amount of participation in the benefits of BD/MC members is 5% of the achieved net profit and of the net profit from transactions reflected in the retained earnings, before the registration of the benefit plan
At least 50% of the benefit plan will be granted as shares
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
240
Image should be here
2023 Board Report Separate Financial Statements
Annex 7.2
Annual change compared to the previous year, over the last 5 years, of the net remuneration of each member of the management structure, of the Company's performance (reflected in the Net Result) and of the average net remuneration of the Company's employees.
Modification (%)/year
2023
2022
2021
2020
2019
Net result (lei)
203,756,752
117,934,739
149,296,850
56,074,556
198,204,892
Annual modification (%) of the company’s performance (net result)
72.8
-21.0
166.2
-71.7
112.3
Annual modification (%) of the remunerations of management structure compared to the previous years
President CEO
42.12
-10.3
74.0
-40.6
58.6
Vice-president, deputy CEO
42.13
-13.1
76.4
-41.7
59.9
President of the Appointing- Remuneration Committee
42.74
-31.1
-3.9
-41.0
59.9
President of the Investments Committee
43.14
-16.0
31.1
-43.2
62.4
President of the Audit Committee
42.79
-17.7
30.5
-42.1
80.0
Annual modification (%) of average remuneration based on the full-time equivalent of employees
10.0
8.2
11.4
5.8
4.4
* Variable remuneration varies according to the Annual Net Result
According to the Remuneration Policy approved by shareholders, the assessment of the member of management structure is made annually, at which time it is also checked if total remuneration abides by the remuneration policy adopted and its contribution to the company’s long-term performance.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
241
Image should be here
2023 Board Report Separate Financial Statements
Annex 8
REPORT ON THE ACTIVITY CARRIED OUT BY THE APPOINTING - REMUNERATION COMMITTEE IN 2023
Preamble
The present report is prepared based on the provisions of Regulation no. 2/2016 on the application of corporate governance principles by entities authorized, regulated and supervised by the Financial Supervisory Authority, applicable on 01.01.2020, with its later amendments and additions and shall accompany the 2023 Board of Directors’ report related to the separate financial statements (Annex 8 to the Report).
Presentation of the Appointing –Remuneration Committee
The Appointing-Remuneration Committee is a permanent committee with consultative function, independent from EVERGENT Investments’ executive management, subordinate to the Board of Directors.
The Committee assists the Board of Directors in fulfilling its responsibilities in the field of appointing management members and their remuneration.
The Committee is comprised of at least 2 non-executive members, of whom at least one is an independent member, in that it abides by the independence principle foreseen by art. 18 of FSA Regulation no. 1/2019 on the assessment and approval of the members of the management structure and individuals holding key-positions within entities regulated by the Financial Supervisory Authority .
The current members of the Appointing-Remuneration committee are set by the resolution of the Board of Directors on 05.04.2021, namely: Costel Ceocea - president, Horia Ciorcilă - member, Octavian Radu - member.
The attributions and responsibilities of the Committee are foreseen in the internal regulation „Procedures regarding the organisational structure and administrative, accounting requirements and control and protection devices in the field of electronic data processing, as well as adequate internal control mechanisms”, AIFM authorized, namely:
Attributions, responsibilities:
(a) It drafts recommendations regarding the appointing policy applicable to managers and directors of the company to be presented for the approval of the Board of Directors.
(b) It endorses, prior to the approval by the Board of Directors, and follows-up the abidance by the remuneration policy for managers, directors and employees of the company, prepared and applied by the company’s executive management. If they identify irregularities in the preparation or application of the remuneration policy, the members of the committee immediately notify in writing the executive management on the situations found and seek their correction, informing the members of the Board of Directors accordingly. The executive management is bound to submit a written response to the committee within 3 working days from the date of receiving the notification, which in turn will inform the members of the Board of Directors. In case the executive
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
242
Image should be here
2023 Board Report Separate Financial Statements
management refuses or unjustifiably delays the application of modifications requested by the Committee, the Board of Directors is bound to submit FSA a report on the irregularities identified within the remuneration policy of EVERGENT Investments SA. The report is submitted within 10 working days from the written notification of the Appointing-Remuneration Committee.
