S C Sinteza S A : Annual report December 2021

SINTEZA S.A. Şos. Borşului nr. 35

410605 ORADEA - ROMANIATel: [phone]

Tel: [phone]

Fax: [phone] e-mail: sinteza@ sinteza. rowww.sinteza.ro

BANCA TRANSILVANIA ORADEA Cont BTRL: RO86BTRL00501202N98396XX

THE BOARD OF DIRECTORS' REPORTON 31.12. 2021

C.U.I.: R0 67329

Nr. înreg. ORC-Bihor: J.05/197/1991

Yearly report according to:	Law 297/2004 regarding the capital
market
Law 24/2017 regarding the issuers of
financial instruments and
market operations
ASF Regulation NO.5 / 2018
For the fiscal year:	2021
Report date:	31.12. 2021
Trade company designation:	Sinteza SA Oradea
Head office:	Oradea, Sos. Borsului no. 35, Bihor
county
Phone / fax number:	0259.456.116 / 0259.462.224
Trade Register Office unique ID:	67329
Trade Register order no.:	J05/197/1991
Regulated market:	Bucharest Stock Exchange
Subscribed/Paid-up share capital:	9,916,889 lei
Main characteristics of securities:	Shares issued in dematerialised
form

1.

Analysis of the trade company's activity

1.1.

Description of the trade company's basic activity

SINTEZA SA, established by Government Decision no. 1213/20.11.1990 from the Chemical Enterprise "SINTEZA", is registered at the Trade Register under no. J / 05/197/1991, Tax ID no. RO 67329 and has its registered office in Sos. Borşului no.35, Oradea, Bihor county. No mergers or reorganizations of any kind took place during 2021.

1.1.1. Elements of general evaluation

In 2021, the company obtained the following indicators, according to the balance sheet:

1. Total income: 43,601,517 lei , of which:

• - net turnover: 42,657,990 lei, of which the amount of 39,272,622 lei is represented by export sales;

• - incomes from the variation of stocks: 55,836 lei;

• - other income: 617,552 lei;

• - financial income: 127,516 lei;

• - revenues from provisions and adjustments regarding the exploitation activity: 110,063 lei;

• - incomes from delayed income tax: 32,560 lei;

• 2. Total expenses: 42,288,406 lei, of which:

  - operating expenses: 41,668,625 lei; - financial expenses: 619,781 lei;

• 3. Net operating result: 1,313,111 lei;

• 4. Cash at the end of the period: 859,368 lei equivalent

1.1.2 Evaluation of the company's technical level

The company exploits the industrial platform from Sos. Borsului no. 35 and operates the installation of Benzoic Acid, installation of an advanced technical level, modernized in previous years, obtaining products intended mainly for the external market.

Through the investment works carried out in 2018, which materialized in research processes, design, verification, acquisitions and execution of equipment, the restoration of the structural elements was aimed at improving the quality and production capacity of benzoic acid. The investment was followed by a period of technological testing, over several months, which aimed to stabilize the technological parameters and finalize the work instructions.

The manufactured organic synthesis products are destined for high chemical technical industrial applications, their use being in an increasing trend in the chemical industry.

At the same time, the company continued in 2021 the activity of renting its available locations, obtaining income from rents.

The company intends to further develop the manufacturing at a high technical level.

The main products manufactured in 2021 and the revenues obtained from their sale, but also other revenues, compared to the previous year are:

Crt.no.	Products	2021	2020
Lei	%	lei	%
1	Exploitation of the industrial platform	864,551	2.03%	757,787	3.45%
2	Organic synthesis manufacturings	41,793,439	97.97%	21,220,792	96.55%
Total	42,657,990	100.00%	21,978,579	100.00%

1.1.3. Evaluation of the technical-material supply activity

The company acquires industrial equipment from reputable companies in the field, both in the country and abroad.

Regarding the acquisition of raw materials, materials, energy, the company operates freely on the competitive market.

1.1.4. Evaluation of sales activity

Sinteza SA sells products manufactured in markets such as: Europe, Turkey, Russia and Asia.

The company sells on the free competitive market, without significant dependencies on a customer or a group of customers.

