IINNTTEERRIIMM FFIINNAANNCCIIAALL · COMPA S,A, Sibiu Separate statement of financial position for 1stH 2020 (All amounts are expressed in RON, unless otherwise specified) Note 30-Jun-2020

H1 - 2020 Report

IINNTTEERRIIMM FFIINNAANNCCIIAALL

RREEPPOORRTT 11sstt HHAALLFF YYEEAARR 22002200

PPrreeppaarreedd IInn AAccccoorrddaannccee wwiitthh tthhee IInntteerrnnaattiioonnaall FFiinnaanncciiaall

RReeppoorrttiinngg SSttaannddaarrddss AAddoopptteedd bbyy tthhee EEuurrooppeeaann UUnniioonn

This is a free translation from Romanian, which is the official and binding version.

H1 - 2020 Report

C O N T E N T S

Report on the review of accounting reports at 1st H 2020 1

Separate statement of the financial position 3

Separate statement of the comprehensive income 5

Separate statement regarding changes in equity 6

Separate statement of cash flows 7

Explanatory notes to the separate interim financial report 8

Declaration in accordance with provisions of the Accounting Law no.82/1991 22

1stH 2020 - Report in accordance with the Regulation FSA No.5/2018 23

Societate de Audit, Consultanţă şi Contabilitate

Sibiu; str.Lector ; nr. 6A

CUI RO15123389; J 32/25/2003; aut CAFR 321/2003

Tel: 0269-222446 ; Mobil: 0745-159770;

AAuuddiitt

CCoonntt

REPORT

ON THE REVIEW OF ACCOUNTING REPORTS

AT JUNE 30st, 2020 OF COMPA S.A. SIBIU

We have reviewed COMPA’s accounting reports, drawn up on the 30st of June 2020,

which comprise the consolidated statement of financial position as at June 30st 2020,

and the consolidated statement of comprehensive income, consolidated statement of

changes in equity and consolidated statement of cash flows for the year then ended,

and notes to the consolidated financial statements, including a summary of significant

accounting policies prepared in accordance with International Financial Reporting

Standards (IFRSs) as adopted by the European Union and the Ministry of Public Finance.

Management is responsible for the preparation and fair presentation of these financial

reports in accordance with International Financial Reporting Standards (IFRSs) as

adopted by the European Union and the Ministry of Public Finance Order no. 2844/2016

approving the accounting regulations compliant with the International Financial

Reporting Standards, applicable to companies whose securities are admitted to trading

on a regulated market.

Our responsibility is to issue a conclusion over these financial reports prepared by S.C.

“COMPA” S.A. Sibiu on the basis of the revision.

The financial reports comprise only part of the reporting components stipulated by the

International Standards for Financial Reporting and do not represent a complete set of

financial situations at 30st of June 2020.

Following the verifications performed on the basis of the obtained evidences, nothing

caught our attention in the sense of making us believe that the accounting reports

prepared by the company do not present fairly, in all material respects, the company's

financial position and the outcome of its activities on the 30st of June 2020, for the

quarter that ended at that date, in accordance with International Standards for Financial

Reporting adopted by EU.

This auditor's report is addressed solely to the company's shareholder as a whole. This

report was drawn up exclusively in order to submit the company's accounting reports

afferent to the period that ended on the 30st of June 2020 at the Financial Supervision

Authority, and can only be used for this purpose.

On behalf of AuditCont SRL Registered with the Chamber of Financial Auditors in Romania with no. 321/2003

Daniela Benga Registered with the Chamber of Financial Auditors in Romania with no. 1169/2001 Sibiu, Romania: 26th August 2020

COMPA S,A, Sibiu Separate statement of financial position for 1stH 2020

(All amounts are expressed in RON, unless otherwise specified)

Note 30-Jun-2020 31-Dec-2019 (*)

ASSETS

Fixed assets:

Tangible assets 4.1 410.169.803 381.231.402

Real estate Investment 4.2 67.760.114 67.571.395

Intangible assets 5 8.402.814 7.432.457

Other receivables (grants and settlement of ventures operations )

6 0 72.572

Other receivables 7 117.439 117.439

Financial investments 20 1.768.450 1.768.450

Deferred tax asset 10 1.308.143 1.175.603

Fixed assets - Total 489.526.763 459.369.318

Current asset:

Stocks 8 87.242.282 105.190.554

Trade and other receivables 6 77.917.003 144.762.086

Other receivables (grants and settlement of ventures operations )

6 9.322.874

8.198.773

Cash and cash equivalents 9 1.161.184 6.079.821

Current assets - Total

175.643.343 264.231.235

TOTAL ASSETS

665.170.105 723.600.553

Equity

Share capital 11 21,882,104 21.882.104

Reserves 11 360.256.486 360.108.664

Reserve adjustment 11 23.122.057 23.122.057

Retained earnings of which: 11 65.318.537 69.374.383

Retained earnings derived from the first-time adoption of IAS 29

11 -648,352 -648,352

Total Shareholders' equity

470.579.185 474.890.563

Liabilities Long term debt

Financial debts 12 93.781.304 96.121.622

Other debts Long term 13 0 0

Deferred revenues (deferred income, grants)

13 31.187.364 34.435.001

Provisions 14 135.645 135.645

Total Long term debt

125.104.313 130.692.268

Current debts

Financial debts 12 5.126.815 4.898.783

Commercial and similar debts 13 42.341.265 94.827.693

Debts from contracts with clients 13 1.612.283 1.217.334

Other debts 13 14.609.096 12.086.134

Current tax debts 10 0 0

Deferred revenues (deferred income, grants)

13 5.797.147 5.391.134

Provisions 14 0 0

Total current liabilities

69.486.608 118.017.722 3,462

TOTAL LIABILITIES

194.590.921 248.709.990

TOTAL EQUITY AND LIABILITIES 665.170.105 723.600.553

3

COMPA S,A, Sibiu Separate statement of financial position for 1stH 2020


NOTE:

(*) Certain initial values are different to the presented financial statements for 2019

The changes are explained in notes 11, 13

CEO, CFO,

Ioan DEAC Ioan MICLEA

4

COMPA S.A. Sibiu Separate statement of comprehensive income for 1stH 2020


5

Nota 30-Jun-2020 30-Jun-2019

Revenues 15 235.513.230 404.906.114

Other revenues 15 5.994.693 5.918.080

Total Revenues

241.507.923 410.824.194

Changes in inventories of finished goods and work in progress

16 -6.035.742 5.042.491

Raw materials and consumables 16 -143.279.968 -263.255.340

Employee benefit expense 18 -52.462.489 -78.965.899

Depreciation and amortization expense 4, 5,16 -25.419.780 -22.231.385

Third parties services 16 -12.219.745 -20.593.182

Other expenses 1617 -4.093.574 -4.944.963

Total expences

-243.511.297 -384.948.279

Operating Results

-2.003.374 25.875.915

Financial income 18 7.093 1.039

Financial expenses (expenditures) 18 -544.354 -394.786

Other financial returns / losses 18 -1.499.927 -871.209

Net financing costs 18 -2.037.189 -1.264.956

Profit before income tax

-4.040.563 24.610.959

(Expenses) / Income from deferred tax 10 -14.504 -384.078

Expense with current tax 10 0 -477.368

Net profit for the period

-4.055.067 23.749.513

Other comprehensive income:

of which: income tax relating to other comprehensive income

Profits tax related to other comprehensive income 10 147.044 120.798

Oher incomes of global result, net of tax

147.044 120.798

Total global result of the year

-3.908.023 23.870.311

Unbound basic result per share / diluted 19 0,02 0,11

CEO, CFO,


COMPA S.A.Sibiu Separate statement regarding the changes in equity capital for the 1stH 2020


6

Equity capital item Registered

Capital Adjustments

capital Legal

reserves

Legal reserves

adjustments

Reassessment reserves

Other reserves

Other reserves

Adjustments

Retained earnings

Total

Balance 01.01.2019 21,882,104 0 4,376,421 22,679,066 81,787,286 226,825,763 442,991 81,755,936 439,749,567

