S C Sinteza S A : Raport anual final 2020 EN

	Tel:	0259 456 116
SINTEZA SA	Tel:	0259 444 969
Şos. Borşului no. 35	Fax: [phone]
410605 ORADEA - ROMANIA	e-mail: sinteza@ sinteza. ro
	www.sinteza.ro

VAT Reg.No.: RO 67329 Reg.No.at Commerce Register: J.05/197/1991

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

SWIFT CODE: BTRL RO22XXX

THE BOARD OF DIRECTORS' REPORT

ON 31.12.2020

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:	2020
Report date:	31.12.2020
Trade company designation:	S.C. Sinteza S.A. 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.:	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:
2. • 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 the exploitation activity 107.777 lei;
   • financial incomes from adjustments for loss of value : 5.399 lei;
   • incomes from deferred income tax: 32.671 lei;
3. Total expenses: 25.817.260 lei, of which:

-	operating costs:	25.385.573 lei;
-	financial expenses:	431.687 lei;

1. Net operational result: -5.170.629lei;
2. 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.		2020		2019
no.	Products	lei		%	lei		%
	Exploitation of the
1	industrial platform	757,787		3.45%	1,414,599		6.29%
	Organic synthesis
2	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:

• development of the product portfolio by contacting research and development institutions
• developing the client portfolio with a focus on those that can offer predictability, higher margins and more favorable payment terms
• development of the industrial park project on the current platform of the company

The Company will continue to run cash generation programs by renting and selling assets which are not affecting the core business and by attracting other funding. The amounts thus obtained, will be used to support the basic activity through investments and working capital.

1.1.10 Information regarding the internal control

Within SC Sinteza SA the ensuring of the internal control aims at the internal control and internal audit activities. In the field of internal control one followed the observance of the internal norms, of the decisions of the leading bodies and financing-accounting norms.

The internal audit is ensured by a contract for services with an independent office. The internal auditor evaluates by a systematic and methodical approach the processes of control and governing of the company and informs the general manager and managers on the significant aspects established by the audit report.

2 Tangible assets of the company

1. Placement and description
2. 1. 
      The company owns and manages the following assets:
   2. Şos. Borşului no. 35 Platform - dedicated to the manufacture of Benzoic

Acid

1. 1. Şos. Clujului Platform no.159 - meant for the rental or sale
   2. Sludge dump - closed for operation and undergoing closing
2. Potential problems related to the ownership right The are no problems related to the ownership right.

3 The market of the securities issued by the company

The social capital of the company is 9.916.889 lei, divided in 66.112.590 shares with a nominal value of 0,15 lei/share. The shares are transacted on the Bucharest Stock Exchange, Standard category. On the date of 31.12.2020 the structure of the shareholding was the following:

F.I.I. BT Invest 1	33,8898 %
Tibor Tincău	28,1346 %
PLATFORMA ROCA SA	18,0000 %