S C Sinteza S A : Raport anual 2020 EN

VAT Reg.No.: RO 67329

Reg.No.at Commerce Register: J.05/197/1991

Tel: [phone]

SINTEZA SA

Tel: [phone]

BANK: BANCA TRANSILVANIA ORADEA IBAN EURO:RO61BTRL00504202N98396XX IBAN RON: RO86BTRL00501202N98396XX

Şos. Borşului no. 35

410605 ORADEA - ROMANIA

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

SWIFT CODE: BTRL RO22XXX

THE BOARD OF DIRECTORS' REPORT

ON 31.12.2020

Yearly report according to:
ASF Regulation NO. 5/2018
For the fiscal year:	2020
Report date:	31.12.2020
Trade company designation:	S.C. Sinteza S.A. Oradea
Head office:	Oradea. Sos. Borsului no. 35,
Bihor county

Law 297/2004 regarding the capital market

Law 24/2017 regarding theissuers offinancial instruments operations

and marketPhone/Fax number: 0259.456.116 / 0259.462.224 Trade Register Office unique ID: 67329

Trade Register order no.: J/05/197/1991

Regulated market: Bucharest Stock Exchange

Subscribed/Paid-up share capital:9.916.889 lei

Main characteristics of securities: Shares issued in dematerialised form

1

1.

Analysis of the trade company's activity

1.1.

Description of the trade company's basic activity

S.C."SINTEZA"- S.A. was established by Government Decision no.

1213/20.11.1990 from the "SINTEZA" Chemical Enterprise, it is registered in the

Trade Register under no. J/05/197/1991, Tax ID no. RO 67329 and has the registered office in Şos. Borşului no. 35, Oradea, Bihor county.

During the year 2020 there have been no mergers or reorganisations of any kind.

1.1.1. General evaluation elements

In the year 2020 the company obtained the following indicators, according to the balance sheet:

1. Total incomes: 20.646.631 lei, of which:

• - net turnover: 21.978.579 lei, of which the amount of 21.220.792 lei represents the export sales;

• - incomes from stocks variation: -2.446.402 lei;

• - incomes from the production of tangible assets: 18.737lei;

• - other incomes: 893.194 lei

• - financial incomes: 56.733 lei;

• - revenues from provisions and adjustments regarding exploitation activity 107.777 lei;

  the

• - financial incomes from adjustments for loss of value : 5.399 lei;

• - incomes from deferred income tax: 32.671 lei;

• 2. Total expenses: 25.817.260 lei, of which: - operating costs: 25.385.573 lei; - financial expenses: 431.687 lei;

• 3. Net operational result: -5.170.629 lei;

• 4. Liquidities at the end of the period: 32.503 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, modernised at the end of the year, obtaining products meant mainly for the external market.

Through the Investment works that were performed in 2018, works which translated into research and design processes, checks, equipment purchase and design, the restoration of Benzoic Acid Unit structural elements, was aimed to improve quality and production capacity for Benzoic Acid product. The Investment works were followed by several months of testing, having the purpose to stabilize Benzoic Acid Unit operating parameters and to finalize the Operating Instructions.

The organic synthesis products manufactured are meant for the industrial chemical applications of high technical level, their use being in an ascending trend in the chemical industry.

At the same time the company continued in the year 2020 the activity of renting its available locations, obtaining incomes from rents.

The company intends the further development of the manufacturings at a high technical level.

The main products manufactured in the year 2020 and the incomes obtained from their sale, but also other incomes, compared to the previous year are:

Crt. no.	Products	2020	2019
lei	%	lei	%
1	Exploitation of the industrial platform	757,787	3.45%	1,414,599	6.29%
2	Organic synthesis manufacturings	21,220,792	96.55%	21,079,808	93.71%
Total 21,978,579	100.00%	22,494,407	100.00%

1.1.3. Evaluation of the technical-material supply

The company acquires industrial technology from renowned companies in the field, both from inland and from abroad.

As for the acquisition of raw resources, materials, energy, the company acts freely on the competitive market.

1.1.4. Evaluation of the sale activity

S.C. Sinteza S.A. sells the products manufactured on markets such as Europe, Turkey, Russia and Asia.

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

The company uses in the sale both the direct sale and the sale through distributors.

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

In the year 2020 the average recorded number of staff members was 87 persons. The company made a number of 16 employments and 14 work contract terminations. From the total staff, 18 are with higher education studies. The degree of unionisation was 20 %.

Within the work relations there were no conflictual elements.

The company periodically organizes courses for professional training and intends the financing of some professional school classes of organic synthesis operators/ chemists.

1.1.6 Evaluation of the aspects related to the environmental impact

The company obtained all the authorisations and permits imposed by the legislation in the field. There is no major impact on the environment and there are no litigations related to the breach of the environmental protection legislation.

1.1.7

Evaluation of the research and development activity

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

1.1.8

Evaluation of the activity regarding the risk management

The company acts on the competitive market, being exposed from this point of view to normal risks. There is no major or significant exposure regarding prices 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.

The price risk - there is a permanent monitoring of this risk considering the market on which the firm acts is a specialized one. In fact the company applies and will apply in the future policies for forming the sale price based on the raw material price (Minimum sale price = Acquisition price + margin). We specify that resorting to this form of price setting is a usual practice on the specific market on which the company acts.;

The credit risk - the company has undergoing and will resort in the future as well to resources drawn especially for the financing of the investment objectives. The resource cost is negotiated and generally sized in connection to the reference rates on the financial market so as to be sustainable for the contractual deadlines. One also takes into account the potential variations of the interest rates;

The liquidity risk - there is a permanent preoccupation for maintaining the liquidity at a level above one. On 31.12.2020 this indicator had the value of 0,56; The cash flow risk is monitored daily through prognoses of encashments and weekly and monthly payments. The company applies the policy of the trade credit in the relation with the traditional customers and correlates the encashments deadlines with the deadlines of the payments (suppliers, banks, budgets, salaries).

1.1.9

Elements of perspective regarding the trade company activity

The company has at the base of its strategy in the field of quality the satisfaction of the requirements and necessities of its customers and other concerned parties by offering on time quality products according to the requirements of the customers, regulation and environmental protection.

The improvements in Benzoic Acid quality and Company alignment to EU market requirements, a market with higher margins, will support the Company's return to the area of operational profit in 2021.

The company's development plans take into account: