Fondul Proprietatea : Convening notice for the Extraordinary General Shareholders’ Meeting of Fondul Proprietatea SA to be held on 28 February 2017

To: Bucharest Stock Exchange Financial Supervisory Authority London Stock Exchange Current report according to Article 113 point A, paragraph (1) letter b) of the Romanian National Securities Commission Regulation no. 1/2006 regarding the issuers and the operations with securities, as subsequently amended and completed, as well as the provisions of Article 99 of the Code of the Bucharest Stock Exchange Market Operator, Title II, Issuers and Financial Instruments Important events to be reported: Convening notice for the Extraordinary General Shareholders' Meeting of Fondul Proprietatea SA to be held on 28 February 2017 Franklin Templeton Investment Management Ltd. United Kingdom Bucharest Branch, in its capacity as Investment Manager of Fondul Proprietatea SA (the "Fund"), hereby, publishes the Convening notice of Fondul Proprietatea's Extraordinary General Shareholders Meeting ("EGM") to be held on 28 February 2017, approved by the Board of Nominees on 17 January 2017, and enclosed in the Annex to this report. The Fund's EGM shall take place at "JW Marriott" Hotel, "Salon CD" Room, 90 Calea 13 Septembrie Street, 5th District, Postal Code 050726, Bucharest, Romania, commencing 10:00 am (Romanian time). Franklin Templeton Investment Management Ltd. United Kingdom Bucharest Branch acting as Investment Manager of FONDUL PROPRIETATEA S.A. Oana Valentina TRUŢA Legal Representative

Report date: 17 January 2017 Name of the issuing entity: Fondul Proprietatea S.A. Registered office: 78-80 Buzesti St., th 7 floor, district 1, Bucharest, postal code 011017 Phone/fax number: Tel.: + 40 21 200 9600 Fax: + 40 21 200 9631 Sole Registration Code with the Trade Register Office: 18253260 Order number in the Trade Register: J40/21901/2005 Subscribed share capital: RON 9,168,314,116.70 Paid-up share capital: RON 8,859,073,619.20 Number of shares in issue: 10,786,251,902 Number of paid shares: 10,422,439,552 Regulated market on which the issued securities are traded: Shares on Bucharest Stock Exchange GDRs on London Stock Exchange

CONVENING NOTICE OF THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS OF FONDUL PROPRIETATEA S.A.

Franklin Templeton International Services S.à r.l., a société à responsabilité limitée qualifying as an alternative investment fund manager under article 5 of the Luxembourg law of 12 July 2013 on alternative investment fund managers, authorized by the Commission de Surveillance du Secteur Financier under no. A00000154/21 November 2013, whose registered office is located at 8a, rue Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg register of commerce and companies under number B36.979, registered with the Romanian Financial Supervisory Authority under number PJM07.1AFIASMDLUX0037/10 March 2016, in its capacity as the alternative investment fund manager and sole director of FONDUL PROPRIETATEA S.A., a joint-stock company incorporated under the laws of Romania, qualifying as an alternative investment fund, with its headquarters in Bucharest, 78-80 Buzeşti Street, 7th floor, 1st District, Romania, registered with the Trade Registry under no. J40/21901/2005, Sole Registration Code 18253260, with a subscribed registered share capital of RON 9,168,314,116.70, a paid-up share capital of RON 8,859,073,619.20 and with a total number of voting rights at 30 December 2016 of 9,631,294,045 (the Company/FP),

Considering

• The provisions of Articles 12 - 13 of the Company's in force Constitutive Act;

• The provisions of Companies' Law no. 31/1990, republished, with its subsequent amendments and supplementations (Law no. 31/1990);

• The provisions of Law no. 297/2004 on capital market, with its subsequent amendments and supplementations (Law no. 297/2004);

• The provisions of Emergency Government Ordinance no. 32/2012 on undertakings for collective investment in transferable securities and investment management companies, as well as for the amendment and supplementation of Law no. 297/2004;

• The provisions of CNVM Regulation no. 1/2006 on issuers and operations with securities, with its subsequent amendments and supplementations (Regulation no. 1/2006);

• The provisions of CNVM Regulation no. 6/2009 on exercising certain rights of shareholders within general meetings of companies, with its subsequent amendments and supplementations (Regulation no. 6/2009);

• The provisions of Regulation of the Financial Supervisory Authority no. 4/2013 regarding depositary receipts (Regulation no. 4/2013);

• The provisions of Article 21 of CNVM Regulation no. 4/2010 on the registration with CNVM and the operation of the company "Fondul Proprietatea" S.A., as well as on trading the shares issued by this company.

CONVOKES:

The Extraordinary General Meeting of Shareholders of Fondul Proprietatea S.A. on 28 February 2017, 10:00 o'clock (Romanian time), at "JW Marriott" Hotel, "Salon CD" Room, 90 Calea 13 Septembrie Street, 5th District, Postal Code 050726, Bucharest, Romania (EGM).