(c) It can draft recommendation on the remuneration policy on the level of EVERGENT Investments Group;
(d) It submits to the Board of Directors the annual report regarding remuneration and other advantages offered to the managers and directors during the financial year;
(e) It is informed about the documentation that is provided to the financial auditor for the analysis of transactions reported in accordance with Art. 108 of Law no. 24/2017 on legal documents concluded with the managers and directors; following the audit report it will recommend measures to be taken, if necessary;
(f) It prepares recommendations regarding the covering of vacant positions in the Board of Directors, abiding by GMS resolutions and applicable law;
(g) It prepares recommendations regarding the adopting of the resolution of the Board of Directors and/or executive management for the appointing, employment, discharge of office or dismissal of department managers and staff in key positions and control position, as well as for setting the their indemnity level and their rights and obligations;
(h) It regularly assesses the level of acquirement and application of specialized knowledge and makes recommendation regarding the continuous update process of the professional knowledge of directors and executive managers;
(i) it makes recommendations for the improvement of knowledge regarding the activity of the company for the purpose of applying the best corporate governance practices;
(j) it monitors the compliance with the requirements and obligations of transparency, information and reporting, regarding the information in this area of activity.
The activity of the Appointing-Remuneration Committee in 2023 covered the following aspects:
A. Annual review of the general principles of the remuneration policy and the evaluation of compliance with the remuneration policy
Legal and internal regulations of remuneration policy
1. Remuneration policy for the directors of the Company, approved by the resolution of the ordinary general meeting of shareholders no. 3 on 28 th January 2021.
2. Remuneration policies and practices for the personnel categories whose professional activity has a significant impact on its risk profile;
3. Guide on solid remuneration policies, in accordance with AIFMD;
4. Memorandum of Association , Art. 7. Board of Directors – line 11;
”(11) The annual general limits of remunerations and bonuses for all the directors, including the supplementary remunerations of the directors in charge of specific duties, as well as of the directors, amount to 0.6% of the average total asset value of the previous year, calculated and reported in compliance with the legal provisions. Included in the general limits, the monthly remuneration for all the members of the Board of Directors is at the level of 0.015% of the average total asset value of the previous year, equally divided. The directors and executive participate in the benefit plan, inclusively paid by share allocation or option allocation to acquire company shares, amounting to 5% of the
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
243
Image should be here
2023 Board Report Separate Financial Statements
realized net profit and net revenue from transactions reflected in reported result. The actual level of this participation is established by the board of directors, after the approval of the annual financial statements in the General Meeting of Shareholders”.
5. Administration and Management Agreements for the mandate corresponding to 2021- 2025 approved by the resolution of the Ordinary General Meeting of Shareholders no. 4 on 28.01.2021.
6. The collective employment contract regulates the fixed and variable remuneration for employees and performance indicators for each job category.
Presentation of the remuneration policy. Responsibilities of the Appointing-Remuneration
Committee
The remuneration policy is applied to personnel from all levels of organisational structure within the company and represents the framework of remuneration policies for EVERGENT Investments Group. Variable remuneration for companies running new investment programs may also be granted before they become profitable, if the granting of the remuneration is sustainable, depending on the financial status of the entity and justified by the performance of the project status, evaluated in a multiannual framework that is specific for the investment. The result of the evaluation and level of remuneration are approved by the executive management of EVERGENT Investments, with the recommendation of the Appointing-Remuneration Committee.
The Appointing-Remuneration committee is responsible for the management of the remuneration and appointing policy:
(a) it analyses and makes sure that the remuneration and benefits policy and recommendations of the governing body correspond to the long-term business strategy, objectives, values or interests of EVERGENT Investments; for this purpose it analyses and makes recommendations to the Board of Directors regarding the remuneration policy and informs the Board of Directors about possible irregularities identified in the preparation or application of the remuneration policy;
(b) it is responsible for preparing decisions regarding remuneration;
(c) it directly supervises the remuneration of staff with management and control functions;
(d) it annually analyses the general principles of the remuneration policy and informs the Board of Directors about their application; it provides an independent internal assessment of the abidance by the remuneration policy:
The Committee has analysed the items on the Board of Directors’ agenda regarding the remuneration policy, to be approved by the Board of Directors:
1. Prior approval regarding the revision of “Remuneration policies and practices for personnel categories whose professional activities have a significant impact on its risk profile” of EVERGENT Investments SA – FSA authorized AIFM.