The company uses for sale both direct sales and through distributors.

1.1.5. Evaluation of the aspects related to the company's staff

In 2021, the average written number of staff was 80 people. The company made a number of 22 employments and 24 work contract terminations. Out of the total staff, 22 are with higher education. The degree of unionization was 14%.

There were no conflicting elements in the labor relations.

The company regularly organizes professional training courses and intends to finance some professional school classes of organic synthesis chemical operators.

1.1.6.1

Evaluation of the aspects related to the environmental impact

The company has obtained all the authorizations and approvals required by the relevant legislation. There is no major impact on the environment and there are no litigation related to breaches of environmental protection legislation.

1.1.7

Evaluation of research and development activity

The company has organized its own department for this activity, the expectations being oriented towards the implementation of new products and technologies.

1.1.8

Evaluation of the risk management activity

The company operates on the free competitive market, being exposed from this point of view to normal risks. There is no major or significant exposure to pricing or liquidity. The company implements the risk management system, the process covering the identification, analysis, management and monitoring of the risks to which it is exposed.

Price risk - there is a permanent monitoring of this risk taking into account the market on which the company operates, which is a specialized one. In fact, the company applies and will apply in the future, the policy of forming the selling price depending on the price of the raw material (Minimum selling price = Purchase price + margin). We specify that resorting to this form of pricing is a common practice on the specific market on which the company operates;

Credit risk - the company has in progress and will use in the future to attract resources especially for financing investment objectives. The cost of resources is negotiated and generally dimensioned in relation to the reference rates on the financial market in such a way as to be sustainable for the contractual terms. Potential variations in interest rates are also taken into account;

Liquidity risk - there is a permanent concern for maintaining liquidity at a level above one. On 31.12.2021 this indicator had a value of 0.9.

Cash flow risk is monitored daily through weekly and monthly revenue and payment forecasts. The company applies the commercial credit policy in relation to the traditional clients and correlates the collection terms with the payment due dates (suppliers, banks, budgets, salaries).

1.1.9

Perspective elements regarding the activity of the company

The company is based on its quality strategy to meet the requirements and needs of its customers and other stakeholders by providing timely, quality products according to customer requirements, regulation and environmental protection.

Increasing product quality and aligning the company with the requirements of the EU market, a market with higher margins, will support the company's return to the operating profit zone in 2022.

The company's development plans take into account:

• • developing the product portfolio by contacting research and development institutions

• • developing a portfolio of clients with a focus on those who can provide predictability, higher margins and more favorable payment terms

The company will continue to run programs to generate liquidity from the rental and sale of assets that are not intended for the core business and to attract other financing. The amounts thus obtained will be used to support the basic activity through investments and working capital.

1.1.9.1

Information on internal control

Within Sinteza SA, the assurance of internal control targets the internal control and internal audit activities. In the field of internal control, the aim was to observe the regulations specific to the company's activity, to observe the internal norms, the decisions of the management bodies and the financial-accounting norms.

The internal audit is ensured by a service contract with an independent firm. The internal auditor evaluates through a systematic and methodical approach the control and governance processes of the company and informs the general manager and the administrators of the significant aspects found in the audit report.

• 2 The tangible assets of the company

• 2.1 Location and description

  The company owns and manages the following assets:

  • a) Sos. Borşului no.35 platform - dedicated to the manufacture of Benzoic Acid

  • b) Sos. Clujului no.159 platform - intended for rent or sale

  • c) Sludge dump - closed for operation and undergoing closing.

• 2.2 Potential property issues

  There are no property rights issues.

• 3 The securities market issued by the company

The share capital of the company is 9,916,889 lei, divided into 66,112,590 shares with a nominal value of 0.15 lei / share. The shares are traded on the Bucharest Stock Exchange, Standard category. As of 31.12.2021, the shareholding structure was as follows:

FIA- BT Invest 1 33.8898%

PASCU RADU 31.1597%

ROCA INVESTMENTS SA 18.0000%

Other natural and legal persons 16.9505%

Total:

100,000%The company did not purchase any treasury shares and did not issue bonds.