Net profit for the period 32,708,709 32,708,709

Other elements of the comprehensive income, of wich:

0 0 0 0 2,103,844 -120,712 0 0 1,983,132

Transfer of reserves to result -45,800 -45,800

Income tax related to other comprehensive income

-120,712 -120,712

Transactions with shareholders recorded directly in equity, of which:

0 0 0 0 0 45,136,062 0 -45,090,262 45,800

Correction of previous exercise errors

0

Distribution of legal reserves

0

Transfer to reserves result 45,800 45,800

Profit distribution 0 45,136,062 -45,136,062 0

Balance 31.12.2019 21,882,104 0 4,376,421 22,679,066 83,891,130 271,841,113 442,991 69,374,383 474,487,208

Equity capital item Registered

Capital Adjustments

capital Legal

reserves

Legal reserves

adjustments

Reassessment reserves

Other reserves

Other reserves

Adjustments

Retained earnings

Total

Balance 01.01.2020 21,882,104 0 4,376,421 22,679,066 83,891,130 271,841,113 442,991 69,374,383 474,487,208

Net profit for the period -4,055,067 -4,055,067

Other elements of the comprehensive income, of wich:

0 0 0 0 0 147,044 0 0 147,044

Income tax related to other comprehensive income

147,044 147,044

Balance 30.06.2020 21,882,104 0 4,376,421 22,679,066 83,891,130 271,988,157 442,991 65,319,316 470,579,185

Following a NAFA control carried out during 2020, COMPA recorded on account of retained earnings due to correction of errors, additional expenses with taxes and fees related to 2017, amounting to 403,355 lei. In order to ensure the comparability of the data, the information for 2019 presented above has been adjusted with these changes.

CEO, CFO,


COMPA S.A. Sibiu Separate statement of cash flow for the 1stH 2020


7

Explanations 30.06.2020 30.06.2019

Cash flows from operating activities

Profit before tax -4,040,563 24,610,959

Depreciation and amortization expenses 25,419,780 22,231,385

(Increases) / Decreases in stocks 17,948,271 -11,063,196

(Increases) / Receivables decreases 65,720,983 -2,234,505

Increases / (Debt decreases) -49,568,516 5,947,933

Adjust other non-monetary items -1,889,472 -2,493,460

Net cash generated from operations 53,590,483 36,999,116

Cash flows from investment activity

Acquisitions of tangible assets and real estate investments -54,533,505 -46,786,371

Acquisitions of intangible assets -1,318,975 -2,689,369

Net cash generated from investment activities -55,852,480 -49,475,740

Cash flows from financial activity

(Increases) / Decreases in bank loans -2,112,286 17,262,125

Interest rates -544,354 -394,786

Net cash generated from financial activity -2,656,640 16,867,339

Net cash generated from total activity -4,918,637 4,390,715

Cash and cash equivalents at the beginning of the period 6,079,821 1,065,470

Cash and cash equivalents at the end of the period 1,161,184 5,456,185

CEO, CFO,


COMPA S.A. Sibiu Explanatory notes to the separate interim financial report from 1stH 2020

(All amounts are expressed in LEI (RON), unless otherwise stated)

8

1. GENERAL INFORMATION

COMPA is a Joint Stock Company, headquarters in Sibiu, No 8, Henri Coandă Street, postal code 550234.

1.1. Domain of activity

The main activity according to CAEN is 2932 – Manufacturing of other parts and accessories for motor vehicles and motor vehicle engines.

1.2. Ownership of company

COMPA is privatized 100% since September 1999. The shareholding structure is as follows:

Shareholder No.of shares % of

Total capital

Deac Ioan 41.585.887 19,0045

Miclea Ioan 41.042.480 18,7562

Legal entities (Romanian or other nationality) 73.903.640 33,7736

Individuals entities (Romanian or other nationality) 62.289.031 28,4657

TOTAL NUMBER OF SHARES 218.821.038 100,0000

Source: Central Depositary S.A. Bucharest.

The company is listed on the stock market shares are traded on the Bucharest Stock Exchange in the Standard category, under symbol CMP.

1.3. The company's evolution

By the Government decision nr.1296 / 13 Dec.1990 the company became COMPA, originating from Intreprinderea de Piese Auto Sibiu (I.P.A. Sibiu). IPA Sibiu was established in 1969 through the merger of two units: Elastic Plant and Automecanica Plant.

Since 1991, COMPA was organized in factories workshops, established for product families as cost centers, which in time became profit centers in order to decentralize and facilitate the establishment of joint ventures.

2. BASIS OF PREPARATION

The individual financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the European Union ("EU"). These financial statements are the first financial statements prepared in accordance with International Financial Reporting Standards. The Group adopted IFRS reporting from the financial statements of 2012.

The financial statements presented in Romanian lei (RON), rounded to the nearest value, which is the functional currency of the company.

3. SIGNIFICANT ACCOUNTING POLICIES

The individual financial statements have been prepared in accordance with International Financial Reporting Standards adopted by the European Union ("EU")

Important accounting policies applied by the company are presented in the financial statements closed on 31.12.2019 and have not suffered changes during the interim report.



9

4.1. TANGIBLE ASSETS Evolution of tangible assets from 1th of January 2020 to 30th of June 2020 is the following:

Explanations Land Buildings Equipment and motor

vehicles

Other tangible assets

Tangible assets in progress

Total

Inventory Value

01.01.2019 43.848.700 88.757.000 581.720.028 1.686.776 33.923.759 749.936.263

Acquisition inputs 1st H 2020

51.394.619 51.394.619

Internally generated inputs 1st H 2020

2.950.166 2.950.166

Inputs from commissioning 1st H 2020

8.471.617

8.471.617

Outputs of transfers to other classes of property 1st H 2020

-8.471.617 -8.471.617

30.06.2020 43.848.700 88.757.000 590.191.645 1.686.776 79.796.927 804.281.048

Amortization, depreciation

01.01.2020 0 367.608.837 1.096.024 0 368.704.861

Expenditure 1st H 2020

Input from transfers from other classes of fixed assets 1st half of 2020

0

Output from transfers to other classes of fixed assets 1st half of 2020

0

Amortization, depreciation afferent outputs 1st H 2020

0

30.06.2020 0 3.139.205 389.838.879 1.133.161 0 394.111.245

Remaining value

01.01.2020

381.231.402

30.06.2020

410.169.803

Tangible assets representing "Tangible assets in progress" are valued at historical cost. The Company chose to assess its tangible assets like land and buildings at fair value. Buildings and land were reassessed on 31.12.2020 by an independent Authorized Valuer. In the fair value hierarchy, the revaluation of buildings and land at fair value is classified as level 2 data.

The method used for fair evaluation level 2 is that of comparing prices. Comparable prices for buildings and constructions nearby are adjusted depending on specific characteristics, like size of property, etc. Most important input for this evaluation method is price/ m². There were no transfers between the level of the classified values and the just values during the year 2019.

During 2019 there were no transfers within the level where the evaluations are classified at fair value. Depreciation of all tangible assets is determined by linear method.

Fixed assets were reduced in 2020 by cassation and depreciation.



10

On 30.06.2020 the mortgage on tangible assets for the contracted loans amounted to a net book value of 121.898.456 lei

4.2. REAL ESTATE INVESTMENTS

The evolution of real estate investments from January 1, 2020 to June 30, 2020 is as follows:

Explanations Real estate

investments

Real estate investments in

progress Total

Balance at 01.01.2020 58.429.296 9.142.099 67.571.395

Inputs from acquisitions in 1st H 2019

180.845 180.845

Internally generated inputs in 1st H 2019

7.874 7.874

Outputs of scrapping

0

Balance at 30.06.2019 58.429.296 9.330.818 67.760.114

The company has investment property assets. These were registered based on the analysis of owned tangible assets by the company and the concluded lease contracts for 2020.

