Santierul Naval Orsova S.A.

Quarterly Report • Aug 13, 2021

INDIVIDUAL SEPARATE FINANCIAL STATEMENTS AT 30.06. 2021

OPIS

		PAGE
1.	BOARD OF DIRECTORS REPORT	2-16
2.	STATEMENT OF FINANCIAL POSITION	17-18
3.	STATEMENT OF COMPREHENSIVE INCOME	19-20
4.	STATEMENT OF CHANGES IN EQUITY	21
5.	STATEMENT OF CASH FLOWS	22
6.	NOTES TO SEPARATE FINANCIAL STATEMENTS	23-62
7.	RESPONSIBLE PERSONS STATEMENT	63

BIANNUAL REPORT

FOR SEMESTER I 2021, IN COMPLIANCE WITH THE ASF REGULATION NO. 5/2018 (appendix no. 14 from the regulation)

DATE OF THE REPORT: 10th of August 2021

NAME OF THE TRADING COMPANY: ŞANTIERUL NAVAL ORŞOVA S.A HEADQUARTERS: NO. 4 TUFĂRI STREET, ORŞOVA TOWN, 225200 MEHEDINŢI COUNTY PHONE: 0252/362399; FAX: 0252/360648 REGISTRATION CODE FOR VAT PURPOSES: RO1614734 NUMBER and date IN THE TRADE REGISTER: J25/150/03.04.1991 LEI CODE: 254900UXAJ8TPIKLXG79 SHARE CAPITAL ISSUED AND PAID UP: 28.557.297,5 LEI NUMBER OF SHARES: 11.422.919 common shares of 2,5 lei each; REGULATED MARKET WHERE THE REAL ESTATE VALUES ISSUED ARE TRANSACTIONED: STOCK EXCHANGE BUCHAREST (symbol: SNO)

1. IMPORTANT EVENTS WHICH TOOK PLACE IN THE FIRST 6 MONTHS AS WELL AS THE MAIN RISKS AND UNCERTAINTIES FOR THE FOLLOWING 6 MONTHS OF THE FISCAL YEAR 2021. COVID-19 IMPLICATIONS ON THE QUARTERLY FINANCIAL RESULTS. TRANSACTIONS WITH AFFILIATED PARTIES.

The company Șantierul Naval Orșova carried out its production activity from the main head-office, during semester I of 2021, without interruption and in compliance with the provisions and scope settled through the income and expense budget corresponding to this period. At Agigea branch, for the activity during this period of the pandemic with COVID-19, the effects were felt rather obvious.

According to the BVC provisions, during this semester, the foreign partners had been delivered and completed 4 ships,3 Money Maker type of ships of 110 m and also the second coastal ship that made the object of the litigation with the company Veka Shipbuildng B.V.

The turnover showed slight increase from the provisions in the BVC, namely 1,19%, yet it showed increase by 77,18% in comparison to the corresponding period from the last year, especially because of the valuing of the coastal type ship.

Just like in the previous years, the income was realized mainly based on the production of ships in Orsova (95,70%) from the rendering of services (repair works) preserving a share of 3,69% and were mostly realized in Agigea Branch. The barges from the patrimony of Agigea Branch and which, during the previous periods, have represented the main source of income for this branch, were not rented during the first semester from 2021, the Covid-19 pandemic severely influencing this market sector.

The value – in absolute numbers – of the 4 ships delivered abroad was 7.694.700 Euro (during the period corresponding to 2020 a number of 2 river ships were delivered and they amounted to 3.695.782 Euro, built at the main site).

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With regards to the activity of the Agigea Branch, the income realized from the services rendered, did not cover the costs from the operating activity, at the end of the reporting period, the result of the activity being negative.

Subsequently, per total of company/activity, in comparison to the provisions from the BVC, the profit from operation was not realized and the gross income was fulfilled 22,8% from the previous year and 13,64% from the provisions in the BVC.

According to the cost centers we may find that:

- the main office recorded on the 30.06.2021 a gross income of 1.105.977 lei while during the period corresponding to the previous year it was recorded 888.787 lei (124,44%);

- on 30.06.2021 the branch in Agigea realized a loss of 942.296 lei, while the loss registered for the period corresponding to the previous year was 166.996 lei.

Apart from the above descriptions, there were existing factors which had a negative influence on our activities, out of which the following are to be mentioned:

• The lack of qualified staff; although the company succeeded in gaining qualified workload in the field of ship constructions by offering proper wages packages, still, at the level of the production sections, the lack of experienced staff is felt strongly which represented and represents an inconvenience during the progress of the company's activity. This deficit of workforce is also subsequent to the fact that through the legislative modifications from the field of pensions, privileged conditions of retirement were created for certain categories of employees with seniority in the work-field. There is still an undergoing concern within the human resources' department for overcoming this situation. Even in these conditions, a high-quality level was ensured, according to the requirements from the external partners.

• The carrying out of the activity at the main head-office in open spaces (outside) during most of the year and subsequently, the dependence to the unfavorable weather conditions influenced extensively the work productivity.

• The internal measures, yet especially those external concerning the pandemic of COVID-19 represented an obstacle in what the progress of the collaboration relationships of the branch in Agigea with the partners from Turkey concerning the rental of MIDIA type ships which highly influenced also the result of the branch's activity, namely the recording of loss from the operating activity.

• Considering the existing circumstances regarding the COVID 19 pandemic, according to the information available, our company considers that there are no significant

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uncertainties, according to point 25 from IAS 1, for the continuation of the activity and that there are no clues which might lead to a depreciation of the withheld assets, in compliance with IAS 36.

• Even if the activity of the branch was affected partially, by the COVID 19 pandemic, its influence to the profit and loss account is difficult to estimate, considering that the loss of certain renting contracts was generated by a complex of circumstances, and the average of incomes from this working point in total income is under 20% under normal conditions.
• during the period analyzed there were no transactions with the affiliated parties.

II. DETAILED INFORMATION CONCERNING:

1. THE ECONOMICAL AND FINANCIAL SITUATION

a) Balance sheet elements at 30.06.2021

The assets, capitals and debts at 30.06.2021, in comparison to the same period of the previous year, are thus:

				INCREASE/D
				ECREASE
				VARIATION
				SEM. I 2021/
				SEM. I 2020
	No.		Sold at	(%)
	row	30.06.2021	30.06.2020
A	B	1	2	3
FIXED ASSETS
I. TANGIBLE ASSETS	01	37.964.817	38.850.311	(2,28)
II. INTANGIBLE				(39,28)
ASSETS	02	4.595	7.568
III. FINANCIAL				(2,96)
ASSETS	03	10.173	10.483
IV. REAL-ESTATE				-
INVESTMENTS	04	508.019	508.019
FIXED ASSETS
TOTAL (row.01 to				(2,26)
04)	05	38.487.604	39.376.381
CURRENT ASSETS
I. FUNDS	06	18.846.300	49.051.129	(61,58)
II. DEBTS	07	14.156.220	1.347.507	950,33
III. SHORT-TERM				(27,50)
FINANCIAL
INVESTMENTS	08	3.880.597	5.352.736
IV. CASH AND				94,06
ACCOUNTS AT
BANKS	09	23.164.109	11.936.527

V. ASSETS					-
CLASSIFIED AS
WITHHOLD FOR
SALE			18.637	18.637
CURRENT ASSETS -
TOTAL					(11,28)
(row.05 to 08)		10	60.065.863	67.706.536
ADVANCED					15,83
EXPENSES		11	265.543	228.391
DEBTS WHICH
MUST BE PAID					(9,79)
WITHIN ONE YEAR		12	8.533.637	9.459.616
CURRENT NET
ASSETS/CURRENT
NET DEBTS (row.10					(11,42)
+11 -12)		13	51.797.769	58.475.311
TOTAL ASSETS
MINUS CURRENT					(7,73)
DEBTS
(row.05 +14)		14
DEBTS WHICH			90.285.373	97.851.692
MUST BE PAID IN					(7,01)
MORE THAN A
YEAR		15
			3.875.003	4.166.922	1.026,64
COMMISSIONS		16	631.886	56.086
SUBSIDIZE FOR
INVESTMENTS		17	-	731	-
CAPITAL AND
RESERVES
I CAPITAL (row 19 to					1,19
21)
out of which:		18	24.690.499	24.400.100
-subscribed and paid					-
capital		19	28.557.298	28.557.298
	Sold C	20
-other elements of the	Sold		3.866.799	4.157.198	(6,99)
capital (ct.103)	D	21
II. CAPITAL					-
PREMIUMS		22	8.862.843	8.862.843
III. RESERVES					(2,61)
FROM
REEVALUATION		23	27.212.735	27.941.234
IV. RESERVES					0,99
(ct.1061+1063+1068)		24	24.650.646	24.409.348
V. REPORTED	SOLD
RESULT, EXCEPT	C	25	697.040	7.574.146	(90,80)
FOR THE	SOLD
REPORTED RESULT	D	26

COMING FROM
THE FIRST
APPLICATION OF
THE IAS 29 (CT.117)
VII. PROFIT OR	SOLD				-
LOSS AT THE END	C	27	-	476.371
OF THE					-
REPORTING
PERIOD (CT.121)	SOLD
	D	28	335.279	-
Profit allocation		29	-	36.089	-
OWN CAPITALS -
TOTAL (row.					(8,38)
18+22+23+24+25-
26+27-28-29)		30	85.778.484	93.627.953
Public assets (ct.1026)		31
CAPITALS – TOTAL			85.778.484		(8,38)
(row.30+31)		32		93.627.953

Out of the above stipulated data, the following conclusions can be made:

• The fixed assets record totally a 2,26% decrease, because of the paying up of the fixed assets, the investments made by the company during this period not being able to counter-balance the level of the pay up.

• The current assets have decreased, totally, by 11,28%

In structure, we have noticed a significant drop especially because of the stocks (they have recorded decrease by 61,58% because of the decrease in the production stock to be executed, subsequently to the recovery of the two coastal ships (the first during the IIIrd trimester of 2020 and the second during the I trimester of 2021); The receivables record an increase by 950,33% from the period corresponding to the year 2020, at the end of the reporting period, the company did not have cashed in the last delivered ship (collected during the first days of the month of July) and the last installment from the value of the coastal ship; The money availabilities of the company have registered significant increase, mainly due to the cashing of the coastal ships.

• The advanced expenses have increased by 15,83% especially because of the increase of local fees and taxes;

• Debts which must be paid within a period of one year have known a 9,79% decrease, mainly due to the decrease of the commercial debts. The debts which must be paid within a period exceeding one year have also registered decrease by 7,01% and refer to the delayed tax, settled subsequently to the re-assessment of the tangible assets.

• The commissions have known a significant increase, especially because of the settlement of a commission for litigations amounting to 531.260 lei for the end of 2020.

• In what the company as a total is concerned, the own capitals show a decrease from the period corresponding to the year 2020. The structure has shown a decrease (by 90,80%), especially based on the result reported after the resolution of the shareholders to distribute as dividend but also of the loss recorded at the end of the reporting period;

Subsequently to the above stipulated, the total of the asset and liability at the end of the Ist semester of 2021 has registered a decrease from the period corresponding to the previous year, namely from 107.311.308 lei on 30.06.2020 to 98.819.010 lei on 30.06.2021.

Other information concerning the assets, debts and own capitals can be found in the Notes to the financial situations concluded on 30.06.2021, attached to the present report.

b) Profit and loss account

The operational incomes for the first 6 months amounted 39.702.225 lei (on 30.06.2020 they were amounting 22.407.707 lei), having the following structure:

-	Sales of goods (constructions and ship bodies)	37.607.312 lei
-	Rendering of services	1.900.597 lei
-	Income from rentals	130.096 lei
-	Other operational incomes	64.220 lei

From the previous year there has been registered an increase in the operational income by 77,18% while the corresponding expenses have registered an increase by 81,78% which made that the company registers a loss from the operational activity.

The gross profit on 30.06.2021, amounting totally 163.681 lei, is thus presented in structure:

343.160 lei Loss from the operation activity

506.841 lei Profit from the fiscal activity

In comparison to the provisions from the BVC, it may be noticed that although the income from the operation activities were realized 98,81% the gross profit was not realized, this failure of non-realization being caused especially by the activity at the branch which as already shown, was seriously affected by the pandemic COVID 19.