2. Prior approval of the revision of “Evaluation Policies and Procedures for individuals from the management structure and individuals covering key positions within EVERGENT Investments”, for alignment to the provisions of FSA Regulation no. 20/2021
3. Prior approval of the variable remuneration structure for 2022 and recommendation to the Board of Directors to approve the granting of variable remuneration to directors, executive managers and employees, as follows:
- in cash – maximum 50% of variable remuneration, share-based – the right to receive free of charge a number of 7.708.908 EVER shares, for a unit price of 1,2850 lei, closing price on 26.04.2023, the date before the approval of the Stock Option Plan
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
244
Image should be here
2023 Board Report Separate Financial Statements
The exercise of the right to receive free shares: following the expiry of the 12 months’ term from the date the share-based payment agreement is entered between the Company and beneficiaries. At the time right is exercises, the company will enter a contract to exercise the transfer option with each beneficiary.
4. Endorsement of the assessment of the employees’ professional performance for 2022.
The committee has also analysed the application of internal regulations provisions “Policies and procedures for the assessment of individual in the management structure and individuals holding key functions in EVERGENT Investments“, in the process of assessing the professional performance of employees in 2022, namely:
✓ Setting the variable remuneration in correlation with the degree of achievement of performance objectives.
✓ The granting of variable remuneration based on the results of the assessment of professional performance, using quantitative and qualitative assessment criteria that were set as follows:
• For directors - according to the provisions of the Memorandum of Association, Administration agreements approved by the General Meeting of Shareholders;
• For executive managers - according to the provisions of the Memorandum of Association, the Management Agreements approved by the General Meeting of Shareholders and resolutions of the Board of Directors;
• For employees – according to the provisions of the collective employment contract and individual employment contract, the criteria being usually set on a yearly basis.
5. Prior approval and recommendation to the Board of Directors to approve the granting of the quarterly bonus fund for directors, managers and employees, making sure that it abides by budget provisions and the abidance by the provisions in the Management Agreements, Administration agreements and collective employment contract; the Committee has endorsed the suggestions of executive management regarding the granting of the bonus fund for employees, with the abidance by the criteria foreseen in 2023 Collective Employment Contract .
6. Prior endorsement and recommendation of the Board of Directors to approve the Collective Employment contract negotiated with the representatives of management with the representatives of employees, that is to come into force starting on 01.01.2023.
Conclusion: The Committee has examined the general principles of the remuneration policy, the way the remuneration policy is abided by and ascertained the adequacy of criteria and their application in 2023.
The Committee has monitored the abidance by the provisions of art. 21 Law no. 74/2015 regarding the publication of fixed and variable remunerations, on personnel categories:
➢ In the annual report of the Board of Directors – in chapter expenses with personnel, presenting the salaries, indemnities and bonus fund that represent part of variable remuneration.
➢ In the explanatory notes to the separate financial statements that present the following information:
• Names of the members of the Board of Directors, namely their qualities (including the directors);
• Number of individual employment contracts, management contracts and administration contracts;
• Wages and indemnities paid based on the individual employment contracts, management contracts and administration contracts that include the fixed remuneration paid as well as the bonus fund that is part of variable remuneration;
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
245
Image should be here
2023 Board Report Separate Financial Statements
• Variable remuneration paid to employees, in cash and share-based through the stock options plan program ;
• Variable remuneration paid to directors (two of them also fulfilling the position of CEO, namely deputy CEO), in cash and in shares offered through the stock options plan program
B. Assessment of the adequacy of individuals in the management structure and key positions, in accordance with new legal provisions stipulated by FSA Regulation no. 1/2019
1. The Committee has presented the Board of Directors reports regarding the assessment of the adequacy of individual from management structure and with key positions, in accordance with FSA Regulation no. 1 /2019 regarding:
1) Annual assessment (for 2022) of the adequacy of individuals in management structure (individual and collective assessment)
2) Annual assessment of the adequacy of key positions, assessment of the adequacy of the individual newly appointed for the Compliance Officer position. Assessment conclusion the committee has ascertained the adequacy of individuals from the management structure and with key positions. The assessment sheets and matrixes approved by the Appointing and Remuneration Committee were used in the assessment.