Certain properties hold a portion destined for leasing and a portion destined for production of goods, provision of services or for administrative purposes. In the case the portion destined for lease has no significant weight, than this portion is treated as a tangible asset.

Real estate investments are evaluated at a fair value. A gain or loss generated by a change in the fair value of property investments is acknowledged in the profit or loss for the period in which it accounted.

Real estate investments were reevaluated on 31.12.2019 by an independent authorized evaluator. The “real estate investments in progress” current assets are evaluated at an historical cost.

Real estate investments decreased in 2020 by scrapping.

5. INTANGIBLE ASSETS

Intangible assets held by the Company are represented by software, software licenses and intangible assets in progress. Their evolution was as follows:

Explanations R & D

expenditure

Software and software licenses

Total

Cost

01.01.2020 4.116.416 11.453.318 15.569.734

Inputs 6 months 2020 499.098 819.877 1.318.975

30.06.2020 4.615.514 12.273.195 16.888.709

Depreciation, amortization

01.01.2020 0 8.137.277 8.137.277

Expenses 6 months 2020 0 348.618 348.618

30.06.2020 0 8.485.895 8.485.895

Remaining value

01.01.2020

7.432.457

30.06.2020 8.402.814



11

The company capitalizes the R & D costs due to the fact that the criteria for recognizing them as an element of intangible asset are met, namely:

- it is likely that the future economic benefits expected to be attributable to the asset are attributable to the Company; and

- the cost of intangible assests can be reliably measured.

6. TRADE RECEIVABLES AND OTHER CLAIMS

The trade receivables and other claims situation is as follows:

Explanations 30.06.2020 01.01.2020

Total, of which

Long term

Short term Total, of

which Long term

Short term

Trade receivables 67.644.330 0 67.644.330 108.991.943 0 108.991.943

Adjustments for trade receivables depreciation

-26.396 0 -26.396 -571.165 0 -571.165

Advanced payments to suppliers

5.150.344 0 5.150.344 11.605.639 0 32.040.964

Staff-related claims 24.032 0 24.032 6.385 0 19.361

Claims related to the consolidated state and local budget

4.247.171 0 4.247.171 5.523.004 0 3.041.781

Other debtors 821.817 0 821.817 1.182.372 0 596.856

Adjustments for debtors depreciation

-578.688 0 -578.688 -301.611 0 -368.925

Prepayments 634.393 0 634.393 609.190 0 1.011.271

Grants receivables (AMPOSDRU and AMPOSCCE projects)

9.322.874 0 9.322.874 11.219.383 72.572 8.198.773

Total Claims 87.239.877 0 87.239.877 138.265.140 72.572 152.960.859

Claims in foreign currencies are valued in lei at the BNR exchange rate from 30.06.2020

. The evolution of adjustments for impairment of receivables throughout the first 6 months of 2020, is as follows

Balance at 31.12.2019 940.090

Adjustments in 1st H 2020 212.519

Reversed adjustment in 2020 -547.525

Balance at 30.06.2020 605.084

The company's policies in the commercial department require registration of impairment adjustments for receivables exceeding 360 days and for receivables which hint an uncertainty factor. Exceptions are receivables registered at partners to which the company is in debt, debts within approximately same time periods as the unearned claims.

7. OTHER RECEIVABLES

The situation of other receivables of the Company is as follows:



12

Explanations

30.06.2020 01.01.2020

Total, of which

Long term Short term

Total, of which

Long term Short term

Custom home warranty 103.000 103.000 0 103.000 103.000 0

Other guarantees 14.439 14.439 0 14.439 14.439 0

Total other assets 117.439 117.439 0 117.439 117.439 0

8. STOCKS

Structure of stocks owned by the Company is presented in the table below:

Explanations 30.06.2020 01.01.2020

Raw materials 35.019.447 46.315.067

Impairment of raw materials -294.848 -295.044

Packaging materials 22.168.789 22.775.912

Impairment of materials and packaging -77.939 -77.960

Semi-finished parts and production in progress 18.759.463 19.063.886

Finished goods and merchandise 11.836.825 17.578.146

Impairment of finished products and goods -169.453 -169.453

Total stocks 87.242.284 105.190.554

Adjustments evolution for impairment of inventories in the first 6 months of 2020 is as follows:

Balance at 31.12.2019

Reversed adjustments in 2020

Adjustments established in 2020

Balance at 30.06.2020

9. CASH AND CASH EQUIVALENTS

Available cash and cash equivalents are as follows:

Explanations 30.06.2020 01.01.2020

Bank accounts in RON 911.342 5.692.304

Currency accounts 237.508 383.007

Cash equivalents 343 486

Petty cash 11.991 4.024

Total Cash and equivalents 1.161.184 6.079.821

The Company owns domestic and foreign currency accounts at the following banks: BRD Group Societe Generale, BCR, RBS Bank, ING Bank, Treasury.



13

10. PROFIT TAX

10.1. Information on the current income tax

Tax for current Company profit, is determined based on the statutory profit and adjusted for non-deductible expenses and non-taxable income at a rate of 16%

Explanations 30.06.2020 30.06.2019

Gross profit -4.040.563 24.610.959

Non-taxable income 547.743 4.016.831

Non-deductible expenses 2.239.151 4.544.098

Tax deductible depreciation difference -2.174.471 403.193

Fiscal profit -174.684 24.735.033

Profit tax 0 3.957.605

Amounts sponsoring 199.335 53.615

Tax relief on reinvested profit 1.039.312 3.426.622

Current income tax payable 16% 0 477.368

In the first semester of 2020, the Company registered an accounting and fiscal loss, as a result of the significant reduction of the activity, in the context of the pandemic generated by the new coronavirus

10.2. Information on deferred tax

Significant components of the deferred income tax included in the financial reports as of 30 June 2019 and 30 June 2017, at a rate of 16%, are as follows:

Explanations

30.06.2020 30.06.2019

Temporary accumulated differences

Deferred income tax debt

Temporary accumulated differences

Deferred income tax

debt

Tangible assets reprocessing -11.269.341 -1.803.096 -9.628.185 -1.540.509

Other liabilities restatement 3.093.451 494.952 575.478 92.076

TOTAL -8.175.890 -1.308.143 -9.052.707 -1.448.433

The company takes into account deferred tax receivables as an estimation of future taxable profit could be used with these receivables.

The evolution of deferred income taxes in the period 01.01.2020 – 30.06.2020 is presented in the table below:

Deferred tax at 01.01.2020 -1.175.603

Deferred tax through the income and loss in 1st H 2020 14.504

Deferred tax recognized through other elements of the 1st H 2020 global result, of which:

-147.044

- Deferred tax from assets revaluation -147.044

Deferred tax at 30.06.2020 -1.308.143



14

11. EQUITY

Shareholder structure on 30.06.2019 is as follows:

Explanations No. of shares % of total share

capital

Deac Ioan 41.585.887 19,0045

Miclea Ioan 41.042.480 18,7562

Legal entities (Romanian or other nationality) 73.903.640 33,7736

Individuals entities (Romanian or other nationality) 62.289.031 28,4657

Total number of shares 218.821.038 100,0000

The company's shares have a nominal value of 0.1 RON /share, the share capital value being of 21,882,104 RON. Since June 1997, the company's shares are traded on the Bucharest Stock Exchange, from July 2001 to second category and is currently quoted in the Standard Category, under symbol CMP.

