Monthly Report

30 December 2016

Fund Description

Fondul Proprietatea (FP) is a joint stock company operating as an Alternative Investment Fund (AIF) with an unlimited lifetime, incorporated in Romania. The Fund was listed on the Bucharest Stock Exchange on 25 January 2011, and on the Specialist Fund Market of the London Stock Exchange ("LSE") by means of Global Depositary Receipts ("GDRs") on 29 April 2015.

Investment Objective

The Fund's investment objective is the maximization of returns and per- share capital appreciation via investments mainly in Romanian equities and equity-linked securities.

Alternative Investment Fund Manager

FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.À R.L. as of 1

April 2016.

Investment Manager

Franklin Templeton Investment Management Limited UK, Bucharest Branch - since 29 September 2010.

SHARE PRICE (RON) AND DISCOUNT (%) SINCE LISTING ON BVB

0.90

0.70

0.50

0.30

5/11 11/11 5/12 11/12 5/13 11/13 5/14 11/14 5/15 11/15 5/16 11/16

FP Share Price Discount

Performance %

1-Mo

3-Mo

6-Mo

9-Mo

1-Yr

2-Yr2

3-Yr2

incept.

NAV RON3

3.67

1.43

3.67

12.79

7.33

3.29

2.65

32.84

Ordinary Share Price RON4

1.15

(1.00)

9.50

10.20

4.90

0.32

4.85

79.22

GDR RON5

(2.48)

(1.72)

8.15

13.91

4.85

N/A

N/A

0.53

NAV USD3

2.49

(6.72)

(2.06)

2.65

3.54

(4.26)

(6.56)

(2.39)

Ordinary Share Price USD4

(0.01)

(8.95)

3.45

0.30

1.20

(7.01)

(4.56)

29.34

GDR USD5

(3.59)

(9.62)

2.17

3.67

1.15

N/A

N/A

(7.46)

Cumulative

NAV/Share:

RON 1.1865 / EUR 0.2613 / USD 0.2757

Ordinary Share Price :

75% RON 0.7950 / EUR 0.1751 / USD 0.1847

GDR price (1 GDR = 50 shares):

RON 40.45 / EUR 8.91 /USD 9.40

Current Share Price Discount6: 33.00%

Current GDR Discount6: 31.81%

55% Fund NAV: RON 11.43 billion /

EUR 2.52 billion / USD 2.66 billion

Market Capitalisation (Excluding treasury shares): RON 7.66 billion / EUR 1.69 billion/

35% USD 1.78 billion

Average Daily Turnover on the BVB1: RON 4.53 million / EUR 1.00 million / USD 1.05 million

15% Average Daily Turnover on the LSE1: RON 1.18 million /EUR 0.26 million / USD 0.27 million

Since perf.

Portfolio Manager

Grzegorz Konieczny - Portfolio Manager Johan Meyer - Portfolio Manager

Fund Details as at 30/12/2016

Base Currency of Fund: Romanian Lei (RON) Date of Fund Launch: 28 December 2005 Performance Inception Date:

31 December 2010 for NAV

25 January 2011 for Ordinary Share Price 29 April 2015 for Global Depositary Receipts Number of Issued Shares: 10,786,251,902

Number of Shares Corresponding to Paid Share capital:

10,422,439,552

Subscribed Share Capital: RON 9,168,314,116.70

Performance data is shown rounded to the nearest hundredth.

The Fund uses these indicators as they are directly related to the performance objectives of the Fund included in the Investment Policy Statement.

2012

2013

2014

2015

2016

Current Discount6

50.09%

40.74%

30.87%

29.12%

32.08%

33.00%

-

-

-

29.51%

29.98%

31.81%

AVERAGE ANNUAL DISCOUNT6

2011

Ordinary Share Price 55.67% GDR -

Paid Share Capital: RON 8,859,073,619.20

Cash Distributions per Share 2017 Special Cash Distribution:

0.05000 RON, payable starting 27 March 2017

2016 Cash Distribution: 0.05000 RON June 2016

2015 Cash Distribution: 0.05000 RON June 2015

2014 Cash Distribution: 0.05000 RON July 2014

2012 Dividend: 0.04089 RON June 2013

2011 Dividend: 0.03854 RON June 2012

2010 Dividend: 0.03141 RON June 2011

2008-2009 Dividend: 0.0816 RON October 2010

PORTFOLIO STRUCTURE

Asset % of NAV

Listed Equities 21.77

Unlisted Equities 66.04

Net Cash & Receivables7 12.19

Sector % ofNAV

Power utilities: generation 30.77

TOP 10 HOLDINGS

Security name % of NAV

Hidroelectrica SA 29.61

OMV Petrom SA 16.26

CN Aeroporturi Bucuresti SA 6.66

E-Distributie Banat SA 5.25

Engie Romania SA 3.97

E-Distributie Muntenia SA 3.93

Fund Identifier

Bucharest Stock Exchange Symbol: FP London Stock Exchange Symbol: FP.

