Aerostar S A : Report of the Board of Directors for the financial year 2021

AEROSTAR S.A.

Contents:

Message of the President & General Director Identification data and object of activity of the Company

Our approach to Covid-19 prevention

	Page
01
The year 2021	2
Main events of the year	2
Evolution of financial performance - results	3
Key figures	3
Main economic-financial indicators	3
Sales in 2021- dashboard	4
Business share in the total sales
Information about the ARS share	5
Investments for sustainability	6
Nonfinancial indicators	7
Environment, Social aspects, Governance
02
Aerostar - information about the	7
Company`s activity
Business environment and model	8
Aeronautical Product Manufacturing Division	8
MRO Civil Aviation Division	8
Defence Systems Division	8
03
Our employees	9
Social and manpower aspects	10
Labour relations and social dialog	10
Training, instruction, professional	11
development
Health and safety at the workplace, working	11
conditions
Principles and values, human rights, fighting	11
corruption and bribery
04
Aerostar shareholders	12
Relation with the shareholders and the capital	12
market
Relation with the parent company	13
Affiliated parties	14
Tangible assets	15

The company AEROSTAR was named successively URA- 1953, IRAv (abbreviation for Aircraft Repair Enterprise)-1970, IAv (abbreviation for Aircraft Enterprise) -1978, and AEROSTAR S.A. since 1991, when it was registered at the Trade Register.

	Page
05
Quality and Environment	17
Pollution prevention and waste recovery	19
Climate change mitigation	21
06
Structure of Aerostar	22
Top management structure	23
Divisional organization of the company	23
07
Corporate governance	24
Corporate governance structures	24
Code of ethics and business conduct	26
Compliance with the code of corporate	30
governance 2021 Appendix
08
Risk and opportunity management	31
Risk management system	31
External context in 2021	32
Context of the organization and interested	33
parties
Main risks and their management	34
Trend of the main risks for the foreseeable	39
future
09
Non-financial statement, our approach to	41
sustainability
10
Summary of financial statements for 2021	45
Notes and individual financial statements

The independent auditor's report

Management statement

Proposed distributions of the profit made in 2021

Note: The Report of the Board of Administrators was prepared in accordance with the reporting regulations in force with a view to providing further information to the shareholders for the evaluation of the company, its strategies and their potential to succeed.

Annual Report

2021

• Looking into the future, the industrial

prospects will be strictly related to the pandemic evolutions, and our prospects will be strictly related to the fulfillment of our sustainability plans. »

Overview

• The year 2021 became the year of both resistance and adaptation to change.

It was the second year during which our expertise was put to the test through increased challenges due to the appearance of new pandemic strains that affected the global economy. We have followed the strategic priorities, while analyzing the new reality faced by the business environment in the aviation industry nowadays.

Our top priorities were, of course our employees' safety and protection in stricter sanitary conditions.

In an uncertain environment, with strong economic disruptions, we can state that the operational performance was as good as reasonably possible.

I, therefore thank all our employees, partners and associates for sticking together in the fight against Covid. »

Grigore FILIP

President & General Director

Additional information on page 3

AEROSTAR / Annual Report -2021

Identification data and object of activity

Telephone/fax

number:

004-0234 575070/

004-0234 572023;

Web/e-mail:

www.aerostar.ro [e-mail]

Reporting period: 1 January

31 December 2021

The company AEROSTAR S.A. was established on April 17, 1953 by the Council of Ministers' Decision no. 1165.

Its activities are carried out at the registered head office, located at no. 9, Condorilor Street, Bacău, postal code 600302.

Since January 2018, AEROSTAR also has a secondary place of business, i.e. a workplace within the perimeter of the International Airport of Iaşi;

The unique identification code of the company at European level (EUID) is ROONRC.J04/1137/1991, and its identification code as a legal entity (LEI) is 315700G9KRN3B7XDBB73;

The main field of activity of the company is production. The main object of activity of the company is the "Manufacture of aircraft and spaceships" - code CAEN 3030;

Subscribed and paid-upshare capital: 48.728.784 RON;

Applicable accounting standards: The individual financial statements are prepared in accordance with the provisions of the International Financial Reporting Standards (IFRS) adopted by the European Union, THE Accounting Law no. 82/1991, republished, as subsequently amended and supplemented and are presented in accordance with the IAS requirements. The bases of presentation of the financial statements are presented in Note 3;

The individual financial statements prepared for the year 2021 are accompanied by the independent financial

auditor's report;

The company AEROSTAR S.A. is listed on the Bucharest Stock Exchange under code ARS, and the records of shareholders and shares are kept, as provided by law, by S.C. Depozitarul Central S.A. Bucureşti;

AEROSTAR / Annual Report -2021

Message of the

President & General

Director

Eng. Grigore Filip

March 2022

Looking into the future

• After two years of pandemic, the aeronautical and aviation industry views with concern the new challenge generated by the imbalances in the global economy.

Such concerns also interest us, at Aerostar, as we look ahead, even though the results obtained in 2021 show an improvement and are close to those obtained in 2019.

Although the prospects for 2022 in the global analyses are indicative of recovery, it is critical to act with agility and flexibility in order to allow such recovery.

The lack of predictibility of the energy costs, the breaking of the global supply chains and the workforce instability are key factors upon which the results of 2022 depend.

In today's reality it is therefore crucial to anticipate the risks and opportunities and to tackle the challenges with cautious optimism.

With our expertise, we search for the most suitable solutions to deal with these new challenges and

continue our growth process. »

AEROSTAR / Annual Report -2021