THE ANNUAL REPORT ON 2009 - S.C. Asigurarea Romneasc - ASIROM VIENNA INSURANCE GROUP S.A.

The Annual Report according to the: Order of the President of the Insurance Supervisory Commission (CSA) no. 113.119/2006 for putting into application of Norms concerning the minimum information that have to be published annually by the insurers. General overview Denomination and legal status: S.C. Asigurarea Romneasc ASIROM VIENNA INSURANCE GROUP S.A. The company was founded starting with 1st of January 1991, by the Government Decision no.1279/1990 and is carrying out the activity of insurance and re-insurance on the grounds of Memorandum of Association, of Law no. 31/1990 - republished, concerning the trading companies, with subsequent modifications and completions, of Law no. 136/1995 regarding the insurances and reinsurances from Romania, with subsequent modifications and completions, of Law no. 32/2000 concerning the insurances companies and supervising of insurances, with subsequent modifications and completions. Number of registration at Trade Registers Office: J40/304/1991 The company was authorized by the Insurance Supervisory Commission through the Decision no.16 from 07th November 2001. ASIROM is registered within the Insurers Register under number RA-023/2003. The address of the headquarter is no. 31-33, Bulevardul Carol I, district 2, code 020912, Bucharest, Romania. Telephone: 004.021.601.1099; facsimile: 004.021.601.1288, 004.021.601.1289

Structure of shareholders at 31st of December 2009: VIENNA INSURANCE GROUP Wiener Stadtische Versicherung A.G. . 85.9124 % Other legal persons .................................................... 13.4860 % Natural persons 0.6016 % .......................................................

The company is managed by a dualist system: The dualist system of the company administration/management was assured during 2009 by: A. The Supervisory Board, composed of: 1) Peter Franz Hfinger 2) Martin Simhandl President Vice- President

3) 4) 5) 6) 7)

Nicolae Iliu Erich Leiss Judit Havasi Daniela Creu Gerhard Lahner -

Member Member Member Member Member

Since 29th of April 2009, the structure of Supervisory Board has changed: 1) 2) 3) 4) 5) 6) 7) Peter Franz Hfinger Martin Simhandl Nicolae Iliu Kurt Ebner Michael Schlgl Daniela Creu Gerhard Lahner President Vice- President Member Member Member Member Member

B. The Managing Board of the company with the following structure: 1) Boris Johannes Schneider 2) Mariana Diaconescu Director 3) Daniela Meghea 4) Ion Brtulescu 5) Martin Hashka President and General Director Vice -President and Deputy General

Member and Executive Director Member and Executive Director Member and Executive Director

In present, ASIROM is authorized by the Insurances Supervisory Commission to practice the follwoing clases of insurances: General Insurances: a) b) c) d) e) f) g) h) i) j) k) l) m) n) insurances of accidents and illness; insurances of health; insurances of terrestrial means of transport, inclusively railways ; insurances of air means of transport; insurances of maritime means of transport (sea, river, lake, navigable canals) insurances of goods in transit, inclusively transported merchandise, luggages and any other assets; insurances of fire and other natural calamities; insurances of damages brought to properties; Motor Third Party liability (MTPL and Green Card); insurances of civil liability for the air means of transport; insurances of civil liability for maritime means of transport; insurances of civil general liability; insurances of credits; insurances of guarantees.

As regards the Life Insurances, ASIROM offers a wide range of products, annuities and supplementary life insurances. Deductibility that is applied to the insurances contracts is regulated through the Code of Fiscal Procedure, such as: a) at the calculation of the tax on profit, there are deductible the expenses with the insurances premiums, which concern the assets of the tax payer, that are