Per total, we may conclude that at the level of the company, the gross profit was realized especially subsequently to the positive influences registered out of the fiscal

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activity (favorable differences subsequently to the evolution of the exchange rate, yet also subsequently to the preoccupation of the company management to carry out hedging operations – in order to protect the exchange rate).

Please see below, synthetically, the accomplishments on 30.06.2021, in comparison to 30.06.2020 and with the provisions from the income and expenses budget.

		REALIZED		%
			PROVIDED IN	2021/	Realiz./BVC
DESCRIPTION OF THE	30.06.2021	30.06.2020	THE B.V.C.	2020
INDICATOR			SEM.I
			2021
TURNOVER	39.638.005	20.989.213	40.178.400	177,18	98,81
INCOME FROM OPERATION	39.702.225	22.407.707	40.178.400	177,18	98,81
EXPENSES FROM
OPERATION	40.045.385	22.029.776	39.078.400	181,78	102,47
PROFIT/LOSS FROM
OPERATION	(343.160)	377.931	1.100.000	-	(31,20)
FINANCIAL INCOME	634.259	402.081	300,000	157,74	211,42
FINANCIAL EXPENSES	127.418	58.221	200.000	218,85	63,71
PROFIT FROM THE FISCAL
ACTIVITY	506.841	343.860	100.000	147,4	506,84
TOTAL GROSS
PROFIT/LOSS	163.681	721.791	1.200.000	22,68	13,64
Tax on profit (delayed
tax/income from the tax on
delayed profit	(498.960)	(245.420)	(192.000)	203,31	259,88
NET PROFIT/LOSS (A)	(335.279)	476.371	1.008.000	-	(33,26)

Other information concerning the incomes and expenses can be found in the Notes to the fiscal situations concluded on 30.06.2021, attached to the present report.

c) Cash flow

During the Ist semester of 2021 the company had enough liquidities available, thus the contracting of bank credits was not necessary. The cash and cash equivalent on 30.06.2021 amounted 23.164.109 lei (on 30.06.2020: 11.936.527 lei)

For the guarantee of the advance payments cashed from clients, opening of credit letters for suppliers and performance bonds, on 30th of June 2021, the company had contracted through BRD, the following approved limits, those being at the same level with the one from the previous year:

• 2.000.000 Euro limit multi-options and multi-estimates at BRD-GSG,

• 2.069.000 USD limit for the coverage of the currency risk.

• Out of the multi-options and multi-estimates limit, at the end of semester I 2021, 3 guarantee letters had been issued in favor of the National Company for Administration of the Sea Harbors Constanta, amounting to 452.759 leu and one in favor of the Dutch company Teamco B.V. amounting to 192.700 Euro.

• For the guarantee of these limits the company used the same types of securities, as during the past years, namely common securities stock: land mortgage, chattel mortgage on the debts, collateral deposit in Euro).

The company did not have any pending obligations at the end of the Ist semester of 2021, all the obligations had been paid up on due date, both to the state budget and to the budget of the social insurances, and also to the employees, third parties and other creditors.

The company did not contract credits for investments during this period.

2. ANALYSIS OF THE COMMERCIAL COMPANY'S ACTIVITY

As shown, during the period assessed, the company has completed and delivered, out of the activity from the main office in Orsova, to the external clients, a number of 4 ships, as shown, out of which:

- 3 Money Maker type ships of 100 m length and

• 1 coastal ship.

The 5 hydro-flap barges from the branch in Agigea which represented during the previous years the main income source at the level of this sub-unit have not been rented during this period, the activity being affected by the effects of the pandemic of COVID 19, as already mentioned.

An assessment of the structure of the income is shown in the Notes to the individual fiscal reports (Notes 5 and 6) which are integer part of this report.

Under the present highly difficult conditions, when the external contracts are obtained rather difficult, at the level of the management, solutions were found in order to ensure continuity of the activity for the following period of time, for the entire year 2021 and for the Ist trimester of the year 2022, at the production site in the main head-office in Orșova. This amount of orders ensures equitably, the uploading of the human resources the company has so far.

Even if the company has undergoing contracts for the vast majority of the following period, the river ships' market have known significant changes from the previous year.

These changes refer both to the level of the request and also to the cost of contracting, both having known an obvious drop from the period before the pandemic with COVID 19, which was confirmed also by the severe decrease of the worldwide trade during this period.

From the point of view of the structure of request for the building of river ships, on the market segment on which the company operates, we cannot discuss about major changes, at present especially the tank ships are under request for the transportation of chemical, petrol products, as well as other liquid goods.

The average number of employees on the 30th of June 2021 was 359 employees (on 30.06.2020 the number was 377).

2.1 Out of the factors of uncertainty for the following period, the next are listed:

• Volatility and progress of the exchange rate – LEI/EURO – the company's results depend a lot on a possible fluctuation, unpredictable, of the parity between the two currencies;
• Recruitment of the qualified human resources, especially welders, fitters, industrial painters and constructors fitter, as well as the instability of the human resources;
• Evolution of the steel cost, and especially to the ships' plate, as well as the manner in which this progress is according to the evolution of the cost to the river ships;
• The credit system practiced by the external funding banks and the specific regulations concerning the conditions the river ships must accomplish and the community supporting politics in this field;
• The lack of perspective concerning the rental of the barges within the branch patrimony.

2.2 Investment

The investment program of the company for the first semester of this year was fully realized, in the period ended on 30.06.2021 being completed and investment objectives expected to be achieved in the second half of 2021.

The total value of the expenses of this kind was amounting 2.286.549 lei from 1.800.000 lei which was budgeted and 2.076.773 lei realized during the Ist semester of 2020.

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These expenses were carried out 63,40% to the main head-office and 36,60% at Agigea Branch. At the headquarters in Orșova there have been purchased new installations and equipments and at the branch, besides the new procurement of machinery, the modernization project of the launching track that was started 4 years ago carried on.

2.3 Events, transactions and economic changes which significantly affect the incomes from the main activity.

During the period analyzed, the company did not have any transactions or economical changes which might affect significantly the incomes from the main activity.

2.3.1. Aspects concerning the risks brought by the Coronavirus pandemic (Covid-19)

Even from the beginning of the pandemic, the company took up special safety measures for its employees and to restrict possible Covid-19 spread. Thus, prevention and protective measures have been implemented in all the working points where the employees had been carrying their activities. The Company implemented immediately and effectively, all the measures imposed in order to protect its employees' health.

Although this situation affected the activity of the company, mainly with regards to the sector of barges' rental, in the context of the Coronavirus pandemic (Covid-19), the company's continuity of activity has been ensured.

The fiscal reports on 30.06.2021 were not audited.

3. CHANGES WHICH AFFECT THE SHARE CAPITAL AND THE MANAGEMENT OF THE COMMERCIAL COMPANY NAVAL SHIPYARD IN ORSOVA

The share capital of the company Şantierul Naval Orşova SA (The naval shipyard in Orsova) registered at the Trade register's Office Mehedinti, did not show any modifications during the Ist semester of 2021, being equal to that from 31.12.2020, namely 28.557.297,5 lei. The share capital is split in 11.422.919 common shares, registered share of 2,5 RON each. An owned share entitled the named shareholder to a vote in the general meeting.

The registry of the shareholders is kept by the CENTRAL DEPOSITORY SA Bucharest.

In what the structure of the shares at the end of the Ist semester 2021 is concerned, in comparison to 30.06.2020, it did not record any modifications, in what the significant shareholders are concerned, thus being:

S.I.F. Transilvania	5.711.432 shares	49,9998%	14.278.580 lei
S.I.F. Oltenia	3.200.337 shares	28,0168%	8.000.843 lei
S.I.F. Muntenia	1.504.600 shares	13,1718%	3.761.500 lei
Other shareholders	1.006.550 shares	8,8116%	2.516.375 lei
TOTAL	11.422.919 shares	100,0000 %	28.557.298 lei

The evolution of the cost of the company's shares and the transaction amount, at the Stock Exchange Bucharest, in the last 2 years, during July 2019-July 2021 is given in the graph below (on the upper side there is shown the evolution of the trading cost, and on the lower side, the amount of traded shares):

Out of this graphic it may be noticed that the cost of the SNO shares, in the last 12 months, has registered a maximal value of 7,90 lei/share during the month of June 2021

and a minimum one of 3.00 lei/share in August 2020, and the liquidity during this period was a lower one.The significant increase registered during the month of June 2021 was subsequently to the proposal from the CA and of the AGOA Resolution concerning the distribution of the dividends for the year 2020.

During the Ist semester of 2021, no changes existed in the consistency of the Managing Board, thus having the following structure:

• MISTER ANDANUT CRINEL-VALER, Romanian citizen, aged 63, Engineer. On 30.06.2021 he did not own any shares of the company;
• MISTER MOLDOVAN MARIUS-ADRIAN, Romanian citizen, aged 40, Economist. On 30.06.2021 he did not own any shares of the company;
• MISS DUMITRESCU LUCIA-CARMEN, Romanian citizen, aged 58, Engineer. On 30.06.2021 he did not own any shares of the company;
• MISTER CIUREZU TUDOR, Romanian citizen, aged 66, Economist. On 30.06.2021 he owned a number of 16.500 shares, representing 0,14% out of the company's share capital;
• MISTER MIHAI CONSTANTIN-MARIAN , Romanian citizen, aged 54, Lawyer. On 30.06.2021 he did not own any shares of the company;

During the period 01.01-30.06.2021, the general ordinary meeting of the shareholders was organized on 16.04.2021. They included the main points in the agenda:

• 1. The selection of the meeting's committee secretariat consisting of three members, namely Miss Maria Carstoiu, Miss Carmen Inca and Mr. Horia Ciorecan, shareholders with their identification data available at the company's head-office, in charge with the checking of the shareholders' presence, the fulfillment of the forms requested by the law and the articles of incorporation for the establishment of the general meeting, the counting of the votes expressed during the meeting of the general shareholders and the realization of the meeting's report;
• 2. The presentation of the report with the results from the revaluation of the tangible assets from the group of ships' transport means. The approval of recording the differences from the revaluation in the accounting registers on 31.12.2020, amounting to 519.762,97 lei.
• 3. The presentation, debate and approval of the annual financial corresponding to the fiscal year 2020, based on the International Standards of Financial Reporting, based on the Management Report of the Management Board and the Report of the independent financial auditor.

• 4. Approval of allocation of the net profit realized in the year 2020. The Management Board proposes that the net profit amounting to 4.653.501.17 lei is allotted to the following scopes:

• 191.823 lei, for the establishment of the reserve fund (legal reserve) according to art. 183 line (1) from the Company's Law no. 31/1990, republished with further amends and abridges;

• 35.406 lei for covering the loss coming from the correction of the accounting errors from the previous period;
• 4.340.709.22 lei for the distribution of dividends, representing 0,38 lei /share
• 85.562.95 lei as own source of financing
• 5. The approval of the distribution per additional dividends to the shareholders, by allotting the amount of 7.082.209,78 lei out of the result reported to 31.12.2020, namely of an additional gross dividend of 0.62 lei/share.
• 6. The asset discharge of the managers, for the fiscal year 2020
• 7. Approval of the Income and Expenses Budget Project and of the Investment Schedule for the year 2021, according to the managers' proposal.
• 8. Approval of the realization during the fiscal year 2021, of the accounting registration under "incomes" of the dividends that had not been collected for over more than three years since the date of enforceability, for which the dividend right is precluded through prescription, namely the dividends corresponding to the fiscal year 2016 existing as unpaid on the date of 31.12.2020 amounting to 56.349,63 lei.
• 9. Approval of the management's remuneration politics and of the management board, un compliance with the Law no. 24/2017, art. 92^1.
• 10. Approval of the indicators and of the performance targets for the fiscal year 2021.attached to the administration and mandate contract.
• 11. Settlement of the remunerations for the managers for the fiscal year 2021.
• 12. Approval of the date of 18th of June 2021 as registration date for the identification of the shareholders who must consider the effects of the general ordinary meeting of the shareholders and of the date of 17th of June 2021 as ex date, in compliance with the art. 187 (point 11) from the ASF Regulation no. 5/2018 with regards to the issuers of financial instruments and market operations further amended and abridged.
• 13. The approval of the date of 30th of June 2021 as payment date of the dividends settled under the points 4 and 5 above, according to the provisions under the art. 187, point 11 from the ASF Regulation no. 5/2018 concerning the issuers of financial

instruments and market operations, further amended and abridged. The costs corresponding to the payment of the dividends will be borne by the beneficiaries' shareholders, from the value of the net dividend.

14. The power of attorney of Mr. Mircea Ion Sperdea, as general manager of the company for the conclusion of the general ordinary meeting of the shareholders' resolution (AGOA) and for any other documents which are necessary to the putting into execution of the AGOA resolution and to carry out the publicity and registration forms.

The resolution no. 52/16.04.2021 adopted on this occasion, was published and communicated, within statutory timescale, to ASF Bucharest and the Stock Exchange Bucharest, according to the legal norms.

STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2021

Reference		Note	30.06.2021	31.12.2020
			RON	RON
	Assets
	Fixed assets
IAS 1.54(a)	Tangible assets	14	37.964.817	37.417.314
	Freehold land and land improvements	14	1.201.941	1.201.941
	Buildings	14	16.251.170	16.999.328
	Plant and machinery, motor vehicles	14	16.536.237	16.373.915
	Fixtures and fittings […]	14	38.434	53.638
	Tangible assets in progress	14	3.937.035	2.788.492
IAS 1.54(b)	Investment property		508.019	508.019
IAS 1.54(c)	Intangible assets	15	4.595	6.192
	Other intangible assets	15	4.595	6.192
IAS 1.54(h)	Trade receivables and other receivables	18	10.173	417.495
IAS 1.54(o), 56	Deferred tax assets	18	16.108	79.048
IAS 1.60	Total fixed assets		38.503.712	38.428.068
IAS 1.54 (g)	Inventories	17	18.846.300	34.611.321
IAS 1.54(h)	Trade receivables and other receivables	18	14.140.112	1.185.231
IAS 1.55	Accrued expenses	18	265.543	130.348
IAS 1.54(d)	Short term investments		3.880.597	3.857.609
IAS 1.54(i)	Cash and cash equivalents	20	23.164.109	30.825.273
IFRS 5.38-40	Non-current assets held for sale		18.637	18.637
IAS 1.60	Total Current Assets		60.315.298	70.628.419
	Total Assets		98.819.010	109.056.487
	Equity
IAS 1.54(r), 78(e)	Share capital	21	28.557.298	28.557.298
IAS 1.55, 78(e)	Share premium		8.862.843	8.862.843
IAS 1.54(r), 78(e)	Reserves		51.863.381	51.777.818
	Result for the period		(335.279)	4.653.501
IAS 1.55, 78(e)	Retained earnings		697.040	7.743.844

STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2021 (continued)

		Row	30.06.2021	31.12.2020
Reference			RON	RON
	Profit appropriation		0	(191.823)
	Other elements of equity		(3.866.799)	(4.028.932)
	Total equity		85.778.484	97.374.549
	Liabilities
	Long-term liabilities
IAS 1.54(o), 56	Deferred tax liabilities		3.875.003	4.037.136
IAS 1.60	Total long-term liabilities		3.875.003	4.037.136
	Current liabilities
IAS 1.54(k)	Trade payables and other debts, including derivatives	19	8.533.637	6.619.329
	Deferred income		0	215
IAS 1.54(l)	Provisions		631.886	1.025.258
IAS 1.60	Total current liabilities		9.165.523	7.644.802
	Total Liabilities		13.040.526	11.681.938
	Total Equity and Liabilities		98.819.010	109.056.487

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME AT 30 JUNE 2021

Reference		Note	30.06.2021	30.06.2020
			RON	RON
	Continuing operations
IAS 1. 82(a)	Income	5	39.507.909	19.545.100
IAS 1.99,103	Other income	6	194.316	2.862.607
	Total Operational Income		39.702.225	22.407.707
	Expenses related to inventories	7	(14.356.978)	(6.972.113)
	Utility expenses	8	(916.126)	(640.116)
	Employee benefits expenses	9	(15.102.836)	(9.758.790)
	Depreciation and amortization expenses	14,15	(2.015.778)	(1.567.814)
	Gains/losses on disposal of property		(136)	(160.988)
	Increase/(Decrease) of receivables allowances and inventory write-down	10	2.331.159	400
	Increase/(Decrease) of provision expenses		393.372	575.149
IAS 1.99, 103	Other expenses	11	(10.378.062)	(3.505.504)
	Total Operational expenses		(40.045.385)	(22.029.776)
	The result of operational activities		(343.160)	377.931
	Financial income	12	634.259	402.081
IAS 1.82(b)	Financial expenses	12	(127.418)	(58.221)
	Net financial result		506.841	343.860
IAS 1.85	Result before taxation		163.681	721.791
	Current income tax expenses	13.a	(429.185)	(146.560)
	Deferred income tax expenses	13.a	(484.456)	(92.024)
	Specific tax expense	13.b	(6.836)	(6.836)
IAS 1.85	Result for continuing operations		421.517	476.371
IAS 1.82(f)	Result for the period		(335.279)	476.371
	Other comprehensive income
IAS 1.82(g)	Reevaluation of tangible assets		0	(142.228)
IAS 1.85	Other comprehensive income after taxation		0	(142.228)

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME AT 30 JUNE 2021 (continued)

Reference		Note	30.06.2021	30.06.2020
			RON	RON
	IAS 1.82 (i) Total comprehensive income for the period		(335.279)	334.143
	Attributable profit
IAS 1.83(b)(ii) Shareholders			(335.279)	476.371
	Profit for the period		(335.279)	476.371
	Total attributable comprehensive income
IAS 1.83(b)(ii) Shareholders			(335.279)	334.143
	Earnings per share
	IAS 33.66 Basic earnings per share		(0,03)	0,04
	IAS 33.66 Diluted earnings per share		(0,03)	0,04
	Continuing operations
	IAS 33.66 Basic earnings per share		(0,03)	0,04
	IAS 33.66 Diluted earnings per share		(0,03)	0,04

Reference STATEMENT OF CHANGES IN EQUITY

Attributable to equity holders

IAS

1.108,109		Share capital	Share premium account	Revaluation reserve	Other reserves	Retained earnings	Result for the period	Other elements of equity	Profit appropriati on	Total equity
	Balance at December 31, 2019	28.557.298	8.862.843	28.083.462	24.108.475	7.431.918	3.205.050	(4.290.219)	(198.765)	95.760.062
IAS 1.106(d)(i)	Loss/ Net profit for the year	-	-	-	-	3.205.050	1.448.451	-	-	4.653.501
	Profit appropriation	-	-	-	-	-	-	-	(191.823)	(191.823)
	Transfer in reserve	-	-	(350.964)	456.608	(151.624)	-	261.287	198.765	414.072
	Revaluation reserve	-	-	(519.763)	-	-	-	-	-	(519.763)
	Dividends	-	-	-	-	(2.741.500)	-	-	-	(2.741.500)
	Balance at December 31, 2020	28.557.298	8.862.843	27.212.735	24.565.083	7.743.844	4.653.501	(4.028.932)	(191.823)	97.374.549
IAS 1.106(d)(i)	Loss/ Net profit for the year	-	-	-	-	4.653.501	(4.988.780)	-	-	(335.279)
	Transfer in reserve	-	-	-	85.563	(277.386)	-	162.133	191.823	162.133
	Dividends	-	-	-	-	(11.422.919)	-	-	-	(11.422.919)
	Balance at June 30, 2021	28.557.298	8.862.843	27.212.735	24.650.646	697.040	(335.279)	(3.866.799)	-	85.778.484

STATUS OF THE TREASURY CASH FLOW

IAS 1.10(d), 113	For the fiscal year completed	30.06.2021	30.06.2020
	Treasury Cash Flow for operating activities
	Profit of the period	(335.279)	476.371
	Adjustment for:
	Depreciation of intangible and tangible assets	1.717.793	1.889.599
	Gain/losses from the sale of the tangible assets	136	160.988
	Net expenses / (net income) with provisions	(393.372)	(575.149)
	Depreciation of current assets	(2.331.159)	(400)
	Expense on the current income tax	429.185	146.560
	Specific activities tax expenses	6.836	6.836
	Expenses on the delayed income tax	484.456	92.024
	Income from the delayed income tax	(421.517)	0
	Cash Flow from operating activities before the amendment of the working capital	(507.642)	1.720.458
	Amendment of the working capital:
	Stocks modification	17.851.926	(3.911.646)
	Modification of the commercial account receivables and of other account	(12.644.072)	837.761
	receivables Modification of the advanced expenses	(135.195)	(161.272)
	Modification of the commercial debts and of other debts	1.230.546	751.775
	Cash flow generated from operating activities	5.795.563	(762.924)
IAS 7.35	Paid interests	(6.835)	(522.477)
7.107.357.31,32 IAS 7.10	Net cash flow from operating activities	5.788.728	(1.285.401)
	Treasury Cash Flow from investment activities
IAS 7.31	Cashed interests	14.099	34.150
IAS 7.16(a)	Tangible and intangible assets acquisition	(2.286.549)	(2.073.304)
	Short term investments	(22.988)	1.324.724
IAS 7.10	Net cash used in investment activities	(2.295.438)	(714.430)
	Treasury cash flow from financing activities
IAS 7.17(d)	Paid dividends	(11.154.454)	(3.024)
IAS 7.10	Net cash from (used in) financing activities	(11.154.454)	(3.024)
	Net increase/decreases of the cash flow and of the cash flow	(7.661.164)	(2.002.855)
	equivalents Cash Flow and equivalents from 1st of January Cash flow and cash flow equivalents at 30th of June	30.825.273 23.164.109	13.939.382 11.936.527

IAS 1.10(e) 1. Reporting company

• IAS 1.138 (a),(b) Şantierul Naval Orşova S.A. is a company headquartered in Romania. The registered office address of the Company is: Tufari Street, no.4, Orşova, Mehedinți county.
• IAS 1.51(a)-(c) The separate financial statements in accordance with IFRS have been prepared for the period 01.01-30.06.2021. The Company's main activity is: construction of ships and floating structures (NACE code: 3011).
• IAS 1.112(a) 2. Basis of preparation

a. Statement of compliance

• IAS 1.16 The company has prepared the annual financial statements for the period 01.01-30.06.2021 in accordance with International Financial Reporting Standards as adopted by European Union, applicable to companies whose securities are admitted to trading on a regulated market, according to the Order of the Minister of Finance no. 881/2012 regarding the application of International Financial Reporting Standards by companies whose securities are admitted to trading on a regulated market and the Order of the Minister of Finance no. 2844/2016 approving the Accounting Regulations in accordance with International Financial Reporting Standards applicable to companies whose securities are admitted to trading on a regulated market, including subsequent amendments and additions.
• IAS.10.17 The financial statements have been authorized for issue by the Board of Directors on August 10th , 2021.

The financial statements have been prepared using the historical cost basis except the following significant items from the statement of financial position, for which the Company has used the fair value model:

• IAS 1.117(a) Investment properties
• Buildings
• Naval means of transport.

a. Functional currency and presentation currency

IAS1.51(d),(e) These financial statements are presented in RON, which is also the functional currency of the Company. All financial information presented in RON, rounded to 0 decimal places. All financial information presented in RON, without decimals rounded (rounding the RON fractions over 50 money, including the neglect of money fractions to 50). Where amounts are presented in other currency than RON, it will be specified accordingly.

IAS 1.112(a) 2. Basis of preparation (continued)

b. Professional judgements and key assumptions

The preparation of financial statements in accordance with IFRS requires the use of management's professional judgment, estimates and assumptions which affects the application of accounting policies and the reported value of assets, liabilities, income and expenses. Actual results may differ from estimated values.

The estimates and assumptions are reviewed regularly. Revisions of estimates are recognized in the period in which the estimate was revised and in future periods affected by the change.

• IAS 1.122,12 Information regarding professional judgments that are critical in applying accounting policies which can significantly affect the values presented in the financial statements are included in the 5,129,130 following notes:
• Note 18 –Investment property classification;
• Note 24 Loans.

c. New International Financial Standards not applied by the Company

The entity does not apply some IFRS or new stipulations regarding IFRS issued, but not in effect at the date of the financial statements. The company cannot estimate the impact of applying these stipulations and intends to apply them when they come into force. Among the issued, but not adopted standards, the company will not face the situation to prospectively apply neither of them. These are:

• IFRS 17 "Insurance Contracts", issued on 18 May 2017, with effect from 1 January 2023.
• Amendments to IFRS 4 "Insurance Contracts", issued on 25 June 2020, with effect from January 1, 2021
• Amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16 "Interest Rate Benchmark Reform" as of 27 August 2020, with effect from 1 January 2021.
• Amendments to IAS 1, Classification of short-term or long-term debts, effective on 1 January 2022."
• Amendments to IAS 16, Tangible assets :receipts before intended use, with entry into force on 1 January 2022."
• Amendments to IAS 37, Onerous Contracts-Cost of contracting, effective on 1 January 2022."
• Annual improvements to IFRS 2018-2020 standards, effective on 1 January 2022.