Power & Gas utilities: distribution, supply 25.43

E-Distributie Dobrogea SA 3.33

Oil & Gas 16.65

BRD Groupe Societe Generale SA 2.64

Bloomberg: FP RO (for BVB) and FP/ LI (for GDRs)

Infrastructure 8.97

Electrica Distributie Muntenia Nord SA 2.23

ISIN: ROFPTAACNOR5

ASF Public Register No: PJR09SIIR/400006/18.08.2010

CIVM Registration No: AC-4386-2/07.11.2016

Description of NAV Basis

Net Asset Value is calculated according to regulations currently applying to Fondul Proprietatea, approved by Local Regulator (CNVM Regulation no. 4/2010 as subsequently amended). Where there is trading activity in the last 30 trading days, shares listed on a regulated market are valued at closing price. The shares admitted to trading on AeRO market (alternative trading system) are valued based on the Reference Price method, respectively the average price. Where there is no trading activity in the 30 trading day period for listed investments, the unlisted valuation approach applies. Investments in unlisted companies are valued using either

Banks 2.82 Electrica Distributie Transilvania Sud SA 2.15

Total 76.03

Heavy Industry 1.81

Aluminium 0.75 Postal services 0.38

Others 0.23 Net Cash and receivables7 12.19

SHAREHOLDERS STRUCTURE8 LARGEST SHAREHOLDERS

% of total

shareholders' equity value per latest annual financial statements (proportionally with the stake held) or by using valuation methods in

% Shareholder As at

voting rights

accordance with International Valuation Standards (fair value principles). Any holding in companies going through an insolvency or reorganization procedure is valued either at zero or at the value provided by an

The Bank of New York Mellon (depository

bank for Global Depository Receipts) 35.07

Elliott Associates 21 October 2015 21.06

independent valuer, using valuation methods in accordance with

Foreign institutional investors 21.94

City of London

5 April 2016 5.04

International Valuation Standards (fair value principles). Any holding in companies under judicial liquidation procedure, or any other liquidation procedures, as well as in companies under temporary or final suspension of operation, is valued at zero until the procedure is finalised.

Starting with the NAV report as at 29 January 2016, the accounting records under IFRS are used for the computation of NAV non-portfolio items.

Romanian private individuals 17.91

Romanian institutional investors 14.12 Foreign private individuals 3.32

Ministry of Public Finance9 0.05

Treasury shares10 7.59

Investment Mgmt.

Source: Ownership disclosures submitted by shareholders.

Total Number of Shareholders 7,146

Monthly Report 30 December 2016

Important Information and Disclaimers

The above portfolio information is calculated on the basis of the NAV. The Investment Manager for the Fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the Top 10 Holdings list where the protection of such information is in the best interests of the Fund. The price of shares and income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is no guarantee of future performance. In emerging markets, the risks can be greater than in developed markets. Investment in the Fund may not be suitable for all investors; we suggest investors seek guidance from a financial adviser. Read the issue prospectus before investing in this fund/investment firm. FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.À R.L. as alternative investment fund manager and sole director of Fondul Proprietatea SA issues quarterly, semi-annual and annual reports which are published on the Fund's website at www.fondulproprietatea.ro. This is a short summary for the information of existing shareholders only and is not intended to be used as the basis for investment decisions.

Existing and potential investors should refer to the Fund's prospectus and amendment, available at www.fondulproprietatea.ro. All information presented in the report is provided by Franklin Templeton Investment Management Limited United Kingdom, Bucharest Branch.

This report is issued in Romania by Franklin Templeton Investment Management Limited United Kingdom, Bucharest Branch, at 78-80 Buzesti Str, Premium Point, 7th and 8th Floors, Bucharest 1, 011017, ROMANIA registered with ASF Public Register No. PJM01SFIM/400005.

References

  1. For the period 1-30 December 2016.

  2. Annualized rate of return.

  3. The NAV per Share Total Return is calculated in RON by geometrically linking total returns for all intermediate periods when official NAV is published. Each total return for a single period is calculated using the following formula: the NAV per share as at the end of the period plus any cash distribution during the period, dividing the resulting sum by the official NAV per share at the beginning of the period. The resulting single period total returns are geometrically linked to result in the overall total return.

  4. The Share Price Total Return is calculated in RON by geometrically linking daily total returns. Daily total return is calculated as the closing price at the end of

    the day, plus any cash distributions on that day, dividing the resulting sum by the closing price of the previous day. The resulting single period total returns are geometrically linked to result in the overall total return.

  5. The GDR Price Total Return is calculated in USD by geometrically linking daily total returns. Daily total return is calculated as the closing price at the end of

    the day, plus any cash distributions on that day, dividing the resulting sum by the closing price of the previous day. The resulting single period total returns are geometrically linked to result in the overall total return.

  6. The discount is calculated based on the latest published NAV at the date of the calculation. For Current Discount, the values are calculated based on the 30 December 2016 NAV.

  7. Net cash and receivables includes bank deposits, current bank accounts, short- term treasury bills and bonds, other receivables and assets, net of all liabilities (including liabilities to shareholders related to the returns of capital) and provisions.

  8. Based on the paid share capital.

  9. 363,812,350 shares unpaid by Ministry of Public Finance.

  10. 712,171,156 treasury shares acquired in the sixth buyback program (remaining balance after the partial shares cancellation recorded on 26 Oct 2016) and 78,974,351 treasury shares acquired in the seventh buyback program.

Fund's headquarters are at 78-80 Buzesti Str, 7th Floor, Bucharest District 1, 011017, Romania

Fund's Fiscal Identification Code (CIF): 18253260 and Trade Registry registration no: J40/21901/2005

tel +40 21 200 9600; fax +40 21 200 9631/32

Email: investor.relations@fondulproprietatea.ro Web: www.fondulproprietatea.ro

© 2017 Franklin Templeton Investments. All rights reserved.

FTIFRO FFS 12/16

Fondul Proprietatea SA published this content on 13 January 2017 and is solely responsible for the information contained herein.
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