connected to the activity object or which are performed into account of the policies that constitutes guarantees related to the loans engaged for the purpose of the business conduct (banking credits, leasing, etc.) b) limited deductibility for the expenses with the insurance premiums, made by the employers for the voluntary health insurances, within the limit of 200 Euro/ employee annually; c) above-mentioned provisions are applicable, also for establishing of the taxable income from the independent activities (in this case, being also, deductible the expenses with the insurance premiums for the professional risks coverage); d) insurance compensations and indemnities are not taxable incomes; e) insurance operations (inclusively the insurance premiums) are exempted from VAT. 10. The insurance and reinsurance activity performed by ASIROM during the 2009 The activity of insurance focused mainly on the increase of profitability, the improvement of the insurance conditions, of inner regulations and of the system for evidencing and administrating of insurances portfolio, its consolidation, elaboration of new insurance products and permanent adjustment to the legislative requirements from insurances domain, in accordance with the norms issues by the Insurances Supervisory Commission, also with the requirements of the European Union. 10.1. Insurances of life The underwriting gross premiums summarized 88.97 mil.RON and were made within life classical insurances and annuities. (insurances that are not connected to the investments funds) 10.2. General Insurances The underwriting gross premiums summarized 556.9 mil.RON, the main percentage being made of vehicles insurances: 79% of the total of underwritings on the general insurances, followed by the insurances against fires and other calamities.(13%) During 2009, the following products were revised/ elaborated: facultative insurance of dwellings and of goods from these dwellings Rezident; insurance against fire and against other calamities of buildings and of other constructions, also of their contents Phoenix; insurance of equipment for constructions and other special installations;

insurance of managerial liability of the administrators and directors D&O ; insurance of goods during the transport Cargo ; third party liability for doctors, pharmacists and other persons from the health care Malpraxis; insurance of damages and theft for the vehicles Casco .

10.3

Activity of sales and marketing Divisions of Sales and Marketing have pursued the continuous diversification of

ASIROM in conditions of profitability, offering to the clients a flexibile system of contracting, differentiate products of insurance according to specific needs and to individual risk profile. Structure of distribution channels for non-life insurances has evolved in the profitability direction, respectively it increased the % of non-commissioned insurances (from 4% in 2008, to 6% in 2009) and decreased the % of insurances sold by our own agents, employees (from 19% in 2008 to 18% in 2009). The main sale force remained the one composed of natural persons (having approx. 49% of sales), followed by brokers, having approx. 20% of sales. Distribution of the life insurances was performed, mainly by the direct sales force (agents as natural persons and employees).

Segment of corporate clients has gained approx. 5% as share quota of ASIROM total portfolio evolving from 56% in 2008 to 61% in 2009. The most significant evolution was registered at RCA, where the corporate segment increased in 2009 by 10%, in terms of underwriting gross premiums compared to 2008, meanwhile the retail segment registered a decrease by approx. 28%. The alternative sales channels registered an average increase of approx. 62%. Subscriptions from the public acquisitions procedures, selections of offers and direct negotiations, during 2009, has recorded a 57% increase compared to 2008, while the insurance protocols and the insurance conventions have brought, stimulated, also by the

new positioning of ASIROM, as a part of a strong international group of insurances, an increase of approximately 64%.

The profitability of branches has been significantly improved, the combined ratio decreasing by about 7.7 percentage points compared to 2008.

Another strategic objective achieved by the Alternative Sales Division has been the development of a new distribution channel ASIROM franchise. Thus, ASIROM a initiated in 2009, the collaboration with the first eight francise partners, the total volume of subscriptions exceeding 1mil. EURO, the relationship registering a gross profitability of approx. 25 %. Among the activities performed by the Marketing and PR Divisions, the most significant one was the initiation of the Culture Change Program, which aimed to stimulate a new mentality of the ASIROM team members, oriented towards profit and communication. Also, various campaigns have helped sales, especially RCA, by means of advertising . Deeply oriented towards the exemplary customer service, the Division organized events and actions, through which the main assets of the company were advertised: high demands, integrity, total commitment to the clients requirements and expectations. The message for the public was that ASIROM VIENNA INSURANCE GROUP is the steadfast friend of Romanians. The internal communication was achieved mainly thorugh the newsletter, which was upgraded from ASIROM in the insurance world to ASIROM NEWS. In the activity of reinsurance, ASIROM VIG has collaborated, mainly with the followings re-insurers: VIG Re Prague, Scor Re (Germania), Swiss Re (Germania), Gen Re (Austria), Hannover Re (Germany), Munich Re (Germany), Sindicate Lloyds (Great Britain) that participated to the S.C. ASIROM S.A. reinsurance contracts also with brokers: Willis Re (Great Britain), RFIB (Great Britain). Both, the above-mentioned reinsurers and brokers are the main companies of profile in this domain, in the world, with a high level of financial security, certified by the international rating agencies (Standard & Poors, AM Best etc.). Also, in 2009 ASIROM VIG intensified the cooperation on the reinsurance line with the members companies in Vienna Insurance Group, by entry in the group protection as NatCat XL (against risks of disaster) and MTPL XL (for Motor Third Party Liability and Green Card), applying the rules of VIG concerning the re-insurers bonity and the common position on the events in the reinsurances market, etc. 10.3.1 Activity of fronting During 2009, S.C. ASIROM S.A. has continued and developed the cooperation with international insurance groups Zurich Financial Services (Switzerland), Royal & SunAlliance (England), International Networking of Insurance (INI), that comprises companies of large international prestige, such as Travellers USA, Victoria Versicherung