IAS 1.112(a) 2. Basis of preparation (continued)

d. Presentation of financial statements

IAS 8.28(f) The Company applies IAS 1 Presentation of Financial Statements (2007) revised, which has been enforced on 1 January 2009. As a result, the Company presents in the Statement of Changes in Equity all changes related to shareholders' equity, while changes in equity unrelated to shareholders are presented in the Statement of Comprehensive Income.

Comparative information has been presented so that they are in accordance with the revised standard. As the impact of change in accounting policy is reflected only on presentation aspects, there is no impact on earnings per share.

IAS 1 Presentation of Financial Statements is basis for the financial statements presentation to ensure comparability both with the entity's financial statements for previous periods and with the financial statements of other entities.

The Company has adopted a presentation based on liquidity in the Statement of Financial Position and a presentation of income and expenses according to their nature in the Statement of Comprehensive Income, considering that these methods of presentation provide more relevant information than other methods that have been permitted by IAS 1.

The aggregation method is optional depending on the manner in which the Company's management considers relevant information for the presentation of the financial position, respectively financial performance.

Separate financial statements are prepared using the historical cost principle, except for buildings, means of shipping and property investments reclassified in accordance with IAS 40 which are presented at their fair value.

For assets and liabilities that were presented at their fair value the company has applied IFRS 13.

Expenses representing inventories consumption, depreciation of fixed assets, interest expenses, employee expenses etc. and which according to the IFRS stipulations, are included in some assets value, are recognized during the period depending on their nature. Complementarily, the accounting records related to assets in progress, on recognize of the related income accounts. In preparation of the annual accounting reports, as well as those submitted during the year to the territorial units of the Ministry of Public Finance, which are prepared in accordance with the format established by the Ministry of Public Finance, the Company which, according to IAS 1, has chosen to present the analysis of expenses using a classification based on their nature, does not present either the value of these expenses or the value of the corresponding revenues as it is stipulation by OMFP 2844 of December 12, 2016 for approving the Accounting Regulations compliant with International Financial Reporting Standards.

Reference	NOTES TO SEPARATE FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS
IAS 1.112(a)	2. Basis of preparation (continued)
	e. Standards	and interpretations available in the current period
	by the European Union, are available in the current period:	The following standards, issued by the International Accounting Standards Board and adopted
IAS 1	Presentation of financial statements	Fundamental Accounting Principles, structure and content of financial statements, mandatory posts and the concept of true and fair view, completed with amendments applicable from 1 January 2013.
IAS 2	Inventories	Defining of the accounting process applicable to inventories in the historical cost system: evaluation (first in - first out, weighted average cost and net realisable value) and the perimeter of allowed costs.
IAS 7	Statement of Cash Flows	Analysis of cash variations, classified into three categories: cash-flows from operating activities, cash-flows from investing activities, cash-flows from financing activities.
IAS 8	Accounting policies, Changes in Accounting Estimates and Errors	Defining the classification, the information that need to be disclosed and the accounting treatment of certain items in the income statement.
IAS 10	Events after the reporting period	Requirements for when events after the reporting period should generate an adjustment to the financial statements: definitions, terms and conditions, particular cases (dividends)
IAS 12	Income Taxes	Definition of tax accounting processing on the period result and detailed stipulations on deferred taxes, supplemented by amendments applicable from 1 January 2013.
IAS 16	Property, plant and equipment	Accounting treatments, net book value calculation and relevant principles regarding depreciation for most types of property, plant and equipment.
IAS 19	Employee benefits	Accounting principles regarding employee benefits: short and long term benefits, post-employment benefits, advantages on equity and allowances on termination of employment, with revisions made in 2011, applicable from January 1, 2013.

IAS 20	Accounting for Government Grants and Disclosure of Government Assistance	Accounting principles for direct or indirect public aid (clear identification, concept of fair value, restraining subsidized connection etc.).
IAS 21	The Effects of changes in Foreign Exchange Rates	Accounting treatments of abroad activities, foreign currency transactions and restating financial statements of a foreign entity.
IAS 23	Borrowing Costs	The definition of borrowing costs and accounting treatments: the notion of qualifying asset, how to capitalize borrowing costs in the amount of qualifying assets.
IAS 24	Related Party Disclosures	Details of related party relationships and transactions (legal and natural persons) who exercises control or significant influence over one of the group's companies or the management.
IAS 26	Accounting and Reporting by Retirement Benefit Plans	Principles and information on the retirement schemes (funds), distinguishing defined contribution schemes and defined-benefit.
IAS 27	Separate Financial Statements	IAS 27 outlines when an entity must consolidate another entity, how to account for a change in ownership, how to prepare separate financial statements, and related disclosures. The financial statements prepared by the company for year ended 31 December, 2014 are separate financial statements, therefore, consolidated financial statements are not applicable in this case. The Transilvanian Financial Investment Company, headquartered in Braşov, Nicolae Iorga Street, No. 2, helds, in present, 49,9998% of the share capital of SC Şantierul Naval Orşova SA, so, they have obligation to prepare the consolidated financial statements.

IAS 28	Investments in Associates	Defining the evaluation and information principles regarding investments in associates, except those held by:
		a) Venture capital organizations
		b) Mutual funds, unit trusts and similar entities, including insurance funds with an investment component which are considered to be at their fair value through profit or loss or classified as held for trading and accounted in accordance to IAS 39.
IAS 29	Financial Reporting in Hyperinflationary Economies	The financial statements of an entity whose functional currency is the currency of a hyperinflationary economy should be presented in the current unit of measure at the financial statement preparation date, meaning non-monetary elements should be restated using a general price index from the date of purchase or contribution. IAS 29 provides that an economy is considered to be hyperinflationary if, among other factors, the cumulative index of inflation exceeds 100% over a period of three years. Continuous decrease of inflation and other factors related to the characteristics of the economic environment in Romania indicates that the economy whose functional currency was adopted by the Company, ceased to be hyperinflationary, affecting periods beginning 1 January 2004. Thus, amounts expressed in the measuring unit, current at 31 December 2003 are treated as the basis for the carrying amounts in the financial statements of the Company.
IAS 31	Interests in Joint Ventures	Accounting principles and policies to joint venture operations performed assets or holdings in a joint venture.
IAS 32	Financial instruments: presentation	Rules of presentation (classification of debt equity, expenses or income/equity).
IAS 33	Earnings per Share	Principles of determination and representation of earnings per share.
IAS 36	Impairment of Assets	Key definitions (recoverable amount, fair value less costs of disposal, value in use, cash-generating units), the frequency of impairment tests, accounting for the impairments, and for goodwill impairment.
IAS 37	Provisions, Contingent Liabilities and Contingent Assets	Defining provisions and approach of estimating provisions, individual cases examined (including the problem of restructuring).

IAS 38	Intangible Assets	Definition and accounting treatments for intangible assets, recognition and measurement policies on the processing costs for research and development etc.
IAS 39	Financial Instruments: Recognition and Measurement	Recognition and measurement principles regarding financial assets and liabilities, the definition of derivatives, hedge accounting operations, the issue of fair value etc.
IAS 40	Investment Property	Establishing the evaluation method: fair value model or cost model, transfers between different categories of assets etc.
IFRS 1	First-time Adoption of International Financial Reporting Standards	The procedures for financial statements according to IAS / IFRS optional exemptions and mandatory exceptions to retrospective application of IAS / IFRS, supplemented by amendments applicable from 1 January 2013.
IFRS 5	Non-current Assets Held for Sale and Discontinued Operation	Defining an asset held for sale and discontinued operations, and the, evaluation of these elements.
IFRS 7	Financial Information: Disclosures	Financial information related to financial instruments are referring primarily to: (i) information about the significance of financial instruments; and (ii) information about the nature and extent of risks arising from financial instruments, supplemented by amendments applicable from 1 January 2013.
IFRS 9	Financial instruments	The Standard includes requirements for recognition and measurement, impairment, derecognition and general hedge accounting of financial instruments. The version of IFRS 9 issued in 2014 supersedes all previous versions and is mandatorily effective for periods beginning on or after 1 January 2018 with early adoption permitted.

IFRS 10	Consolidated Financial Statements	Establishing principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.
IFRS 11	Joint Arrangements	Establishing principles for financial reporting for entities that hold interests in jointly controlled commitments
IFRS 12	Disclosure of Interests in Other Entities	Requires an entity to disclose information that will enable users of its financial statements to evaluate: the nature and risks associated with interests held in other entities; and the effects of those interests on the financial position, financial performance and its cash flows.
IFRS 13	Fair value measurement	The definition of fair value, establishing, in a single IFRS, a framework for measuring fair value, requiring the presentation of information on fair value.
IFRS 15	Revenue from Contracts with Customers	IFRS 15 specifies how and when an IFRS reporter will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers. IFRS 15 was issued in May 2014 and applies to an annual reporting period beginning on or after 1 January 2018. On 12 April 2016, clarifying amendments were issued that have the same effective date as the standard itself.
IFRS 16	Leasing contract	Its objective is to standardize the way in which financial and operational leasing contracts are recognized in order to have a better comparability in the financial statements between the entities that use different types of contracts.

IAS 1.112(a) 3. Significant accounting policies

117(a)

The accounting policies presented below have been applied consistently in all periods presented in these financial statements by the Company, except for matters described in note 2 (e) of changes in accounting policies.

IAS 1.41 Certain comparative amounts have been reclassified to conform with current year presentation.

a. Foreign currency

(i) Transactions in foreign currency

The Company's foreign currency transactions are registered at exchange rates communicated by the National Bank of Romania ("NBR") for the transaction date. Foreign currency balances are converted in RON at the exchange rates communicated by NBR for the balance sheet date. Gains and losses resulting from the settlement of transactions in a foreign currency and the conversion of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss in the financial result.

b. Financial instruments

(ii) Share capital

The share capital may be increased or reduced on the basis of decision of the extraordinary General Assembly of shareholders, under the conditions and in accordance with law No. 31/1990, company law, republished. Prior to any capital increase by subscription of new consideration, the company will proceed to update the value of tangible and intangible fixed assets owned. Ordinary shares are classified as equity.

c. Tangible Assets

IAS 16.73 (a) (i) Recognition and evaluation

Tangible assets are initially measured at cost, (those purchased from suppliers) or if the input value received as a contribution in kind to the establishment of share capital or increase of share capital.

For subsequent recognition of plant, naval means of transport and investment properties, the company has opted for the revaluation model (fair value model).

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

Some of the tangible non-current assets were revalued based on government decisions ("GD") no. 945/1990, no. 26/1992, no. 500/1994, no. 983/1998, no. 403/200 and no. 1553/2003 by indexing the historical cost with indices prescribed in the respective government decisions. Increases of the tangible non-current assets' value resulting from these revaluations were initially credited to revaluation reserves and thereafter, except for the reevaluation made under GD. 1553/2003, in equity, in accordance with the respective government decisions. GD 1553/2003 foresaw the need to adjust the index value by comparing the utility value and market value. At 31 December 2006, the Company proceeded to review the value of buildings and special constructions using the opinion of specialists employed in the Company.

On 31 December 2007, the Company has not proceeded to review the value of fixed assets at the Orşova headquarters, instead Agigea Branch conducted a revaluation of fixed assets from the structures and ships category, before the merger, for the old company: SC Servicii Construcţii Maritime SA Agigea. During the years 2007, 2008 and 2009 were recorded entries in the technological equipment category and other intangible assets category which led to a presentation in the financial statements, of the assets from these categories both at historical cost indexed in accordance with government decisions (" GD "), which have been applied to date, as well as historical cost.

At 31 December 2009 the Company revalued the buildings and special constructions using the opinion of an independent external evaluator.

At 31 December 2010 and 31 December 2011 the Company has not made any revaluations of tangible assets held.