The equity of the company include the following:

Explanations 30.06.2020 31.12.2019

Subscribed and paid capital 21.882.104 21.882.104

Revaluation reserves 83.891.130 83.891.130

Legal reserves 4.376.421 4.376.421

Adjustment of legal reserves 22.679.066 22.679.066

Other reserves 277.919.148 277.918.370

Adjustment of other reserves 442.991 442.991

Current and deferred income tax recognized in the equity account -5.930.213 -6.077.257

Retained result representing surplus from revaluation reserves 57.804.937 57.804.936

Retained results from the first adoption of IAS, less IAS 29 29.144 29.144

Retained result from switching to IFRS, less IAS 29 8.611.538 8.611.538

Reported result from the correction of accounting errors -403.355 -403.355

Retained result due to the modification of accounting policies 89.693 89.693

Retained result due to the adoption of IAS 29 for the first time -648.352 -648.352

Reported result from correction of errors 3.890.000 0

Current year profit -4.055.067 32.708.709

Distribution of profit

-28.817.930

Total equity 470.579.185 474.487.208

Following a NAFA control carried out during 2020, COMPA recorded on account of retained earnings due to correction of errors, additional expenses with taxes and fees related to 2017, amounting to 403,355 lei. In order to ensure the comparability of the data, the information for 2019 presented above has been adjusted with these changes.



15

Evolution of the indebtedness of the Company is as follows:

Explanations 30.06.2020 31.12.2019

Total debts 194.590.921 248.709.990

Cash and cash equivalents 1.161.184 6.079.821

Net debt 193.429.737 242.630.169

Equity 470.579.185 474.487.208

Level of indebtedness 0,41 0,51

The company's indebtedness on 30.06.2019 was 0.99

12. FINANCIAL LIABILITIES

Long term and short term financial liabilities expressed in EUR are as follows:

Currency (EUR)

Credit institution Loan type

30.06.2020 01.01.2020

Total, of which:

Long term (< 5 years)

Short term Total, of

which Long term (< 5 years)

Short term

BRD Group Societe Generale Romania

Credit line for manufacturing

6.292.565 6.292.565 0 6.970.805 6.970.805 0


Investment credit

2.586.177 2.209.239 376.938 2.586.177 2.211.177 375.000

ING Bank Sibiu Credit line for manufacturing

4.047.114 4.047.114 0 5.080.089 5.080.089 0

ING Bank Sibiu Investment

credit 7.500.000 6.818.182 681.818 6.500.000 5.850.000 650.000

Total financial liabilities (EUR) 20.425.855 19.367.099 1.058.756 21.137.071 20.112.071 1.025.000

Long term and short term financial liabilities denoted in RON are as follows:

Currency (RON)

Credit institution

Loan type

30.06.2020 01.01.2020

Total, of which:


Short term

Total, of which


Short term


Credit line for manufacturing

30.470.488 30.470.488 0 33.315.569 33.315.569 0


Investment credit

12.523.043 10.697.796 1.825.247 12.360.114 10.567.877 1.792.238

ING Bank Sibiu Credit line for manufacturing

19.597.338 19.597.338 0 24.279.271 24.279.271 0



16

Credit institution

Loan type

30.06.2020 01.01.2020

Total, of which:


Short term

Total, of which


Short term

ING Bank Sibiu Investment

credit 36.317.250 33.015.682 3.301.568 31.065.450 27.958.905 3.106.545

Total financial liabilities (RON) 98.908.119 93.781.304 5.126.815 101.020.405 96.121.622 4.898.783

For loan contracts, the company filed guarantees.

Tangible fixed assets in favor of credit institutions on 30.06.2020 are in amount of 121.898.456 lei lei

These include land, buildings and equipment. Furthermore, for employed credit guarantees “security interest on debts” was constituted proportionally to the exposure value of the financing banks.

Interest margin of engaged credits at banking institutions vary between:

- Euribor at 1 month + 1.55 % per year

- Robor at 3 mounth +1% per year

Foreign currency debts are evaluated in RON at the official exchange rate of BNR on 30.06.2020.

13 COMMERCIAL LIABILITIES AND OTHER PAYABLES

The commercial debts and other liabilities are as follows:

Explanations

30.06.2020 01.01.2020

Total, of which

Long term

Short term

Total, of which

Long term

Short term

Suppliers 42.198.739 0 42.198.739 94.689.654 0 94.689.654

Advanced payments received from customers

142.527 0 142.527 138.039 0 138.039

Debts from contracts with clients

1.612.283 0 1.612.283 1.217.334 0 1.217.334

Staff-related debts 5.358.126 0 5.358.126 5.423.464 0 5.423.464

Social security and unemployment debts

8.921.852 0 8.921.852 6.110.799 0 6.110.799

Current income tax liabilities

0

0 0 0 0

Various creditors 329.118 0 329.118 148.516 0 148.516

Revenue in advance 836.301 0 836.301 1.411.453 72.572 1.338.881

Investment grants from AMPOSDRU and AMPOSCCE contracts

36.098.094 31.137.248 4.960.846 38.355.443 34.303.190 4.052.253

Inventory excess of property nature

50.116 50.116 0 59.239 59.239 0

Total Commercial liabilities and other payables

95.547.156 31.187.364 64.359.792 147.553.941 34.435.001 113.118.940



17

Foreign currency debts are valued in RON at the official exchange rate of the National Bank of Romania as of June 30, 2020

Following an ANAF control carried out during 2020, COMPA registered additional debts to the general consolidated state budget, amounting to 403,355 lei

In order to ensure the comparability of the data, the information related to 2019 presented in the explanatory notes on 30.06.2020 have been adjusted with these changes.

14. PROVISIONS

Provisions situation as of 30.06.2019 is shown below:

Explanations 30.06.2020 01.01.2020

Total, of which

Long term Short term Total, of

which Long term Short term

Provisions for guarantees to customers

26.945 26.945 0 26.945 26.945 0

Provisions for employee benefits

108.700 108.700 0 108.700 108.700 0

Total Other debts and provision

135.645 135.645 0 135.645 135.645 0

In the first half of 2020, the company did not provide additional provisions for the guarantees granted to the clients and for the benefits of the employees, considering that no changes were made to the situation as at 31.12.2019.

15. INCOME

The company's income structure is as follows:

Explanations 30.06.2020 30.06.2019

Total Turnover, of which: 235.513.230 404.906.114

Revenues from sales of finished products 229.083.835 400.945.602

Revenues from provision of services 1.255.521 2.637.593

Revenues from sale of goods 4.083.143 390.940

Revenues from other activities (rents, various activities) 515.579 471.370

Revenues from associated subsidies (EU funds projects) 575.152 460.609

Other operating income 5.994.693 5.918.080

Total operating income 241.507.923 410.824.194

Other operating revenues consist of:

Explanations 30.06.2020 30.06.2019

Revenues from sales revaluation of properties 3.457.139 3.846.652

Revenues from investment grants (projects and partner contract projects AMPOSDRU and AMPOSCCE)

2.339.249 2.057.883

Other operating revenues 198.305 13.545

TOTAL Other operating income 5.994.693 5.918.080



18

16. EXPENSES

Operating expenses made within the first 6 months of 2017 and 2019 are presented in the following table:

Explanations 30.06.2020 30.06.2019

Material expenditures 131.633.888 248.234.168

Stock differences 6.035.742 -5.042.491

Energy and water expenses 11.646.079 15.021.172

Employee benefits expenditures, of which: 52.462.489 78.965.899

Salaries and compensations 51.309.867 77.060.580

Insurance and social protection expenses 1.152.622 1.905.319


Adjustments to the value on current assets -335.224 -326.008

Expenses with third party services 12.219.745 20.593.182

Other tax expenditures, taxes and similar payments 2.019.834 2.464.480

Other operating expenses 2.073.740 2.480.484

Total Operating expenses 243.511.297 384.948.279

Segments of activity

The Board of Directors regularly evaluates the Company’s activity in order to identify the activity segments that need separate reporting. The Company is based in Romania. All its revenues belong to its home country.The immovable assets, other than financial instruments, receivables concerning the deferred tax, receivables concerning post-hire benefits and other rights resulted from endurances contracts are based in Romania. The company holds no such assets outside the home country.

All revenue belongs to the activities done in Romania.