 Germany, Amlin BeNeLux, Gothaer Germany, etc). On the basis of the cooperation contracts, S.C. ASIROM VIG has issued local policies of fronting type, for the companies clients as members of these groups, policies that were partially ceded, in optional reinsurance facultative. Most of these customers are large industrial groups and/or international trading companies, such as: Nestle, Siemens, Bayer, Merck, Sandoz, Aker, Heidelberg, Dr.Oetker, Ericsson, Whirlpool, EON Gaz, Selgros, Ford, Peugeot, Eurocopter, Mega Image, LG Electronics, Agrana, Baumax, etc.

Number of territorial units w as, at the end of 2009 - 191, of which: 45 Branches, Sucursale, 85 de Representative Offices and 61 Agencies and Working Points (in 172 towns, locations from Romania). In 2009, within ASIROM, an average number of 1,943 employees (inclusively at the headquarter) had performed their activity, of which, a number of 972 employees (insurance inspectors) had tasks for sales, and 200 employees (claims inspectors) has tasks to ascertain and to solve the claim files. NETWORK OF ASIROM BRANCHES 1 2 3 4 5 ASIROM ALBA ASIROM ARAD ASIROM ARGE ASIROM BACU ALBA IULIA Branch ARAD Branch PITETI Branch BACU Branch Branch ORADEA BISTRIA NSUD Branch BOTOANI Branch BRAOV Branch BRILA Branch BUZU Branch RESIA Branch CLRASI Branch str. Piaa Iuliu Maniu nr. 13, ALBA IULIA str. N. Grigorescu nr. 1 - 3, ARAD str. Smeurei nr. 43, PITESTI str. 9 Mai nr. 25, BACAU str. tefan Zweig nr. 5, ORADEA str. G-ral G. Blan BISTRITA NASAUD str. Octav Bncil BOTOSANI Bd. M. Koglnicenu BRASOV str. Calea Clrasilor BRAILA Bd. N. Blcescu, bloc BUZAU nr. nr. nr. nr. 56, 33, 11, 46,

ASIROM BIHOR ASIROM BISTRIA 6 NSUD ASIROM 7 BOTOANI ASIROM 8 BRAOV ASIROM 9 BRILA ASIROM 10 BUZU ASIROM CARA 11 SEVERIN ASIROM 12 CLRAAND

Camelia,

P-a 1 Decembrie 1918, bl. 4, RESITA str. Bucureti nr. 183, CALARASI

13 ASIROM CLUJ ASIROM 14 CONSTANA ASIROM 15 COVASNA ASIROM 16 DMBOVIA 17 ASIROM DOLJ ASIROM 18 GALAI ASIROM 19 GIURGIU 20 ASIROM GORJ ASIROM 21 HARGHITA ASIROM 22 HUNEDOARA ASIROM 23 IALOMIA 24 ASIROM IAAND ASIROM 25 MARAMURE ASIROM 26 MEHEDINI ASIROM 27 MURE ASIROM 28 NEAM

CLUJ Branch

str. Clinicilor nr. 20 NAPOCA Bd. Tomis nr. 142, CONSTANA Branch CONSTANTA SF. GHEORGHE str. Godri Ferencz Branch GHEORGHE str. Libertii, TRGOVITE Branch TARGOVISTE CRAIOVA Branch