On 31 December 2012, the Company proceeded to the revaluation of naval buildings and vehicles, both at headquarters in the town of Orşova, as well as at Agigea branch using the opinion of an independent external evaluator.

On 31 December 2013, the Company revalued naval vehicles, both at headquarters in the town of Orşova, as well as at Agigea branch using the opinion of an independent external evaluator.

On 31 December 2014, the evaluated naval vehicles, using the opinion of an independent external evaluator.

On 31 December 2015, the Company proceeded to the revaluation of naval buildings and vehicles, both at headquarters in the town of Orşova, as well as at Agigea branch using the opinion of an independent external evaluator.

On 31 December 2016, the Company proceeded to the revaluation of buildings and naval vehicles amounted to the nature of shipping assets located at Agigea branch using the opinion of an independent external evaluator.

IAS 1.112(a) 3. Significant accounting policies (continued) 117(a)

On 31 December 2017, the company proceeded to the revaluation of tangible assets such as naval vehicles amounted to the nature of shipping assets located in the branch Agigea using the opinion of an independent external evaluator.

On December 31, 2018, the Company proceeded to reevaluate tangible assets such as shipbuilding buildings and means of transport both at the head office in Orşova and at Agigea branch using the opinion of an independent external evaluator.

On December 31, 2019, the Company proceeded to reevaluate tangible assets such as shipbuilding buildings and means of transport located in the branch Agigea using the opinion of an independent external evaluator.

On December 31, 2020, the Company proceeded to reevaluate tangible assets such as shipbuilding buildings and means of transport located at the branch Agigea using the opinion of an independent external evaluator.

Regarding the accounting treatment of revaluation differences, these were made in accordance with IAS 16 as follows:

If the carrying amount of an asset is increased as a result of a revaluation, the increase shall be recognized in other comprehensive income and accumulated in equity under the heading of revaluation surplus. However, the increase shall be recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss.

If the carrying amount of an asset is impaired as a result of a revaluation, the decrease shall be recognized in profit or loss. However, the decrease shall be recognized in other comprehensive income to the extent that the revaluation surplus shows a credit balance for the asset. Reduction recognized in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus.

The Company has used the net value model. The amount of the revaluation surplus was credited to revaluation reserve balance for those non-current assets which fair value was higher than the net book value. For the non-current assets which fair value has been less than the carrying amount, firstly the revaluation surplus has been decreased and after that if necessary it has been reflected as an operating expense in the profit and loss statement.

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

Maintenance and repairs of tangible assets are recorded as an expense when incurred. Significant improvements of tangible non-current assets that increase the value or useful life or significantly increase the capacity to generate economic benefits are capitalized as asset. Assets that have the nature of inventory objects, including tools are recorded as an expense when purchased and are not included in the account value of the tangible assets.

(ii) Reclassification to investment property

The transfer to or from investment properties shall be made if, and only if, there is a change in use.

(iii) Depreciation of tangible non-current assets

Depreciation is the equivalent to irreversible impairment of an asset, as a result of normal use, natural factors, technical progress or other causes. Fixed assets' depreciation shall be accounted as an expense (recognized in profit or loss).

The company uses straight-line depreciation method for all tangible assets owned, by dividing the book value equally, over its useful life. The depreciation method is applied consistently to all assets of the same type and with identical conditions of use. If tangible assets are placed in conservation, the company did not account the depreciation expense, instead at the end of the period, the company will record a corresponding expense adjustment for the impairment of the asset. The degree of impairment will be determined as much as possible by a certified evaluator. A significant change in the conditions of use of tangible assets or aging may justify a revision of the useful life. Also, if the tangible non-current assets are placed in conservation (their use is discontinued for a long period), the useful life can be revised.

The residual value and service life shall be reviewed at least at each financial year end.

Depreciation is calculated on the fair value, using the straight-line method over the estimated useful life of the assets as follows:

Asset	Years
Constructions	5 - 45
Equipment	3 - 20
Other equipment and furniture	3 - 30

Lands are not a subject of depreciation, as they are deemed to have an indefinite life.

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

The management continually evaluates the development plan. The effect of lifetime review, based on GD. 2139/2004, was reflected in the depreciation expense in the year 2005 and in future periods in the amount of depreciation expenses without any temporary differences.

(iv) Derecognition

The account value of a fixed asset shall be derecognised:

• when disposed, or

• when no future economic benefits are expected from its use or disposal.

The gain or loss arising from the derecognition of a fixed asset shall be included in profit or loss when the item is derecognised. Gains shall not be classified as revenue.

d. Intangible Assets

• (1) Cost
• (i) Software

Costs for the development or maintenance of computer software programs are recognized as an expense when they occur. Costs that are directly associated with identifiable and unique products, controlled by the Company and will probably generate economic benefits exceeding costs for a period longer than one year are recognized as intangible assets. Direct costs include the development team staff costs and an appropriate proportion of overhead expenses.

Expenditure which results in extending the useful life and increasing the benefits of software over the initial specifications are added to the original cost. These costs are capitalized as intangible assets if they are not part of tangible assets.

(ii) Other intangible assets

All other intangible assets are recognized at cost.

Intangible assets are not revalued.

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

• (2) Amortization
• (i) Software

Software development costs capitalized and they are amortized using the straight-line method over a period between 3 and 5 years.

(ii) Other intangible assets

Patents, trademarks and other intangible assets are amortized using the straight-line method over their useful life. Software licenses are amortized over a period of 3 years.

e. Investment property

An investment property is a real property (land or a building - or part of a building - or both) owned rather to earn rentals or for capital appreciation or both, rather than:

• (a) used for production or supply of goods or services or for administrative purposes; or
• (b) to be sold in the ordinary course of business.

For the evaluation after recognition, the company uses the fair value model, this accounting treatment has been applied to all investment properties.

A gain or loss arising from a change in fair value of investment property shall be recognized as an income or as an expense in the statement of comprehensive income for the period.

In determining the fair value of investment property, the company uses the services of certified values.

f. Inventories

Inventories are assets:

• Held for sale in the ordinary course of business;
• In process for sale in the ordinary course of business;
• Raw materials and consumables

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

Measurement of inventories

Inventories are required to be stated at the lower value between cost and net realizable value. Inventories should not be reflected in the statement of financial position an amount greater than the amount that can be obtained through their sale or use. In this case, the inventories value should be decreased to the net realizable value by reflecting a write-down.

Cost of inventories

The primary basis for accounting inventories is the cost .

The cost of inventories should comprise all costs of acquisition and processing and other costs incurred in bringing the inventories to the shape and place in which they are currently.

Price differences over the cost of acquisition or production should be disclosed separately in the accounts and are recognized in cost of the asset.

Regarding the method of valuation, the company used, until December 31, 2010, the weighted average cost method, but starting from January 1, 2011, the company is using the first-in - first out method.

The cost of finished goods and work in progress includes materials, labor and indirect production costs associated. Where necessary, adjustments are made for wasted or obsolete inventories. The net realizable value is calculated as the selling price less costs to complete and costs necessary to make the sale

IAS 1.112(a) 3. Significant accounting policies (continued) 117(a)

g. Impairment

(i) Financial assets (including receivables)

A financial asset or group of financial assets is impaired if, and only if, there are any objective evidence of impairment arising as a result of one or more events that occurred after the initial recognition of the asset, and these events have an impact on future cash flows of the financial asset or group of financial assets that can be estimated reliably. On each financial year date, the company examines whether there is any objective evidence that the financial asset or a group of financial assets is impaired. The loss is given by the difference between the asset's book value and the present value of future cash flows using the effective interest rate of the financial asset at initial recognition.

If in a subsequent period, an event occurring after the recognition of the impairment will determine an increase of the asset's value, the impairment will be reversed.

h. Employee benefits

The Company makes payments to pension funds, health funds, unemployment funds, allowances and vacations for all staff. These expenses are recognized in the statement of comprehensive income for the period covered. At retirement, the company granted, as a stimulant, between one and four salaries to every person who ceases contractual relationship with the company.

The Company does not operate any other pension plan or retirement benefits so it has no other obligations in respect of pensions.

During the year, according to the collective labor agreement, depending on the possibilities of the company, employees can receive awards, financial aid for deaths in the family, serious and incurable illness etc.

i. Provisions

Provisions are recognized when the Entity has a present legal or constructive obligation, arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits and when a reliable estimate can be made of its amount.

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

(1) Provisions for annual vacations and other similar staff rights.

Company debt regarding annual employee vacations is recognized in proportion to the duration of untaken vacation days by the end of the year. At the balance sheet date, a provision for the estimated obligation is recognized, provision which includes both the actual amount of untaken vacation days and related social contributions. Also, for the retirement of employees who are qualified for this matter, the company established a provision according to the collective agreement stipulations through the valid period.

(2) Provisions for litigation

For those pending lawsuits, in which the company is the defendant and courts have not issued a final and executory judgment, the company made provisions for the amounts estimated. The amounts paid to the company customers, for any damage caused to the ship during transport, and which have failed to be recovered from the insurance company which issued the insurance policy and for whom there is a pending lawsuit, are treated similarly.

(3) Provisions for guarantees

For river vessels produced by the Company, it is stipulated in the export contracts that the seller is obliged to guarantee the proper execution, for a period of 6-9 months from date of sale (ownership transfer), depending on the complexity of the ships.

Provisions made for this purpose are based on calculation of the average share of total claims paid customer deliveries during the last period (previous year).

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

j. Revenue

Revenue refers to goods sold and services rendered.

Sales revenues include sales of ships and services provided (rentals and ship repairs) made in the ordinary course of business (excluding value added tax).

Revenue is recognized upon delivery of goods to the buyer or carrier, delivery against invoice, and for export products, after being charged and all the customs formalities are completed, or delivered to the place specified in the contract (port of destination), with the transfer of risks to the buyer.

Revenue is measured at the fair value of the counter performance received or to receive.

Interest incomes are recognized using the effective interest method in proportion to the relevant period of time, based on the principal and the effective rate until the maturity date or for a shorter period if this period is linked to the transaction costs, when it is established that the company will obtain such income.

IFRS 7.20,24 k. Financial income and expenses

Interest income is recognized as the income generates, on an accrual basis using the effective interest method in proportion to the relevant time, based on the principal and the effective rate over the period to maturity or a shorter period if this period is link to transaction costs, when it is established that the company will obtain such income.

Income from financial assets or dividends receivable from entities in which the Company is a shareholder, are recognized in the financial statements of the financial year in which they are approved by the General Meeting of each entity.

l. Income tax

The Company records current income tax using the taxable income from tax reporting, determined by the relevant Romanian legislation.

Income tax obligation for the reporting period and prior periods is recognized to the extent that is not paid.

If the amounts paid on the current and prior periods exceed the amounts due for those periods, the excess is recognized as recoverable amount.

IAS 1.112(a) 3. Significant accounting policies (continued)

117(a)

Recognition of deferred tax assets and liabilities

Deferred income tax is, using the balance sheet method, based on temporary differences arising between the tax bases of assets and their carrying amount. Deferred tax assets are recognized to the extent that there is the possibility of achieving future taxable profit from which the temporary differences can be recovered.

4. Determination of fair value

Certain accounting policies of the Company and disclosure requirements demand the determination of fair value for both financial and non-financial assets and liabilities. Fair values were determined for evaluation and / or disclosure purposes based on the methods described below. Where appropriate, additional information about the assumptions used in determining the fair value are presented in the notes that are specific to the asset or the liability.

In the assessment of tangible and intangible assets, fair value measurement is an option. Fair value assessment is made for categories of assets and is treated as a revaluation. The excess resulting from revaluation directly affects equity, unless previously it was recognized as a revaluation loss. Revaluation losses affect the statement of comprehensive income, unless there is an added value previously accounted directly in equity. There are differences between the two asset structures in terms of how to determine the fair value.

IAS 16 "Property, plant and equipment" asserts that: "After recognition as an asset, an item of tangible assets whose fair value can be measured reliably shall be carried at a revalued amount, representing its fair value at the revaluation date minus any subsequent accumulated depreciation and any accumulated impairment losses. Revaluations shall be made with sufficient regularity to ensure that the carrying amount does not differ significantly from that which would be determined using fair value at the balance sheet date." [9]

IAS 38 "Intangible Assets" indicates: "The purpose of revaluations under this standard, fair value shall be determined by reference to an active market".[10]

4. Determination of fair value (continued)

If IAS 16 "Property, plant and equipment" allows the determination of fair value through other methods if there isn't an active market, IAS 38 "Intangible Assets" narrow the assets that can be revalued, showing that only the assets for which an active market exists, can be revalued.