17. EMPLOYEE BENEFITS EXPENSES

Employee benefits expenses include salaries, compensations and social security contributions. Short term benefits are recognized as expenditures as the services are rendered

Explanations 30.06.2020 30.06.2019

Salaries and compensations 59.707.239 77.060.580

Government grants for expenditure on employees -8.397.372 0


TOTAL 52.462.489 78.965.899

18. FINANCIAL LOSSES (GAINS)

The financial losses (gains) structure is shown below:



19

Explanations 30.06.2020 30.06.2019

Gains from foreign exchange differences relating to monetary items denominated in foreign currency

-1.370.996 -767.090

Losses from interest rates -537.262 -393.747

Gains from financial asset disposal -128.931 -104.119

Total Losses / Gains -2.037.189 -1.264.956

19. EARNINGS PER SHARE

The earnings per share for 1st H of 2019 and 2017 is summarized as follow:

20. FINANCIAL INVESTMENTS

The company's financial investments represent shares owned at affiliated entities. Securities held are carried at cost and include the following:

Company that holds the securities

Social headquarters % of share

capital Securities

Value Main activity (according to

CAEN)

COMPA IT S.R.L. No.8, Henri Coandă Str., Sibiu,Sibiu County

100,00 200.000 6201 “Activities of achieving custom software”

TRANS CAS S.R.L. No.12, Henri Coandă Str., Sibiu,Sibiu County

99,00 1.498.450 4941 “Freight transport by road”

RECASERV S.R.L. No.51, Henri Coandă Str., Sibiu,Sibiu County

70,00 70.000 5629 “Other types of activities”

TOTAL

1.768.450

Entities affiliated with the company were formed in time, due to the need of outsourcing some COMPA S.A. specific activities like: software design, domestic and international auto transport, catering, etc.

The outsourcing accomplished to streamline these activities and to benefit from some state-offered facilities for specific activities (IT activities, transport licenses etc.). Most contracts and transactions with these entities represent COMPA (holder of special and specific installations) sourcing utilities like: electricity, heat, water, telephone services, compressed air, rental of premises and equipment necessary to conduct business, as well as contracts for the supply of goods and services. On the other hand, these affiliated entities provide COMPA with the goods and services they produce and for which outsourcing was imposed.

Relationships were conducted on free market commercial terms, the price of which is agreed upon by negotiation, falling in the prevailing market levels.

Explanations 30.06.2020 30.06.2019

No. of shares at the beginning of the year 218.821.038 218.821.038

Shares issued during the year 0 0

No. of shares at the end of the year 218.821.038 218.821.038

Net profit -4.055.067 23.749.513

Earnings per share (in RON per share) basic / diluted -0,02 0,11



20

Transactions in the first 6 months of 2020 and 2019 with the companies in which COMPA holds stakes were as follows (amounts include VAT):

Explanations 30.06.2020 30.06.2019

Company where securities are held Purchases of

goods and services

Sales of goods and

services

Purchases of goods and

services

Sales of goods and

services

TRANS C.A.S. S.R.L. 5.503.767 254.886 9.577.955 196.887

COMPA - IT S.R.L. 1.288.175 21.893 1.483.930 21.936

RECASERV S.R.L. 533.034 28.306 829.441 32.134

Mutual debts and claims registered at 30.06.2019 and 30.06.2020 are:

Claims receivable by COMPA S.A. from:

Explanations 30.06.2020 30.06.2019

TRANS C.A.S. S.R.L. 157.742 60.471

COMPA-IT S.R.L. 3.191 3.340

RECASERV S.R.L. 16.819 15.853

Debts paid by COMPA Company S.A. to:

Explanations 30.06.2020 30.06.2019

TRANS C.A.S. S.R.L. 3.364.835 2.958.160

COMPA-IT S.R.L. 806.028 834.543

RECASERV S.R.L. 397.650 282.268

Outstanding balances are not guaranteed. No guarantees have been issued nor received for claims or liabilities of affiliated entities.

Company Management

List of the Board members:

NAME AND SURNAME QUALIFICATION POSITION

DEAC Ioan Engineer Chairman & CEO

MICLEA Ioan Economist Board member & CFO

MAXIM Mircea Florin Engineer Board member

BALTEŞ Nicolae Economist Board member/ Chairman of the Audit Council

VELŢAN Ilie-Marius Economist Board member/ Audit Council member



21

List of company executive members:

DEAC Ioan CEO

MICLEA Ioan CFO

FIRIZA Ioan Organizational Management & HR Director

BĂIAŞU Dan-Nicolae Commercial Director

ACU Florin-Ştefan Technical Director

MUNTENAŞ Bogdan-Vasile Logistics Director

ŢUICU Liviu-Laurenţiu Quality and Environment Director

HERBAN Dorin-Adrian Systems Management & Continuous Improvement Director

ŢUŢUREA Mihai Production Director

FIRIZA Sorin Ioan Deputy Production Director

MORARIU Mircea Deputy Production Director

DRAGOMIR Marius-C-tin Chief engineer - Maintenance

Transactions with the company's executive members are limited to wages and allowances.

Explanations 30.06.2020 30.06.2019

Wages and allowances granted to the Board of Directors and executive management members

2.818.243 3.307.199

21. EVENTS SUBSEQUENT TO THE DATE OF THIS REPORT

The spread of the Coronavirus COVID-19 epidemic, especially in Europe, in countries such as Germany, France, Italy, England, the Czech Republic, Slovakia, where the car industry is strongly developed, has a strong uncertainty on our company COMPA.

As COMPA is mainly oriented towards the production of components for the automotive industry, any change in the manufacture of car manufacturers has directly affected the manufacture of components at COMPA.

As the material base is provided almost exclusively from imports, specifically from Western Europe, any syncope in the supply chain has also inevitably affected COMPA

The General Meeting of Shareholders took place on April 27, 2020, and approved the financial situations concluded on December 31, 2019 and profit distribution from 2019.

Chairman & CEO, CFO,


H1 - 2020 Report

22

DECLARATION

In accordance with provisions of article 30 of the Accounting Law no.82 / 1991 The separate financial statements are prepared on June 30, 2020 for:

Name of the issuing entity COMPA S.A.

County 32 Sibiu

Registered office Sibiu, No. 8, Henri Coandă street, Sibiu County, postal cod 550234

Registration number in the Trade Registry J32/129/1991

Property form 34 Companies stock

Predominant activity (CAEN code and class name) 2932 - Manufacture of other parts and accessories for motor vehicles VAT No RO 788767

Ioan MICLEA undersigned,

According to Art.10 (1) of the accounting Law no.82 / 1991, having the position of Economical Manager undertakes

the responsibility for elaborating the financial reporting statement at June 30, 2020 and confirms the following:

a. Separate statements for June 30, 2020 are prepared in accordance with International Financial Reporting

Standards as adopted by the European Union.

b. The accounting policies used in preparing the 1stH 2020 are in accordance with the applicable accounting

regulations.

c. The company operates in terms of continuity.

CFO,

Ioan MICLEA

H1 2020 Report

111ssstttHHHAAALLLFFF YYYEEEAAARRR 222000222000

RRREEEPPPOOORRRTTT

CCCOOOMMMPPPAAA SSS...AAA... SSSIIIBBBIIIUUU

�

H1- 2020 Report

23

RR EE PP OO RR TT aaccccoorrddiinngg ttoo FFiinnaanncciiaall SSuuppeerrvviissoorryy AAuutthhoorriittyy RReegguullaattiioonn nnoo.. 55//22001199 ((AAnnnneexx 1144))

oonn iissssuueerrss ooff ffiinnaanncciiaall iinnssttrruummeennttss aanndd mmaarrkkeett ooppeerraattiioonnss

Report date June 30th 2020

Name of the issuing entity COMPA S.A.