C. Measures for the application of 2020-2026 Succession Plan. Recommendations regarding the appointing policy within EVERGENT Investments
1. The Appointing-Remuneration committee has made recommendations to the Board of Directors for the application of 2020-2026 succession plan regarding:
• Set-up of new positions;
• Initiation/ acceleration of the selection and recruitment procedure in 2021, including by contracting outside specialized consultancy for the newly set-up positions and existent vacant positions.
2. According to its responsibilities, the Committee issues recommendations for the purpose of adopting the Board of Directors’ decision for the employment, discharge of function, namely firing of department directors and individuals holding key positions. In exercising these responsibilities, the committee recommended appointing Mr Gabriel Lupaşcu as Compliance Officer, according to FSA Regulation no. 1/2019.
D. Abidance by the appointing and remuneration policies on the level of EVERGENT Investments Group
Recommendations were prepared for companies in EVERGENT Investments Group in 2022, as follows :
1. Subsidiary Mecanica Ceahlău SA – recommendation regarding the remuneration of executive managers and members of the Board of Directors;
2. Subsidiary Agrointens SA:
– recommendation regarding the appointing and remuneration of the interim CEO
- recommendation regarding the appointing and remuneration of the CEO
- recommendation on the extension of director mandates and implementation of corporate governance principles;
- recommendation regarding the appointing of the members of the Board of Directors, their mandate duration and remuneration
3. Subsidiary CASA SA: recommendation regarding the appointing of a new candidate in the Board of Directors
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
246
Image should be here
2023 Board Report Separate Financial Statements
4. Subsidiary EVER AGRIBIO SA: recommendation on the appointing of a new candidate in the Board of Directors, update of Administration Contracts and remunerations for BD members.
E. Recommendations to executive management on the appointing of candidates for the position of managers in companies in EVERGENT Investments portfolio, submitted for the approval of GMS of that particular companies, according to the procedures regarding the selection and appointing process for individuals in the Boards of Directors of companies in the portfolio
Internal Regulation
The appointing of employees of EVERGENT Investments in companies from the entity’s portfolio is a expressly standardized in “Guideline regarding the selection and appointing process of individuals supported by EVERGENT Investments in the Board of Directors of companies in which it is shareholder”, annex to the Procedure “Exercise of EVERGENT Investments’ attributions as shareholder in companies from Private- Equity, Financial- Banking, Energy-Industrial and - SELL Portfolios”.
According to this procedure, in the analysis process of convening notices for GMSs of companies in the portfolio in 2023, based on the selection principles and criteria set, directors have submitted for the approval of the Appointing-Remuneration Committee some candidates for the director position in companies from EVERGENT Investments’ portfolio, that were later submitted for the approval of the GMS in that respective company, according to legal provisions.
Note : The half-yearly activity reports of the Appointing-Remuneration committee related to 2023 were approved by the Board of Directors.
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
Image should be here
247
Image should be here
2023 Board Report Separate Financial Statements
Annex 9
STATEMENT
According to the provisions of Article 63 paragraph (1) letter c) of Law 24/2017, we, the undersigned Claudiu DOROŞ as President & CEO and Mihaela MOLEAVIN as Finance Director - responsible for preparing the separate financial statements of EVERGENT Investments SA (the Company) as at 31 December 2023, declare the following:
a) The separate financial statements were prepared in accordance with the Accounting Regulations compliant with the International Financial Reporting Standards applicable to entities authorized, regulated and supervised by the Financial Supervisory Authority in the Financial Instruments and Investments Sector, approved by Financial Supervisory Authority Norm no. 39/2015;
b) The accounting policies used in preparing the annual financial statements are in accordance with applicable accounting regulations;
c) EVERGENT Investments Group carries out its activity on a going concern basis;
d) We are not aware, at the date of this statement, of any other information, events, circumstances that would significantly alter the above statements.
We confirm that the separate financial statements, which are compliant with the aforementioned regulations, present a true and fair view of the financial position and performance (including the assets, liabilities, profit and loss account of the Company) and that the Board of Directors' Report includes a fair analysis of the Company's development, financial position, and performance, as well as a description of the main risks and uncertainties specific to the activities carried out.
Claudiu Doroş Mihaela Moleavin
President & CEO Finance Director