A special structure of non-current assets is the investment property. IAS 40 "Investment Property" offers two options for their evaluation: cost model or fair value model. As compared to IAS 16" Property, plant and equipment", where, if cost model is applicable, entities are only encouraged to disclose the fair value in the notes, IAS 40 "Investment Property" requires the estimation of fair value, for evaluation (fair value model) or to present in the notes (cost model).

For in assets held for continuing use, it can sometimes be difficult to estimate fair value minus costs of disposal. In the absence of a reliable basis for estimating the amount that an entity could obtain, from the sale of these assets in an arm's length transaction between knowledgeable, willing parties, IAS 36 "Impairment of Assets" indicates that the entity may use the asset's value as its recoverable amount (fair value is equal with the value in use).

As of January 1, 2013 requirements are applicable to the valuation of assets and liabilities at fair value under IFRS 13 "Fair Value Measurement". IFRS 13 applies to assets and liabilities held by an entity for which, in accordance with other standards, it is required or permitted a fair value measurement or disclosure about fair value is required.

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.. The price used to assess the asset or liability at fair value is not adjusted by the amount of transaction costs because they are not a feature of the asset or liability, but a feature of the transaction.

Fair value assessment of an asset or liability considers the characteristics of the asset or liability which that market participants would consider in determining the price of the asset or liability at the measurement date.

Fair value measurement is performed on the assumption that an asset or liability is traded between market participants according to the normal conditions of sale of an asset or the transfer of a liability that characterizes the market at the measurement date. A normal transaction involves access to the market for a period that precedes evaluation enabling typical marketing activities and usual for those trading the respective assets or liabilities.

5. Incomes

	Total	39.507.909	19.545.100
IAS 18.35(b) (i) IAS 18.35(b) (ii)	Sales of goods Rendering of services	37.607.312 1.900.607	17.766.333 1.778.767
		30.06.2021	30.06.2020

Incomes for the first 6 months of 2021 are 102.14% higher than in the corresponding period last year, mainly due to the increase in revenues from the sale of ships built at the main headquarters in Orsova. During this period, the Company completed and handed over to external customers a number of 4 ships (2 ships in the corresponding period of 2020). Of these, 3 ships were built and completed this year, and one is the second coastal ship, which has been the subject of litigation with the Dutch company VEKA. The market for river / sea shipbuilding is still weak, but the company has covered production capacity until the end of the year. Although they are not a significant percentage in turnover, the provision of services increased by 6.86%, and this increase compared to the previous year was mainly due to the ship repair activity at the Agigea branch. The main client was Navrom Galați. These presentations are made by the Company in accordance with IFRS 8.

6. Other incomes

	30.06.2021	30.06.2020
Income from rents (other than rent	130.096	1.444.113
real estate investments) Income from asset salles	-	1.407.032
Other operational incomes	64.220	11.462
Total	194.316	2.862.607

The amounts entered in the position of income from rents refer especially to the rents coming from the lease of existing spaces at the Agigea branch. In the first half of 2021, these revenues are at a lower level than in the corresponding period of the previous year, the 5 barns in the branch records not being rented in the first 6 months of this year, these revenues being influenced by the effects of the COVID-19 pandemic.

Reference NOTES TO INDIVIDUAL FINANCIAL SITUATIONS IN ACCORDANCE WITH IFRS

30.06.2021	30.06.2020
6.856.930	3.945.179
7.148.917	2.742.653
6.274.273	2.396.914
372.482	149.025
324.711	111.329
177.451	85.385
245.391	181.844
92.750	92.122
13.091	10.463
(101)	(148)
	6.972.113
	14.356.978

In sem.I 2021 the significant share in the total expenses with the stocks is held by the raw materials (naval sheet) and the auxiliary materials (profiles, pipes). In total, there is an increase in expenditures, by 105.92% compared to the previous year, this increase being correlated with the fact that revenues from the sale of ships also registered an increase of 111.68%. Expenses representing stock consumption that, according to the provisions of IFRS, are included in the value of some assets are recognized during the period depending on their nature. Accordingly, the accounting records the value of current assets in the income statement. We specify that the Company, according to IAS 1, has chosen to present the analysis of expenses using a classification based on their nature, and therefore does not present either the value of these expenses or the value of the corresponding income.

8. Utilities outgoings
	30.06.2021	30.06.2020
Expenses with energy	890.834	622.452
Expenses with water	25.292	17.664
Total	916.126	640.116

In the first half of 2021, utility expenditures increased compared to last year (by 43.12%), this in the conditions in which the realized production (revenues) increased, but also the supply tariffs experienced a slight increase. We point out that an influencing factor in this increase is also the method of presenting expenses using a classification based on their nature, according to IAS 1.

IAS 1.104 9. Staff costs

	30.06.2021	30.06.2020
Personnel expenses Expenses with contributions to compulsory social insurance	13.839.611 1.263.225	9.160.090 598.700
Total	15.102.836	9.758.790
Medium number of employees	359	377

In the period analyzed in 2021, salary expenses experienced a significant increase, by 51.09% compared to the corresponding period in 2020. This increase is due both to the increase in the salaries of the Company's staff, starting with October 2020, with the gross amount of 250 lei / employee - CA decision no. 9 / 02.10.2020, as well as the increase of the production volume realized and delivered in the 1st semester of 2021. As in the case of other categories of expenditure, and in the presentation of staff expenditure, a factor influencing this increase is the method of presenting expenditure using a classification based on its nature.

10. Value adjustement of current asset	30.06.2021	30.06.2020
Losses(Profit) on receivables and various debtors Income from adjustments for impaiment of current assets	(644) (2.330.515)	(400) -
Total	(2.331.159)	(400)

The amounts presented above refer to the adjustment of depreciations related to stocks and other receivables made in the first half of 2021, following the capitalization by sale and the second coastal, respectively the amounts for which, in previous years, were resumed at income , depreciations were established.

IAS 1.97 11. Other outgoings

	30.06.2021	30.06.2020
Expenses with maintenance and repairs	206.685	40.268
Expenses with royalties, managed locations and rents	1.168.763	246.169
Expenses with premium insurance	72.502	46.531
Expenses with commisions and fees	8.916	12.665
Protocol, advertising and advertising expenses	21.988	15.820
Goods and personel transport expenses	3.495.583	559.645
Travel expenses, secondments and transfers	9.363	6.339
Postage and telecommunications expenses	27.341	23.015
Banking services expenses	24.098	28.244
Other expenses for services performed by third parties	4.872.927	2.023.941
Expenses with other taxes and fees	191.632	204.135
Expenses for environment protection	3.090	2.967
Expenses with fixed assets held for sale	-	249.305
Expenses with compensations,fines and penalties	244.191	-
Other operational expenses	30.983	46.460
Total outgoings	10.378.062	3.505.504

In the period 01.01-30.06.2021 the level of expenditures above increased by 196.05% compared to the similar period of the previous year, and in the case of these categories of expenditures, an influencing factor in these increases is the method of presenting expenditures. using a classification based on their nature. We will explain below some of the positions that have a significant share in total expenses: There is a significant increase in maintenance and repair costs, the Company paying special attention to the repair of transport and lifting equipment. Expenses with the transport of goods and persons, expenses that are closely related to the volume of sales revenues. These refer in particular to the transport of the 3 river vessels built at the main headquarters, on the route: Orşova - Rotterdam, or other delivery points in the Netherlands or Germany, indicated in the commercial contracts. We specify that, in accordance with the contractual provisions, the transfer of the property right is carried out together with the delivery of the ships in these points, during the whole transport period the ships being ensured by the care of the Company, according to the contractual clauses.

The volume of services performed by third parties increased compared to the first half of 2020, but the Company resorted to a lesser extent to subcontractors or to the outsourcing of naval painting works. With regard to auditors' fees, included in the total amount of this position, it is found that their level is close to that of the previous year. Specifically, during the analyzed period, they registered the following values: 48,358 lei, including VAT. fees to statutory auditors (47,747 lei, including VAT, in the corresponding period of the year previously), and for the

IAS 1.97 11. Other outgoings ( continued )

internal audit services the amounts paid in the period 01.01-30.06.2021 were 21,081, including VAT (20,747 lei, including VAT, in the corresponding period of the previous year). As regards the position on costs of compensation, fines, they refer mainly to the expenses occasioned by the litigation with VEKA, stating that for the receivables generated by this litigation were constituted in previous years impairments, so that there were no significant influences on profit or loss and other comprehensive income.

IAS 1.86 12. Financial income and expenses

Recognized in the profit or loss account:

		30.06.2021	30.06.2020
IFRS 7.20 (b)	Interest income from bank deposits	18.358	41.142
IAS 21.52 (a)	Incomes from exchange rates differences	615.901	360.939
	Total financial incomes	634.259	402.081
IAS 7.20 (b)	Interests expenses	-	-
IAS 21.52 (a)	Expenses from exchange diferences rates	127.418	58.221
	Total financial expenses	127.418	58.221
	Net financial result	506.841	343.860

In connection with the above amounts, the following details are given:

• interest income is related to bank deposits and current account availability;

• due to the evolution of the exchange rate, but also to the hedging contracts concluded through BRD, the income from the exchange rate differences was higher than the expenses from the exchange rate differences.

• in the analyzed period of 2021, the company did not have bank credits, so it did not register interest with this title.

13a. Expenditure on profit tax

		30.06.2021	30.06.2020
	a) Expenditure on current profit tax
IAS 12.80 (a)	Current period	429.185	146.560
IAS 12.80 (b)	Adjustments of previous periods
	b) Deferred income tax expense
IAS 12.80 (c)	Initial recognition and reversal of temporary differences	484.456	92.024
IAS 12.80 (g)	Changes in previously unrecognized temporary differences
IAS 12.80 (f)	Recognition of previously unrecognized tax los
	Total profit tax expenses ( a+b)	913.641	238.584
IAS 12.81 (c)	Reconciliation of effective tax rate
	Profit of the period	221.685	781.568
	Non-deductible expenses	272.172	23.459
	Non-taxable incomes	2.723.887	591.658
	Elements similar to incomes ( amortisation after	415.004	887.374
	reevaluation 2003)
	Other taxable amounts(tax recognized profit)	4.497.433	0
	Deduction of legal reserve	0	36.089
	Taxable profit	2.682.407	1.064.654
	Expense with the current profit tax	429.185	170.345
	Sponsorship	-	7.500
	Bonus OUG 33/2020	-	16.284
	Profit after taxation	(207.500)	635.008

13b. Specific tax expenses

Starting with the year 2017, with the entry into force of Law no.170 / 2016 regarding the specific tax for certain activities, the company owes this type of tax for the activity of the canteen that operates under its subordination. We mention that in the Company's premises a working canteen operates, its activity being codified CAEN 5629 "Other food services n.c.a." and registered in the constitutive act of the company as a secondary activity.

For the year 2021, the expense with the specific tax due for this activity is in the amount of 13,671 lei, and for the first semester of this year the payment obligation is 6,836 lei.

Reference NOTES TO INDIVIDUAL FINANCIAL SITUATIONS IN ACCORDANCE WITH IFRS

IAS 16 14. Tangible non-current asset

		Land and buildings	Machines and equipments	Furniture and fixtures	Work in progress	Total
	Costs or assumed costs
IAS 16.73 (d)	Balance at 1 January 2021	21.356.506	55.393.007	469.450	2.788.492	79.987.455
IAS 16.73 (e)(i)	Acquisitions	13.879	1.124127	-	1.524.480	2.662.486
IAS 16.73 (e)(ii)	Outgoings of non current asset	-	123.439	-	375.937	499.376
IAS 16.73 (d)	Balance at June 30, 2021	21.350.385	56.393.695	469.450	3.937.035	82.150.565
	Depreciation and losses from depreciation
IAS 16.73 (d)	Balance at 1 January 2021	3.135.237	39.019.092	415.812	-	42.570.141
IAS 16.73 (d)(vii)	Depreciation during the year	762.037	938.955	15.204	-	1.716.196
IAS 16.73 (d)(ii)	Outgoings of non current asset	-	100.589	-	-	100.589
IAS 16.73 (d)	Balance at June 30, 2021	3.897.274	39.857.458	431.016	-	44.185.748
IAS 1.78 (a)	Accounting values
	Balance at 1 January 2021	18.201.269	16.373.915	53.638	2.788.492	37.417.314
	Balance at June 30, 2021	17.453.111	16.536.237	38.434	3.937.035	37.964.817

IAS 16 14. Tangible non-current asset (continued)

On 30 June 2021, land has a book value of 1,201,941 RON and represents an area of 86,000 square meters, of which:

• 85,790 square meters at its headquarters in Orşova and
• 210 square meters at its Branch in Agigea, Constanta County.