Social headquarters Sibiu, no.8, Str.Henri Coandă, 550234

Phone number +40 269 237878

Fax number +40 269 212204; +40 269 237770

VAT code RO 788767

Registration number in the Trade Registry J 32 / 129 / 1991

European Unique Identifier (EUID) ROONRC.J 32/129/1991

Subscribed and paid share capital 21,882,103.8 RON

Regulated Market on which the issued securities are traded

Bucharest Stock Exchange, Standard Category, Symbol CMP

LEI Code 315700EXV87GJDVUUA14

https://asfromania.ro/en/legislation/sectorial-legislation/capital-market/secondary-legislation-cnvm/regulations-cnvm/6382-regulation-no-5-2018-on-issuers-of-financial-instruments-and-market-operations

H1- 2020 Report

24

C O N T E N T S

1. ECONOMIC AND FINANCIAL SITUATION

1.1. Presenting an analysis of current economic and financial situation compared to the same period of last year.

a) Balance sheet elements, assets representing at least 10% of the total cash assets and other liquid availabilities; reinvested profits; total current assets; company debt situation; total current liabilities;

b) Profit and loss account: net sales; gross revenues; elements of costs and expenses accounting for at least 20% of net sales or gross revenues; risk provisions for various expenses; reference to any sale or shutdown of an activity segment done in the last 6 months or intended to be conducted in the following 6 months; declared and paid dividends

c) Cash flow: all changes that occurred at the cash level of core activities, investments and financial activities, cash level at the beginning and end of the period

2. ANALYSIS OF THE COMPANY'S ACTIVITY

2.1. Presentation and analysis of the trends, elements, items, events or uncertainty factors that could affect the liquidity of the company, in comparison to the same period of last year.

2.2. Presentation and analysis of the effects on the company's financial situation, all capital expenditures, current or anticipated (including the funding purposes and sources of these expenditures), in comparison to the same period of last year.

2.3. Presentation and analysis of the events, transactions, economic changes that significantly affect revenues from core activities. Specifying the extent to which revenues were affected by each identified element in comparison to the same period of last year.

3 CHANGES THAT AFFECT THE SHARE CAPITAL AND THE MANAGEMENT OF THE COMPANY

3.1. Expounding the cases in which the company was unable to meet its financial obligations during said period.

3.2. Description of any changes to the rights of holders of securities issued by the company

4. SIGNIFICANT TRANSACTIONS

4.1. In the case of issuers of shares, information on major transactions concluded by the issuer with the persons they act in agreement with, or in which these people were involved with, in the relevant time frame.

4.2. Mutual re ceivables with affiliated entities - June 30, 2020

4.3. Securities lodged.

H1- 2020 Report

25

1. ECONOMIC AND FINANCIAL SITUATION

SIGNIFICANT EVENTS THAT TOOK PLACE BETWEEN 01.01.2020 – 30.06.2020 WITH IMPACT ON THE FINANCIAL POSITION OF THE COMPANY

The most important events that occurred in the 1st H of 2020 are:

The main event in the economic and social activity of our company COMPA S.A. represents the spread of the COVID 19 Corona virus pandemic around the world, with devastating effects on the world economy.

The economy of the European Union has been and still is strongly affected. COMPA, a company operating in the automotive industry has been and is affected by this health crisis knowing that the global car industry, especially the European car industry had an unprecedented contraction in the first part of 2020.

Strongly connected to the automotive industry within the European Union, COMPA had during the first Semester of 2020 and especially in 2nd trimester of 2020 a dramatic decrease of the realized production, respectively of the turnover.

The turnover achieved in the first 6 months of 2020, amounting to 235,513,230 lei represents only 58.16% of the level achieved in 2019 (404,906,114 lei).

The export turnover for the first 6 months is also only 52.2% compared to the corresponding achievements of the previous year.

As a result of this large-scale crisis, COMPA suspended Individual Employment Contracts in both April and May 2020.

The total number of staff had a decreasing evolution during this period, through departures on request, retirements, etc., as follows:

• 2082 employees were registered in the personnel records on 31.12.2019

• 1923 employees were registered at the end of the 1st Semester 2020 (30.06.2020)

The personnel policy tries to maintain the basic staff, so that when the number of orders recur we can meet customer requirements.

The evolution of the turnover within the COMPA company since the onset of the state of emergency, especially during Quarter 1 2020 was totally unpredictable, most of the company's partners in the automotive industry and not only, requested to stop deliveries and their short-term forecasts had a very high degree of uncertainty.

During the 2nd Quarter of 2020, the largest decrease was registered in April 2020, in which the turnover was only 20.8% of the average for January and February 2020.

In May 2020 and June 2020, respectively, there were timid increases in turnover from one month to another, so that the impact of the achievements of Quarter 2 of 2020 in total turnover in Semester 1 of the year was totally unfavorable, the decrease of achievements of this total indicator Semester 1 of 2020 at the level of only 58.16% of the achievements of Semester 1 of 2019, representing an unprecedented reduction in the evolution in recent years of production achieved at COMPA in recent years.

Benefiting from the technical unemployment indemnity for two months (April - May 2020) according to the legislation adopted during this period by the Romanian Government, the Employment Contracts were suspended for a significant number of employees:

H1- 2020 Report

26

• 1734 employees had their Individual Employment Contract suspended in April 2020, according to GEO 30/2020

• 1731 employees had their Individual Employment Contract suspended in May, according to GEO 30/2020

For these 2 months, according to GEO 30/2020, technical unemployment benefits amounting to:

• 3,315,272 lei for April 2020

• 3,708,076 lei for May 2020

Following the cessation of the effects of the application of facilities approved by the Romanian Government for the decreed emergency period (March 14 - May 14, 2020) and the establishment of the alert state, it was requested, based on GEO 92/2020, granting 41.5% of the salary gross employment rate for a number of 1281 persons who had their Individual Employment Contract suspended for at least 15 days during the alert period and until 31 May 2020.

The number of persons whose Individual Employment Contract was activated based on GEO 92/2020 was 1281 persons for whom the amount of 1,374,024 lei was requested, representing 41.5% of the gross basic salary for June 2020.

The dramatic reduction in production volumes ordered by customers, especially in the 2nd Quarter of 2020, had a major impact on the company's profitability throughout the first half of 2020.

With all the efforts of the company's management, to reduce all categories of costs, to properly size certain variable costs, the impact of fixed costs (depreciation, some salary categories, local taxes, etc.) related to a manufactured production, respectively Turnover achieved in the months of April and May (of approximately 30% of the average of January - February 2020), led to the registration in the first 6 months of 2020 of a loss of 4,055,067 lei to the net profit.

Investment spending has been limited to a strictly necessary level, especially in the second half of the 2020 Semester, by acting on suppliers of machinery and equipment to extend the delivery time where possible, as well as to freeze for a certain period of time of making new investments initially foreseen in BVC 2020.

1.1. Presenting an analysis of current economic and financial situation compared to the same period of last year, including at least:

a. Balance sheet elements, assets representing at least 10% of the total cash assets and other liquid availabilities; reinvested profits; total current assets; company debt situation; total current liabilities;

Analyzing the economic and financial situation for the first half of 2020, the following indicators are presented:

INDICATOR Achievements

30.12.2019 Achievements

30.06.2020

Level of achievement

(col.2 /col.1) (%)

0 1 2 3

Fixed assets 414,209,151 489,526,763 118.18

Current assets 305,128,366 175,643,343 57.56

Debts of less than one year 148,103,857 69,486,608 46.92

Debts over a year 107,210,426 125,104,313 116.69

Capital and reserves 464,023,223 470,579,185 101.41

H1- 2020 Report

27

The total assets of the company at the end of 1st half of 2020, compared with those for the corresponding period of 2019, registered a significant increase, above the level of the turnover increase.

The balance of fixed assets on 30.06.2020 in the amount of 489,526,763 lei registered an increase of 18.18% compared to the level of 414,209,151 lei registered on 30.06.2019.

The increase in fixed assets in both Semester 2, 2019 and Semester 1, 2020 was the result of most of the major investments made by COMPA within a year, investments provided in BVC to increase existing production capacity and to ensure new production capacities for the manufacture of new products, according to the initial requirements of our partners.

During the first half of 2020, fixed assets increased by over 30 million lei, the largest share of growth being recorded in property, plant and equipment, especially inputs of machines and equipment purchased through investments.