- 22, CLUJ bl. TD 2A, nr. 2, SF. bl. B1,

str. Madona Dudu, bl 8, CRAIOVA str. Domneasc nr. 40, bl. 5 U. 2, GALAI Branch GALAI str. Vlad epe, bl. MUV 3, GIURGIU Branch GIURGIU str. Ecaterina Teodoroiu, bl. 6 TARGU JIU Branch parter, TARGU JIU MIERCUREA CIUC Str. Koussthlajos nr. 17 A (fosta Branch Florilor), MIERCUREA CIUC DEVA Branch SLOBOZIA Branch IASI Branch Baia Mare Branch TURNU SEVERIN Branch Branch TARGU MURE PIATRA NEAM Branch str. Ion Creang nr. 21, DEVA B-dul Chimiei, bl. D3 parter, SLOBOZIA B-dul tefan cel Mare bl. B2 - C3, IAAND str. Culturii nr. 9, BAIA MARE str. Al. Brccil bl. B2, TURNU SEVERIN Piaa Teatrului nr. 4, TARGU MURE Bd. Traian nr. 6, PIATRA NEAM str. A.I. Cuza nr. 9, Bl. C.A.M. 1, SLATINA str. Cantacuzino nr. 192, bl. A1, PLOIETI str. Transilvania nr. 3 - 5, SATU MARE str. Unirii nr. 16, ZALU Bd. V. Milea nr. 12 A, SIBIU

29 ASIROM OLT SLATINA Branch ASIROM 30 PRAHOVA PLOIETI Branch ASIROM SATU 31 MARE SATU MARE Branch 32 ASIROM SLAJ 33 ASIROM SIBIU ASIROM 34 SUCEAVA ASIROM 35 TELEORMAN 36 ASIROM TIMI ASIROM 37 TULCEA ZALU Branch SIBIU Branch SUCEAVA Branch

str. Petru Rare nr. 14, SUCEAVA str. Ion Creang nr. 52 - 54, ALEXANDRIA Branch ALEXANDRIA Piaa Consiliul Europei nr.1, TIMI str. Unirii nr. 4, bl. D, TULCEA

TIMI Branch TULCEA Branch

38 ASIROM VASLUI VASLUI Branch str. tefan cel Mare nr. 70, VASLUI ASIROM RAMNICU VALCEA str. Gen. Magheru, bl. S3, 39 VLCEA Branch RAMNICU VLCEA

ASIROM 40 VRANCEA ASIROM BUCHAREST 41 MUNICIPALITY ASIROM 42 DOROBANTI ASIROM MIHAI 43 BRAVU ASIROM 44 OLTENIEI ASIROM 13 45 SEPTEMBRIE ASIROM 46 Headquarter

FOCANI Branch

str. Republicii nr. 7, FOCANI

str. Ion Ghica nr. 7, sector 3, ION GHICA Branch BUCURESTI str. Vasile Lascar nr. 178, sect. 2, DOROBANTI Branch BUCURESTI MIHAI BRAVU Bd. Mihai Bravu nr. 90 - 96, sect. Branch 2, BUCURESTI str. Impratul Traian nr. 32, sect. OLTENIEI Branch 4, BUCURESTI Branch 13 Calea 13 Septembrie nr. 63, sect. SEPTEMBRIE 5, BUCURESTI Bd. Carol I nr. 31 - 33, sect. 2, BUCURESTI BUCURESTI

ASIROM Channels of distribution are formed of: a) 10,518 - insurance agents as natural persons; b) 430 insurance agents as legal persons and brokerage companies. ASIROM has concluded a number of approximately 600 conventions with service units from the entire country. Thus, there is the possibility of direct settlement of accounts (payments) towards the service unit, without being necesarry to acquit the repairings, this being made directly on the grounds of these conventions, by ASIROM . The complete list containing the service units, agreed by ASIROM is available on www.asirom.ro. Representative Offices for Compensations ASIROM has appointed representative offices for compensations in each member state of EU (the list which is permanently up-dated, can be found on the companys site). These representative offices for compensations are empowered to instrument the claims in the name and on behalf of the insurer and to represent the insurer within the compenstaion convention, performed with the insured Party and with damaged Party. List of units can be found on the companys site: www.asirom.ro . SUMMARIZED GENERAL BALANCE FINANCIAL EXERCISE CLOSED ON 31 DECEMBER 2009 31 December 2009 PATRIMONIAL ELEMENTS (lei)

I. Intangible asssets

3,481,890

II. Investments Lands and constructions 206,266,997

Titles owed at the affiliated companies Other investments in financial immobilizations Shares, other securities with variable incomes and units To the common investments funds Obligations and other titles with fixed income Other loans Deposits at the credit institutions TOTAL