On 31.12.2007, the Agigea Branch, named at that time Shipyard Services SA Agigea, carried out the land revaluation operation of 210 sqm. As a result, after the merger (in 2008) and until this date, the Company's lands are valued at fair value for the land in the Branch's patrimony and at historical cost for the lands from Orșova.

In the course of the year 2017 the company has put up for sale by tender two plots of land in the area Gratca, of 937 square meters and 3,988 square meters, in accordance with the management decision of 16 February 2017. Although these lands have not found yet their buyers, they have been classified in an appropriate manner as non-current assets held for sale (account 311).

The company has completed cadastral situation for the entire area of the premises owned by Orşova headquarters. The company has completed the land register for the whole situation in the area of property at its headquarters in Orşova.

Revaluation of tangible non-current assets

On 31 December 2004, the value of tangible non –current assets is presented at historical cost, indexed in accordance with government decisions ("GD"), which were applied by that date or at historical cost.

At 31 December 2005 the Company proceeded to revise the value of tangible assets by using the opinion of specialists, employed by the Company. At 31 December 2006, the Company proceeded to review the value of buildings and special constructions using the opinion of specialists, employed in the Company. On 31 December 2007, the Company has not proceeded to review the value of assets at the Orşova headquarters, instead, Agigea Branch conducted a revaluation of fixed assets of structures and ships group, before the merger, under the old name: SC Servicii Construcţii Maritime S.A. Agigea.

During 2007, 2008 and 2009 there were entries recorded in the technological equipment category and other intangible category which leads to a presentation in the financial statements, of the assets of these groups, both at historical cost indexed in accordance with government decisions (" GD "), and historical cost.

At 31 December 2009, the Company proceeded to the revaluation of buildings and special constructions, both at the headquarters in the town of Orşova and at Agigea branch, using the opinion of independent external evaluators. The reflection method of the revaluation in the company's bookings was to eliminate the depreciation from the book value of assets. The amount of the revaluation surplus was credited to revaluation reserve balance for those targets whose fair

IAS 16 14. Tangible non-current asset (continued)

value was higher than the net book value, and for the other purposes for which the fair value has been less than the book value a reduction of the existing revaluation surplus was reflected affecting operating expenses for the purposes for which revaluation reserves were not previously recognized or the recognized revaluation reserve was insufficient to cover the decrease.

At 31 December 2010 and 2011, the company did not revalued non-current assets.

At 31 December 2012, the company revalued buildings and means of naval transport, both at headquarters in the town of Orşova and Agigea branch using the opinion of an independent external value. The Company has used the net value model. The amount of the revaluation surplus was credited to revaluation reserves for those assets which fair value was higher than the net book value, and for the other assets which fair value has been lower than the book value a reduction of the existing revaluation surplus, was reflected affecting operating expenses for the purposes for which revaluation reserves were not previously recognized or the recognized revaluation reserve was insufficient to cover the decrease. For the fixed assets that are under conservation at Agigea branch, an impairment of 6,739 RON was recognized.

At 31 December 2013, the company proceeded to the revaluation of means of naval transport, both at headquarters in the town of Orșova and Agigea branch using the opinion of some independent external evaluators. The reflection method of the revaluation in the company's bookings was to eliminate the depreciation from the book value of assets. The amount of the revaluation surplus was credited to revaluation reserve balance for those targets whose fair value was higher than the net book value, and for the other purposes for which the fair value has been less than the book value a reduction of the existing revaluation surplus was reflected affecting operating expenses for the purposes for which revaluation reserves were not previously recognized or the recognized revaluation reserve was insufficient to cover the decrease.

For the fixed assets that are under conservation at Agigea branch, an impairment of 155,474 RON was recognized, at the end of 2013; at 31.12.2012 the impairment was 6,739 RON.

At 31 December 2014, the company proceeded to the revaluation of means of naval transport using the opinion of some independent external evaluators, applying the same rules and methods regarding the registration of the resulting differences.

For the fixed assets that are under conservation at Agigea branch, an impairment of 195,218 RON was recognized, at the end of 2014; at 31.12.2013 the impairment was 155,474 RON.

At 31 December 2015, the company proceeded to the revaluation of means of naval transport, both at headquarters in the town of Orșova and Agigea branch using the opinion of some independent external evaluators. The reflection method of the revaluation in the company's bookings was to eliminate the depreciation from the book value of assets. The amount of the revaluation surplus

IAS 16 14. Tangible non-current asset (continued)

was credited to revaluation reserve balance for those targets whose fair value was higher than the net book value, and for the other purposes for which the fair value has been less than the book value a reduction of the existing revaluation surplus was reflected affecting operating expenses for the purposes for which revaluation reserves were not previously recognized or the recognized revaluation reserve was insufficient to cover the decrease.

For constructions and ships, an increase amounted at 2,181,569 RON was recorded. However analyzed individually, there are positions that present decreases, their total value is amounted at 3,591,056 RON, out of which 3,416,821 RON were incurred from revaluation surplus previously recorded for these items and 174,235 RON were supported on costs.

Please note that further information regarding the revaluation can be found in the Administrators' report prepared and presented separately in the general meeting of shareholders.

Valuation techniques used by the evaluator for fixed assets under IFRS 13.91, were as follows:

• The cost approach for naval means of transport and for fixed assets in conservation

• The income approach for leased buildings (investment properties).

On December 31, 2016, the company proceeded to the revaluation of fixed assets amounted to the nature of shipping assets, using the same external independent evaluator's opinion and based on the same rules on recording differences in results. In the ordinary general meeting of shareholders, the results of this reassessment will be presented as visually distinct agenda. For fixed assets placed in conservation at Agigea branch was recognized an impairment at the end of the year 2016 total of 287,458.76 RON (to 31.12.2015 this impairment was of 252,756,17 RON).

On December 31, 2017, the company proceeded to the revaluation of fixed assets amounted to the nature of shipping assets, using the same external independent evaluator's opinion and based on the same rules on recording differences in results. In the ordinary general meeting of shareholders, the results of this reassessment will be presented as visually distinct agenda.

For fixed assets placed in conservation at Agigea branch was recognized an impairment at the end of the year 2017 total of 304,490.18 RON (to 31.12.2016 this impairment was of 287,458.76 RON)

On December 31, 2018, the company proceeded to re-evaluate the property, buildings and ships, both at the headquarters of Orşova and at Agigea branch using the opinion of independent external evaluators. The method of reflecting revaluation in the Company's accounts was that of eliminating depreciation from the carrying amount of assets. With the value of the revaluation surplus, the balance of revaluation reserves was credited for those items whose fair value was higher than net book value, and for the other objectives for which the fair value was less than the net book value reflected the decrease of the existing revaluation surplus and / or the impairment of operating expenses in the case of previously unrecognized

IAS 16 14. Tangible Non-current Assets (continued)

revaluation reserves or recognized revaluation reserves was insufficient to cover the decrease. In both the construction group and the ship, by total group, there are increases, totaling 5,330,995 RON. However, individually analyzed were positions where there were decreases, their total value being 1,054,765 RON, out of which: 1,047,790 RON were borne from the revaluation surplus previously recorded in these positions and the amount of 6,975 was incurred on costs.

At December 31, 2019, the Company proceeded to reevaluation the tangible assets of the nature of the means of ship transport, using the opinion of the same independent external evaluator and based on the same rules regarding the recording of the resulting differences. In the ordinary general meeting of the shareholders, the results of this reassessment will be presented as a separate item on the agenda.

At December 31, 2020, the Company proceeded to reevaluation the tangible assets of the nature of the means of ship transport, using the opinion of the same independent external evaluator and based on the same rules regarding the recording of the resulting differences. At the ordinary general meeting of shareholders, the results of this revaluation will be presented as a separate item on the agenda.

In order to carry out these operations, the company turned to the specialized services of the evaluator DARIAN DRS S.A., headquarters in Timisoara.

Valuation techniques used by the evaluator for fixed assets under IFRS 13.91, were as follows:

• The cost approach for naval means of transport and for fixed assets in conservation
• The income approach for leased buildings (investment properties).

According to IFRS 13, valuation at fair value of buildings and means of naval shipping supposed taking into consideration the characteristics of the assets, which users of financial statements would consider in determining the price of the asset at the balance sheet date. Fair value determination was carried out by an independent external evaluator and shall be treated as level 2 under IFRS 13 for the data taken into account in determining the fair values as at 31 December 2019, the date of financial reporting. At the company level, there has not been any change of the level presented by IFRS 13 for the data taken into account in determining the fair values. Also, the maximum amount for assets valued at fair value does not differ from the current amount of use.

Impairment losses and subsequent reversals

At the end of 2020, for the fixed assets in conservation at the Agigea branch, the depreciation test was also performed, being recognized a total depreciation of 406,522 lei, related to other fixed assets than the buildings. This depreciation is found at the same level and on 30.06.2021.

IAS 16 14. Tangible Non-current Assets (continued)

Pledged or mortgaged non-tangible asset

To guarantee the multi-option and multi-currency global limit, in value of 2,000,000 ( as to same level like 2019), made available by BRD-GSG SA, the Company established the following::

• First rank mortgage on the following properties: Repair hall, New Hall, Thermal power station, Compressors Station and PSI Shed, Operating Group, Cafeteria, Merged building, all including land, toate împreună cu terenul aferent, properties assessed according to the Guarantee Monitoring Report at EUR 1,512,800 market value, registered in the Land Book Register under the numbers 1133, 1146, 1121, 1145, 1134, 1135 and 1132;
• Security interest with dispossession on a deposit in value of 401.201 EUR.
• Assignment of receivables as collateral on receipts in a total value of 12.255.500 EUR, resulting from the commercial contracts concluded by the Company with third parties, not cashed up at 30.06.2021.

Non-tangible asset under construction

On 30.06.2021 the company has unfinished investment objectives in the amount ( mainly slipway modernization at Branch Agigea) of 3.937.035 lei (4.140.566 lei on 30.06.2020). A significant weight in them is represented by the modernization works of the launching track from the Agigea branch, including the replacement of the strollers, as well as the manufacture, in own direction at the central headquarters, of adjustable devices for making block sections. .

IAS 38 15. Intangible assets

IFRS 3.61 IAS 38.118 (c),		Other assets	Total
(e)	Cost
IFRS 3.B67 (d)(viii),IAS 38.118	Balance at 1 January 2021	1.077.700	1.077.700
IAS 38.118(e)	Acquisitions	-	-
	Outgoings of intangible assets	-	-
IAS 38.118	Balance at 30 of June 2021	1.077.700	1.077.700
	Depreciation and amortisation losses
IFRS 3.B67 (d)(i),IAS 38.118	Balance at 1 January 2021	1.071.508	1.071.508
IAS 38.118(e)(vi)	Amortisation during the year	1.597	1.597
	Outgoings of fixed assests	-	-
IFRS 3.B67 (d)(viii),IAS 38.118	Balance at 30 of June 2021	1.073.105	1.073.105
	Accounting values
IAS 38.118(c) IAS 38.118(c)	Balance at 1 January 2021 Balance at 30 of June 2021	6.192 4.595	6.192 4.595

IAS 39 16. Other investments, including derivative financial instruments

The securities are recognized in the financial statements in accordance with IAS 27 (revised in 2010), IAS 36 (revised in 2009), IAS 39 (revised in 2009) and IFRS 7 (issued in 2008). From the corroboration of the provisions of the 4 standards, the company adopted the following policy for the recognition and evaluation of the shares and the securities:

• investments in subsidiaries, jointly controlled entities and associated entities are recognized at cost value;

• short-term investments held for sale not quoted on the stock exchange are recorded at cost, for the impairments being made adjustments (the treatment for the depreciation of these securities is established by IAS 39 paragraph 63);

• Short-term investments held for sale listed on the stock exchange are recorded at fair value (the value of the last trading day of the year), any gains or losses to be recognized in the capital situation. If there is objective evidence of impairment (as presented in paragraph 59 of IAS 39), as well as in the case of foreign exchange losses and gains, the loss of value will be recognized in the profit and loss account.

