We inform that this time we are not able to prepare and present the Sivensa’s consolidated financial statements adjusted for inflation at March 31 2015, in accordance with the International Financial Reporting Standards (“IFRS”), whose application is mandatory for the entities regulated by the National Superintendence of Securities and therefore, to perform and publish the analysis of the consolidated results of Sivensa corresponding to the quarter ended on said date, as the Central Bank of Venezuela (BCV) has not issued at the date of this release, the National Consumer Price Index (“NCPI”) for the months of the semester ending on June 30, 2015. In this regard we inform that the application of said standards, specifically the International Accounting Standard No. 29 (IAS 29) which requires that the financial statements of certain entities are adjusted for inflation and to that end it calls for the use of a general price index reflecting the changes in the general buying power of the local currency. The NCPI is the general price index utilized in Venezuela for the restatement of the financial statements adjusted for inflation in Venezuela.
As we indicated in our quarterly report issued on January 30, 2015, the Directory of the Federation of Colleges of Venezuelan Public Accountants, in its special session of December 25 2014, indicated that because of a delay in the issuance of the NCPI, the Companies which require issuing financial information of general year-end closing process or intermediate periods, must estimate the impact of the inflation on the financial situation and the result of their operations at the date being reported. Nevertheless, said communication also indicates that the process of reasonable estimate implies the utilization of judgments based on the most recent reliable information available; consequently each entity must evaluate within this context, the base to be used for the best estimate that it needs to determine, considering that the financial information presented must comply, among others, with the characteristic of reliability.
Considering our comments in the previous paragraph, management considers appropriate to differ the issuance and publication of the Sivensa’s consolidated financial statements, adjusted for inflation at June 30, 2015, and the analysis of the Sivensa’s consolidated results belonging 2 to the quarter ended on said date, until the BCV publishes the NCPI for the months of the semester ending on June 30, 2015.
Finally, despite the difficult situation the Company has faced in recent years and continues to face today as result of the expropriation, intervention, takeover of control and other measures of equivalent effect adopted by the national government over its operating affiliates Sidetur, Venprecar and Orinoco Iron, the Board of Directors and management of the Company would like to inform its shareholders that the main objective is to continually evaluate possible scenarios of action against such measures, in both the context of the Company and the country, as well as other actions that can be executed in the future in the best interest of the Company and its shareholders, follow up on claims and legal proceedings to preserve their rights and remain in the best spirit and willingness to negotiate a solution with the national government that would be beneficial to the parties involved and in the best interest of the country, the shareholders of the Company and the community in general, in order to resume the production and export activities that the aforementioned affiliates maintained in the past.
Caracas, July 31 2015.
THE BOARD OF DIRECTORS