14,783,299 17,968,586

6,430,489 308,416,421 113,817,316 667,683,108

III.Part ceded from the technical reserves related to the contracts cedate into reinsurance 45,789,640 IV. Debts Insured Other debts from the insurance operations Debts provenite din operaiuni de reinsurance Otherdebts TOTAL V. Other elements of assets Technological equipment, devices, means of transport, tangibel assets Consumables Cash and accounts into the banks TOTAL VI. Expenses in advance (downpayments) Downpayments, interests And rents in advance Acquisition reported expenses general and life insurances Other expenses registered in advance TOTAL 274,077 44,790,048 167,802 45,231,927 10,364,625 2,768,855 22,031,308 35,164,788 185,055,553 7,199,542 51,366,514 243,621,609

TOTAL OF ASSETS (I+II+III+IV+V+VI)

1,040,972,962

31 December 2009 (lei) I. Equity and reserves Paid up equity Equity premiums Reserves from re-assessment Legal reserves Reserves representing surplus Achieved from the re-assessment reserves Other reserves Own shares Reported result- debtor balance Exercise result Loss Profit Profit distribution TOTAL 5,160,460 258,023 266,356,450 2,349,949 40,266,732 414,120 180,049,191 157,853,432 92,962,500 144,041,209 4,443,502

II. Tehnical reserves, of which: Technical reserves concerning life insurances Technical reserves concerning general insurances III. Provisions for imposits IV. Other provisions V. Debts from direct insurance operations VI. Debts from reinsurance operations VII. Other debts VIII. Incomes in advance

664,594,573 232,237,656 432,356,917 150,002 4,337,107 1,166,360 1,447,092 80,412,746 22,508,632

TOTAL LIABILITIES (I+II+III+IV+V+VI+VII+VIII)

1,040,972,962

The financial investments of the companies had been formed of bank deposits, state titles, corporate obligations, fund units and buildings and participations at social equity at other trading companies. For the purpose of protection the portfolio safety into the financial investments, but also for obtaining of high yield on long-term, the percentage of state titles issued by the Ministry of Finances, has increased in totally, ASIROM making a prudential policy of investments. By this, in 2009, the financial yield has situated over the inflation rate. Strategy of the company development on 2010 aims mainly the continuation of the process of transformation/reorganization of the company and of territorial structure of the branches and finalizing of this process. Thus, ASIROM is consolidating position of favorite insurer of Romanians.

Translation from Romanian PRICEWATERHOUSECOOPERS

THE INDEPENDENT AUDITORS REPORT TOWARDS THE SHAREHOLDERS OF ASIGURAREA ROMANEASCA ASIROM VIENNA INSURANCE GROUP S.A. 1. The summarized financial statements attached to the Annual Report of Asigurarea Romaneasca ASIROM Vienna Insurance Group S.A. (Company) has been extracted from the individual financial statements of the company for the financial exercise ended at 31 December 2009, elaborated in accordance with the Order of the Insurance Supervisory Commission (CSA) no. 3120/2005, with the subsequent modifications and completions and with the accounting policies described in the Notes to the individual financial statements. The company management is liable for the elaboration and presentation with accuracy of these summarized financial statements. Our responsibility is to express an opinion upon the conformity, in all significant issues, concerning the individual financial statements, from which they were extracted. 2. We audited in accordance with the International Standards of Audit, the individual financial statements for the financial exercise ended at 31 December 2009, from which the General Balance and the Profit and Loss Account were extracted, appointed as summarized financial statements. In our Audit Report, dated on 12 April 2010, we stated an opinion without reserves upon the individual financial statements of the company, from which there were extracted the summarized financial statements. 3. In our opinion, the summarized financial statements at 31 December 2009 under all significant issues, are in accordance, with the individual financial statements, from which they were extracted. 4. For a better understanding of the financial position of the company and its operation results for the financial exercise ended at 31 December 2009, also of the applicability area of our audit, the summarized financial statements must be analyzed together with the individual financial statements from which our audit report is extracted also.

Paul Facer 14

Statutory Auditor, stamp and signature: illegible On behalf of PricewaterhouseCoopers Audit SRL Bucharest, 12 April 2010.

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