Current assets decreased on 30.06.2020 to the level of 175,643,343 lei representing 57.56% of the value of the balance registered on 30.06.2019. From this category of assets, the balance of receivables was particularly reduced, the level of which was recorded on 30.06.2020 is only 44.6% of the value of receivables registered on 30.06.2019.

The level of stocks on 30.06.2020 represents 71.2% of the value of the balance of these stocks registered on 30.06.2019.

Debts of less than one year, registered on 30.06.2020, amounting to 69,486,608 lei represent only 46.92% of the value of these debts registered on 30.06.2020. They were reduced, mainly, as a result of the reduction of commercial debts, respectively of debts towards suppliers, which represented on 30.06.2020 only 33.2% of the value of commercial debts registered on 30.06.2019.

Debts greater than one year, amounting to 125,104,313 lei on 30.06.2020, are 16.69% higher than the level of these debts in the corresponding period of the previous year (30.06.2019). The overwhelming share of these debts is represented by the debts towards the financing banks. The increase in the level of these debts was influenced by the large volume of investments made during this one-year period (Semester 2, 2019 - Semester 1, 2020).

- Equity, plus reserves on 30.06.2020, compared to the same period last year (30.06.2019) recorded an increase of 1.41%, being influenced by the evolution of net profit in this period, which unfortunately in Semester 1, 2020 had a totally unfavorable impact on the evolution of the company's equity.

b. Profit and loss account: net sales; gross revenues; elements of costs and expenses accounting for at least 20% of net sales or gross revenues; risk provisions for various expenses; reference to any sale or shutdown of an activity segment done in the last 6 months or intended to be conducted in the following 6 months; declared and paid dividends;

The Income and expenses statement for the 1st H of 2020 in comparison to the same period of last year is as follows:


H1 2019 Achievements

H1 2020 Degree of fulfillment

(col 2 / col 1) (%)

0 1 2 3

Turnover 404,906,114 235,513,230 58.16

from which, export 322,427,860 168,316,216 52.20

Other operating revenues 5,918,080 5,994,693 101.29

H1- 2020 Report

28


H1 2019 Achievements

H1 2020 Degree of fulfillment

(col 2 / col 1) (%)

0 1 2 3

Total operating revenues 410,824,194 241,507,923 58.79

Stock change -5,042,491 6,035,742 -119.70

Material costs 248,234,168 131,633,888 53.03

Costs with energy 15,021,172 11,646,079 77.53

Costs with salaries 78,965,899 52,462,489 66.44

Depreciation and impairments of assets

22,557,393 25,755,004 114.18

Other operating expenses 25,212,138 15,978,095 63.37

Total operating expenses 384,948,279 243,511,297 63.26

Operational result 25,875,915 -2,003,374 -7.74

Interest expenses 394,786 544,354 137.89

Other financial charges 5,969,286 3,682,624 61.69

Total financial expenses 6,364,072 4,226,978 66.42

Interest revenue 1,039 7,093 682.68

Other financial revenue 5,098,077 2,182,696 42.81

Total financial revenues 5,099,116 2,189,789 42.94

Financial result -1,264,956 -2,037,189 161.05

TOTAL REVENUE 415,923,310 243,697,712 58.59

TOTAL EXPENSES 391,312,351 247,738,275 63.31

Gross result 24,610,959 -4,040,563 -16.42

Current income tax 477,368 0 0.00

Deferred income tax 384,078 14,504 3.78

Net result 23,749,513 -4,055,067 -17.07

Analyzing in detail the elements of the profit and loss account, respectively the level of achievements during the first 6 months of 2020, we can highlight the following aspects:

The effect of the Coronavirus COVID 19 pandemic worldwide, including in the European Union, had a major impact on the economic activity of COMPA, reflected mainly on the indicators in the profit and loss account that during the Semester 1, 2020 and especially in Quarter 2, 2020 saw an unprecedented decline.

Stopping the delivery of products by almost all customers, the dramatic reduction of production volumes, especially from customers operating in the automotive industry, had a catastrophic impact on manufactured production, respectively on the evolution of turnover.

It decreased in April 2020 to a level of 20.8% of the average turnover achieved in January and February 2020, and in May 2020 the value of the turnover achieved represented 32.2% of the average turnover of January and February.

These major influences in the evolution of the turnover achieved in the Semester 1, 2020 and especially the particularly low achievements of this indicator in the Quarter 2, 2020, substantially diminished the value of the turnover for the whole of the Semester 1, 2020, which is as we showed only 58.16% of the achievements of this indicator of Semester 1, 2019.

Operating income also evolved similarly to turnover.

Most of the company's fields of activity, respectively most of the profit centers within COMPA had major production decreases and implicitly a considerable decrease in revenues in the Quarter 2, 2020, with an unfavorable impact on the results of the entire Semester 1, 2020.

H1- 2020 Report

29

We highlight, however, an activity where the production was maintained at a level of 5 working days a week, a non-automotive business field, respectively the manufacture of components for WILO type fluid pumps.

From the category of costs we can highlight significant increases compared to the period corresponding to the previous year, as follows:

- Depreciation expenses and depreciation of fixed assets in the amount of 25,755,004 lei, registered an increase in Semester 1, 2020 of 14.18% compared to the similar period of the previous year (Semester 1-2019). constant throughout the period, the machines and equipment that did not work due to lack of orders, could not be placed in conservation according to the provisions of IFRS .; Costs with depreciation of property, plant and equipment had the greatest impact on the company's profitability during this period; registration of the loss of -4,055,067 lei, reflected in the profit and loss account for the Semester 1, 2020.

- Interest expenses in the amount of 544,354 lei made for the Semester 1, 2020 increased by 37.89% compared to the corresponding period of the previous year. The increase of interest rates is determined by the commitment of investment loans for the realization of the Investment Program from the second part of 2019, but also of those from Semester 1, 2020.

- The other categories of expenses from the profit and loss account of Semester 1, 2020 had relatively similar evolutions to the turnover achieved during this period.

-The net result, in fact the net loss of -4,055,067 lei reflected in the profit and loss account is due exclusively to the effect of the evolution of the Coronavirus COVID 19 pandemic which had a devastating impact on the world economy, including the activity of COMPA.

Despite all the insistent efforts of the Board of Directors, of the company's management, by monitoring each category of expenditure during this period, unfortunately the loss could not be avoided, a situation unprecedented in the activity of COMPA in the last 30 years and especially after privatization when the company COMPA registered a profit every year.

c) Cash flow: all changes that occurred at the cash level of core activities, investments and financial activities, cash level at the beginning and end of the period.

Cash flow calculations for the total activity in the first half of 2020.

Explanations 30.06.2019 30.06.2020

Cash flows from operating activities Profit before tax 24,610,959 -4,040,563 Depreciation and amortization expenses 22,231,385 25,419,780 (Increases) / Decreases in stocks -11,063,196 17,948,271 (Increases) / Receivables decreases -2,234,505 65,720,983 Increases / (Debt decreases) 5,947,933 -49,568,516 Adjust other non-monetary items -2,493,460 -1,889,472

Net cash generated from operations 36,999,116 53,590,483

Cash flows from investment activity

Acquisitions of tangible assets and real estate investments

-46,786,371 -54,533,505

Acquisitions of intangible assets -2,689,369 -1,318,975

Net cash generated from investment activities -49,475,740 -55,852,480

H1- 2020 Report

30

Cash flows from financial activity

(Increases) / Decreases in bank loans 17,262,125 -2,112,286

interest payments -394,786 -544,354

Net cash generated from financial activity 16,867,339 -2,656,640

Net cash generated from total activity 4,390,715 -4,918,637

Cash and cash equivalents at the beginning of the period

1,065,470 6,079,821

Cash and cash equivalents at the end of the period 5,456,185 1,161,184

Analyzing the cash flow at the end of Semester 1-2020, we can highlight the following aspects:

The cash flow was positive.