Only the persons registered as shareholders of the Company on 9 February 2017 (the Reference Date) in the register of shareholders kept by Depozitarul Central S.A. have the right to participate and vote at the EGM.

The agenda of the EGM is as follows.

1. The approval of the decrease of the subscribed share capital of Fondul Proprietatea S.A. as follows.

   The approval of the decrease of the subscribed share capital of Fondul Proprietatea S.A. from RON 5,742,226,025.22 to RON 5,238,521,987.92 through the reduction of the par value of the shares of Fondul Proprietatea S.A. from RON 0.57 to RON 0.52. The decrease is motivated by the optimization of the share capital of Fondul Proprietatea S.A., involving the return to the shareholders of a part of their contributions, proportionally with their participation to the paid-up share capital of Fondul Proprietatea S.A..

   After the decrease, the subscribed share capital of Fondul Proprietatea S.A. shall have a value of RON 5,238,521,987.92 being divided in 10,074,080,746 ordinary shares, each having a par value of RON 0.52.

   The approval of the amendment of Article 7 paragraph (1) of the Constitutive Act of Fondul Proprietatea S.A. as follows.

   "(1) The subscribed share capital of Fondul Proprietatea is in amount of RON 5,238,521,987.92, divided in 10,074,080,746 ordinary, nominative shares, having a nominal value of RON 0.52 each. The capacity as shareholder of Fondul Proprietatea is attested by a statement of account issued by Depozitarul Central SA".

   The approval of the amendment of Article 9 paragraph (2) of the Constitutive Act of Fondul Proprietatea S.A. as follows.

   "(2) The nominal value of a share is RON 0.52".

   The decrease of the share capital herein is performed based on Article 207 paragraph (2) letter (b) of Law no. 31/1990 and will be effective after the following conditions are met ("Conditions"):

2. this resolution is published in the Official Gazette of Romania, Part IV for at least two months;

3. Financial Supervisory Authority ("FSA") endorses the amendment of Article 7 paragraph (1) and Article 9 paragraph (2) of the Constitutive Act of Fondul Proprietatea SA as approved by shareholders during this meeting, where required by applicable law or regulation;

4. the share capital decrease approved by the shareholders on 31 October 2016 is effective;

5. the shareholders' resolution for approving this share capital decrease is registered with the Trade Registry.

   The approval of the payment to the shareholders registered as such at the Registration Date of this EGM of RON 0.05/share, proportionally with their participation to the paid-up share capital of Fondul Proprietatea S.A..

   The payment shall start on the Payment Date of this EGM provided that the Conditions are met.

6. The ratification and the approval of all EGM resolutions and of all legal acts (including resolutions, decisions, notices for convening all EGM and contracts) concluded, adopted and issued in the name of Fondul Proprietatea S.A. through its sole administrator and/or its alternative investment fund manager between 6 September 2010 and 27 February 2017 and the approval and ratification of any implementation acts, facts and operations based on such, including the management of Fondul Proprietatea S.A. under an unitary system, as well as the approval of all the changes to the Constitutive Act approved by all the extraordinary general meetings of shareholders between 6 September 2010 and 27 February 2017, as endorsed by FSA.

7. In accordance with Article 1292 of Regulation no. 1/2006, the approval of:

8. 9 June 2017 as the Ex - Date, computed in accordance with the provisions of Article 2 paragraph (2) letter f1) of Regulation no. 1/2006;

9. 12 June 2017 as the Registration Date, computed in accordance with the provisions of Article 238 paragraph (1) of Capital Market Law no. 297/2004;
10. 30 June 2017 as the Payment Date, as it is defined by Article 2 letter g) of Regulation no. 6/2009.

    As it is not applicable to this EGM, the shareholders do not decide on the date of the guaranteed participation, as defined by Article 2 letter f1) of Regulation no. 6/2009.

11. The empowerment, with authority to be substituted, of Grzegorz Maciej Konieczny, to sign the shareholders' resolutions and the amended and restated form of the Constitutive Act, as well as any other documents in connection therewith, and to carry out all procedures and formalities set out by law for the purpose of implementing the shareholders' resolutions, including formalities for publication and registration thereof with the Trade Register or with any other public institution.

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GENERAL INFORMATION WITH RESPECT TO THE EGM

The right to include new items on the agenda. The right to present drafts of resolutions for the items included on the agenda or for the items proposed for inclusion on the agenda.

In accordance with the provisions of Article 1171, paragraph (1) of Law no. 31/1990, Article 7 paragraph (1) of Regulation no. 6/2009 and the provisions of Article 13, paragraph (5) of the Company's Constitutive Act, one or several shareholders representing individually or jointly at least 5% of the Company's share capital may request the Sole Director of the Company the introduction of additional items on the agenda of the EGM and/or the presentation of draft resolutions for the items included or proposed to be included on the agenda of the EGM.

These requests must comply, cumulatively, with the following requirements:

a) in the case of natural person shareholders, they must be accompanied by copies of the shareholders' identity documents (the identity documents presented by the shareholders must allow their identification in Company's registry of shareholders kept by