	30.06.2021		30.06.2020
Other investments	Accounting value	Imparment adjustements	Net value	Accounting value	Imparment adjustements	Net value
Long term investments
Shares detained at Kritom	684.495	684.495	0	684.495	684.495	0
Other titles detained on long term	0	0	0	0	0	0
Total investments on long term	684.495	684.495	0	684.495	684.495	0

IAS 39 16. Other investments, including derivative financial instruments (continued)

In 1993, S.C. Servicii Construcţii Maritime S.A. ("SCM"), a company acquired by Şantierul Naval Orşova S.A. during the financial year ended 31 December 2008, made with the Anonymous Society "Domik Kritis", based in Crete, a joint venture named "Kritom Shipping Company", based in the city Iraclio, Crete. The share capital owned by SCM at Kritom Shipping Company was 49%:

• the total share capital of this company was 1,230,600 euro, consisting of a total number of 4,200 shares of 293 euro / share,
• SCM, at that time held 2,058 shares, respectively 602,994 euros (49%), and Domiki Kritis held 2,142 shares worth 627,606 euros (51%)

According to the latest information received from the Greek authorities, the Greek partner proceeded, without our consent, by virtue of the provisions of art.3.4 of the Convention establishing the company, to double the share capital of Kritom, reaching 2,461,200 euros (8,400 shares ), from which:

• The joint-stock company "Domiki Kritis", which has since become Aristodimos E. Lidakis SA, holds 1,857,620 euros, the equivalent of 6,340 shares, representing 75.48%, and
• Santierul Naval Orsova holds 2,060 shares worth 603,580 euros, respectively 24.52% of the share capital.

The founding convention of the Kritom Shipping Company provides that the duration of the company is for the period 1993-2012. However, in 2012, the Greek shareholder, without consulting the Company, and using the dominant position in the General Meeting decided to extend the duration of the company by 25 years, until 2037.

At the moment, based on the information we have, the company is active but due to result of the pandemic and the lockdown situation in Greece , it does not generate revenue.

For more information about the current situation of Kritom and to clarify all aspects of administration, Șantierul Naval Orșova contacted a law firm that will represent us in court and support our interests as a shareholder.

In accordance with IFRS 13, fair value evaluation of short term investments assumes taking into consideration the characteristics that market participants would consider in determining the price of the asset at the measurement date. Fair value determination was made according to the available information on the interbank market and is assimilated to the first level required by IFRS 13 for data taken into account in determining the fair values at December 31, the reporting date.

On 30 June, 2021, the Company had fully set up impairments for these securities, amounted to 684,495 RON, so the net value on 30 June 2021 was 0 RON (the same situation was registered at 31 December, 2019).

The factors that contributed to these depreciations are the distrust and lack of transparency shown by the Greek partner, which manages the company, as we have shown.

17. Stock

		30.06.2021	30.06.2020
IAS 1.78 (c),2.36(b)	Raw materials and materials	7.852.176	7.017.322
IAS 1.78(c), 2.36(b)	Production in progress	11.777.399	48.824.420
IAS 1.78(c), 2.36(b)	Fixed assets detained for sale	18.637	68.853
IAS 1.78(c), 2.36(b)	Finished products	-	-
IAS 1.78(c), 2.36(b)	Products kept by third parties	-	-
IAS 1.78(c), 2.36(b)	Goods	-	-
	Imparment adjustments	(783.275)	(6.840.829)
	Stocks at net value	18.864.937	49.069.766

IAS 1.104,

2.36(e)(f) For For the stocks of raw materials and materials older than 2 years (for the tin stocks older than 3 years), existing in the balance at the end of 2020, without movement, the company adjusted the book value, constituting a total depreciation of 783,340 lei , which is maintained at a close value, respectively 783,275 lei, and on 30.06.2021. Compared to the corresponding period of the previous year, there is a significant decrease due to the resumption of depreciation income established in previous years for the ongoing production related to the two coastal areas.

On 30.06.2021, the company had registered fixed assets held for sale in the amount of 18,637 lei, representing 2 lands in patrimony at the main headquarters in Orsova. Valuation reports have been prepared for these fixed assets and the sale procedure is established.

18. Trade and similar receivables, other receivables and advances

		30.06.2021	30.06.2020
IAS 1.78 (b)	Trade receivables in relation to related parties	-	-
	Loans to executives	-	-
IAS 1.78 (b)	Trade receivables	12.782.473	597.152
	Adjustments for the impairment of trade receivables	(166.620)	(166.620)
IFRS 7.8(c)	Net commercial loans and receivables	12.615.853	430.532
	Claims - total	1.789.802	1.136.392
	Different debitors	310.821	654.015
	Suppliers - debtors	7.090	50.082
	VAT to be recovered and not exigible	539.422	354.776
	Adjustment for other receivables	(304.633)	(649.277)
	Expenses registered in advance	265.543	228.391
	Other receivables	971.559	498.405
	Total	14.405.655	1.566.924

18. Trade and similar receivables, other receivables and advances (continued )

Regarding the commercial receivables, on 30.06.2021 they are a higher level than those registered at the end of the corresponding period of the previous year, but they are related to the current deliveries of goods and services, maturing in the next period. During the analyzed period, there were no movements in the Company's impairment accounts related to trade receivables adjustments. However, there is a decrease in impairment accounts for Other receivables, especially due to the resumption of income from impairments for expenses with arbitrators / lawyers involved in the dispute with Veka. The receivables analyzed in this note do not include receivables presented in the category of fixed assets.

19. Trade payables and other liabilities
	30.06.2021	30.06.2020
Trade payables - short term
Social security and other taxes	1.612.039	1.173.074
	1.922.858	913.132
Suppliers - invoices to be received	420	13.002
Customer creditors	3.889.609	3.878.445
Other creditors	1.108.711	3.481.963
Total	8.533.637	9.459.616

Short-term trade payables relate to payment obligations to suppliers and advances received from customers, both types of obligations increasing compared to the similar period of the previous year, but without exceeding payment deadlines. We note an increase in the obligations regarding social insurance and other taxes and fees due to the state budget, their balance on 30.06.2021 representing current debts whose payment, by compensation or payment was made in July 2021.

20. Cash and cash equivalents

	30.06.2021	30.06.2020
Bank accounts in lei	1.577.298	3.357.634
Bank accounts in foreign currency	21.569.186	8.567.066
Petty cash in lei	13.245	3.385
Other values	4.380	8.442
Total	23.164.109	11.936.527

Cash and cash equivalents increased significantly compared to the previous period (by 94.06%), mainly due to the collection, in proportion of 80%, of the coastal companies that were the subject of the dispute with VEKA. We specify that at the end of sem. In 2020, they were in the category of stocks as running production.

21. Capital and reserves

Capital social

IFRS 7.7 IAS 1.79(a)(i),(iii) The structure of the shareholders as of June 30, 2021 did not change from the one existing on the reference date 02 of April, 2021, choose date for OGMS from 16 of April, 2021, respectively:

	Number
	Of shares Amount
		(lei)
SIF 3 Transilvania	5.711.432	14.278.580
SIF 5 Oltenia	3.200.337	8.000.843
SIF 4 Muntenia	1.504.600	3.761.500
Other corporate shareholders/individual shareholders	1.006.550	2.516.375
	11.422.919	28.557.298

The subscribed and paid up share capital is amounted to 28,557,298 RON, divided into a number of 11,422,919 nominal and dematerialized shares, each worth 2.50 RON.

The company's shares are dematerialized, ordinary and indivisible.

The identification data for each shareholder, the contribution to the share capital, number of shares owned and the participation of the shareholder in share capital are presented in the shareholder register kept by the company registry contractually designated for this purpose.

Each subscribed and paid share, grants the shareholders, under the law, the right to vote in the General Meeting of Shareholders, to vote or to be elected to the governing bodies, the right to participate in the distribution of profit or any rights derived from the shareholder quality. During period 01.01-30.06.2021 there were no changes in share capital.

22.Employees benefits

a) Remuneration of directors and administrators

In order to exercise the management activity, the Company is obliged to pay the directors a fixed monthly remuneration, established by the articles of association or the decision of the general meeting of shareholders, as the case may be, and a variable remuneration in relation to the achievement of objectives and performance indicators. administration. The fixed monthly remuneration of the administrators for the period January 1- June 30, 2021 was in the amount of 293,868 lei, in the same monthly amount as in 2020, from the last part of the year when the new Board of Directors was elected, and for the period corresponding to the previous year was in the amount of 638,920 lei in accordance with the provisions of the Articles of Association. For 2020, the variable remuneration for directors and general manager was not approved. The variable remuneration due to the directors and the general manager for 2019, paid in the first half of 2020, was approved in the Ordinary General Meeting of Shareholders on April 10, 2020 (OGMS Decision no. 49 / 10.04.2020) and was in the

22.Employees benefits (continued)

amount of 198,766 lei for administrators and 39,753 lei for general manager. The company did not grant advances or loans to directors or administrators in the first 6 months of 2021.

Wage expenses:

	Financial exercise	Financial exercises
	End at	End at
	30 June 2021	30 June 2020
	(lei)	(lei)
Administrators	293.868	638.920
Directors	650.997	570.524
	944.865	1.209.444

In 2021 there were no changes in the composition of the Board of Directors, this being the same as on 31.12.2020, respectively:

• Mr. Andanut Crinel-Valer President
• Mr. Moldovan Marius- Adrian– member
• Mr. Dumitrescu Lucia- Carmen– member
• Mr. Mihai Constantin- Marian member
• Mr. Ciurezu Tudor member

The indemnities and other rights granted to the administrators are provided in art. 19 of the Articles of Association and in the management contracts, which were approved at the General Meeting of Shareholders on October 2, 2020. The allowances for 2021 were established and approved by the OGMS on April 16, 2121. The salary and other rights due to the general manager were established by the Board of Directors, within the limits provided in art. 22 of the Articles of Incorporation and, respectively, of the Mandate Agreement concluded between the Board of Directors and the General Manager. The mandate of the current Board of Directors ends on October 2, 2022 and that of the General Manager ends on November 9, 2022.

Salaries payable at the end of the period:

	30 June 2021	30 June 2020
	(lei)	(lei)
Administrators	28.653	42.918
Directors	33.865	22.495
	62.518	65.413

22.Employees benefits (continued)

b) Employees

The average number of employees during the year was as follows:

	Financial exercise	Financial exercises
	Ended at	Ended at
	30 June 2021	30 June 2020
Administrative staff	45	50
Direct productive staff	248	271
Indirect productive staff	66	56
	359	377

23. Other information, implications of the COVID-19 pandemic on the half-yearly report

In the current context generated by the COVID 19 pandemic based on the information available to it, the company considers that there are no significant uncertainties, according to point 25 of IAS 1, for the continuation of the activity and there are no indications leading to an impairment of assets held, according to with IAS 36.

The impact that the COVID-19 pandemic had on the company's activity during the reported period was likely to influence the financial performance of the Agigea branch, mainly due to the impossibility to find partners for renting salandas.

The company has sufficient own financial resources to ensure financial stability, there is no risk of liquidity or negative influences on cash flows.

The company's management has as permanent objectives the analysis of the future impact of the pandemic on the financial performance and the taking of adequate measures to reduce the related risks.

Administrator Dr. Ing. Crinel-Valer Andanut

Issued Ec. Marilena Visescu

STATEMENT

The undersigned PhD Ing. Crinel-Valer Andanut – president of Management Board and Ec. Marilena Visescu – economic manager of company Santierul Naval Orsova SA, with headquarters in the town of Orsova, no. 4 TUFARI str., Mehedinti County, we state that according to our knowledge, the financial-accounting semester situation, corresponding to the semester I 2021 which was conceived in compliance with the applicable accounting standards (IFRS), shows an accurate and corresponding image to the reality in what the assets, obligations, financial position, profit and loss account of the company above mentioned are concerned.

We mention that the company has no affiliates.

We state as well, that the Report of the Management Committee of company Santierul Naval Orsova SA, conceived for semester I of the year 2021, shows accurately and completely all the information supplied for this period of time.

PRESIDENT OF THE MANAGEMENT BOARD: PhD Ing. Crinel-Valer Andanut ECONOMIC MANAGER: Ec. Marilena Visescu