The major impact in generating the positive flow on 30.06.2020, had: depreciation of buildings, machines and equipment, decrease in the value of current assets (receivables, inventories), and cash at the beginning of the period;

The unfavorable impact on cash flow had in particular: the large volume of investments made and the losses recorded in the Semester 1, 2020.

2. ANALYSIS OF THE COMPANY'S ACTIVITY

2.1. Presentation and analysis of trends, elements, items, events or uncertainty factors that could affect the liquidity of the company, in comparison to the same period of last year.

The liquidity of a company is its ability to have the necessary funds to carry out its economic and financial activity, the ability to make payments on time to the state budget and to suppliers.

The current liquidity index of 2.53 achieved in the 1st H 2020 is a good liquidity index, (having a level similar to that recorded in the two semesters of 2019).

2.2. Presentation and analysis of the effects on the company's financial situation, all capital expenditures, current or anticipated (including the funding purposes and sources of these expenditures), in comparison to the same period of last year.

Capital expenditures

In the investment activity, funds were used for:

purchase of equipment;

modernization of existing equipment and installations;

improvements to some of the production facilities.

H1- 2020 Report

31

The necessary funds for the investment activity in the amount of 55,852,480 RON for the 1st H of 2020 were provided from own sources. The economic effects of purchasing new machinery and production lines are:

increase in labor productivity;

decrease in repair costs;

improvements in the technological flow;

increase in the quality of manufactured parts and decrease of scrap;

reduction of energy consumption;

improvement in the precision of part processing;

safety improvements of operational machinery;

cost reduction of non-quality;

increase in the efficiency of promptness, etc.

2.3. Presentation and analysis of the events, transactions, economic changes that significantly affect revenues from core activities. Specifying the extent to which revenues were affected by each identified element in comparison to the same period of last year.

The evolution of items constituting incomes from core activities for the 1st H of 2016 can be observed in the below table:


H1 2019 (RON)

Achievements H1 2020 (RON)

Level of achievements

(column 2 / column 1)

%

0 1 2 3

Sold production 404,054,565 230,854,935 57.13

Revenue from sale of goods 390,940 4,083,143 1044.44

Income from subsidies related to net turnover

460,609 575,152 124.87

Capitalized production 3,846,652 3,457,139 89.87

Other operating revenues 2,071,428 2,537,554 122.5

Total operating revenue 410,824,194 241,507,923 58.79

The total operating income obtained for Semester 1, 2020 had an evolution similar to that of the turnover achieved in the same period, respectively Semester 1, 2019.

The achieved level of total operating revenues for the Semester 1, 2020 of 58.79% and implicitly on revenues from sold production and operating revenues was influenced by the global evolution of the Coronavirus pandemic, with impact on the entire European and world industry .

H1- 2020 Report

32

3. CHANGES THAT AFFECT THE SHARE CAPITAL AND THE MANAGEMENT OF THE COMPANY

3.1. Expounding the cases in which the company was unable to meet its financial obligations during said period.

In 1st H 2020, as in the past few years, COMPA has had no cases of failure to comply with its financial obligations, delays in creditors' payment, and in particular of materials and equipment suppliers.

3.2. Description of any changes to the rights of holders of securities issued by the company

During this period there were no cases on amendments of stakeholder rights of securities issued by COMPA.

4. SIGNIFICANT TRANSACTIONS

4.1. In the case of issuers of shares, information on major transactions concluded by the issuer with the persons they act in agreement with, or in which these people were involved with, in the relevant time frame.

During the 1st H 2020, COMPA did not carry out major transactions with affiliated companies in its Group or with other companies holding shares in COMPA S.A.'s share capital.

Entities affiliated with the company COMPA SA were formed in time, due to the company’s need for outsourcing some specific activities like: software design, domestic and international road transport, catering, etc.

The purpose of this outsourcing was to make these activities more efficient and to benefit from state-licensed facilities (IT activity, transport licenses, etc.).

On the other hand, these affiliated entities provide COMPA with the goods and services they produce and for which the outsourcing was imposed

The relations were carried out in commercial terms of the free market, their price being negotiated at market levels.

H1 2020 Report

The transactions in the first half of the year 2020 are highlighted in the table below:

Con-tract No

Contract date Seller Buyer Subject of contract

Valued achieved at 30/06/2020

RON (without VAT)

Penalties (/ day)

Payment term

4 01.06.2006 COMPA SA COMPA-IT SRL Space rental 10,800 0.02% 60 days

1 01.06.2006 COMPA SA COMPA-IT SRL Fixed assets rental 480 0.02% 60 days - 01.01.2005 COMPA SA COMPA-IT SRL Providing and distributing heat 1,825 0.02% 60 days

- 01.01.2005 COMPA SA COMPA-IT SRL Electricity provision 2,759 0.02% 60 days

- 01.01.2005 COMPA SA COMPA-IT SRL Drinking and industrial water provision 1,613 0.02% 60 days

15 08.01.2007 COMPA SA COMPA-IT SRL Providing of telephone services 286 0.02% 60 days

- Occasional orders COMPA SA COMPA-IT SRL Supply of materials and services 917 0.02% 60 days

6 01.06.2006 COMPA SA TRANS CAS SRL Space rental 87,000 0.02% 60 days

3 01.06.2006 COMPA SA TRANS CAS SRL Fixed assets rental 60,000 0.02% 60 days

- 01.02.2005 COMPA SA TRANS CAS SRL Electricity provision 2,506 0.02% 60 days

- 01.02.2005 COMPA SA TRANS CAS SRL Providing and distributing heat 43,909 0.02% 60 days

- 01.02.2005 COMPA SA TRANS CAS SRL Supply of drinking and industrial water 10,717 0.02% 60 days

16 08.01.2007 COMPA SA TRANS CAS SRL Providing of telephone services 748 0.02% 60 days

7003 08.01.2007 COMPA SA TRANS CAS SRL Selling of materials and end products 3,555 0.02% 60 days

7004 08.01.2007 COMPA SA TRANS CAS SRL Repair services for drive shafts, metrology, others 7,920 0.02% 60 days

5 01.06.2006 COMPA SA RECASERV SRL Space rentals 18,000 0.02% 60 days

2 01.06.2006 COMPA SA RECASERV SRL Fixed assets rental 600 0.02% 60 days

- 01.01.2005 COMPA SA RECASERV SRL Providing and distributing heat 3,960 0.02% 60 days

- Occasional orders COMPA SA RECASERV SRL Providing services 1,460 0.02% 60 days

2011 15.11.2005 COMPA-IT SRL COMPA SA Software and maintenance services 1,082,500 0.02% 60 days

715 16.07.2009 TRANS CAS SRL COMPA SA Domestic and international transport services for passengers and goods 4,625,014 0.02% 60 days

- 01.07.2004 RECASERV SRL COMPA SA Cooking- catering services, snack-bar, entertainment, special diet 71,273 0.02% 60 days

- 01.03.2006 RECASERV SRL COMPA SA Cleaning and sorting services 382,233 0.02% 60 days

33

H1 2020 Report

4.2. Mutual re ceivables with affiliated entities - June 30, 2020

Receivables to be cashed in by COMPA S.A. from:

RON

TRANS C.A.S. S.R.L. 157,742

RECASERV S.R.L. 3,191

COMPA-IT S.R.L. 16,819

COMPA S.A.’s debts to :

RON

TRANS C.A.S. S.R.L 3,364,835

COMPA-IT S.R.L. 906,028

RECASERV S.R.L 397,650

4.3. Securities lodged

Since the cooperation relations between COMPA and affiliates do not indicate any risks regarding the fulfillment of contractual obligations due to contracts concluded according to table presented in point 1, there were no guarantees constituted.

CEO, CFO,


34

Documents

IINNTTEERRIIMM FFIINNAANNCCIIAALL · COMPA S,A, Sibiu Separate statement of financial position for 1stH 2020 (All amounts are expressed in RON, unless otherwise specified) Note 30-Jun-2020